Land Registry - 28 March 2011 - -0.8%/1.7%

Generali

ukcarper wrote: »

About half are over 4%. I’m pretty sure only the extreme bulls, I think you know who I mean, would argue against real term falls.

Although I suppose if you want to buy you need to compare with wage inflation.

19/32 increased by over 4%.

27/32 increased by more than 2% (wage inflation I think)

chucky

Generali wrote: »

They are all positive but that's only in nominal terms. Mostly they're falling once you adjust for inflation.

the curious thing is that we can quite easily have nominal rises in the next few years despite them dropping in real terms.

many don't realise that you don't have to have 100% of people getting above inflation pay rises to get nominal house price rises.

Hamish reckons it's only 30% of people getting pay rises - no idea how he worked that out.

Generali

chucky wrote: »

the curious thing is that we can quite easily have nominal rises in the next few years despite them dropping in real terms.

many don't realise that you don't have to have 100% of people getting above inflation pay rises to get nominal house price rises.

Hamish reckons it's only 30% of people getting pay rises - no idea how he worked that out.

Falling house prices only really create a problem when they end up with negative equity so in many ways a situation where house prices are roughly stable (up or down a couple of percent a year is neither here nor there) and inflation is at 2-3% would be ideal.

Negative equity causes big problems for banks as it means that their nice safe secured loan is suddenly unsecured in part. It's a big problem for home owners as they can't sell so can't move to follow a job or business opportunity and it can cause pain for many years if they are repossessed.

Wookster

ukcarper wrote: »

All of the boroughs are positive over the year but I must admit I will be surprised if that's the same this time next year.

True. How many have increased in the last quarter though?

I think we're really storing up problems with banks not closing their position on people on severe arrears. Boom and bust is part of the growth process and sad as it maybe for those involved, if you can afford your house, other people shouldn't be subsidising it for you.

chucky

Wookster wrote: »

True. How many have increased in the last quarter though?

I think we're really storing up problems with banks not closing their position on people on severe arrears. Boom and bust is part of the growth process and sad as it maybe for those involved, if you can afford your house, other people shouldn't be subsidising it for you.

arrears have fallen and are at surprisingly low levels.

Graham_Devon

chucky wrote: »

arrears have fallen and are at surprisingly low levels.

An interesting arrears statistic is this one:

In 1990, 1.31% of mortgages were in 6-12 months arrears.

In 2010, 0.69% of mortgages were in 6-12 months in arrears.


Looks like we are doing ok. Just under half the arrear rates of 1990.


Average mortgage rate in 1990 was approx 14%
http://www.whatprice.co.uk/financial/base-rates.html

Average mortgage rate in 2010 was 3.50%
http://www.myintroducer.com/view.asp?ID=6399


So, in 1990, with mortgage rates 4x higher than they are now, the arrear rates were only 1.89x higher than they are today. Not even double.

Food for thought. Or not, if thats your persuassion.

chucky

Graham_Devon wrote: »

Food for thought. Or not, if thats your persuassion.

here's the thing - it's decent post until you post stupidity like this.
people post back at you and you go running claiming people pick on you...

it's sad, actually it's not. it's predictable.

i'll give you a reply on your post because it's always good to highlight your mistakes

you've decided to remove the inflation factor in 1990 which was close to 10% and now it's 4% or about 2.5% when stripping out VAT.

you've also decided to not take into account the affordability factor comparing both the 1990 when it was 3.7 and now it's 4.0.

you're comparing apples and pineapples without taking the above into consideration. do you understand why you're wrong?

ukcarper

Graham_Devon wrote: »

An interesting arrears statistic is this one:

In 1990, 1.31% of mortgages were in 6-12 months arrears.

In 2010, 0.69% of mortgages were in 6-12 months in arrears.


Looks like we are doing ok. Just under half the arrear rates of 1990.


Average mortgage rate in 1990 was approx 14%
http://www.whatprice.co.uk/financial/base-rates.html

Average mortgage rate in 2010 was 3.50%
http://www.myintroducer.com/view.asp?ID=6399


So, in 1990, with mortgage rates 4x higher than they are now, the arrear rates were only 1.89x higher than they are today. Not even double.

Food for thought. Or not, if thats your persuassion.

Some more to think about

From this link http://uk.answers.yahoo.com/question/index?qid=20100315071014AA4sFWm average wage in 1990 about £17.5k compared to £37.5k now seems a bit high but let’s say they are accurate.

Person in 1990 gets a 3 x salary mortgage £52.5k at 14% that would be £636 a month out of £1458 gross pay.

Person in 2010 gets a 5 x salary mortgage £187.5k at 3.5% that would be £948 out of £3120 gross pay.

chucky

ukcarper wrote: »

Some more to think about

From this link http://uk.answers.yahoo.com/question/index?qid=20100315071014AA4sFWm average wage in 1990 about £17.5k compared to £37.5k now seems a bit high but let’s say they are accurate.

Person in 1990 gets a 3 x salary mortgage £52.5k at 14% that would be £636 a month out of £1458 gross pay.

Person in 2010 gets a 5 x salary mortgage £187.5k at 3.5% that would be £948 out of £3120 gross pay.

he's deliberately forgotten the percentage of income used to service a mortgage is much lower now than it was in 1990.

Graham_Devon

LOL. Well that one rocked the boat.

As for chuckies complaints and insults on not understanding...

Why would I compare inflation? It means nothing in these terms.

If I was going to look at inflation (which I'm not, as it's not neccessary to make the point I was making), I'd compare wage inflation.