Repo's up and some startling numbers

IveSeenTheLight

shortchanged wrote: »

Totally against rampant HPI,

Yet you've been shown and concede you know people yourself who have benefitted from HPI.

shortchanged wrote: »

Totally against rampant HPI, as all it does is help one generation and shaft another. I would like to see HPI roughly in line with the UK's inflation rate and that following some correction to house prices to more realistic levels than they still are, although I do see them starting to come down where I live.

Take a simple theory: -

You buy a flat valued at £100k on a 95% LTV.
Your income may be £27k for this example, representing a 3.5 x multiple for the £95k loan (rounded)
You'd like to eventuall buy a house that's valued at £160k.

Lets assume 0 net inflation / wages / HPI for ease of example and as you explain, you'd like each to follow each other.

After 5 years (fixed at say 4.9%), you've reduced the outstanding balance to £84,137.
Remember, that house you want is still valued at £160k
You have built up your equity from the initial £5k deposit to now be valued at almost £16k.

After 5 years, can you afford the £160k house?
You'd have enough deposit to get a similar 95% LTV, indeed you could just get a 90% LTV with your equity.
The LTV multiple however has increased from 3.5 x to 5.6x (or 5.3 if you drop to the 90% LTV)
Should banks lend to you in that circumsatance?

RenovationMan

geneer wrote: »

I wish you could have responded in a way relevant to what I said, which was simply noting that the historical trend of the next generation being better of than the last is very likely at an end for the time being.

You emotive tirade was certainly entertaining, but of little relevance to my own contribution or indeed motiviations. .

Your contribution and motivation seems to be to sit on a forum and moan about how hard done to you are. Hence my reply. If that is not the case then I suggest you drop the chip on your shoulder and post more like Brit and macaque who also want prices to fall but don't feel they need to blame other forum users for their circumstances.

geneer wrote: »

You mentioned HPI.
I said you occasionally appear to want credit for simple good fortune.
For example, when you crowed about the fact that you were benefiting from the emergency base rates caused by the economic meltdown you never saw coming.

So 'crowing' is saying that I have benefited from low rates and that I hope to continue from them? Yes, then I must be crowing. Just as you 'crow' every time house prices fall, or some other bit of news related to your own VI goes your way. I don't think either of us is unique in this though, do you geneer?

shortchanged_2

IveSeenTheLight wrote: »

Yet you've been shown and concede you know people yourself who have benefitted from HPI.

As I said they benefitted massively because they bought a few years before I did. I have absolutely no chance of affording the sort of houses they are living in now thanks to HPI.

IveSeenTheLight

shortchanged wrote: »

As I said they benefitted massively because they bought a few years before I did. I have absolutely no chance of affording the sort of houses they are living in now thanks to HPI.

We've shown that some people could only afford to upsize because of HPI.
Like you, they possibily wouldn't have been able to afford without HPI.

The question therefore comes back as: -

Do you want HPI to give you the potential to upsize earlier?
or
Do you not want HPI and resign yourself taking far longer to upsize?

Unless your hoping for prices to reduce to meet your needs which is unfortunately unlikely.

RenovationMan

IveSeenTheLight wrote: »

We've shown that some people could only afford to upsize because of HPI.
Like you, they possibily wouldn't have been able to afford without HPI.

I don't see how you or shortchanged (with his friends) have shown this at all. All of the calculations that I did with non-HPI vs HPI and the example you gave showed that we have far higher mortgages due to HPI than we would have done if there was no HPI.

How then can it be more affordable to move up the housing ladder due to HPI? Can someone please explain the theory with some easy examples because I'm just not getting it!

shortchanged_2

IveSeenTheLight wrote: »

We've shown that some people could only afford to upsize because of HPI.
Like you, they possibily wouldn't have been able to afford without HPI.

The question therefore comes back as: -

Do you want HPI to give you the potential to upsize earlier?
or
Do you not want HPI and resign yourself taking far longer to upsize?

Unless your hoping for prices to reduce to meet your needs which is unfortunately unlikely.

To be honest I have all but given up any hope of upsizing as there is now far too much of a gulf between 3 and 4 bedroom houses where I live.
I seriously wonder though how people from the time I bought and later are going to be able to upsize during their lifetime until property becomes more in line with earnings.

RenovationMan

shortchanged wrote: »

To be honest I have all but given up any hope of upsizing as there is now far too much of a gulf between 3 and 4 bedroom houses where I live.
I seriously wonder though how people from the time I bought and later are going to be able to upsize during their lifetime until property becomes more in line with earnings.

When did you buy?

shortchanged_2

RenovationMan wrote: »

When did you buy?

Back in 2004.

pop_gun

chucky wrote: »

it's so glaringly obvious that it's cringeworthy now. it's getting desperate to try and prove something else.

if you have a 100% mortgage, then surely the mortgage is the house price. i can't see, why you're trying to dodge this bullet?

RenovationMan

RenovationMan wrote: »

I don't see how you or shortchanged (with his friends) have shown this at all. All of the calculations that I did with non-HPI vs HPI and the example you gave showed that we have far higher mortgages due to HPI than we would have done if there was no HPI.

How then can it be more affordable to move up the housing ladder due to HPI? Can someone please explain the theory with some easy examples because I'm just not getting it!

No takers?