MSE News: Guest Comment - Glimmer of hope for first time buyers

milliebear00001

Jimmy_31 wrote: »

I base it on the fact that the house prices are still high due to having a boom not long ago and everybdy still wants to get a boom price for their home.

If what you are trying to say is that houses are not overpriced then see the article attached to this thread.

I'm not trying to say anything at all. I agree that houses are appallingly expensive, but that's not necessarily the same thing as 'overpriced' is it? I see it as a supply and demand issue where demand currently outstrips supply.

It isn't the first time we've had a massive increase in house prices over a short period of time either. I would agree more with Brit's post that a bigger problem is that wage inflation hasn't kept up with this increase.

That's clearly not the case everywhere though as I have just bought a house for just about 3.5 x our household income and we are a household that largely lives on one salary (mine!)

HAMISH_MCTAVISH

milliebear00001 wrote: »

It isn't the first time we've had a massive increase in house prices over a short period of time either.

True.

1980 to 1990 -- Real terms increase in house prices, 80%.

2000 to 2010 -- Real terms increase in house prices, 81%.

That's clearly not the case everywhere though as I have just bought a house for just about 3.5 x our household income

Indeed.

I don't know anybody that ever bought a house on 7,8,9 times their income.

Despite the protestations of some on here, such a thing is virtually unheard of.

HAMISH_MCTAVISH

milliebear00001 wrote: »

I agree that houses are appallingly expensive, but that's not necessarily the same thing as 'overpriced' is it? I see it as a supply and demand issue where demand currently outstrips supply.

True.

There is no such thing as "overpriced" housing.

Prices are set by supply and demand, nothing else.

camaj

HAMISH_MCTAVISH wrote: »

True.

There is no such thing as "overpriced" housing.

Prices are set by supply and demand, nothing else.

That doesn't mean it can't be overpriced though. Overpriced would mean more than something is that could be considered a fair price. If the average salary is, say, £20k then the avg houseprice should be £60-70k. Given that it's probably double that, then calling it overpriced is a fair call. 6-7x the avg salary is overpriced.

flecker

HAMISH_MCTAVISH wrote: »

Sure they did......

The biggest annual fall in prices occurred in Northern Ireland (-10.8%), followed by the north-west (-3.7%) and Yorkshire and the Humber (-3.6%). Annual price falls were also recorded in Wales, the north-east, the east Midlands and the south-west.

In London, the average home rose in value by 5.5%, and in the east by 1.4%. Annual gains were also recorded in the south-east and the West Midlands.

http://www.guardian.co.uk/money/2011/apr/12/house-prices-up-february

Not according to the latest Halifax regional data:
http://www.lloydsbankinggroup.com/media1/research/regional_house_price_map_page.asp

Year on year fall for the North was -13.1% (London -5.6%).

HAMISH_MCTAVISH

flecker wrote: »

Year on year fall for the North was .

Jimmy31 is referring to the North West.

And Halifax has that data as -1.6% YoY.

HAMISH_MCTAVISH

camaj wrote: »

That doesn't mean it can't be overpriced though. Overpriced would mean more than something is that could be considered a fair price. If the average salary is, say, £20k then the avg houseprice should be £60-70k. Given that it's probably double that, then calling it overpriced is a fair call. 6-7x the avg salary is overpriced.

No, I don't think you understand.

Prices are where they are because of an imbalance between supply and demand. The main reason for this is that for many years now housebuilding has failed to keep up with new household formation.

At the moment for example, we add 400,000 more people a year, create 250,000 new households a year, and build only around 100,000 new houses.

In such a situation, then the cost of housing must inevitably rise over the long term. Either rents, or house prices, or both.

This does not mean that housing is "overpriced". By definition, there is no such thing as overpriced housing. There's only the market price which is set as a function of supply and demand. Nothing else.

camaj

HAMISH_MCTAVISH wrote: »

This does not mean that housing is "overpriced". By definition, there is no such thing as overpriced housing. There's only the market price which is set as a function of supply and demand. Nothing else.

I understood perfectly well. I don't accept that there is only the "market price". There is nothing to stop us from saying something is overpriced or too expensive. The market price, for whatever reason, is too high. It might be the "right" price but the right price can be too high or too low.

AndersLimpar_2

The missus and I got on the ladder as FTB's in December. 90% LTV with Yorkshire BS, free this and free that, great deal at the time. No help from mum and dad all our own savings, 45k joint earnings. We got the mortgage, got the 3 bed, double garage, loft room house we dreamed of (165k), 5 months down the line we couldnt be happier. First BBQ in our own house yesterday, bloody brilliant.

House prices are no going to drop to a level that will save us £100's a month on the mortgage, so we just got on with it. Yes in comparison to my brother, who bought a 3 bed house for 40k 10 years ago we are in a lot more debt that he is, but thats just the way things go, we cant all be big winners in the housing market sadly.

Esoog

after retiring from football in 2001, limpar opened a bar, the limp bar, in central stockholm, although it has since closed. Whilst the bar's closure was initially shrouded in mystery, it has since emerged that it was probably a decision taken on health and safety grounds, due to an incident that occurred in late november 2000. Rumour has it that an over-zealous punter drunkenly slipped and suffered a broken leg, in the process of congratulating limpar on the afore-mentioned 50-yard reverse ball which lit up the '95 cup final so memorably.

:d....................