FTB's "Missing Deal Of A Lifetime"

Graham_Devon

I love it. A whole piece about how houses are the most affordable ever, but even more people are locked out.

The irony. Blame it all on the banks.

Banks lend to much, we have to come to their rescue....BAD banks!!

Banks don't lend enough, lend sensibly...BAD banks!!

Price of asset? No problems!

mystic_trev

LSR expects prices to be "flat or falling" over the next 12 months. Ms Kidd warned: "Once affordability starts to decline, this could be a signal of future payment difficulties and future house price falls.SLps Research suggests a substantial minority of borrowers have insufficient income to cover both expenditure and mortgage payments."

chucky

so real house price falls with nominal house price rises are going to hurt FTBs - why is this a surprise?

macaque_2

Sibley wrote: »

I'm sorry but I've got to step in here.

Hamish is actually posting facts. The truth.

Now a lot of people on here are members of House Price Crash website. A band of disenchanted renters on low incomes who want the housing market to crash. They look for these type of articles and posts then pile in with negative comments, in the hope that homeowners will panic and sell them their house with a 90% discount. In fact, I don't believe if prices dropped 90% they have what it takes to be a homeowner. They probably got blacklisted when they didn't pay their Provident loans.

Sibley, you have worked yourself into a bit of a lather here but I think you are missing the point.

The average age of the first time buyer is creeping up year by year. House sales are hitting record lows. Unemployment is rising. Incomes are static at a time when house prices have factored in 60% earnings inflation. Affordability is being measured against freakishly low interest rates. The UK has the most over priced homes in the world whilst our economy is mired in debt and wealth creation sinks year on year. Young people are coming out of University with hugh student loan debts at the same time that lenders are demanding 25% deposits. These are facts that I am sure you will agree with.

I don't want to tar all bulls with the same brush but many are people who have done nothing useful in their lives but suddenly found themselves sitting on windfall profits by accident of birth date or the death of a relative. These people get incensed at the thought of seeing their paper profits unwound. Are you one of them?

The house price bubble has spawned unprecendented levels of greed, selfishness and bone idleness (over 8 million people have stopped working). Young people who want their own home now face the twin hazards of negative equity and the prospect of huge mortgage repayments when interest rates resume normal service.

High house prices are unfair, socially divisive and they damage the economy. The desire for cheaper housing is not a conspiracy against you but an understandable desire for a decent life free from debt, and huge repayment burdens.

chucky

macaque wrote: »

The average age of the first time buyer is creeping up year by year.

wrong - it is lower than it was in 1990 and averaging out at the same age as the last 20-25 years.
i'll give you that there are less FTB's though.

macaque wrote: »

Incomes are static at a time when house prices have factored in 60% earnings inflation.

apparently they're rising at about 2.5%-3% per year - less than inflation of course but it still makes your point wrong

macaque wrote: »

Affordability is being measured against freakishly low interest rates.

they may not be freakish if they stay for the next 5-10 years... it becomes normal...

macaque wrote: »

The UK has the most over priced homes in the world

probably incorrect again

macaque wrote: »

High house prices are unfair, socially divisive and they damage the economy. The desire for cheaper housing is not a conspiracy against you but an understandable desire for a decent life free from debt, and huge repayment burdens.

of course they are - very few people would deny this but what do you do?

set up a web site for priced out people campaigning for freedom from debt?

i'm surprised with macaque - you're normally good and accurate in your points.

macaque_2

macaque wrote: »

Sibley, you have worked yourself into a bit of a lather here but I think you are missing the point.

The average age of the first time buyer is creeping up year by year. House sales are hitting record lows. Unemployment is rising. Incomes are static at a time when house prices have factored in 60% earnings inflation. Affordability is being measured against freakishly low interest rates. The UK has the most over priced homes in the world whilst our economy is mired in debt and wealth creation sinks year on year. Young people are coming out of University with hugh student loan debts at the same time that lenders are demanding 25% deposits. These are facts that I am sure you will agree with.

