House prices, according to Mum and Dad

sm9ai

EdInvestor wrote:

This index is also worth a look.It's "smoothed" version of the Nationwide and Halifax month on month figures for the last few years, done by an economist who posts at the Fool.It seems to suggest the market bottomed out in September a year ago and now has resumed rising.The economist reckons double digit rises are a possibity for this year, as does the Telegraph writer.

Note what happened when it bottomed out. Interest rates were cut. Now they are going up again.

EdInvestor

Lneders now using affordability criteria, rather than income multiples, to decide on qualified borrowers

This means they will favour people who have stayed out of debt, rather than those with very high salaries.

mrsS_2

Interestingly (to me anyway) I raised this subject a couple of weeks ago, ie why are ftbs struggling so much when the flat i bought in 1985 is relativley much more affordable now and I was basically told that house prices are the highest ever in no uncertain terms and that I was talking out of my bottom!

Interest rates are lower now, multiples are higher, wages are higher, yet apparently houses are the most unaffordable they have ever been.

Yet I can look at the flat I bought 20 years ago, with the salary I and my husband would be getting for the same job and I KNOW it is more affordable now!

but apparently I am wrong.

However, reading this thread I find that somehow I am not.......

roswell

Interest rates will not be low for ever simple fact is they fluctuate we have had the good low time but if they double between now and 2008 how many bankrupcies will there be? just because you can afford it today in low interest rates you cant afford the upkeep, the raising council tax / energy prices and inflation is not 2 % and probably never has been ....

Market_Oracle

roswell wrote:

Interest rates will not be low for ever simple fact is they fluctuate we have had the good low time but if they double between now and 2008 how many bankrupcies will there be? just because you can afford it today in low interest rates you cant afford the upkeep, the raising council tax / energy prices and inflation is not 2 % and probably never has been ....

Yes thats a good point

About Council Tax & Energy - There going up by an average of 15% per year !

Hereward

MarketOracle.co.uk wrote:

Yes thats a good point

About Council Tax & Energy - There[sic] going up by an average of 15% per year !

But what about all the things you buy that haven't gone up in price or are cheaper than last year? Just because somethings in the econmy are going up by 15% doesn't mean eavrything else is, somethings could be falling at 15% which may counteract the 15% rises. Inflation is a very individual thing and changes in price should be looked at on all the things you buy.

Market_Oracle

Hereward wrote:

But what about all the things you buy that haven't gone up in price or are cheaper than last year? Just because somethings in the econmy are going up by 15% doesn't mean eavrything else is, somethings could be falling at 15% which may counteract the 15% rises. Inflation is a very individual thing and changes in price should be looked at on all the things you buy.

The point is that those costs, especially council tax are directly related to house purchases.

EdInvestor

Inflation tends to be higher for older people, where council tax and utilities make up a bigger chunk of their total budget.

But inflation is low for younger people and families, because they benefit from very low food prices, reducing prices for thinks like phones and internet, and cheap goods from countries like China.

sanfrancisco

Hereward wrote:

But what about all the things you buy that haven't gone up in price or are cheaper than last year? Just because somethings in the econmy are going up by 15% doesn't mean eavrything else is, somethings could be falling at 15% which may counteract the 15% rises. Inflation is a very individual thing and changes in price should be looked at on all the things you buy.

The point also is that inflation has been rampant on all non discretionary items, and has been falling (now rising watch out) on non discretionary items (DVD's etc). Tell me one item that people HAVE TO BUY that has/is not rising at 10% plus a year - council tax, gas, eletricity, petrol, train tickets, TV licence etc etc. I can only think of communication (internet and phones). Sky has gone up.

sanfrancisco

EdInvestor wrote:

Inflation tends to be higher for older people, where council tax and utilities make up a bigger chunk of their total budget.

But inflation is low for younger people and families, because they benefit from very low food prices, reducing prices for thinks like phones and internet, and cheap goods from countries like China.

Yes that is true most young families I know don't pay for council tax and utilities.