Rightmove April +1.7%

HAMISH_MCTAVISH

chucky wrote: »

in which country did BTL price out FTBs?

Sure as hell wasn't in this one.

Cleaver

the.ciscokid wrote: »

Not sure, !!!!ing it up the wall, or earning very little would be my guess, but it is a guess. What were employment rates like in 1999? When did BTL kick of and start pricing young FTBs out of the market?

Lots of questions there I don't know the answer to. I guess I take a bit of a hippy view of all this, in that prices come and go, unemployment goes up and down, generations have different opportunities and challenges. What will be will be.

In terms of your comment in bold, BTL never did price young FTBers out of the market. It was one of many factors that drove up prices and made it more difficult for young people to buy their first home. But your language suggests that it was the driving factor, which I don't believe it was. The whole country was on a property obsession for much of the decade, not just BTL investors.

My personal opinion is that house prices will nominally stay the same for five, and maybe up to ten, years. I think wages will start to creep up over the next decade and that houses will still be treated with a bit of caution and not seen as the cash-cow they once were. So over the next ten years we will slowly see them become more and more affordable. And then we'll probably have another boom. Hopefully we will have all found other hobbies by that point.

the.ciscokid

chucky wrote: »

in which country did BTL price out FTBs?

looking at England, the number of private rented property (BTL) is pretty flat from 1999 to 2005. the number of owner occupiers didn't really change much either...

Well, you need to squint to be able to see it on that graph, but it looks to me like private rented increased around 20 to 30%, but owner occupation tailed off.

I would be interested to see something up to 2010.

Edit:

No graph, but this seems to agree:

Owner occupation in the UK boomed from the 1950s onwards, overtaking the private rented sector in 1961. It got a further boost from the right-to-buy policies granted to council tenants in the 1980s.

After rising from 57% in 1981 to a peak of 71% in 2000, the rate of owner-occupation has stalled and has now begun to fall slightly.

The biggest fall in owner-occupation in the past few years has been in London. Between 2001 and 2006 the number of owner-occupiers in the capital dropped by 111,000, a fall of 6.3%.

One factor acting as a drag on owner occupation has been the growth of private landlords using buy-to-let mortgages.

This has helped revive the private rental sector, with about 10% of all new mortgages now being given to people buying a property in order to let it.

But this has led to accusations that many would-be home owners have been priced out of the market by prospective landlords.

Critics complain that many buy-to-let landlords have been able to obtain bigger mortgages, financing more expensive house purchases, than other ordinary buyers could normally afford.

Cleaver

DexterA wrote: »

There's an ongoing issue for the young of today. High unemployment, high student debt, people working to older ages and not retiring, longevity leading to a lack of houses coming to market.

Increasing home prices do not help people in their ambition to buy a property and start a family.

Increasing home prices being good for the economy is incorrect. It increases banks paper assets, but it does not help the young. The young are the future.

I think everyone agrees with this sentiment, pretty much. But sentiment doesn't drive the market. The market is driven by a number of factors relating to supply and demand.

chucky

the.ciscokid wrote: »

Well, you need to squint to be able to see it on that graph, but it looks to me like private rented increased around 20 to 30%, but owner occupation tailed off.

20% to 30% - what are you talking about?? :rotfl:

let's try again - it's around 12% of property that is privately rented ot 20% or 30%!!




do you want to try again?

the.ciscokid

Cleaver wrote: »

Lots of questions there I don't know the answer to. I guess I take a bit of a hippy view of all this, in that prices come and go, unemployment goes up and down, generations have different opportunities and challenges. What will be will be.

In terms of your comment in bold, BTL never did price young FTBers out of the market. It was one of many factors that drove up prices and made it more difficult for young people to buy their first home. But your language suggests that it was the driving factor, which I don't believe it was. The whole country was on a property obsession for much of the decade, not just BTL investors.

My personal opinion is that house prices will nominally stay the same for five, and maybe up to ten, years. I think wages will start to creep up over the next decade and that houses will still be treated with a bit of caution and not seen as the cash-cow they once were. So over the next ten years we will slowly see them become more and more affordable. And then we'll probably have another boom. Hopefully we will have all found other hobbies by that point.

Greed of the BTLer was a factor, but not the driving one, that would be greed of the government, and the banks (loose lending, casino banking and so on). I am not surprised Hamish thinks 100% mortgages were a good thing - this is far too blinkered, and short term a view.

The problem with your solution is a price out generation.

the.ciscokid

chucky wrote: »

20% to 30% - what are you talking about?? :rotfl:

let's try again - it's around 12% of property that is privately rented ot 20% or 30%!!

do you want to try again?

If you start with 10, and increase to 12/13, what percentage increase is that?

Edit: Also, what types of property does the average BTLer buy, and what percentage of the transactions in the market were FTBs?

DexterA

Cleaver wrote: »

I think everyone agrees with this sentiment, pretty much. But sentiment doesn't drive the market. The market is driven by a number of factors relating to supply and demand.

This is a major breakthrough on the forum. We've established everyone agrees house prices are too high, and increases are not to be celebrated (take note Hamish).

We can agree on this.

Cleaver

the.ciscokid wrote: »

Thanks, good post. The only thing I would say is that nowadays it is harder to save a deposit, as inflation is rampant leaving less available for building a deposit.

Inflation would have made little or no difference to us if we were 21 to 23 now and saving for a deposit. For two years we didn't go out, didn't have takeaways, didn't have holidays, sold one of our cars, did mass sales on eBay, walked or biked miles instead of taking the car, made food from leftovers better than we ever had before, worked two jobs, did every bit of overtime possible, didn't see friends very often (this one hurt) pretty much didn't buy anything expensive or even new and basically shovelled every penny in to our savings account.

Sorry to sound a bit high and mighty on this, but the rate of inflation is no reason to not save a deposit. I'm not saying that it's easy to save a deposit, or that anyone can do what we did above because some people don't have any money spare at the end of the month and already live like we did. But I'm proud of how we managed to save £14,000, because it was through hard graft and sacrifice. The inflation rate was nothing to do with it.

Cleaver

DexterA wrote: »

This is a major breakthrough on the forum. We've established everyone agrees house prices are too high, and increases are not to be celebrated (take note Hamish).

We can agree on this.

Well, I kinda agree with this. Remember though, I live in the North West of England. A nice terrace can be had for £90k, a nice three or four bed home can be had for £150k and a very nice house can be had for £200k in most areas. So house prices seem a bit toppy, but they're not stupidly priced in relation to wages. Obviously in the South East it's a completely different story.

I certainly agree that high house prices are not to be celebrated, but nor are low house prices. House prices just are what they are.