I don't want to tar all bulls with the same brush but many are people who have done nothing useful in their lives but suddenly found themselves sitting on windfall profits by accident of birth date or the death of a relative. These people get incensed at the thought of seeing their paper profits unwound. Are you one of them?

The house price bubble has spawned unprecendented levels of greed, selfishness and bone idleness (over 8 million people have stopped working). Young people who want their own home now face the twin hazards of negative equity and the prospect of huge mortgage repayments when interest rates resume normal service.

High house prices are unfair, socially divisive and they damage the economy. The desire for cheaper housing is not a conspiracy against you but an understandable desire for a decent life free from debt, and huge repayment burdens.

The 70% committee have reviewed this post and awarded it a silver medal on the grounds of truth, accuracy and common sense.

Damaged

HAMISH_MCTAVISH wrote: »

Houses are at peak affordability. Absurdly high deposit requirements lock out many potential FTB's from the market.

With a mortgage payment cheaper than rent in 75% of the UK, of course houses are affordable. The limiting factor is the deposit requirement, which is now far too high due to mortgage rationing.

Paying a mortgage is no harder than paying rent. Saving a 40K or 50K deposit whilst you are paying rent that is as high or higher than a mortgage payment, is a ridiculous burden to impose on FTB's.

So investors are replacing FTB's once again, and many FTB's will lose out on their chance of buying.

Personally I think the banks are doing a fine job at stabilising the market. House prices have stabilised over the last year thanks to the banks not lending silly money or to those with low deposits.

As we are seeing now, transactions numbers are low relative to the boom. This is a good thing and is now the new norm.

The banks are unwinding their positions and letting the market re set itself. All in all, it is a win win for everyone.

Linton

macaque wrote: »

Sibley, you have worked yourself into a bit of a lather here but I think you are missing the point.

The average age of the first time buyer is creeping up year by year. House sales are hitting record lows. Unemployment is rising. Incomes are static at a time when house prices have factored in 60% earnings inflation. Affordability is being measured against freakishly low interest rates. The UK has the most over priced homes in the world whilst our economy is mired in debt and wealth creation sinks year on year. Young people are coming out of University with hugh student loan debts at the same time that lenders are demanding 25% deposits. These are facts that I am sure you will agree with.

I don't want to tar all bulls with the same brush but many are people who have done nothing useful in their lives but suddenly found themselves sitting on windfall profits by accident of birth date or the death of a relative. These people get incensed at the thought of seeing their paper profits unwound. Are you one of them?

The house price bubble has spawned unprecendented levels of greed, selfishness and bone idleness (over 8 million people have stopped working). Young people who want their own home now face the twin hazards of negative equity and the prospect of huge mortgage repayments when interest rates resume normal service.

High house prices are unfair, socially divisive and they damage the economy. The desire for cheaper housing is not a conspiracy against you but an understandable desire for a decent life free from debt, and huge repayment burdens.

Hooray the bears are back! This forum can wake up again.

High house prices are not the fundamental problem, they are a symptom.

I believe there are two primary causes - insufficient houses being built and people's willingness/desire to spend the maximum they can possibly afford on their housing.

Given these drivers the free market will adjust prices to ensure that the number of people with the means and wish to buy will equal the number of houses available.

Note that "means" covers mortgage cost, deposit, and availability of credit and other financing.

Of course there are social problems but there is no point in wanting prices to go up or down, it wont make any difference. Prices must go their own way, broadly upwards, until the fundamentals change.

drc

Isn't this a paradoxical statement?

FTBers are missing out on the "affordability of a lifetime" because they can't afford the cost of a house.

Linton

drc wrote: »

Isn't this a paradoxical statement?

FTBers are missing out on the "affordability of a lifetime" because they can't afford the cost of a house.

The point about paradoxes is that they are true...

If affordability includes the ability to pay the interest, the ability to raise a deposit, and the ability to get credit then only a few FTBers can afford to buy a house. That few is just about sufficient to buy the houses available!

Once they have bought their house the ongoing affordabality - ie the mortgage repayment - is less of a problem than raising the initial capital.