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Debate House Prices


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What would happen if house’s dropped to the magic 3.5 times average income?

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Comments

  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    GDB2222 wrote: »
    Could you kindly let us all know how much you know about feudal planning laws?

    One of the few things I do know something about - with my super-useful high first in English Legal History!
    ...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    neverdespairgirl wrote: »
    Weren't any, apart from the afore-mentioned prohibition on castle building.

    Those invaders from France ignored the rules. Building the Tower of London in the process to name one.

    Even brought their own stone.
  • tonyhamm
    tonyhamm Posts: 221 Forumite
    edited 9 September 2010 at 11:15AM
    The bottom line is if there is continuing mass immigration then by definition, prices will continue as they are and this whole 3-4 times salary issue is moot. Another city the size of Birmingham is needed every 4-5 years on the supply side if you expect things to be the same as before Labour and the bankers they are in cahoots with came to power!

    If mass immigration stopped, then possibly people would find supply may start to catch up.

    We can see this government under Damian Green talks strong, but acts weak on this issue, immigration has in fact never been higher, and the student visa/scam loophole is still left 100% open. Its just more of the same.

    People say houseprices are also based on credit standards - Well, A credit factor was only an issue when they didn't start printing truckloads of crisp new money and giving peoples savings to the banks. Mortgages are cheap again in relative terms.
    so says another ordinary mug fighting the 1% who own the political machine grinding them down from on high...
    :A
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    tonyhamm wrote: »
    People say houseprices are also based on credit standards - Well, A credit factor was only an issue when they didn't start printing truckloads of crisp new money and giving peoples savings to the banks. Mortgages are cheap again in relative terms.

    Affordability is not in itself an issue. As prices will naturally be determined by the open market.

    If lenders return to running their mortgage books at closer to 3x times joint salary as a maximum lending multiple. Then house prices will be capped.

    The fate of house prices depends more on the future wage income stream. The performance of the wider economy. To create real wealth.
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    Thrugelmir wrote: »
    Affordability is not in itself an issue. As prices will naturally be determined by the open market.

    If lenders return to running their mortgage books at closer to 3x times joint salary as a maximum lending multiple. Then house prices will be capped.

    The fate of house prices depends more on the future wage income stream. The performance of the wider economy. To create real wealth.
    your argument falls down miserably when the average mortgage multiple is already and has been for a very long time around 3.5x times income.
  • GDB2222
    GDB2222 Posts: 26,498 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    chucky wrote: »
    your argument falls down miserably when the average mortgage multiple is already and has been for a very long time around 3.5x times income.

    Do you have a source for that?
    No reliance should be placed on the above! Absolutely none, do you hear?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    chucky wrote: »
    your argument falls down miserably when the average mortgage multiple is already and has been for a very long time around 3.5x times income.

    All the major lenders currently have mortgage books well in excess of 3.5 times joint income. RBS is currently in excess of 4. Virgin Bank is aiming to target its loan book at around 3 to 3.25 times. Back to the days of conservative lending practices. Spin off will be limited mortgage funds so people may have to wait again.
  • Hectors_House
    Hectors_House Posts: 596 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Strings wrote: »
    How long do you think it would last for? I don’t think it would last for very long, people would just buy more as the demand for housing would be very high given it would be so cheap.

    So in reality, the 3.5 x salary for housing is nothing but a dream, as it will never be maintained


    We managed to get our house at just over 2x salary and both of us are on average wages. We had a lot of luck and knew to stand our ground and barter hard.

    I'm not too sure about lots of people piling in and prices riseing again as that all depends on whether the banks would start to loan crazy loan to salary incomes again.

    Around where I live prices for a two-bed Victorian terrace have slipped back to below £100k (in same cases in the £70k - £80k price range) yet these houses aren't selling quickly.
  • buglawton
    buglawton Posts: 9,246 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    A lot of it has to do with the local unemployment rate. For example, Thames Valley has around 2% unemployment and house prices are perhaps 7 times salary.
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    GDB2222 wrote: »
    Do you have a source for that?
    sure
    http://www.communities.gov.uk/documents/housing/xls/table-517.xls

    2009 the average advance vs income was 3.02 times for FTB for non FTBs it was 2.76.

    the house price vs average income is a different matter - not as comfortable and is reflected in the average deposit amount.
    Thrugelmir wrote: »
    All the major lenders currently have mortgage books well in excess of 3.5 times joint income. RBS is currently in excess of 4. Virgin Bank is aiming to target its loan book at around 3 to 3.25 times. Back to the days of conservative lending practices. Spin off will be limited mortgage funds so people may have to wait again.
    you're trying to confuse the point by now taking specific banks now instead of saying 'all the major lenders" as you previously said to try and prove it's the norm - it's not the case at all
    Thrugelmir wrote: »
    All the major lenders currently have mortgage books well in excess of 3.5 times joint income.
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