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Debate House Prices
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Comments
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RenovationMan wrote: »Heaven forbid. How far would London house prices have to fall in order for the 3.5x salary to work there?
Why are there many people there with more than 3.5 times income mortgages? Heaven forbid.
I thought according to some on here this never really happened.0 -
shortchanged wrote: »Why are there many people there with more than 3.5 times income mortgages? Heaven forbid.
I thought according to some on here this never really happened.
Most people are like you and dervprof (and myself) have bought pre-boom and are now sitting on hefty HPI. We can have 3.5x salary mortgages and still live in nice homes. FTBers can't though, unless they save up hefty deposits.
Are you advocating that FTBers should save hefty deposits?0 -
RenovationMan wrote: »Most people are like you and dervprof (and myself) have bought pre-boom and are now sitting on hefty HPI. We can have 3.5x salary mortgages and still live in nice homes. FTBers can't though, unless they save up hefty deposits.
Are you advocating that FTBers should save hefty deposits?
No, I'm advocating a reduction in house prices to be able to let FTB'ers to have the same opportunites as we had.0 -
RenovationMan wrote: »Most people are like you and dervprof (and myself) have bought pre-boom and are now sitting on hefty HPI. We can have 3.5x salary mortgages and still live in nice homes. FTBers can't though, unless they save up hefty deposits.
Are you advocating that FTBers should save hefty deposits?
We HAD 3.5x mortgages, and are now sitting on hefty HPI. We will have to give up some of that hefty HPI in order to allow FTBers at least a chance.
If there aren't enough properties for FTBers, I only see big problems in offering FTBers ever higher salary multiples so they can "get on the ladder".30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
shortchanged wrote: »No, I'm advocating a reduction in house prices to be able to let FTB'ers to have the same opportunites as we had.We HAD 3.5x mortgages, and are now sitting on hefty HPI. We will have to give up some of that hefty HPI in order to allow FTBers at least a chance.
This has always been my point about the 'Householder Bears' on here. They all bought before the boom and so are quite happy to be generous with some of that not-earned HPI money.
What about people who came after you guys? The FTBers from, say, 2002 onwards? Don't you care about them? What do they deserve?0 -
shortchanged wrote: »RenoMan I stated a long time ago my position on this and I'm sure it was to you.
For me there has to be a cap somewhere and for me the lower the better, purely because I feel it will help control house prices and protect it from further boom and bust cycles.
So say the set limit for a single earner is 3.5 times income, this should be the top level for a clean credit record etc. If someone has lots of debts etc then they get lent less, say 3 times or 2.5.
You find this hard to understand now because I agree at the present time with house prices as they are nobody would be able to afford a house with these income multipliers, so therein lies the problem.
The "problem" you have is that you don't want to accept that there is a free market.
The whole salary multiple argument is somewhat ridiculous because if you don't earn enough where you live you either move further out (and pay transport costs) or you rent. Ultimately there will always be winners (who buy) and looser's (who rent). For many people they simply can't afford to buy because they just don't earn enough. Affordability on the other hand rewards the frugal rather than the payslip "wealthy".
House prices in many areas will never fall to to 3.5x salary multiples and even if there was sufficient wage inflation to catch up then it will likely lead to house price increases as a result.
Then again where I live the average 3 bed house is 14x the average local wage and prices here are now back up to 2007 levels (they had been steadily increasing since initial crash).0 -
RenovationMan wrote: »This has always been my point about the 'Householder Bears' on here. They all bought before the boom and so are quite happy to be generous with some of that not-earned HPI money.
What about people who came after you guys? The FTBers from, say, 2002 onwards? Don't you care about them? What do they deserve?
It's interesting that after I have had a barrage of posts from both shortchanged and dervprof all night, that when I ask this question (again) they vanish. Funny that.0 -
RenovationMan wrote: »It's interesting that after I have had a barrage of posts from both shortchanged and dervprof all night, that when I ask this question (again) they vanish. Funny that.
Nothing funny in that, I went to call my sister on her birthday.
My response will follow shortly........30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
RenovationMan wrote: »This has always been my point about the 'Householder Bears' on here. They all bought before the boom and so are quite happy to be generous with some of that not-earned HPI money.
What about people who came after you guys? The FTBers from, say, 2002 onwards? Don't you care about them? What do they deserve?
For those of us who bought before the boom to not encourage the banks to lend ever larger amounts, so that our "not-earned HPI money" be maintained (see Hamish, Sibley & Co.).30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
it's 3 years now isnt it? newbies to the financial scene can be forgiven now for thinking this rate is normal, as it has become so. Problem is many people now base their lives on this rate being the 'norm' as it has been all their short working life, and it makes any rises in the future very disruptive to many people, especially those with large mortgages who are not fixed.
Although in practice no-one getting a new mortgage now is paying 1 or 2%/ They're probably paying at least 5%. which isn't much off what they would have paid when the BR was 4%-5% but banks margins were less.
The only people really benefitting from the near-zero base rate are those who already had a tracker loan pre-financial crisis.
We've got several BTL loans off Woolwich and Skipton at BR + 1,1.2, or LIBOR +1.2,1.5 etc for the life of the loan, that mean we are doing very well off the stupidly low base rate.
But I don' think new borrowers are paying rates like that at all. Lenders are effectively charging all new borrowers much more "realistic" rates, whatever the base rate is at.0
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