Homes for FTB's at most affordable in 10 years

ukcarper

Graham_Devon wrote: »

I'm not being obtuse, you simply cannot look at one area of the country (it being the lowest) to explain an overall average.

I would fully agree with you that the salary used will be the highest average they can use.

At the end of the day though, the statistics can say whatever they like. Clearly the real world completely disagrees, and thats all there is to it really.

You don’t get it then where I am average terrace is £164k divided by 4 = £41k median full time male £30k therefore not affordable according to report. Median full time male Lancashire £26k terrace £62k affordable. Ratio of affordable to not affordable same as 2002.

Graham_Devon

Apologies UKcarper, my bad, was indeed misreading.

IveSeenTheLight

chewmylegoff wrote: »

yes, so statistically, mortgage payments are at their most affordable for ages, but in order to qualify to a mortgage you need a big deposit.

simply looking at the cost of repayng a mortgage and declaring that to be an indicator of affordability, whilst completely ignoring that, in deposit terms, mortgages are at their least affordable for ages, is a bit silly in my view. you can argue that the deposit requirements amount to "mortgage rationing" if you want, but that doesn't change the fact that deposit requirements are the limiting factor in the affordability stakes and are completely ignored for the purposes of the title of this thread.

I've answered this twice before now.

IveSeenTheLight wrote: »

Do you want to not compare like for like?


I've seen there are two takes on affordability

1. Property Affordability
2. Mortgage affordability

1) Now I would agree that the indicators are that property is becoming less affordable. Simply looking at the how ownership percentages show that this is decreasing, largely due to deposit requirements and credit availability.


2) With regards to mortgage affordability, it's undeniable that using the same statistic of measurement, property is at one of the lowest points in the last 30+ years. Potentially, there will never be a better time to have a mortgage. There are very good historical long term fixes for those cautious of rate rises. Lets not even consider that the demographic of mortgage payers has moved more towards dual income households whilst the measure still utilises one wage ( average earnings for Male Full Time employees).

Can we agree on the following: -

Property is becoming less affordable to the masses, but for those that can get the deposit and credit it's one of the most affordable times

In terms of the OP, the article is clearly talking about Mortgage Affordability

IveSeenTheLight

Graham_Devon wrote: »

you simply cannot look at one area of the country (it being the lowest) to explain an overall average.

When I was a FTBer, I looked at the property priced in the area and adjusted my scope to suit properties that were affordable on my salary.

Graham_Devon wrote: »

At the end of the day though, the statistics can say whatever they like. Clearly the real world completely disagrees, and thats all there is to it really.

In the real world, there are still FTBers,presumably who can afford the mortgages. Therefore it cannot "completely disagree" with the statistic

Graham_Devon

IveSeenTheLight wrote: »

In the real world, there are still FTBers,presumably who can afford the mortgages. Therefore it cannot "completely disagree" with the statistic

Yes, and as already stated. Bentleys are affordable to people who have bought Bentleys. Therefore Bentleys are affordable.

Great.

chewmylegoff

IveSeenTheLight wrote: »

I've answered this twice before now.



In terms of the OP, the article is clearly talking about Mortgage Affordability

trouble is that this is semantics.

if you can't afford the mortgage that you need to buy the property (i.e. you don't have a big enough deposit), you can't afford the property, can you?

there's no point saying that houses are really affordable if no-one can afford to borrow the money that they need to buy them, as if that's the case, then the houses are not affordable at all, are they?

ukcarper

That's correct it's the deposit that is the main problem not the house price.

Perhaps the main problem with 100% mortgages was they encouraged people not to save for a deposit. When I first bought I new I would need a deposit and started to save in plenty of time. Now people find themselves without any savings and in a position where saving is more difficult.

Graham_Devon

ukcarper wrote: »

That's correct it's the deposit that is the main problem not the house price.

Perhaps the main problem with 100% mortgages was they encouraged people not to save for a deposit. When I first bought I new I would need a deposit and started to save in plenty of time. Now people find themselves without any savings and in a position where saving is more difficult.

The deposit is merely a percentage of the house prices. So it has everything to do with the house price.

Higher the house price, higher the deposit. You can't single out one part of that, they are interlinked.

robmatic

Graham_Devon wrote: »

The deposit is merely a percentage of the house prices. So it has everything to do with the house price.

Higher the house price, higher the deposit. You can't single out one part of that, they are interlinked.

A 20% deposit requires a hell of a lot more committed saving than a 0% deposit, regardless of the house price.

ukcarper

Graham_Devon wrote: »

The deposit is merely a percentage of the house prices. So it has everything to do with the house price.

Higher the house price, higher the deposit. You can't single out one part of that, they are interlinked.

True but let's assum the average prices dropped from £160k to £150k a 10% deposit would fall from £16k to £15k not that much different.