U.K. Home Prices Decline as Outlook Worsens, Hometrack Says

HAMISH_MCTAVISH

shortchanged wrote: »

We should stick to the pre boom lending criteria.

I agree. Pre-boom lending criteria would be great.

I was offered a 95% mortgage in 1990, my parents were offered one in 1967, and 100% mortgages were available at least as far back as 1982.

Historically normal, prudent, sensible lending criteria would be a massive improvement on the absurd and abnormal mortgage rationing of today.

In fact, it would lead to lending doubling, if not tripling, were normal, pre-boom lending standards applied now.

So by all means, bring it on.

Great idea.

mrsp80

MrRee wrote: »

Renting is for mugs and those who dream of, but cannot achieve, a home of their own.

I have rented when very hard-up .... I disliked buying someone else's property for them.

I have owned many house since those dark rental days ... I now sit in a large house with zero payments to be made on mortgage or rental.

Those who continued to rent when I bought 30 years ago are paying £2000+ to live in a property I do - and, will pay that (increased each year) for the rest of their days ...... I am effectively saving £2000 a month! WhooooHooooooo!!!!!

Buying will always be the wise option - and house prices will always be higher over an 10 year period.

It is as certain as the sun rising in the East.

I agree. The people who have made the most money out of property over the years are those who invested when the market was low or flat, were able to keep hold of those properties, then saw them boom again when the markets improved.

I only wish I'd been in a position to buy property in the late '90s, just before the boom. I knew someone who bought a flat for about £40K then sold it 5 years later for £110K.

As long as you can pay your mortgage, in fairness it is probably cheaper than renting... win-win.

nollag2006

mrsp80 wrote: »

...in fairness it is probably cheaper than renting... win-win.

It is definitely cheaper to buy than to rent in 4 out of 5 UK cities:
http://money.uk.msn.com/news/money-news/articles.aspx?cp-documentid=158230800


Win - win, unless you are happy to pay rapidly rising rents

nollag2006

doire wrote: »

Not all renters hate it. And not all renters rent because they have no choice.

But plenty, if not nearly all do hate the insecurity of renting

And the main factor inhibiting renters' choice in buying a property is not some fallacious belief that house prices will drop any time soon. It is pure and simply - lack of available mortgage credit.

Once the purse strings loosen, there is 5 years worth of pent up demand that will cause house prices to surge.

Mallotum_X

RenovationMan wrote: »

Just to add, the reason that the person with a net gain of £156,000 would view a 20% correction as a soft landing is because he has not 'lost' anything. His house may have been worth more as one point in time when he wasn't looking to sell it than at another point in time when he wasn't looking to sell it but he won't care because he's not looking to sell it. The £54k wasn't really there to 'lose'.

I agree that they havent lost anything, but many people would have been well aware of their peak value.

If Mrs Smith across the road sold at X, then in the homeowners house theirs is worth at least that, as theirs will be better in some way than Mrs Smith's house (have you seen her dreadful wallpaper).

So whilst common sense would say your view is correct I think human emotion will come in and many will see that drop in value as a 'crash' rather than soft landing.

shortchanged_2

HAMISH_MCTAVISH wrote: »

Well seeing as how property isn't overpriced today, that shouldn't be a problem then.:D

In your opinion Hamish.

shortchanged_2

HAMISH_MCTAVISH wrote: »

Historically normal, prudent, sensible lending criteria would be a massive improvement on the absurd and abnormal mortgage rationing of today.

You won't find me arguing with this Hamish.

The problem still exists though that if you had this lending criteria with 3.5 times single and 2.5 times joint income mortgages and no more, people would still struggle to afford houses at current prices.

You and I well know that the 125% mortgages and liar loans pushed house prices to unsustainable levels and they are still not dropping enough to be affordable at historical lending criteria.

ukcarper

shortchanged wrote: »

You won't find me arguing with this Hamish.

The problem still exists though that if you had this lending criteria with 3.5 times single and 2.5 times joint income mortgages and no more, people would still struggle to afford houses at current prices.

You and I well know that the 125% mortgages and liar loans pushed house prices to unsustainable levels and they are still not dropping enough to be affordable at historical lending criteria.

The average terraced house according to Land Reg is £122k. Median full time male wage is £28k and for a female it is £22k making a total of £50k 2.5x is £125k.

Mallotum_X

Median full time male wage is £28k

Are you sure? I thought the mean average was less than that, 28k as a median sounds very high.

ukcarper

Mallotum_X wrote: »

Are you sure? I thought the mean average was less than that, 28k as a median sounds very high.

The median full time male wage in 2010 was £28,091 and the mean was £35,814 according to ONS