Why house prices must fall by 28 per cent

FATBALLZ

This is a shocker, I was certain they were going to fall by 27%.

Silverbull

PasturesNew wrote: »

28% isn't really "all that much" is it.

You wouldnt call 28% a crash?

Id hate to see what youd call a crash.

Anyway 28% average falls will mean some places fall over 50%. As some already cheap areas in Wales etc cant really fall much more.

System

How many alias' is that for downey now? 12?

Yakubu22

RenovationMan wrote: »

Do we have details on what the average house actually looks like? If it's a 1 bed apartment/house then I think the market is in real trouble! If, on the other hand, its a three bed semi then I dont understand why this would impact first time buyers. I certainly didn't buy a three bedder for my first home - though had interest rates been as low as they are now, then perhaps I would have?

I guess my question is, why is this report comparing the cost of an average house to the income of first time buyers, when the average ftb would not be buying the average house? I hope my question makes sense to someone, I think I have too many occurances of the word average!

I agree that while FTBs traditionally started with a flat or small house and progressed to say a 3-bed semi (family sized home). With the average age of a FTB now being in their 30s. It means that 1 bed apartments aren't suitable for their requirements.
Very few FTBs are in their early 20s and so buying an apartment with intentions to bring up a family in the next few years is daft.

I agree FTBs shouldn't always expect to be able to get an "average" priced house. But if you're the average FTB and 34yo, then waiting another 5 years to build up equity. Just so you can afford reasonable space to start a family, isn't right either.

chucky

Yakubu22 wrote: »

But if you're the average FTB and 34yo

it's actually 32

http://www.communities.gov.uk/documents/housing/xls/141293.xls

interesting that FTB's are younger now than it was in 1990

RenovationMan

I did a quick google on the average age of a FT Buyer:

The age of the average first time buyer has risen to 34 from 27 in 30 years, according to a study by loan provider GE Money Home Lending and customer research organisation The Future Foundation.
The survey, which compares attitudes today with those of 30 years ago, also shows 76% of consumers see first time buyer affordability as worse than before as house price inflation has risen 1,436% over 30 years.
The proportion of homeowners buying with a spouse has decreased since 1977 from 80% to just a third today. Almost 30% of first time buyers today buy alone, almost double the figure in 1977. More than 51% of all first time buyers now receive some form of financial support from parents or grandparents.
Gerry Bell, head of mortgage marketing at GE Money Home Lending, says: “Our analysis reveals that today’s potential younger buyers have vastly different attitudes, aspirations and lifestyles to their counterparts 30 years ago. This refusal to conform to traditional family-oriented motivations and the desire to gain independence and experience, undoubtedly delays the purchase of a first home and contributes to the ongoing affordability issues faced by these consumers.”
In 1977 more than half of first time buyers said marriage was their main reason for buying property, compared with just 14% in 2007. Independence is the main reason for buying a home today for more than a half of consumers, compared with under a third in 1977.

While FT Buyers may be older, it doesn't seem to follow that they're looking to buy family homes because not only are they putting off buying their first home until a later age, they're also putting of having a family until a later age.

Women are also more likely to have children later in their lives: whilst in 1971 the average age to have a child was just over 23, in 2007 it was 28.
The survey saw a significant increase in the number of working people living alone, which has doubled since 1971. Now, 12 per cent of adults live on their own, with the largest increase among working-age adults.

JonnyBravo

RenovationMan wrote: »

I hope my question makes sense to someone, I think I have too many occurances of the word average!

The average post should contain no more averages than 4 on average. If your average of averages per post is significantly higher than this then there is a great danger that the average man, or indeed average woman, won't have a clue what you're on about.... [STRIKE]on average[/STRIKE] typically.

HTH.

buglawton

bouche wrote: »

We all read what we want to read and hear what we want to hear.

28% crash??? - is never gonna happen.

28% rise??? - with a long term investment I see no reason this shouldn't happen in. say 10-15 years. Easy!!

Which, assuming 2 to 3 percent compound inflation per year, would mean no real price rise at all.

phil_b_2

Joeskeppi wrote: »

We've officially gone full circle now, we're back to "wait til the winter".

Winter is the new 'spring' in the housing world. Prices will jump 10%!

chucky

buglawton wrote: »

Which, assuming 2 to 3 percent compound inflation per year, would mean no real price rise at all.

do you know what that means in real terms?