Why is property unaffordable for even the relatively well-off among the population?

Linton

MrPThomas wrote: »

£40K - £60K wage is way above average.

Lets talk about average wages in the UK.

Someone with average wages has always been able to buy a house with a little deposit.

This is the norm, at the moment house prices are inflated compared with average wages.

Is this the norm??? Until historically relatively recently the majority of the population were living in rented accomodation.

At the moment a couple on average wages can buy a house in most parts of the country. It may not always be a house that they believe people of their status in society ought to be living in, but they can buy one.

The matter of the deposit is another issue. Credit is still restricted. As the banks get their capital base sorted out this should resolve itself.

quantic

I think the problem is, you need to be better off to buy a house now, as wages have not increased. My sisters first house cost her £69,000. In todays market they sell £170,000 (Even in the crash). I could not afford to buy a house the same as hers, even tho I earn more than her.

Percy1983

HAMISH_MCTAVISH wrote: »

However the banks are still rationing mortgages through requiring absurdly high deposits and perfect credit scores, as bank funding is in short supply.

Surely if that system was implemented from the start as it should have been then this mess wouldn't be with us now.

ps, I don't think 10% deposit is unreasonable.

Pete111

MrPThomas wrote: »

£40K - £60K wage is way above average.

Lets talk about average wages in the UK.

Someone with average wages has always been able to buy a house with a little deposit.

This is the norm, at the moment house prices are inflated compared with average wages.

But not if you are talking about household income Which is more relevant than ever these days. I would venture that for the south at least that range above is pretty low

Take two freinds of mine who have just bought in London. They are in their early 30's. One is in marketing at a mid sort of level and the other is a nurse. I know their income is over 75k.

They bought at just under 340k - so probably about average for London.

LilacPixie

Is property that unaffordable?? I have just offered on, and had accepted, a 3 bed family home. Wether or not you would consider us to be well off or not is subjective i guess. Personally i think we are pretty typical OH works full time, I work 28 hours a week, 2 kids another on the way etc etc.

Now if I wanted a 4 bed detatched with double garage and room for a pony then no I couldn't afford to buy it but to be honest I don't think that sort of house is an average buy for a couple both under 30.

shortchanged_2

The problem at the moment is that first time buyers are seriously struggling to get on the ladder due to still too high property prices and tougher (rightly so) lending criteria. Without first time buyers people wanting to move up the property ladder will struggle to do so without out buyers for their property and so forth.
The answer is that property prices need to come down, the problem is that so many people would have paid far too much for property a couple of years ago and they have the fear of negative equity and will be reluctant to sell at a loss.

HAMISH_MCTAVISH

Percy1983 wrote: »

Surely if that system was implemented from the start as it should have been then this mess wouldn't be with us now.

Not at all.

UK mortgage lending standards didn't cause this mess.

I don't think 10% deposit is unreasonable.

Nor do I.

But they are almost impossible to get.

The number of mortgages being issued at 90% LTV is just 10% of what it was in 2006, and for the very few that can get one, the rates are sky-high.

StevieJ

MrPThomas wrote: »

Why is property still unaffordable for even the relatively well-off among the population?

My question is really as the global crisis gets worse and worse, why are UK house prices not following the rest of the world and crashing?

The USA, Ireland and other places are seeing half price houses why not the UK yet?

They are not unaffordable near me, although 5 bed detached are probably out of the scope of a FTB.

StevieJ

MrPThomas wrote: »

£40K - £60K wage is way above average.

Lets talk about average wages in the UK.

Someone with average wages has always been able to buy a house with a little deposit.

This is the norm, at the moment house prices are inflated compared with average wages.

I thought your reference point was

Why is property still unaffordable for even the relatively well-off among the population?

lisyloo

Because no body will sell their house at house price. They will just go on living there or rent it out. Simple really.

ILW has hit the nail on the head.
There is a seller strike.

My mum is trying to move after disability following surgery to remove a brain tumour.
They are on their second chain.
If it falls through they'll stay where they are and get a stair life instead of a bungalow.

The point of the anecdote?
Very few absolutely HAVE to sell.