Demand for rented accomodation rises

mcc100

julieq wrote: »

http://www.bbc.co.uk/news/business-14135553

As it's difficult to buy because of mortgage rationing

Mortgage rationing has nothing to with the fact that it's difficult to buy.

It's difficult to buy because house prices are still artificially inflated.

Graham_Devon

geneer wrote: »

Oh look. Hamish is telling us what a Big


/QUOTE]

You can almost smell the excitement.

Would be a shame to ruin it and suggest they put some figures in the "outgoings" box. Carper appears to be exempt from all outgoings. Even electric, gas, transport and council tax.

Tell me your secret carper!

HAMISH_MCTAVISH

geneer wrote: »

All Ive done is demonstrate how the average first time buyer would have required 5.4x their average salary at the peak of the bubble.

No, you haven't.

Because the average first time buyer earns more than the average person, and the average first time buyer house is cheaper than the average house..

You demonstrated that the average house price was 5.4 times the average salary of all people at peak. Not that the average first time buyer earns the same as the average person, nor that the average FTB house is as expensive as the average house.

Epic Fail. Try again.

Do please enlighted us with the supporting evidence which backs up your assertion.

Sure.

http://www.cml.org.uk/cml/publications/newsandviews/83/303

Table one....

ukcarper

Graham_Devon wrote: »

geneer wrote: »

Oh look. Hamish is telling us what a Big


/QUOTE]

You can almost smell the excitement.

Would be a shame to ruin it and suggest they put some figures in the "outgoings" box. Carper appears to be exempt from all outgoings. Even electric, gas, transport and council tax.

Tell me your secret carper!

Seeing as it didn’t ask for any of those can you explain what you mean. Unfortunately I didn’t put my earnings in as I don’t earn anywhere near what Hamish earns but I manage ok on my income which is in the bottom part of your chart but I haven’t got a mortgage.

The calculator on this site gives a max of 3x who knows what’s right.

ukcarper

mcc100 wrote: »

Mortgage rationing has nothing to with the fact that it's difficult to buy.

It's difficult to buy because house prices are still artificially inflated.

Prices might well still be high but the reason most people can't buy is because they haven’t got the deposit.

Thrugelmir

julieq wrote: »

For the rest, lending restrictions will eventually lift, and given that the average maximum salary multiple was only 3.5 income even at the height of the boom, lending of silly money isn't required.

Averages are wonderful. However they disguise a wide variation that extends beyond just salary multiples.

The lenders that didn't lend sensibly at the height of the boom. .

First National, Lehmans, Northern Rock, Bradford & Bingley, Alliance & Leicester, HBOS, Morgan Stanley, Bristol & West, Abbey National, Mortgage Express, Chelsea Building Society, GMAC and Amber Home Loans to name a few...........

My question to you. What do they all have in common?

geneer

HAMISH_MCTAVISH wrote: »

No, you haven't.

Because the average first time buyer earns more than the average person, and the average first time buyer house is cheaper than the average house..

You demonstrated that the average house price was 5.4 times the average salary of all people at peak. Not that the average first time buyer earns the same as the average person, nor that the average FTB house is as expensive as the average house.

Epic Fail. Try again.

Thats an epic fail is it. :rotfl:

Nah mate. Here's an epic fail.

HAMISH_MCTAVISH wrote: »

Sure.

http://www.cml.org.uk/cml/publications/newsandviews/83/303

Table one....

:rotfl:From the CML.

. Income multiples reflect the income figure provided by buyers in their mortgage application and may reflect one or more incomes

Apples and oranges Hamish.
Epic Fail. Try again.

Now given that you haven't got any coherent evidence to justify your assertion, we lets put things into some kind of context shall we.


Peak of 80s bubble.
Nationwide Q3 1989. 3.8
CML FTB earnings ratio. Q3 1989. 2.28
3.8/2.28=1.67

Peak of last bubble.
Nationwide average price to average salary index. Q4 2007. 5.4.
CML FTB earnings ration. Oct. 2007. 3.38
5.4/3.38=1.6

Interesting no?

Another little factoid, courtesy of Auntie, 2007.
http://news.bbc.co.uk/1/hi/business/4418882.stm

If you're applying for a mortgage on your own, for instance, they will usually lend around 3 to 3.5 times your gross annual income - hence the 'multiple' bit. If, on the other hand, you're applying for a mortgage with someone else, they'll typically lend either 2.5 times your joint income, or 3 times the larger income plus 1 times the second income.

Lenders are currently offering larger multiples. In recent years there has been a clear trend towards higher multiples, in some cases as much as 7.5 times annual salary (although 4 to 5 times salary is more common).

Over the past few years, some of the big lenders have started to turn their backs on income multiples, which they see as crude and simplistic.
One high street lender even went so far recently as to announce that income multiples will soon be a "thing of the past".

Thats what you think matey. :rotfl:

HAMISH_MCTAVISH

geneer wrote: »

Nationwide average price to average salary index. Q4 2007. 5.4.
CML FTB earnings ration. Oct. 2007. 3.38
5.4/3.38=1.6

Interesting no?

Interesting in as much as it somewhat quantifies the breakdown between single and joint applicants.

Regardless, the average borrowings never exceeded 3.5 times income of applicants.

(as I've already pointed out, some of those applicants were joint, and some single)

However, the point remains that the average income of actual house buyers is higher than the average income of all people.

And the average FTB house is cheaper than the average house.

That does not mean no person ever borrowed more than 3.5 times income, and I've never claimed otherwise. It does indicate that widespread high LTI borrowing was a bit of a myth however, and that most people borrowed responsibly.

geneer

HAMISH_MCTAVISH wrote: »

Interesting in as much as it somewhat quantifies the breakdown between single and joint applicants.

Hows that then?

HAMISH_MCTAVISH wrote: »

Regardless, the average borrowings never exceeded 3.5 times income of applicants.

(as I've already pointed out, some of those applicants were joint, and some single)

However, the point remains that the average income of actual house buyers is higher than the average income of all people.

And the average FTB house is cheaper than the average house.

That does not mean no person ever borrowed more than 3.5 times income, and I've never claimed otherwise. It does indicate that widespread high LTI borrowing was a bit of a myth however, and that most people borrowed responsibly.

Kinda cherry picking what you respond to eh Spamish.
Kinda loading up with a lot of disclaimers. :rotfl:


What is in fact kinda interesting is that the ratio of FTB lending multiples to the average price/average salary is remarkably consistent, which would suggest that this measure is actually a fairly decent way of proportionately assessing long term trends.


Whats also interesting is that the lending mutiples in 2007 were far higher than the 80's peak. Of course it may be that FTBs were not maxing themselves out then. But that does seem unlikely.

Not got much to say about aunty beebs reporting have you?

Jegersmart

julieq wrote: »

What insane risk? There was none. OVERWHELMINGLY people afford their mortgage repayments - those that don't even under extreme conditions of recession and elevated interest rates are in low single figure percentages.

If it was sensible to lend 2.5x joint income at a time when mortgage rates were at 7%, it's more than prudent to lend at 3.5x when rates are far lower and likely to stay there.
.

I think you misunderstand the concepts of "risk" and "probability" rather comprehensively. Not only that but you are also working from potentially incorrect statements or "facts" which are clouding your ability to understand.

Let me give you a hint to get you started, the latter part of your statement above has only a "decent chance" of being correct as long as it applies only to short term debt (less than 3-4 years). Why?