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Debate House Prices
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How many people should we prevent from buying a house?
Comments
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Seems that a 10% deposit and a decent credit file should get you a mortgage.
It should, but it doesn't.
Just 2% of mortgage approvals are for LTV of 90% or more.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »It should, but it doesn't.
Just 2% of mortgage approvals are for LTV of 90% or more.
Seem to be a few on offer (albeit with higher IRs), why are they not being taken up?0 -
HAMISH_MCTAVISH wrote: »Second page. Still no response.
How many people should be prevented from buying houses so that prices remain at current low levels?
Is it acceptable to prevent a million people from buying to prevent 17,000 repossessions?
Because lets be clear, the posters who want lending to remain restricted are actually wanting fewer people to be able to buy houses.
And by artificially limiting demand to exclude a million people that could otherwise afford to buy, changing the supply/demand balance that sets pricing.
Hamish, the reason your question has not been answered is because it is absolutely the wrong way round. The question ought to have had been "How many people should be prevented from buying houses so that prices remain at current HIGH levels?"
The point I have been making is that it would be easy to create another million houses by releasing more land for building purposes. However, that would result in lower house prices, which would put more pressure on the banks. The whole point of government policy at the moment is to restrict the number of homes so as to try to prop up house prices as much as possible.
Everybody else can see that, why cannot you?No reliance should be placed on the above! Absolutely none, do you hear?0 -
You should be careful what you wish for: In my opinion, a 50% nominal fall in house prices is only feasible during a significant economic downturn and none of us want that.
But that is what we have got and it is not going to change anytime soon."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
HAMISH_MCTAVISH wrote: »Because lets be clear, the posters who want lending to remain restricted are actually wanting fewer people to be able to buy houses.
And by artificially limiting demand to exclude a million people that could otherwise afford to buy, changing the supply/demand balance that sets pricing.
Lets be honest here Hamish. I would love to see a fully functioning housing market where people pay a fair price for a house but I don't agree with the current pyramid scheme we now currently have.
As I keep saying the market needs to correct more in line with earnings and then subsequent HPI needs to be controlled through controlled lending practices.
And as someone mentioned earlier if house prices drop you will create demand which would create the market conditions you so desire for builders to build again. Is that wrong?0 -
shortchanged wrote: »As I keep saying the market needs to correct more in line with earnings and then subsequent HPI needs to be controlled through controlled lending practices.
And as someone mentioned earlier if house prices drop you will create demand which would create the market conditions you so desire for builders to build again. Is that wrong?
Prices are down how much since peak? What's the real term drop? Data last week showed that compared to average wages house prices are the cheapest since 2003.
Just what is the ideal house price?
I don't think we need the affordability ratio to improve via falling house prices. That's going to be damaging to bank balance sheets and confidence leading to less lending and a further concentration of housing stock with the wealthy.
Wouldn't it be much more positive to wish for some wage inflation instead and slight to stagnant nominal house price increases?0 -
Prices are down how much since peak? What's the real term drop? Data last week showed that compared to average wages house prices are the cheapest since 2003.
Just what is the ideal house price?
I don't think we need the affordability ratio to improve via falling house prices. That's going to be damaging to bank balance sheets and confidence leading to less lending and a further concentration of housing stock with the wealthy.
Wouldn't it be much more positive to wish for some wage inflation instead and slight to stagnant nominal house price increases?
This doesn't really make any sense though and I would really like to know where they work out these figures. We know that house prices rose 200 - 300% in many cases over the previous decade and have dropped what, say 20% off peak.
Have household incomes increased by the same amount over the same period. I very much doubt it otherwise the average single income would be around £50,000 whereas even if you go by the mean figures of today it is only around £35,000.0 -
The whole point of government policy at the moment is to restrict the number of homes so as to try to prop up house prices as much as possible.
:rotfl:
You've got that completely the wrong way around. They've been desperately trying anything they can to hold prices down.
-Lending, still on it's ar5e. No support from government to increase lending numbers. Failure to include mortgage lending in "project merlin" for banker bonuses. etc
-Stamp duty exemption for FTB-s cancelled
-Stamp duty increases for higher priced houses.
-Mortgage assistance scheme only for newbuilds, to increase supply.
-Release of large amounts of government land to builders on a build now pay later scheme.
-Changing planning law to presumption in favour of development, and from 1000 pages to 50 pages.
etc etc etc
They couldn't do any more to hold down house prices if they tried, yet prices remain stubbornly high anyway.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Its not the buying its the ability to service the debt for the whole 25 years that is the problem.
My town has seen a fair few repossessions as this area has no jobs, exactly what happened in the last recession.0 -
shortchanged wrote: »This doesn't really make any sense though and I would really like to know where they work out these figures. We know that house prices rose 200 - 300% in many cases over the previous decade and have dropped what, say 20% off peak.
Have household incomes increased by the same amount over the same period. I very much doubt it otherwise the average single income would be around £50,000 whereas even if you go by the mean figures of today it is only around £35,000.
Here's the link to the article I read..
http://www.guardian.co.uk/money/2012/mar/31/house-prices-north-south-divideAverage price for a city home in the UK of £173,202 is 5.5 times gross annual earnings for full time employees, the lowest ratio since 2003
The Nationwide affordability graph which uses median full time male earnings vs prices shows prices falling back towards the long term average but settling a bit above it.
http://www.nationwide.co.uk/hpi/historical/Mar_2012.pdf
There's an argument to say that the long term average has been skewed by unusually cheap property in the 90's and that we've found the equilibrium point for now.
I'm surprised that the 'bears' haven't been all over these figures.0
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