House price rises

cwcw

talksalot81 wrote:

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.

25 is pretty young for a couple to have children (except on some sink estates, where you'd be a grandparent already).

talksalot81

ukbondraider wrote:

Tom my point is that the problem with this country is that everyone EXPECTS to be able to buy a house.

And your point is wrong. People expect to be able to afford the same as someone in exactly the same boat a few years ago. It is totally silly to suggest that someone of totally identical intellect/talent/job/earnings should expect to afford less than I can today.

ukbondraider wrote:

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???????

With a phd and above average earnings, I cannot afford. Nor can most of those in the same position as I. Since I am above national average in a low earning area, it follows that alot more people cannot afford!

cwcw wrote:

25 is pretty young for a couple to have children (except on some sink estates, where you'd be a grandparent already).

Medically it is not. Medically we are at the perfect age. Get to 30 and the risk to the mother and child really starts to increase.

cwcw

talksalot81 wrote:

Medically it is not. Medically we are at the perfect age. Get to 30 and the risk to the mother and child really starts to increase.

In the context of an average middle class family though, I would say 25 is pretty young. 30ish is more usual, by which time you're earning more and have accumulated more wealth (hopefully!). I don't think there is a significant health risk increase until the mother is in her late 30s onwards. Whatever is right for the couple involved though. It's too late for me to research what the actual average is, or studies into health implications and age, it's way past my bed time.

Alan_M_2

ukbondraider wrote:

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.

Well that moves the goal posts somewhat.

My parents have both just taken out a 25 year mortgage on their house so they can have a nice easy retirement, they are both in their 70's.

This is hardly a normal loan by any stretch of the imagination, but I've signed as guarantor.

However, both my parents situation and that of your sister fall so far out of what is considered normal that both are completely irrelevant in the context of this thread.

The average Joe won't ever have an income anywhere near 6 figures, is unlikely to have a brother who can provide any deposit required to meet the lenders need.

A good friend of mine is a chartered surveyor, he was talking to me at the weekend about a couple of valuations He's done this week, one for a £1.6 Million Property in the West end, on which they required a £1.3 Million mortgage, He phoned the agent and discovered it was actually on the market for £1.3 Million and they were trying to get a 100% Mortgage.....I did have a chuckle at that. £8000 a month repayments at 5.5 % (realistically this is someone on a £250K salary minimum - what the hell are they doing with no deposit?)

That aside, your perspective of what is affordable and what isn't is somewhat different from the average house buyer or in fact the average poster on this site.

mobile-advice

talksalot81 wrote:

With a phd and above average earnings, I cannot afford. Nor can most of those in the same position as I. Since I am above national average in a low earning area, it follows that alot more people cannot afford!

Whereabouts do you live?

Alan_M_2

cwcw wrote:

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.

Here is where we have a dichotomy, on another thread started today was an excellent link to an article posted in the FT, if you get a chance to read the full PDF then do so, it's very interesting reading.

http://forums.moneysavingexpert.com/showthread.html?t=340683

I digress, - what we have is wages being artificially kept low by a high influx of immigrant labour and outsourcing to cheaper (foreign) sources and a struggling manufacturing industry (struggling to compete with the cheap importation of goods from abroad - of which I confess I am guilty myself as an importer)

House prices are rising because of historic "affordability" ratios created by low interest rates and high income multiple lending.

The very existence of these two economic entities create the dichotomy, i.e a change cannot occur without an extreme correction of either - long term they both cannot exist as independent entities in a single economy.

That's either a property crash or a period of hyper inflation....which do you think will happen in reality? Any government presiding over a period of hyper inflation is effectively abdicating at the next election - albeit involuntarily!

roswell

Neither would be pretty,

Lets hope china doesnt go spending all those Dollars.

wisbech_lad

In Vancouver they have the same issue - young couples spending very high amounts of take home pay on mortgages and then living on macaroni and cheese - asset (& liability) rich, but cash poor.

talksalot81

cwcw wrote:

In the context of an average middle class family though, I would say 25 is pretty young. 30ish is more usual, by which time you're earning more and have accumulated more wealth (hopefully!). I don't think there is a significant health risk increase until the mother is in her late 30s onwards. Whatever is right for the couple involved though. It's too late for me to research what the actual average is, or studies into health implications and age, it's way past my bed time.

I am specifically not thinking about what is usual. I am approaching and saying that it is biologically better to have children when you are young. You are countering with the 'usual' timescale which is defined by ones earnings. So you are in fact citing that something has led to people having children at a sub-optimal age - I am saying that something is finances. I am saying that it is awful that money is forcing the sacrifice of health.

Furthermore your suggestion of waiting a few years is not valid. House prices are advancing alot more rapidly than our salaries will. In a few years time we will be further away from affording than we are now...

mobile-advice wrote:

Whereabouts do you live?

Belfast - so now we have that one in the open consider the response you wish to give me.

- NI is growing at between 30 and 45% depending on which measure you use. Far faster than I can ever accumulate on my own initiative.
- If you suggest this is unsustainable (which you really should, otherwise NI will be more expensive than london this time next year!), where will we go? Do you think we will simply grow at national rate?
- If so, do you not consider a slow down of between 25 and 40% to be something of a crash?

tomstickland

House prices are advancing alot more rapidly than our salaries will. In a few years time we will be further away from affording than we are now...

Why will house prices continue to rise whilst salaries don't?