House Prices Simply Too Expensive For The Young

ukcarper

B_Blank wrote: »

Exactly, Game, Set and Match.

We could always use average terraced house £124k

julieq

Graham_Devon wrote: »

Oh yes. Those magical 0.5% trackers that were availiable....erm....nowhere.

Great, fantastic. Thanks for the advice. Some people missed the boat that never actually existed. Bravo.

You could get a 0.5% tracker in October 2007, which would have been just about right for a purchase at the turn of the year. That's a matter of record, and I'm not sure why you'd want to deny it. Anyone with the balls to have planned a purchase in that time period will be sitting pretty now on virtually zero outlay for housing. And certainly people did, as these products were sold, and purchases were made. While the bears were waiting for prices to drop further and all risk factors to dissolve before starting. At which point lending was being constrained and low trackers withdrawn.

Hindsight is very easy to apply, but even then bears miss the obvious fact that the best buying scenario was as I described. It's not a question so much of missing the boat, which is a very absolutist position coming from the idea someone has the skill to time markets very accurately - that's nonsense and no-one who understands risk would even try. It's about actually looking at the truth of a situation and making choices appropriately rather than being led to wrong conclusions by what borders on religious dogma.

julieq

B_Blank wrote: »

Exactly, Game, Set and Match.

Not really.

In a market where not everyone can afford to participate, prices are skewed upwards.

The lower 30% of incomes or so are historically excluded from owner occupation, so the first stop is to say that average purchase prices may be related to the average salary of the top 70% of owners, not the average salary of the general population.

However for housing it's more complicated than that, because there is a lot of equity sloshing around the system for those already on the ladder, and because there's a high demand for rented housing which creates a commercial market on top of the residential one.

All that works to exclude first time buyers. I'm sorry about that, but it's a fact. It doesn't systematically remove all first time buyers - there are plenty of affordable locations still - but it acts to push the bar on salaries and deposit higher and higher over time.

Graham_Devon

julieq wrote: »

You could get a 0.5% tracker in October 2007, which would have been just about right for a purchase at the turn of the year.

Fantastic.

So not in the sweet spot you talk about.

Indeed, when house prices were still rising, and you would have bought at absolute peak...not in the sweet spot you talk of. Just right at the very very top.

Let me remind you what you said....

julieq wrote: »

The best time to buy isn't in 2 or 3 years time when we'll be well into recovery with mortgage rates rising. It was 2 or 3 years ago, and the sweet spot was mid crash somewhere between Sept 07 and Feb 08 where you could have had a +0.5% tracker and negotiated hard on price. But if you were a bear you were renting, building up your deposit and waiting for further falls which never came.

Now take a look at the land registry data. Your sweet spot "mid falls" appears to br right at the very peak.

http://www.housepricecrash.co.uk/indices-land-registry-national-monthly.php

You then state that the falls never came. I suggest you look at the data. The falls came right after your suggested sweet spot to buy.

The "sweet spot" about all this, is Hamish coming along and stating "exactly" and calling everyone else idiots.

julieq

Shift the date on a year then Graham. I didn't check the trough date and I got the year wrong. Mea culpa.

However I was making a general point, and that point is still made. Low trackers were available, and the best point to buy was early 2009 which would have allowed you to get a low rate tracker and a low price. The best time to buy is not in 2 to 3 years time, and waiting for some fictional set of combined circumstances really just means you wait forever. It's an absolutist position.

moneykev

Why does everyone always talk about FTBs not being able to buy?

There are a huge number of people equally (including myself) not able to move up the ladder because of the even bigger increases in prices at that point in the chain. Until these over-inflated prices crash then the whole thing will simply continue to get bunged up.

Solution: build a few million homes to depress the market prices, but do it in a carefully managed and planned way do that we don't end up like Spain or Ireland.

ILW

moneykev wrote: »

Why does everyone always talk about FTBs not being able to buy?

There are a huge number of people equally (including myself) not able to move up the ladder because of the even bigger increases in prices at that point in the chain. Until these over-inflated prices crash then the whole thing will simply continue to get bunged up.

Solution: build a few million homes to depress the market prices, but do it in a carefully managed and planned way do that we don't end up like Spain or Ireland.

Who is going to build these few million homes?

nicko33

julieq wrote: »

Low trackers were available, and the best point to buy was early 2009 which would have allowed you to get a low rate tracker and a low price.

Which is approximately when I bought.
(not because I was trying to time anything, but because of other real-life factors)
I remember Base+0.89 was available around then, but I missed the best deals because as the base rate dropped it soon became Base+1.89

tinkers

FTB's probably do not want to buy old boarded up houses pretending to be affordable and pay for it with a sales job in the evening as well as work full time because I bet that isn't what you bought as an FTB!!! The wage ratio to house price is SO different now as the op has kept trying to highlight to you!

Conrad wrote: »

I got the 'average' point, but I dismissed it as a notional average is meaningless in terms of what real people CAN do right now to buy a home. A mental construct such as an 'average' is utterly meaningless.

Work hard, maybe take a second job, save 15% and buy more or less within any County in Britain - no average to concern onself with.

Note, academic Econcomists did not spot the crunch comming, whereas as amateurs on HPC, myself included did.

Stop worrying about academic stuff, and concentrate on the practical.

BOTTOM LINE - FTB can buy a home with ease.

ILW

tinkers wrote: »

FTB's probably do not want to buy old boarded up houses pretending to be affordable and pay for it with a sales job in the evening as well as work full time because I bet that isn't what you bought as an FTB!!! !

I did.....