You aint seen nothing yet: Why house prices could fall another 20%

Thrugelmir

des_cartes wrote: »

Don't be surprised. The Telegraph have been talking down prices because they are closely linked to the Tories and the Tories want lower house prices.

The majority of the population want lower house prices irrespective of political alliegance.

Higher prices and therefore yet more debt to service has no benefit to the UK economy.

IveSeenTheLight

des_cartes wrote: »

But is the average more or less representative than 'it has always been' ? I would suggest that with the earnings of the top decile being higher and higher in terms of multiples of median earnings that the average has become more skewed over years and is therefore less representative when looking at house price affordability.

IIRC 68% of property is owner occupied.
therefore theoretically, only the top 68% of earners are realistically likely to be home owners.

the problem is that owner occupancy is lowering meaning that fewer and fewer households will be in a position to be home owners.

des_cartes

Really2 wrote: »

You are using the wrong average, for mortgages the average wage used was full time male, not the average UK wage.

Irrelevant when discussing the logic.

des_cartes

IveSeenTheLight wrote: »

IIRC 68% of property is owner occupied.
therefore theoretically, only the top 68% of earners are realistically likely to be home owners.

the problem is that owner occupancy is lowering meaning that fewer and fewer households will be in a position to be home owners.

Entirely compatable with the fact that houses have become increasingly unaffordable for many people.

FTBFun

des_cartes wrote: »

Don't be surprised. The Telegraph have been talking down prices because they are closely linked to the Tories and the Tories want lower house prices.

The Tories may want lower house prices (do they?) but just talking about it isn't going to make any difference.

Now if they relaxed planning permission and subsidised house building, we'd be talking.

des_cartes

Thrugelmir wrote: »

The majority of the population want lower house prices irrespective of political alliegance.

Higher prices and therefore yet more debt to service has no benefit to the UK economy.

Absolutely correct and what's more the government know this.

Really2

des_cartes wrote: »

Irrelevant when discussing the logic.

What logic? that part time at McDonalds should be a wage to buy a house on? Including part time wages is irrelevant to house prices, you never could buy a house on a part time wage?

If you look at the past you have to look at like for like, EG what the nationwide has done.
It was never 4X the average wage, it was 4X the average full time male wage?

Thrugelmir

IveSeenTheLight wrote: »

the problem is that owner occupancy is lowering meaning that fewer and fewer households will be in a position to be home owners.

Only if the demand from "investors" increases sufficently to pick up the slack.

ukcarper

Where I am.

Median wage male full time £39k
Median all £28k
Minimum wage 40hrs £12k

Using Santander mortgage site you could borrow £193k using male and minimum wage £240k with 20% deposit that would get you a reasonable 3-bed semi.
Using all you could get £152k with 20% deposit £190k that would get you a reasonable 3bed terrace.

I’m not saying that is a good idea to base your mortgage on two incomes but it seems to the norm now.
So if buyers manage to saved a deposit properties will not be beyond them.

des_cartes

Really2 wrote: »

What logic? that part time at McDonalds should be a wage to buy a house on? Including part time wages is irrelevant to house prices, you never could buy a house on a part time wage?

If you look at the past you have to look at like for like, EG what the nationwide has done.
It was never 4X the average wage, it was 4X the average full time male wage?

The logic being that the average male wage (or average wage) is skewed further from reality today than it has been in the past due to the fact that the earnings of the highest decile are greater in multiples of the median than they were.