CML: Age of FTB

ess0two

Jack_Johnson_the_acorn wrote: »

Single people need to be on a decent income, a 1 bed place is actually quite affordable IMO

Yeah but its generally accepted in here a 3 bed semi with garden should be the norm for a simgle person.

Jack_Johnson_the_acorn

ess0two wrote: »

Yeah but its generally accepted in here a 3 bed semi with garden should be the norm for a simgle person.

Why? I am moving into a 3 bed maisonette as there are 2 of us and we might choose to start a family, essentially 1 person needs 1 bedroom.:huh:

robmatic

Jack_Johnson_the_acorn wrote: »

Why? I am moving into a 3 bed maisonette as there are 2 of us and we might choose to start a family, essentially 1 person needs 1 bedroom.:huh:

Quite right. Some people have an excessive sense of entitlement though and think that they as a single person somehow deserve the average family home.

IveSeenTheLight

ukcarper wrote: »

Geneer made a remark about historical norms for house prices. I asked how much he thought they were over valued compared to historical norms. He replied 20% which I thought was about right, I’m not sure what that has to do with how much people think they will fall.

He also mentioned according to economists.
I simply was wondering which economists were currently valuing property as being 20% overvalued

Originally Posted by geneer
As I recall, apparently still some 20% overvalued.
According to economists anyway.

I fail to see how prices could be over valued by a percentage if they do not think they will correct to that level.

ukcarper

IveSeenTheLight wrote: »

He also mentioned according to economists.
I simply was wondering which economists were currently valuing property as being 20% overvalued

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I fail to see how prices could be over valued by a percentage if they do not think they will correct to that level.

I don’t really want to defend geneer but to be honest I asked a straightforward question and he gave me a straightforward answer. The way I looked at it was to look at Nationwide average earnings to average house price figures and compare that to long tern average of 4x.

IveSeenTheLight

ukcarper wrote: »

I don’t really want to defend geneer but to be honest I asked a straightforward question and he gave me a straightforward answer. The way I looked at it was to look at Nationwide average earnings to average house price figures and compare that to long tern average of 4x.

That's one way of looking at it, but what does the data mean.

The make-up of how mortgages are financed I would consider has changed over time, with far more emphasis on joint incomes.

If the data (as I understand it) is taken on average wages calculated from the ONS, then this is comparing a single wage to what generally is joint wages for mortgages.

That naturally would explain why the income multiplier has increased.

However there are other indices to consider as in from an affordability perspective.
According to Halifax the: -
Mortgage Repayments as a percentage of income is currently 27.8% as opposed to the long term (28 year) average of 36.7%.

Moving back on to prices
House Prices - Earnings Ratio is currently 4.30 as opposed to the long term (28 year) average of 4.06.
This represents that house prices are only 5.9% above their long term average.

Percy1983

Very much the chicken and the egg, are prices higher because 2 people are paying, or are 2 people paying because prices are so high.

I really do think its a great shame these days that one parent in a couple can't stay at home or go part time, we have a whole generation being brought up by other people as its the only way they can keep a roof over there heads.

IveSeenTheLight

Percy1983 wrote: »

Very much the chicken and the egg, are prices higher because 2 people are paying, or are 2 people paying because prices are so high.

I really do think its a great shame these days that one parent in a couple can't stay at home or go part time, we have a whole generation being brought up by other people as its the only way they can keep a roof over there heads.

They can.
My wife stays at home, I know many others that have stay at home or part time mums.

The thing is you need to plan a bit more and probably be a lot more fruigle in the early years and plan for a reduced income in future years

Percy1983

But when you have to fruigle on the 2 incomes just to afford the house that not reallt possible.

I will admit we will be fine as my other half is a teaching assistant so hours/holidays fit with her and I am 9-5 mon-fri so not to bad.

IveSeenTheLight

Percy1983 wrote: »

But when you have to fruigle on the 2 incomes just to afford the house that not reallt possible.

I'll not profess to say that it's absolutely possible in all areas, but certainly in many parts it is

Percy1983 wrote: »

I will admit we will be fine as my other half is a teaching assistant so hours/holidays fit with her and I am 9-5 mon-fri so not to bad.

It was nine years from when we first bought to when we had children.
That's nine years of opportunity to reduce the mortgage debt as far as possible.
In that tiime, generally there is opportunities to increase wages and or gain promotion, thus income increases whilst the debt decreases.
My wife is stay at home and will do so until both my kids are at school, so we planned at around 7 years of reduce family income.

I'll not profess it's easy, simple or ideal, but it is certainly possible