Telegraph: Lending main obstacle for buyers, causing Brits to "give up"

HAMISH_MCTAVISH

myhouse wrote: »

Well personally I think you'll be surprised at how fast rates rise when they do finally start back up. But that's a matter of conjecture and only time will tell. I do think you're rather optimistic to be talking about 8 years of super low rates.

Well to be fair I'm cheating somewhat, as even the BOE have come out and said they believe the new "neutrality point" for base rates is around 3%, versus the 5.5% seen in the last decade.

And as I can't see the economy in a roaring recovery any time in the next 5 years, that would justify raising base rates to the point where demand destruction is required, I'm quite prepared to bet that we won't see rates much above 3% before 2016.

Where did you get the 3.5 income statistics? - not disputing it necessarily, but it would surprise me if the rate over the boom period was constant with pre-bubble times.

CML

The average multiple for FTB's never crossed 3.5 times income at peak, and the average for 2TB never crossed 3 times income.

The average is intersting but the volumes of those who over-stretched is certainly going to be higher than pre-bubble.

The numbers that genuinely overstretched, to the point where even small rises in base rates will cause forced sales, are vanishingly small.

I would suggest that ultra-low rates of 2 years (and possibly another 1-2 years) will not compensate for having paid 20-30% more than a house was worth, particularly when you suddenly find yourself locked in to your mortgage and unable to move house for many years.

I would suggest that with house prices now just around 10% below peak, and already well above it in some areas, 8 years of ultra low rates will do very nicely for most.

abaxas

HAMISH_MCTAVISH wrote: »

The average multiple for FTB's never crossed 3.5 times income at peak, and the average for 2TB never crossed 3 times income


I would suggest that with house prices now just around 10% below peak, and already well above it in some areas, 8 years of ultra low rates will do very nicely for most.

What about FTB numbers? Attenborough is starting a new three part series on them. Hopefully a breeding colony will be setup and the housing market will be saved.

Houses are not 10% below peak. Lots are at peek, some above and some 50-70% down.

There is no longer one market, but it's split back into localities. Some are doing well, others make the 90's crash look like a small fart.

geneer

HAMISH_MCTAVISH wrote: »

.
I would suggest that with house prices now just around 10% below peak, and already well above it in some areas, 8 years of ultra low rates will do very nicely for most.

Would that be "average house prices" then Spamish?

I'd suggest this doesn't mean what you like to make out it does.
(as has been proven).

HAMISH_MCTAVISH

geneer wrote: »

Would that be "average house prices" then Spamish?

I'd suggest this doesn't mean what you like to make out it does.
(as has been proven).

No geneer, just because you obsessively repeat the same misinformation in your trolling, doesn't mean it's "proven".

Plenty of indices don't use a simple blunt average, but instead mix adjust, or use repeat sales regression, precisely to avoid the sort of sales mix skew you claim makes the indices inaccurate.

Of course, you know that already but choose to deliberately misrepresent the facts.

Graham_Devon

myhouse wrote: »

Where did you get the 3.5 income statistics? - not disputing it necessarily, but it would surprise me if the rate over the boom period was constant with pre-bubble times. The average is intersting but the volumes of those who over-stretched is certainly going to be higher than pre-bubble.

The measurement is somewhat changed.

Hamish's stats are 3.5x household income, if I recall correctly. Not 3x salary.

It used to be 3x one wage, or whatever. Hamish is saying it hasn't changed, it's still that way, but it has changed, as it's now 3.5x total household income. Not 3.5x one income.

Hence house prices are able to rise and rise, wages rise no where near in line with house prices, yet the 3.5x factor stays the same....it's the data its made up of thats changed.

HAMISH_MCTAVISH

Graham_Devon wrote: »

The measurement is somewhat changed.

Hamish's stats are 3.5x household income, if I recall correctly. Not 3x salary.

No, it's 3.5 times income of the borrowers. Whether that be single or joint application the CML don't specify. But as they do specify that the average income of actual FTB borrowers is in the low 30K range, and the average FTB purchase in the low 100K range, then single seems most likely in most cases.

It used to be 3x one wage, or whatever. Hamish is saying it hasn't changed, it's still that way, but it has changed, as it's now 3.5x total household income. Not 3.5x one income.

False.

See above.

Also for reference, the average long term house price is not 3 times one wage, it's 4 times male full time (mean) salary. Versus 4.5 times today. And the average long term deposit level is around 10%. So 3 times single income for all borrowers was obviously never the case.

Graham_Devon

HAMISH_MCTAVISH wrote: »

No, it's 3.5 times income of the borrowers. Whether that be single or joint application the CML don't specify. But as they do specify that the average income of actual FTB borrowers is in the low 30K range, and the average FTB purchase in the low 100K range, then single seems most likely in most cases.



False.

See above.

Also for reference, the average long term house price is not 3 times one wage, it's 4 times male full time (mean) salary. Versus 4.5 times today. And the average long term deposit level is around 10%. So 3 times single income for all borrowers was obviously never the case.

We've been through all this before. We can go through it all again if you like?

But basically, if the average house in 2007 was nearly 200k, and the average wage just shy of 30k, how on earth was it always 4x salary?

It wasn't. As I say, we've been here before. I'm quite happy to undo your bull meme, but really can't be bothered, when its glaringly obvious to everyone that 100% mortgages, at say 200k and average salaries at say 30k, ISNT 4x wages.

HAMISH_MCTAVISH

Graham_Devon wrote: »

We've been through all this before. We can go through it all again if you like?

But basically, if the average house in 2007 was nearly 200k, and the average wage just shy of 30k, how on earth was it always 4x salary?

That's why they call it an average Graham.....

A long term average.

As I say, we've been here before. I'm quite happy to undo your bull meme, but really can't be bothered, when its glaringly obvious to everyone that 100% mortgages, at say 200k and average salaries at say 30k, ISNT 4x wages.

Mr Muddle strikes again.....

I didn't say 2007 prices were 4 times male mean full time salary.

In fact, given todays prices are 4.5 times male mean full time salary, that would be impossible now, wouldn't it....

Graham_Devon

HAMISH_MCTAVISH wrote: »

That's why they call it an average Graham.....

A long term average..

Using long terms averages, to talk about near term prices is completely and utterly futile.

I'm actually bored. This is completely pointless. Everyone else can see it, so I'm not sure why I'm bothering highlighting the completely obvious to you. You see what you want to see and thats that.

HAMISH_MCTAVISH

The Graham Devon posting checklist....

1. See fact he doesn't like. Muddle up the topic being discussed.

Graham_Devon wrote: »

Using long terms averages, to talk about near term prices is completely and utterly futile.

2. Try and distract from the fact he's changed the subject.

I'm actually bored. This is completely pointless.

3. Attack opponent with fallacious rhetorical spin.

Everyone else can see it, so I'm not sure why I'm bothering highlighting the completely obvious to you.

4. Attempt to disengage without admitting he's wrong.

You see what you want to see and thats that.

Wow... another textbook formula post from the master of distraction.