House price rises

roswell

You are now going in a complete circle the discusion started about you feel houseing is affordable for ALL then used an exceptional example we are simply pointing out that housing isnt affordable for all as you originaly stated, There are many Ifs and buts in your statements that make life easy for you to justify to yourself its over simplified. Fact is things change things will always change and theres nothing to say that in any 2, 5, 10 years your sister and her Boy friend will still be able to afford the house.

Affordability is only a perception at the time.

Alan_M_2

ukbondraider wrote:

You are the one who cant understand what they have read. They are on a 5 yr fixed. On their current salary they will likely pay off the whole mortgage in 10 yrs. However factor in the expected salary increases during the next few yrs and they are confidently expecting to clear the whole £300K in the 5 yr fixed. i.e they are not exposed to any rate rises. They also have a backup plan if this doesnt work out after yr 5, this being myself. Had they not had this backup they would have taken out a 10 yr fix and still be unaffected. So in summary they WILL have enough available income as they know their costs whether interest rates get to 10% or 1000000000%.

What company has provided a 100% mortgage on £300K with a 10 year fixed rate of 5.5%?

I've never seen a deal of that nature, maybe 80% but not 100%.

Or are you underwriting the loan as a guarantor?

ukbondraider

roswell wrote:

You are now going in a complete circle the discusion started about you feel houseing is affordable for ALL .

Roswell you are really beginning to make me question your intellect. Please read and digest all info before typing. I am saying that Housing at its current state is still affordable by alot of people which is why we wont see a crash. I am in addition saying that this will mean some people will not be able to afford but that they shouldnt expect that it is their right to be able to afford a place.

DO YOU UNDERSTAND???????

tomstickland

In my opinion you have a distorted level of confidence in your understanding of the market.

ukbondraider

Alan_M wrote:

What company has provided a 100% mortgage on £300K with a 10 year fixed rate of 5.5%?

I've never seen a deal of that nature, maybe 80% but not 100%.

Or are you underwriting the loan as a guarantor?

You are right. Its one of the reason my sister went for a 5 yr fix as she wanted to do this house buying without my help. However if she was not in a job where I expect her salary will hit 6 figs in 3 yrs time then I would have insisted that she takes out a 10 yr fix where I would provide any deposit required.

Rick62

I am saying that Housing at its current state is still affordable by alot of people which is why we wont see a crash.

DO YOU UNDERSTAND???????

Well thats cleared up that question. Lets all pile into property because its going to keep rising 10%/year forever.

Where do you get your arrogance?

roswell

I bow down to your superiority on the matter and would like to offer you my property for £185 000 cash.

cwcw

Rick62 wrote:

Well thats cleared up that question. Lets all pile into property because its going to keep rising 10%/year forever.

Where do you get your arrogance?

I don't think anyone believes property can continue its current growth, but I don't see why there has to be a crash just because there has been in the past. The situation is "different this time" as they say. As things stand, people can still afford houses because interest rates are relatively low. If they stay fairly low, unless there is an external and unpredictable trigger, I don't see why growth can't just slow rather than prices crashing. I see 2007 as being the last year of big increases (10%) then 2008 will slow down, but hopefully not crash. Instead of wishing misery on others by hoping for a crash (and spreading sentiment through web forums like HPC), people could instead hope for a slowdown and wage inflation.

talksalot81

ukbondraider wrote:

I believe the latter, except someone on £15K should not be considering buying a house IMO (but of course that depends on locality) and someone on on £30K should be considering starting out somewhere.

But why should someone earning this much be excluded?

Furthermore, why should timing be such a critical factor. 3 years ago an older friend was able to access the lower run of the ladder with a 13k salary. Today he owns the same house worth £180k, a house I could not begin to afford despite having a phd and 26k of salary. Is this something that should worsen? In another 3 years will it then be impossible for someone not earning 50k to afford this house?

It has got to stop somewhere...

talksalot81

lisyloo wrote:

If you genuine can't afford them i.e. can't afford to feed them properly then YES I DO believe you shouldn't bring them into this world.
I don't think however that this is what we are talking about. We are talking about people wanting kids AND other things as well.
I feel that sometimes people have to make sacrifices and can't necessarily have it ALL and have it NOW.

What you are suggesting is equally dangerous I am afraid. Not financially but medically.

At 25, myself and fiancee are the perfect age to have kids. We are both young, fit and healthy. However we really cant afford to do it because of the cost of housing. This is despite having saved hard and my being a doctor. So by your reasoning we should wait. At current levels and trends, we will have to wait until one of our parents dies that we can afford to get a house suitable for children and have the finances to look after them. Is that a good idea?

So the choice is you have kids when it is medically safest, or you wait until it is financiall safe and accept a significant increase in complications to yourself and child? Personally I think that a child is better in a loving struggling family than being born with Downs (or dying) into a family which can afford.