Cheapest Houses since 1999

HAMISH_MCTAVISH

Le_Chuck wrote: »

or maybe people are being more realistic in what they can afford, and buying cheaper houses, rather than over stretching themselves

You think people were overstretching themselves in 1999?

Scully38

HAMISH_MCTAVISH wrote: »

Well if you read the thread you'll find out.....

To summarise, although house prices are higher, so are wages, and both mortgage interest rates and taxes are lower.

So the percentage of the average after tax income spent on buying the average house is now the same as it was in 1999.

Thanks, I read the thread and am still disagreeing with the fact that on face value the prices of houses are not as cheap now as they were in 1999. A lot of people are still on average wages (unless they get promotions) tax income has not changed drastically since 1999.

In 1999 I was on a wage of 21k, and my wages only went up through inflation on average £200 a year, so my point is still that house prices have maintained their values within about 10-20% of the highest value they attained in the big 'boom' of property prices. As for taroxes, I still pay tax on my wages the same as I did before, same proportion as I did when I was on 21k a year. The cost of living has increased, however wages have not increased dramatically enough to cover the cost of an avg house price in 2011. So, sorry I disagree with you on that. Why do you think most people are having to save longer/borrow a tonne of money for houses. If it was simply a case of the same house prices in 1999 then why aren't more people on the property ladder, and why are FTB struggling so much? It's not simply the fact that there are fewer mortgages available, truth is the house prices have never fallen back to an acceptable level for FTB to get their first home.

purplelila-2007

You can all argue all you like - houses are NOT affordable , hence why they have been falling in price and will continue to do so .

Mortgages are only affordable to those with large deposits or those servicing exisiting mortgages or those who have built up at least 40% equity built up in their homes .

HAMISH_MCTAVISH

Scully38 wrote: »

In 1999 I was on a wage of 21k, and my wages only went up through inflation on average £200 a year,

1) The OP is dealing with averages, it is possible for any individual's circumstances to be different.

2) A wage of £21,000 in 1999 would be slightly over £30,000 today if it had just kept up with average wage increases since then. Even for a person with zero career advancement.

3) In 1999 the average mortgage interest rate was 6.5%, today it is 3.5%.

4) IN 1999 the average house price was around £90,000. Today it's around £165,000.

Hence, the cost of buying a house is now at it's lowest since 1999, on average.

HAMISH_MCTAVISH

purplelila-2007 wrote: »

why they have been falling in price and will continue to do so .
.

Except they aren't.

Prices are up 4.5% since the start of the year.;)

Graham_Devon

HAMISH_MCTAVISH wrote: »

1)

Hence, the cost of buying a house is now at it's lowest since 1999, on average.

Why do you keep saying this when it's obviously not?

For those who have ALREADY bought, it's cheaper, simply based on interest rates. It's hardly rocket science considering base rates have never been this low.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Why do you keep saying this when it's obviously not?

Because it is.

For those who have ALREADY bought, it's cheaper, simply based on interest rates. .

False.

The article clearly states it's for new house purchases and based on the combination of current rates and house prices.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Because it is.



False.

The article clearly states it's for new house purchases and based on the combination of current rates and house prices.

It's not. You are just talking nonsense.

For those who can afford a low LTV mortgage, things will be great.

But it's not cheaper to buy a house now than in 1999, as you are only looking at those who HAVE bought and CAN afford to buy.

So many more CAN'T afford it, which is why were seeing some of the lowest transaction rates on record, and why you bemona mortgage "rationing".

Think about it. If houses are at the most affordable since 1999, we wouldn't have the low transaction levels we do.

There. Done and dusted, your whole argument undone.

The numbers priced out of home ownership could triple overnight, and this article would say the exact same thing. Therefore, it's a load of nonsense. It only applies for those already in the game.

Loughton_Monkey

I fail to understand why people cannot interpret the facts of the situation correctly. It's really not difficult.

The 'cost' of a house is (say) £170,000. But 99% of the FTB's do not have £170,000 swishing about in a Nationwide e-Saver. They have to resort to something called a "Mortgage". And a mortgage charges fees (sometimes) and then a monthly interest.

And, incidentally, in case anyone hasn't noticed, you used to be able to get 100% mortgages. Now you can only get 85% or 90% at the very most.

So why is it difficult for people to struggle with the most simple state of affairs that most 12-year-olds could grasp:

1. The Price of a house is probably cheaper (or not a lot different) than 10/12 years ago in real terms.

2. The cost of the interest for a 90% mortgage - compared with real wages - is the cheapest it has ever been.

3. It is the deposit that used to be "zero", and is now (say) £17,000. Now I don't know about anyone else, but I'd call this an infinite rise wouldn't you?

So all you little girls and boys who do not have the intellect to differentiate between chalk and cheese [i.e. the ability to save £17K for a British youngster these days, and the ability to pay 28% of their income to service the mortgage] should simply keep quiet.

The overall 'affordability' of a first house now has more than one dimension.

If only posters could think in more than one dimensions we could have a decent discussion.

claire16c

Quote : That is, as long as a buyer is not looking for somewhere in London or other popular locations in the South East

Theres rather a lot of people who live in London and the South East...