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

ukcarper

What about this a bit controversial I know but.

Had a quick look to see what a couple on benefits get with two kids get after rent not including child benefit which is universal they get £231 a week.

Some one earning £25k will take home £48 working tax credit plus £368 pay a total of £416 so £185 more than someone on benefits. Which is about £800 a month if they have a 4x mortgage £100k at your average of 3.5% they will be paying about £500 and even if rates go up to 8% they will still have more than person on benefits.

According to some people on here people on benefits are living the life of Riley so why can’t mortgage payer afford his mortgage.

Graham_Devon

ukcarper wrote: »

The point is someone in 1990 with a 3x mortgage was paying a bigger percentage of their wages that someone now with a 5x mortgage.

In fact interest rate would have to double to 7% before they was spending the same percentage of their income on mortgage repayment as the person in 1990.

Do you really think that if you spend one thirds of your pay on your mortgage it is just same as spending two thirds.

Bolded bit: Yes.

So what base rate would be required based on todays mortgages?

It could be that 3%+ starts pushing people up to 5-6-7%.

We are then at the same level of arrears as 1990, when base rates were how much higher?

I'd take issues with your figures, even you were surprised by them. We all know that really, the average wage is nowhere near £37,000. So I'd prefer to see your figures based on real average wages.

Average wage: £25,948
http://www.statistics.gov.uk/cci/nugget.asp?id=285

Do the sums based on that, it changes your figures immensly, or are we going to get back into a circling average wage debate. If we are, I'm out, and you lot can throw as much cr*p as you like. I know the whole debate is pointless as soon as that argument starts.

ukcarper

Graham_Devon wrote: »

Bolded bit: Yes.

So what base rate would be required based on todays mortgages?

It could be that 3%+ starts pushing people up to 5-6-7%.

We are then at the same level of arrears as 1990, when base rates were how much higher?

I'd take issues with your figures, even you were surprised by them. We all know that really, the average wage is nowhere near £37,000. So I'd prefer to see your figures based on real average wages.

Average wage: £25,948
http://www.statistics.gov.uk/cci/nugget.asp?id=285

Do the sums based on that, it changes your figures immensly, or are we going to get back into a circling average wage debate. If we are, I'm out, and you lot can throw as much cr*p as you like. I know the whole debate is pointless as soon as that argument starts.

The wages are high they are even higher than full time male according to ONS but if we assume the relationship between 1990 and now is correct ONS doesn’t go back that far as I said the actual wage used doesn’t make any difference.

Two other things the bank rate in 1990 was 14% not mortgage rate and I have used 5x now which is not typical.

ukcarper

Ok then

£25k 5x = £125k £632 a month out of Just over £2k

1990 lets say half

£12.5k 3X = £37.5k £454 a month out of just over £1k

Graham_Devon

ukcarper wrote: »

Ok then

£25k 5x = £125k £632 a month out of Just over £2k

1990 lets say half

£12.5k 3X = £37.5k £454 a month out of just over £1k

This is all ok, but it now doesn't relate to house prices.

It's just numbers multiplied by 5 and 3. What's more, it appears you are ignoring tax completely, as the person on 25k wouldn't have just over 2k a month.

Do you see where I'm coming from? If people are going to pick me up on the extremities, howcome it's ok to just band figures around willy nilly for everyone else. Forget taxes, just make up some 5x an arbituary figure and suggest therefore things are better today.

I don't really want to have the ongoing argument. I thought that the figures shown in my post which has caused a stir were pretty self explanatory.

We don't actually need to work out any of the above, as the arrears figures I used, will, naturally, take into affordability by absolute default.

wotsthat

Obfuscation - the concealment of intended meaning in communication, making communication confusing, intentionally ambiguous, and more difficult to interpret.

ukcarper

Graham_Devon wrote: »

This is all ok, but it now doesn't relate to house prices.

It's just numbers multiplied by 5 and 3. What's more, it appears you are ignoring tax completely, as the person on 25k wouldn't have just over 2k a month.

Do you see where I'm coming from? If people are going to pick me up on the extremities, howcome it's ok to just band figures around willy nilly for everyone else. Forget taxes, just make up some 5x an arbituary figure and suggest therefore things are better today.

I don't really want to have the ongoing argument. I thought that the figures shown in my post which has caused a stir were pretty self explanatory.

We don't actually need to work out any of the above, as the arrears figures I used, will, naturally, take into affordability by absolute default.

So how many people have bigger than 5x salary mortgages I believe the average is a lot less than that. The price of the house is irrelevant. My house is probably worth £275k and I’m only on just over £12k a year but I won’t be losing my house or going into arrears.

chucky

Graham_Devon wrote: »

We are then at the same level of arrears as 1990, when base rates were how much higher

do you mean that nearly a 100% difference in the number of is the same level...

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.

your school has a lot to answer for...

Graham_Devon wrote: »

I'd take issues with your figures, even you were surprised by them. We all know that really, the average wage is nowhere near £37,000. So I'd prefer to see your figures based on real average wages.

people on the minimum wage do not buy houses. including them in the average salary of a home owner or FTB doesn't prove anything.

chucky

ukcarper wrote: »

So how many people have bigger than 5x salary mortgages I believe the average is a lot less than that. The price of the house is irrelevant. My house is probably worth £275k and I’m only on just over £12k a year but I won’t be losing my house or going into arrears.

the average mortgage is around 3.5 times salary.

cue the liar loans posts and that 50% of mortgage were self certified mortgages and this number isn't accurate.

Graham_Devon

ukcarper wrote: »

So how many people have bigger than 5x salary mortgages I believe the average is a lot less than that. The price of the house is irrelevant. My house is probably worth £275k and I’m only on just over £12k a year but I won’t be losing my house or going into arrears.

We do not know, because of self cert etc. I wouldn't even suggest the average is 5x to be honest, probably under. Its the price of the house and therefore mortgage thats the issue.

But seriously. If people are going to try and suggest I don't understand, and then just literally pick figures out of the air to prove me wrong, and then state I'm obfusicating....surely that proves my very point when I said:

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

I'm picked up for not including detailed inflation summaries.

Yet just stating 5 x any olf figure and 3 x any old figure, ignoring tax, ignoring anything else, is just fine and dandy. Afterall, it hasn't got my username on the post....and thats what this is all about right? Hence wotsthat is here with no opinion, no insight, just a wooden spoon.