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Debate House Prices
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60% of Mortgage Applications Refused
Comments
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MacMickster wrote: »I suspect that would be no more than 3 X salary, as opposed to the average applicant today wanting 4 X salary.
Our mortgage in 1990 was over 3 x joint income.Maybe if people applied for sensible, prudent and historically normal sized loans in terms of income multiples then the lenders may view more of those applications favourably.
In 1967 a GPO phone engineer (same as a BT phone engineer today) earned £1000 a year.
And a teacher with a few years experience earned £720 a year.
The 3 bed semi-detached house they purchased was £3900.
So in my families area of Scotland, an "average" house was 3.9 times an above average wage at the time for the area, closer to 5 times a teachers wage, and mortgage interest rates were in double digits.
Yet they were offered a 95% mortgage.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
What makes me laugh about this thread is the HPI cheerleaders complaining about the stringency of the "new" regulations and harking back to the "old" regulations.
But the "old" regulations they talk of is not the proper "old" regulations but the new debt-junkie "old" regulation from a few years ago.
Anyone with half a brain knows that the last house price boom could not have happened if it wasn't for crazy lending and yet these idiots still think it was all down to a lack of supply that caused the boom.
Absolutely bonkers they are."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
HAMISH_MCTAVISH wrote: »In 1967 a GPO phone engineer (same as a BT phone engineer today) earned £1000 a year.
And a teacher with a few years experience earned £720 a year.
The 3 bed semi-detached house they purchased was £3900.
So in my families area of Scotland, an "average" house was 3.9 times an above average wage at the time for the area, closer to 5 times a teachers wage, and mortgage interest rates were in double digits.
Yet they were offered a 95% mortgage.
Yet my parents tell me about having to save a £500 deposit (with a building society at which they had to have an account for a number of years first and demonstrate the ability to save regularly) in order to buy a house for £2,500 in the mid 1960s. This was, of course, to buy a small house. First-time buyers did not buy an average house, but hopefully an average first-time buyers house.
It is nice to try to equate the average income to the average house, but the problem comes in defining the averages (eg 10 farmworkers cottages sell for £60,000 each and the farmhouse is sold for £1million. What is the price of the average house?)."When the people fear the government there is tyranny, when the government fears the people there is liberty." - Thomas Jefferson0 -
the proper "old" regulations.
The regulations and prudent, sensible lending practices I'm referring to, where a 5% deposit and a job would get you a decent rate go as far back as the 1960's.
If you go back just a few decades before that, then 90% of the people in the UK were "priced out", as 90% of houses were owned by 10% of people.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
MacMickster wrote: »It is nice to try to equate the average income to the average house, but the problem comes in defining the averages (eg 10 farmworkers cottages sell for £60,000 each and the farmhouse is sold for £1million. What is the price of the average house?).
Nationwide and Halifax define the average house (actually, a "typical house") as a 3 bedroom, and model their indices around that. Hence the skew from sales mix you describe doesn't happen.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
MacMickster wrote: »I suspect that would be no more than 3 X salary, as opposed to the average applicant today wanting 4 X salary.
Maybe if people applied for sensible, prudent and historically normal sized loans in terms of income multiples then the lenders may view more of those applications favourably.
I got over 3x joint in 1972 with a 10% deposit0 -
HAMISH_MCTAVISH wrote: »Our mortgage in 1990 was over 3 x joint income.
In 1967 a GPO phone engineer (same as a BT phone engineer today) earned £1000 a year.
And a teacher with a few years experience earned £720 a year.
The 3 bed semi-detached house they purchased was £3900.
So in my families area of Scotland, an "average" house was 3.9 times an above average wage at the time for the area, closer to 5 times a teachers wage, and mortgage interest rates were in double digits.
Yet they were offered a 95% mortgage.
....and what is it now? there's your answer0 -
....and what is it now?
The price of the house is slightly higher relative to income. But the total cost to purchase relative to income is significantly lower, even with interest rates at the long term average of 5%.there's your answer
Quite.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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