HousePrices double every X no of years- so last X years went up 300% correction?

Graham_Devon

HAMISH_MCTAVISH wrote: »

What, like certain precious metals, for example?;)

But look, there are obviously limits on house prices.

The cost of buying a house, realistically, cannot ever exceed the cost of a lifetime of rent. At this point, buying a house becomes the worse option. Until that point, buying a house makes sense.

However, the cost of buying a house including all the interest is still only around one third of the cost of renting for a full adult lifetime.

Theres plenty of scope for prices to rise yet.

Particularly as the percentage of after tax income spent on mortgage payments in 1990 was 68%...... whereas today it is only around 30%.

Once again you discount the costs of buying a house, the maintanance of the house, the problems of actually getting a house, and focus purely on the rent vs mortgage cost.

sjaypink

HAMISH_MCTAVISH wrote: »

However, the cost of buying a house including all the interest is still only around one third of the cost of renting for a full adult lifetime.

But you are just averaging the costs without factoring in the ability to pay over the relevant timescales!

I can assure you ATM it is alot easier to pay £400 pm on rent than pay £7/800 to a mortgage. Yes I know over the long term the rent will be plenty more expensive (and nothing to show for it :rolleyes:), but that doesn't matter RIGHT NOW in terms of whether house prices still have along way to rise- fact is, they don't. They have surely reached their peak.

If 40 year long mortgages were the norm this would be a very different story I guess

Radiantsoul

The problem with any sort of prediction is that there is actually a pretty small data set.

Much of the data starts from the 1970s which is only one generation and their are a couple of spikes and dips that make the trend hard to determine. The market in which housing is traded has also changed radically in the last 30 years - we have had financial liberalisation, women entering the labour market, higher immigration, pro-home ownership goverment, etc. I am not sure how easy it would be to strip this out and to come up with an unadjusted trend, and even if you could it is clear that the political and economic climate could dramatically change the trend.

CLAPTON

SilverStandard wrote: »

If anything goes up 3% ABOVE inflation then eventually it will be so out of wack with everything else that goes up the same as inflation.

Think about it.

re-read my post

clearly maths is not your strength

HAMISH_MCTAVISH

sjaypink wrote: »

I can assure you ATM it is alot easier to pay £400 pm on rent than pay £7/800 to a mortgage.

Except those numbers are not typical.

There are plenty of places where rent is significantly more expensive than a full repayment mortgage.

And on a national average basis, rent is now within 10% of the cost of a full repayment mortgage.

Yes I know over the long term the rent will be plenty more expensive (and nothing to show for it :rolleyes:),

Around 300% more expensive over a lifetime. And you're right, with nothing to show for it.

but that doesn't matter RIGHT NOW in terms of whether house prices still have along way to rise- fact is, they don't. They have surely reached their peak.

:rotfl:

The amount of after tax income spent on mortgages today is just 30%. In 1990, it was 68%. We are nowhere near the peak price of houses, nor anywhere near the limits of peoples ability to pay over 25 years.

And then there will be 30 year mortgages, then 40 years, then 50 years.

The market will find a way, it always does.....;)





If 40 year long mortgages were the norm this would be a very different story I guess[/QUOTE]

HAMISH_MCTAVISH

Radiantsoul wrote: »

The problem with any sort of prediction is that there is actually a pretty small data set.

Much of the data starts from the 1970s which is only one generation and their are a couple of spikes and dips that make the trend hard to determine. The market in which housing is traded has also changed radically in the last 30 years - we have had financial liberalisation, women entering the labour market, higher immigration, pro-home ownership goverment, etc. I am not sure how easy it would be to strip this out and to come up with an unadjusted trend, and even if you could it is clear that the political and economic climate could dramatically change the trend.

Very true.

As little as 100 years ago 100% of housing was owned by only 10% of the population.

The other 90% could not afford to buy and were forced to rent.

It is entirely possible we may have seen the peak in owner occupation.

JonnyBravo

SilverStandard wrote: »

about silver 95% of all silver has been consumed and the last 5% will run out by 2020.

:rotfl:

10 years??? Sure. :rolleyes:

I'll bet come 2020 you're saying it'll run out sometime like 2030.

Graham_Devon

HAMISH_MCTAVISH wrote: »

The amount of after tax income spent on mortgages today is just 30%. In 1990, it was 68%. We are nowhere near the peak price of houses, nor anywhere near the limits of peoples ability to pay over 25 years.

Oh shutup Hamish.

Today the base rate is 0.5%.

In 1990 the base rate was around 14%.

To compare these 2 years is beyond ridiculous.

chucky

Graham_Devon wrote: »

Oh shutup Hamish.

Today the base rate is 0.5%.

In 1990 the base rate was around 14%.

mmmm - when people start to think that the base rate is the rate that people pay on their mortgage that's when you know they haven't got a clue... well done :beer:

kriss_boy

Looking at nethouseprice.com I've frequently come across properties bought in and around 2002 then sold in 2007 for 4 times the original purchase price. Crazy huh.