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Debate House Prices
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This can't go on: house prices must drop or wages must rise.
Comments
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I think the article is spot on. When young professionals in their early 30s can't afford a house on one salary then prices are too high.
One of the key factors likely to be a real downer on the market is the pending regulation on new mortgages, i.e. the end to self certification and the need for all borrowers to prove their income, no more "liar loans". Apparently half of all loans in the last 3 years were advanced without buyers having to prove their income. When this stops there could be more problems.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/7886101/Self-certification-mortgages-likely-to-be-banned-by-FSA.html0 -
HAMISH_MCTAVISH wrote: »What, the median average houshold income that includes all the pensioners and lifetime unemployed people.
The ones that don't buy houses.....
Gee, do you think that may be why Halifax use the Full time employed male income?
Employment being a bit of a prerequisite for actually buying a house, in most cases?
That and the fact they have many decades of history using the same measure, so it's a consistent data series.
Yes, that one, as pensioners have to live somewhere too.
Anyway, the reference may be consistent, but the data isn't consistent. We have moved more towards 2 wages buying a house, not one, which used to be the case....
You know this, as in most other arguments about affordability, you use this 2 wages measurement yourself. Not a single earner measurement.
Plus, of course, as I've said over and over again. That halifax data ONLY includes those that were able to afford. if anyone is priced out, it won't include them. So you can have a situation whereby more and more are priced out by high prices each year, but the affordability multiple stays the same. It's a reference. But it's not a particularly good one.0 -
The working world has changed and house prices reflect that.I think the article is spot on. When young professionals in their early 30s can't afford a house on one salary then prices are too high.
I'm female and in my 30's and all my friends in the same age group with children work apart from one. And I'm sure she is going to start working again in 2 years as there are family health reasons why she doesn't work.One of the key factors likely to be a real downer on the market is the pending regulation on new mortgages, i.e. the end to self certification and the need for all borrowers to prove their income, no more "liar loans". Apparently half of all loans in the last 3 years were advanced without buyers having to prove their income. When this stops there could be more problems.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/7886101/Self-certification-mortgages-likely-to-be-banned-by-FSA.html
No the market will adapt it always will.
Self-employed people always needed accounts to get the best rates. The fact that many didn't bother and brokers were happy to inflate earnings in some cases was a problem.I'm not cynical I'm realistic
(If a link I give opens pop ups I won't know I don't use windows)0 -
Graham_Devon wrote: »Yes, that one, as pensioners have to live somewhere too.
How many pensioners do you know in the market for a new house?
Other than the ones that already own and are downsizing?Anyway, the reference may be consistent, but the data isn't consistent. We have moved more towards 2 wages buying a house, not one, which used to be the case....
You know this, as in most other arguments about affordability, you use this 2 wages measurement yourself. Not a single earner measurement.
Indeed.
Which is why prices are actually more affordable than the data suggests. And even going on the data, they're not that much less affordable than the long term average.
Glad you finally argued yourself into a corner Graham.
Well done.Plus, of course, as I've said over and over again. That halifax data ONLY includes those that were able to afford. if anyone is priced out, it won't include them. So you can have a situation whereby more and more are priced out by high prices each year, but the affordability multiple stays the same. It's a reference. But it's not a particularly good one.
Nice try, but you're wrong.
The Halifax series is comparing against the average male full time mean income from ONS. Not from a database of it's buyers.
If you take a database of actual buyers, such as the CML provides, the average is less than 3.5 times income even for FTB's and even at peak.;)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »How many pensioners do you know in the market for a new house?
Other than the ones that already own and are downsizing?
Plenty move around. Some upsize.Which is why prices are actually more affordable than the data suggests. And even going on the data, they're not that much less affordable than the long term average.
Glad you finally argued yourself into a corner Graham.
Well done.
You've lost me. How can two people have to work in order to buy equal "prices are actually more affordable".Nice try, but you're wrong.
The Halifax series is comparing against the average male full time mean income from ONS. Not from a database of it's buyers.
If you take a database of actual buyers, such as the CML provides, the average is less than 3.5 times income even for FTB's and even at peak.;)
If they don't buy, they won't be included in the statistics.
Why do you think Nationwides statistics show different.
I'm not sure I can be bothered continuing this one. We been here many many times before. The fact is, using a single male mean average is somewhat silly. I agree, it's a long set of data, but it doesn't actually relate to the world we live in.
All I will say to you is....glad you are happy to use single income when talking about affordability. Please don't pull others up for doing the same, as you ae just flicking between whichever suits you best at the time.0 -
HAMISH_MCTAVISH wrote: »Employment being a bit of a prerequisite for actually buying a house, in most cases?
Not during the last couple of years of the boom (say 2005-2007)
Ayone could get a mortgage then. And that is part of the problem now.
You try to pass yourself off as an expert McTittish and quoting all sorts of figures, but you really haven't got a clue.
You are a very, very silly boy."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
funny that it's only those that can't afford to buy are the ones that most think that houses are unaffordable...Graham_Devon wrote: »This can't go on: house prices must drop or wages must rise.
it's like an obese person on a diet in a chip shop - they're guaranteed to be hungry...0 -
funny that it's only those that can't afford to buy are the ones that most think that houses are unaffordable...
it's like an obese person on a diet in a chip shop - they're guaranteed to be hungry...
I'm sure Jeremy Grantham, founder of the investment firm GMO, can afford to buy.
However, nice to see you chuckles, on your usual form.0 -
never mind eh - you couldn't afford to buy a house, so you took the 4th best option...Graham_Devon wrote: »I'm sure Jeremy Grantham, founder of the investment firm GMO, can afford to buy.
However, nice to see you chuckles, on your usual form.
chin up...0 -
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