House prices need to drop 40% to be affordable discussion

Jimmy_31

MrRee wrote: »

I can tell you something right now.

BTL Landlords will buy up all available property LONG before prices drop 40% - of that you can be guaranteed ...... hell, I'll buy everything I see come to the market if it means returning me a yield of 25% on my money!

A 7% rental Yield is the base price of a property in my opinion.

If interest rates increase then all bets are off as the yields would then need to climb.

Interest Rates are the absolute driving force ..... cheap loans, pathetic savings rates = a floor under property prices.

It is as it is and it is as it always has been.

Plenty of houses around the northwest were selling for 100k and now they are down to 60k and not selling. No BTL landlords want them anymore.

What are you waiting for ?

IveSeenTheLight

Jimmy_31 wrote: »

Plenty of houses around the northwest were selling for 100k and now they are down to 60k and not selling. No BTL landlords want them anymore.

What are you waiting for ?

Of course any savvy investor will assess the rental market for the property they are looking to purchase.

I assume you would happily buy one of these for your personal use given they are apparently down 40%

Interestingly as these hit the claimed 40% mark required for property to be affordable to the average wage this discussion relates to, could you please give some examples (as there are plenty).

Jimmy_31

IveSeenTheLight wrote: »

Of course any savvy investor will assess the rental market for the property they are looking to purchase.

I assume you would happily buy one of these for your personal use given they are apparently down 40%

Interestingly as these hit the claimed 40% mark required for property to be affordable to the average wage this discussion relates to, could you please give some examples (as there are plenty).

I will happily be buying one later next year i expect, The longer i save and the more they drop will give me a very small mortgage to pay, if any.

Rightmove will be of some help to you.

shortchanged_2

http://career-advice.monster.co.uk/salary-benefits/pay-salary-advice/uk-average-salary-graphs/article.aspx

Well these are some figures for average wages throughout the UK.

Now multiply say a single income of 3.5 and a joint income of 2.5 (historically traditional income multiplier pre boom) and see what figures you get.

There is a major shortfall there somewhere.

Graham_Devon

IveSeenTheLight wrote: »

There are some that believe there needs to be a 40% reduction in house prices in order for the single average person would then be able to afford property.

I would appreciate anyone who has an on topic point to add to this discussion.

I'm also interested in their viewpoint on the following queries.

As these "some" people is actually me, I feel it's only fair to have a look at what I ACTUALLY said, rather than your version, which has twisted it, and added the words "need to".

So, here's what was actually said. Note the bold bits.

Graham_Devon wrote: »

Hamish, a 40% reduction in prices, from today (nominal) would mean the average earner could get a 4x average income mortgage.

I'm not talking about the male full time highest average wage possible, I'm talking about what people actually earn on average.

I'm not talking two full time wages, as people cannot earn two full time wages and raise a family in general, so there is no point in going there.

I'm talking borrowing 4 x standard 1 wage income. Which is how it used to be. 40% would certainly help, but this is all based on national averages, so isn't all that useful.

I'm not saying that 40% falls will, or should happen. However, I am describing to you the neutrality point where houses become "do-able" with hard work for the average family, and also allows to save for pensions / a holiday with the kids, and a slightly, just slightly, better standard of living, which helps the country massively. It's no good suggesting people should live 8 to a house. All you are suggesting is we reduce our quality of life, to prevent house prices from falling.....thats just plain stupid.

I do wish you would stop playing the context game, and discuss whats said, instead of starting a thread with your own version of what I said, which quote clearly, you have made up.

I've already told you I won't be answering your questions on the previous thread. Why start a whole new thread requesting I answer what I have already told you I won't be answering as you keep twisting my words?

MrRee_2

Jimmy_31 wrote: »

Plenty of houses around the northwest were selling for 100k and now they are down to 60k and not selling. No BTL landlords want them anymore.

What are you waiting for ?

Simple question - can they be rented straightaway, without work, for £400 a month?

A link to a £60,000 property would be helpful - after all, that's a small amount to invest and get 7%+ yield.

MrRee_2

shortchanged wrote: »

http://career-advice.monster.co.uk/salary-benefits/pay-salary-advice/uk-average-salary-graphs/article.aspx

Well these are some figures for average wages throughout the UK.

Now multiply say a single income of 3.5 and a joint income of 2.5 (historically traditional income multiplier pre boom) and see what figures you get.

There is a major shortfall there somewhere.

The shortfall is being made up by the Bank of Mum and Dad in a lot of purchasers.

There is no way that FTB's can compete with BTL landlords unless they get help from elsewhere ... not in most cases.

ukcarper

shortchanged wrote: »

http://career-advice.monster.co.uk/salary-benefits/pay-salary-advice/uk-average-salary-graphs/article.aspx

Well these are some figures for average wages throughout the UK.

Now multiply say a single income of 3.5 and a joint income of 2.5 (historically traditional income multiplier pre boom) and see what figures you get.

There is a major shortfall there somewhere.

I’ve just done one of your sums 2.5x joint average male +average female from your link, answer £135k.

Average house £162k less 10% deposit leaves £146 so not that far out.

nearlynew

I love it when people with IO mortgages are portrayed as being "savvy" - when in reality they only have IO mortgages because that's all they can afford.

It really makes me laugh

geneer

Graham_Devon wrote: »

As these "some" people is actually me, I feel it's only fair to have a look at what I ACTUALLY said, rather than your version, which has twisted it, and added the words "need to".

So, here's what was actually said. Note the bold bits.



I do wish you would stop playing the context game, and discuss whats said, instead of starting a thread with your own version of what I said, which quote clearly, you have made up.

I've already told you I won't be answering your questions on the previous thread. Why start a whole new thread requesting I answer what I have already told you I won't be answering as you keep twisting my words?

Light is quite keen on seeing questions answered, so I'm sure he will respond shortly.