First time buyers priced out...

HAMISH_MCTAVISH

chucky wrote: »

it happens each and every time. whenever house prices fall, less people buy and/or are able to buy property.

Indeed.

Regular as clockwork, yet some idiot always wants to try and argue the reverse.

HAMISH_MCTAVISH

the.ciscokid wrote: »

Wrong way round.

Care to look at transaction numbers through the last cycle?

Or let me guess, you don't believe those figures either....;)

Percy1983

As a FTB in the making this mortgage 'rationing' or sensibility as I prefer to call it is just fine.

Yes without it I could buy today but the price would be higher and I would be locked in a bidding war with any idiot who walked into the bank and said they want a house.

The current system means the price is more reasonable my deposit will reduce the mortgage further so I will be better off for the next 25 years for the sake of waiting a bit longer now and saving a deposit.

Of course this doesn't work if you want to ramp prices.

chucky

HAMISH_MCTAVISH wrote: »

Indeed.

Regular as clockwork, yet some idiot always wants to try and argue the reverse.

can you explain it to this one then

the.ciscokid wrote: »

Wrong way round.

the.ciscokid

HAMISH_MCTAVISH wrote: »

Care to look at transaction numbers through the last cycle?

Or let me guess, you don't believe those figures either....;)

Point me to them.

You are saying because prices are down less people can afford them. Which is bass ackwards.

I am saying because people cannot afford, prices go down.

shortchanged_2

PAY_MY_RENT wrote: »

I agree. And don't forget Shared Ownership either. These schemes really are excellent. They give aspiring FTBers the chance to get on that crucial first rung of the housing ladder. I couldn't recommend them highly enough. One's dream home is out there waiting for you if you just want it bad enough.

You really sound like a quite sinister little character. Creepy .

You're not the child catcher from chitty chitty bang bang are you?

chucky

the.ciscokid wrote: »

Point me to them.

You are saying because prices are down less people can afford them. Which is bass ackwards.

I am saying because people cannot afford, prices go down.

you miss the point - affording something is different to being able to buy something.

do you really think if house prices fell, that would be the only thing that dropped or went down?

try again

Jimmy_31

Percy1983 wrote: »

As a FTB in the making this mortgage 'rationing' or sensibility as I prefer to call it is just fine.

Yes without it I could buy today but the price would be higher and I would be locked in a bidding war with any idiot who walked into the bank and said they want a house.

The current system means the price is more reasonable my deposit will reduce the mortgage further so I will be better off for the next 25 years for the sake of waiting a bit longer now and saving a deposit.

Of course this doesn't work if you want to ramp prices.

Totally agree, i am saving a deposit just like you are doing and hope the banks dont start throwing money at people again or the whole mess will just start back up, I am currently waiting for prices to fall further than they have done so my deposit is increasing whilst the houses im looking at are falling in value.

Lifes a lot easier when the banks behave themselves isnt it.:)

julieq

B_Blank wrote: »

Loughton Monkey doesnt believe lowering the price of something makes it more affordable! What a genius.

Well it doesn't necessarily. If prices drop 10% but mortgage rates double, affordability goes down. Affordability for housing is generally defined as the cost of a mortgage as a proportion of take home income. Now we've had years of bears arguing that low interest rates have been bailing over indebted householders out, in which case affordability hs improved. There can't really be any argument over that. The problem for FTBs is that they can't access the mortgage market. So they see anyone in their peer group who was able to buy say in early 2009 on a tracker paying essentially nothing for housing, while they're paying bundles on rent and unable to get a mortgage. By the time they get to a decent deposit, the chances are that lending will have increased and prices will have started going up again. Soul destroying really.

The key point I made wasn't about affordability anyway, that was a secondary point, although kudos to Cleaver for attempting to explain it to Graham over a few posts. That takes considerable patience.

The important part is that you don't need first time buyers in the housing market to sustain prices, you just need demand for housing. Yield and capitalism will do the rest.

Percy1983

julieq wrote: »

Well it doesn't necessarily. If prices drop 10% but mortgage rates double, affordability goes down.

So if prices go down I will be paying a higher rate of interest for the next 25 years?

Yes short term it may be slightly worse but overall a cheaper house with a higher rate of interest for the first few years is better than an over priced house.