Homes for FTB's at most affordable in 10 years

IveSeenTheLight

wotsthat wrote: »

How do we know if houses are cheap or expensive if they aren't measured in a way that puts the price into context.

Indeed, affordability should be a must in any consideration in affording property.

P.S. Wgaes are still inflating albeit maybe not as fast as other costs of living.

undetterred

Wookster wrote: »

Great, houses are affordable in the North, where there are no jobs and much fewer people but they are still relatively unaffordable in the South East where there are more jobs and more people.

Doesn't seem like a lot of progress for me.

Trouble is we dont want your type up north.

HAMISH_MCTAVISH

Fella wrote: »

It's disingenous in the extreme to use "affordability" as a measure of house prices when we have 0.5% IRs & no wage inflation.

No, what's disingenious in the extreme is to use 0.5% base rates and mortgage rates interchangeably.

Base rates may be at 0.5%, but the average FTB is still paying between 4% and 6% for their mortgages.

Just like they were 10 years ago.

And no doubt just like they will be 10 years from now.

At 0.5% base rate many things are affordable. If IRs shoot up they resoundingly won't be. And there's no wage inflation in sight to make repayments more affordable.

Utter nonsense.

People aren't paying 0.5% rates now. And the only way that base rates will "shoot up" is if the economy recovers quite dramatically. Which won't happen until lending recovers quite dramatically. And for lending to recover, there once again has to be competition in the market between lenders. So bank margins would fall, even as base rates rose.

Meaning FTB-s will end up paying pretty much the same as they are now.

You know as well as I do that if IRs shot up the various VIs would instantly drop "affordability" as a measure of house prices, you'd never hear the word again.

They've been running the affordability series since the late 80's, when rates hit 17%. They're sure as hell not going to stop just because rates slowly go back to normal over the next decade as the economy recovers.

Fella

HAMISH_MCTAVISH wrote: »

Base rates may be at 0.5%, but the average FTB is still paying between 4% and 6% for their mortgages.

Just like they were 10 years ago.

And no doubt just like they will be 10 years from now.



Utter nonsense.

People aren't paying 0.5% rates now.

Not sure where you're getting your figures from. There are plenty of people on ultra-low rates at the moment, I knew a fair few of them personally. Your post suggests that people pay 4%-6% year in year out regardless of the base rate which is utter tosh. If the base rate rose to 4% you won't find anyone on a 4% deal or anything like it.

Obviously there is a spread of different people on different deals during any period but the fact is 0.5% base rates mean servicing a mortgage is currently as "affordable" as it's ever going to be.

IveSeenTheLight

Fella wrote: »

Obviously there is a spread of different people on different deals during any period but the fact is 0.5% base rates mean servicing a mortgage is currently as "affordable" as it's ever going to be.

This statement makes a compelling argument that it's better to be paying down a mortgage now as opposed to when rates rise.

Many economists are now predicting post 2016 for rate rises.

So if your holding off, your gambling that thereis sufficient house price falls to counter the current rate levels over the potential timeframe before you buy.

Fella

IveSeenTheLight wrote: »

This statement makes a compelling argument that it's better to be paying down a mortgage now as opposed to when rates rise.

I'm firmly in the school that believes the best time to pay down a mortgage is always "now".

IveSeenTheLight wrote: »

Many economists are now predicting post 2016 for rate rises.

None of us know where rates will be in 2016. However surely ALL of us know not to pay the slightest bit of attention to economic forecasters? A 5-y-old is as likely to get it correct.

IveSeenTheLight wrote: »

So if your holding off, your gambling that thereis sufficient house price falls to counter the current rate levels over the potential timeframe before you buy.

I bought my house in 1997 & paid it off 4 years later.

IveSeenTheLight

None of us know where rates will be in 2016. However surely ALL of us know not to pay the slightest bit of attention to economic forecasters? A 5-y-old is as likely to get it correct.

I bought my house in 1997 & paid it off 4 years later.

True, predictions can tend to be incorrect in timing.
I therefore refer back to the current time for having a mortgage is like making hay while the sun shines.

P.S. Paid you house off in 4 years after buying at the trough.

You either had some damn good wages / rises or managed to buy when property was significantly undervalued

Wookster

undetterred wrote: »

Trouble is we dont want your type up north.

You've just been granted a one way ticket to my ignore list.

robmatic

Fella wrote: »

Not sure where you're getting your figures from. There are plenty of people on ultra-low rates at the moment, I knew a fair few of them personally. Your post suggests that people pay 4%-6% year in year out regardless of the base rate which is utter tosh. If the base rate rose to 4% you won't find anyone on a 4% deal or anything like it.

Obviously there is a spread of different people on different deals during any period but the fact is 0.5% base rates mean servicing a mortgage is currently as "affordable" as it's ever going to be.

This entire thread is about affordability for first time buyers.

Please provide some evidence for your assertion that 0.5% base rates mean that FTBers are paying ultra low rates - much lower than they were, say, ten years ago.

Fella

robmatic wrote: »

This entire thread is about affordability for first time buyers.

No it's not.

The content of the OP related to FTBers. My posts have been all about the use of Affordability as a self-serving term trotted out by VIs.

It appears you don't get to decide what's discussed on a given thread.