Private Rents in England "Unaffordable"

HAMISH_MCTAVISH

Graham_Devon wrote: »

I'm not trying to measure against the past, I'm simply looking at today and suggesting house prices are about 30-40% overvalued compared to incomes.

And how do you make that assertion unless you're comparing an income ratio from the past?

As I said, what the Halifax 4.4 times male full time ratio does do is provide a consistent benchmark over the long term, which shows house prices today versus full time male salary are around 10% higher than the long term average, versus full time male salary.

Which is not to say house prices are affordable for everyone.

If you are a part time female, house prices are pretty unaffordable today.

But then again they were compared to the long term average as well.

ukcarper

Graham_Devon wrote: »

No, I'm not using it as the average person does NOT earn 36-38k.

Were going to get stuck at the same juncture I fear. You wish to use the highest possible figure, I wish to use what people actually earn.

No point in discussing really is there, as I'm not painting any picture. If anyone is, it's you, as I have not mentioned the decades you have decided to tell me I am actually talking bout.

Just chose to use the more realistic figure. Sorry. I really don't see the pointin using anything else. I'm not trying to measure against the past, I'm simply looking at today and suggesting house prices are about 30-40% overvalued compared to incomes.

You’ve missed the point if you’re comparing historical house prices it doesn’t matter what group of people’s earnings you use as long as it’s the group all the time.

Like they were in early 70s and late 80s

Graham_Devon

I'm not comparing historical prices!! I'm talking now, today for the third time!

jeez, you guys are fixated.

ukcarper

Graham_Devon wrote: »

I'm not comparing historical prices!! I'm talking now, today for the third time!

jeez, you guys are fixated.

So basically it's just what you would like them to be and has no relation to what they have been in the past.

HAMISH_MCTAVISH

Graham_Devon wrote: »

I'm not comparing historical prices!! I'm talking now, today for the third time!
.

And interest rates are lower.

Hence the percentage people pay of their income is at historic lows, even though most people are not getting 0.5% mortgages.

The change from mortgage rates of 10% to 15% being normal, to mortgage rates of 4% to 6% being normal, is almost certainly a permanent one. If you have any understanding of how interest rates are set and how demand destruction works, you know that.

Linton

Graham_Devon wrote: »

Or prices reduce to become more aligned with incomes, and therefore more people can get the mortgages.

...

If prices reduced to become more aligned with incomes more people would be able to put in an offer for a house.

But there are not enough houses on the market for all these people.

What happens?

- Those with more money put in higher offers to outbid those with less. Prices go up.

When do prices stop going up?

- When sufficient people have been priced out of the market so that the number of buyers equals the number of houses available.

Easy really - I dont understand why you dont get it.

If you want to enforce low prices with the supply at its current level you must stop people putting in higher offers - how do you do that?

Or the government allocates houses by something other than price. What criteria would you use?

Turnbull2000

Gahh! Why do people keep peddling the obsolete salary multiples? That benchmark is barely relevant these days. Firstly, two incomes instead of one are now the norm. Secondly, long-term interest rates are much, much lower. So rather than one earner borrowing at 10%, we have two earners borrowing at 5% (or less).

The bears need to understand that what's considered 'normal' can change.

IveSeenTheLight

Graham_Devon wrote: »

I'm not comparing historical prices!! I'm talking now, today for the third time!

jeez, you guys are fixated.

What comparson are you making to suggest that house prices are 30-40% overpriced?

The further back you go in history, you may find that indeed property multiples of income was far higher. It's only the last 30-40 years where more people have had the opportunity to be owners

Graham_Devon

IveSeenTheLight wrote: »

What comparson are you making to suggest that house prices are 30-40% overpriced?

The one I stated when I said it.

Conrad

Just to remind you'all, over zealous FSA regulation has in large part lead to this inequity. The benefits of such tight regulation are minimal - the UK mortgage market was always orderly and repos proportionaly low. In return for little benefit, millions are unable to meet FSA lending rules and thus are forced to enrich landlords.

I'm going to keep saying this - one day you'll suddenly find this story unfolding in the media - I can see it now . "MILLIONS FORCED TO RENT UNDER TORIES", even though the FSA regulation damage was done by Labour (mind you Tory MP's I've written to have yet to recognise this ticking time bomb - a reflection of my prose no doubt - but I care not really as I earn more in tough times anyway).


Low growth also stems in large part from the inability of people to buy a home and bother investing in.