Home ownership back to 1988 levels.....

Derivative

The problem is basically an error in taking two averages which cannot be compared like for like.

The national average starter house for the national average wage is not a good measure to use, for a simple reason:

Average wages across regions vary by a factor of about 1.5, whereas average starter home prices vary by a factor of about 3 across regions, pushing up the national average more.

Graham_Devon

Derivative wrote: »

The problem is basically an error in taking two averages which cannot be compared like for like.

The national average starter house for the national average wage is not a good measure to use, for a simple reason:

Average wages across regions vary by a factor of about 1.5, whereas average starter home prices vary by a factor of about 3 across regions, pushing up the national average more.

All very true. But its far easier to take the national average for basic discussion. Same goes for every discussion from whatever point of view.

HAMISH_MCTAVISH

Graham_Devon wrote: »

I'm now struggling to see what your argument actually is.

No, you're struggling to twist it into something you can argue with.

You yourself couldn't do it without you parents, but seem to talk down to everyone else and suggest others had to do it the hard way.

Pointless distraction, that if anything proves "average houses" weren't any more affordable to young people 22 years ago. We could have afforded a starter flat just fine on our own. But not a proper house without adding some wedding gift money to our saved deposit.

My question to you was about more lending. I'm asking how that is achieveable.

You have stated more people need to be leant money. Which is what I questioned you on.

Eh?

Yes, mortgage lending should be available to more people. Not just those with a huge deposit, but people with normal deposits too.

But now, you have turned your argument around to suggest only certain people will be able to afford the properties. These people are already getting the lending.

No they aren't.

IN most of the country, if you can afford rent you can afford a mortgage payment.

It's not affordability stopping people from buying, it's mortgage rationing.

So who are you suggesting extra lending should be give to? The people who, in your own words, can't afford it?

No, the people who can afford it. But the banks refuse to lend to as they don't have enough money to lend.

Graham_Devon

HAMISH_MCTAVISH wrote: »

No, the people who can afford it. But the banks refuse to lend to as they don't have enough money to lend.

And you have just defined those who can afford it. It's why I posed my question the way I did, it was a leading question. I'm not twisting, I just posed a question to you leading to the answer I wanted. It's why I asked you again, just to make sure before I carried on my (planned) argument.

And I can tell you, those people are being leant money. You know they are, I know they are.

So what are you actually saying? Jack up the lending and lend more to people on lower salaries? If so, were back to my point about the mortgage payment eating up close to the entire income.

You can't lend more to people on a lower income without having the affordability problem.

You are clearly living in cloud cukoo land if you don't believe the price has anything to do with affordability. If the price had little to do with it, you yourself wouldn't have had to take a hand out.

Those who can afford it, your 35k income FTB, ARE being lent the money. You've made a point of this yourself in the past showing increased lending.

Secondly, you have been slamming mortgage "rationing" and now you go on to say they don't have enough money to lend. To satisfy you, how should they go about lending their money?

HAMISH_MCTAVISH

Graham_Devon wrote: »

And I can tell you, those people are being leant money. You know they are, I know they are. .

No they aren't.

The banks are rationing funds to match the limited pool of funding.

They do this through having deposit requirements at a level which excludes the majority of potential FTB's that could otherwise afford the mortgage payments just fine.

A 25% deposit for the average 130K starter house is £32,500.

If a person on 35K saves 15% of their after tax income, it would take them close to a decade to save that deposit.

Versus just a couple of years or so for a normal deposit.

Graham_Devon

HAMISH_MCTAVISH wrote: »

If a person on 35K saves 15% of their after tax income, it would take them close to a decade to save that deposit.

Versus just a couple of years or so for a normal deposit.

But house prices are not an issue?

And you know full well there are lower deposits available out there. You have trumpeted them youself, so stop being so darn disingenuous to make your arguments.

System

Back to 1988 levels... perhaps 1988 and earlier was normal, I think everyone will agree that the easiest time to make yourself a homeowner has passed, the figures prove it.

All we need is a rental system like germany etc now.

ukcarper

It is possible to buy a 2-bed house in Hampshire for about £130k or a 1 bed flat for £100k.

The average wage in Hampshire is slightly above national average.

£95k at 4% over 25 years is £506 a month £123.5k is £658 at 6% the figures are £619 and £805. Some one on £24k will take home £1554 the median part time wage is £8.5k giving another £678.

It would cost above 4% and below 6% figures to rent

Draw your own conclusions

Graham_Devon

ukcarper wrote: »

It is possible to buy a 2-bed house in Hampshire for about £130k or a 1 bed flat for £100k.

The average wage in Hampshire is slightly above national average.

£95k at 4% over 25 years is £506 a month £123.5k is £658 at 6% the figures are £619 and £805. Some one on £24k will take home £1554 the median part time wage is £8.5k giving another £678.

It would cost above 4% and below 6% figures to rent

Draw your own conclusions

I'm really bored of this renting argument.

It's probably cheaper for people to drive to work than it is to commute on public transport in many cases.

But if you don't drive or can't afford the car and associate costs of that car in the first place, then you have one choice....use the services available to you.

Indeed, it's probably cheaper for me to use public transport to get to work. But that transport doesn't exist. Therefore theres no point in anyone suggesting I should ditch the car to save money. Might be saving money, but there is no other option open.

Same with renting. People keep assuming people have a black or white choice of "rent or buy" with no financial or other lifestyle issues to take into account.

The people who have that choice will be few and far between.

ukcarper

Graham_Devon wrote: »

I'm really bored of this renting argument.

It's probably cheaper for people to drive to work than it is to commute on public transport in many cases.

But if you don't drive or can't afford the car and associate costs of that car in the first place, then you have one choice....use the services available to you.

Indeed, it's probably cheaper for me to use public transport to get to work. But that transport doesn't exist. Therefore theres no point in anyone suggesting I should ditch the car to save money. Might be saving money, but there is no other option open.

Same with renting. People keep assuming people have a black or white choice of "rent or buy" with no financial or other lifestyle issues to take into account.

The people who have that choice will be few and far between.

I’m not against renting and as you say a lot of people are renting because they have no other option but in most parts of the country the thing that is stopping people buying is the size of the deposit required.

As my figure show if someone living in Hampshire could get a Mortgage they would be able to afford the repayments as they are probably paying the same if not more in rent.

I would not advocate high loan to salary mortgages but the one is my example are 4x for single person in flat or 3.8 joint for couple. Bear in mind that the average used for main person is all and the average for full time will be higher.