Who'd vote for lower house prices? Not many...

Thrugelmir

IveSeenTheLight wrote: »

Should house prices continue to rise (and they are likely long term)and price out more of the population, they'd be in a better position than if I hadn't hedged property for them.

If prices hedge out even more of the population from buying. Who will be the buying in the market?

chucknorris

the_flying_pig wrote: »

i know that you appreciate there are some subtleties beyond this but, goodness me, we're talking about inflation.

imagine that i had £30 in my pocket at the beginning of a Saturday night & was determined to spend it on ten pints of wifebeater, each priced at £3.

if someone offered me another £30 to spend, but at the same time told me that the price of lager had doubled to £6 a pint, meaning that i'd need to spend all of my £60 in order to get a proper skinful, what kind of a short-sighted idiot would i be if in response to this i threw my hands in the air in celebration, shouting, 'woohoo, i've doubled my money :beer: :beer:'???

the people here who the [house price] inflation benefits are the people who have stopped buying. now, i know that's a fair old slice of the population in the case of housing, but it's obviously not everyone or even necessarily most people.

We were NOT taking about inflation we are talking about 'net worth', net worth can be high for other reasons than inflation. For example I bought the house we live in for cash, my wife also owns 3 houses outright (forgetting about our other investments for now) our 'net worth' being high has very little to do with inflation.

the_flying_pig

chucknorris wrote: »

We were NOT taking about inflation we are talking about 'net worth', net worth can be high for other reasons than inflation. For example I bought the house we live in for cash, my wife also owns 3 houses outright (forgetting about our other investments for now) our 'net worth' being high has very little to do with inflation.

of course we're talking about inflation. HPI never brings about an increase in a single person's net worth whilst the price of everything else stays constant [in the way that for example, finding a vein of diamonds in your back garden would]. it's an increase in your net worth that only comes about alongside, and at the cost of, an increase in the price of lots of other stuff [namely houses]. if you're not going to ever be interested in buying another house [or if you're a landlord, of course] then, fine, you're quids in. otherwise...

chucknorris

the_flying_pig wrote: »

of course we're talking about inflation. HPI never brings about an increase in a single person's net worth whilst the price of everything else stays constant [in the way that for example, finding a vein of diamonds in your back garden would]. it's an increase in your net worth that only comes about alongside, and at the cost of, an increase in the price of lots of other stuff [namely houses]. if you're not going to ever be interested in buying another house [or if you're a landlord, of course] then, fine, you're quids in. otherwise...

Read the historical posts we (on my posts on this thread) were not talking about AN INCREASE in net worth we were simply talking about net worth, NOT how it occured. Fair enough if it arrived by inflation, but in my quoted example our net worth was high because we put the cash in, nothing to do with inflation!

You seem to think wealth can only come from HPI this is simply not the case! People can invest wealth earned elsewhere in property. Some people on this forum board seem to be obsessed with HPI and don't realise that there are many other ways that wealth can be accumulated and then subsequently invested in housing.

IveSeenTheLight

Thrugelmir wrote: »

If prices hedge out even more of the population from buying. Who will be the buying in the market?

Those with the foresight to secure property for their family

The market for rental would continue to expand, so investors in the rental market.

Maybe not the socialist ideal as likely this further reduces the home ownership percentages.

There will always be movers, but maybe the owners need to raealise that owning a property needs to be a longer term consideration than the perception.

IveSeenTheLight

Emy1501 wrote: »

Most people can just afford 1 house let alone 3.

My kids will lucky as their grandparents own a number of houses so they probably be ok but their or your kids situation is unlikely to be the norm.

Of course, not everyone will be in a position to secure the future for their family and many quite simply are unfortunate that they will never be in a position to be homeowners.

Home ownership is not a right, it has to be earned.

It appears that the future is bright for my kids and yours.
I can tell you, for many others I know as well.

I don't want to be stereotypical, but it is laughable when you see reports of people struggling with the likes of energy price increases, feeding their kids waffles and fish fingers whilst their children are playing their X-Box or Playstation on a wall mounted 40+ inch flat screen.

Some people need to look to the generations of the past, how they survived and saved.
Even as simple as good home cooking with a week meal plan that includes using leftovers or re-using for lunch the next day.
We have a canteen at work and I'm amazed how much is spent each day by some (maybe as much as £10 a day) on lunch / coffee's
A little planning and organisation could save those people loads.

I didn't get in the position I am by having things handed to me, my wife and I sacrificed quite a bit whilst others around spent their earnings willy / nilly.

Maybe the country could do with setting up MSE centres around the country and get people to look hard into their income, expenditure and maximising where they could adjust and benefit from a lifestyle / planning change.

Emy1501 wrote: »

The reality if housing cost continue to outstrip inflation then our growth problems will not go away and we will soon be left behind.

Lloyds show a spreadsheet which calculates affordability
http://www.lloydsbankinggroup.com/media/excel/2012/HPI_Quarterly/AffordabilityQ32012.xls

Currently in the UK, the : -

House Price to Earnings Ration is 4.04 as opposed to the 30 year average of 4.07

Mortgage repayments as a percentage of income is 26.1% as opposed to the 30 year average of 36.3%.
The 30 year historical low is 23.6% so we are only 2.5% away from from being the lowest in that period.

Both the price to earnings and the repayments as a percentage of earnings are below the last 30 year average.

ILW

IveSeenTheLight wrote: »

Of course, not everyone will be in a position to secure the future for their family and many quite simply are unfortunate that they will never be in a position to be homeowners.

Home ownership is not a right, it has to be earned.

It appears that the future is bright for my kids and yours.
I can tell you, for many others I know as well.

I don't want to be stereotypical, but it is laughable when you see reports of people struggling with the likes of energy price increases, feeding their kids waffles and fish fingers whilst their children are playing their X-Box or Playstation on a wall mounted 40+ inch flat screen.

Some people need to look to the generations of the past, how they survived and saved.
Even as simple as good home cooking with a week meal plan that includes using leftovers or re-using for lunch the next day.
We have a canteen at work and I'm amazed how much is spent each day by some (maybe as much as £10 a day) on lunch / coffee's
A little planning and organisation could save those people loads.

I didn't get in the position I am by having things handed to me, my wife and I sacrificed quite a bit whilst others around spent their earnings willy / nilly.

Maybe the country could do with setting up MSE centres around the country and get people to look hard into their income, expenditure and maximising where they could adjust and benefit from a lifestyle / planning change.



Lloyds show a spreadsheet which calculates affordability
http://www.lloydsbankinggroup.com/media/excel/2012/HPI_Quarterly/AffordabilityQ32012.xls

Currently in the UK, the : -

House Price to Earnings Ration is 4.04 as opposed to the 30 year average of 4.07

Mortgage repayments as a percentage of income is 26.1% as opposed to the 30 year average of 36.3%.
The 30 year historical low is 23.6% so we are only 2.5% away from from being the lowest in that period.

Both the price to earnings and the repayments as a percentage of earnings are below the last 30 year average.

That would make average salary over £40k. Is that correct?

Graham_Devon

ILW wrote: »

That would make average salary over £40k. Is that correct?

Pretty much.

Makes the average salary in London £78k too.

£37.5k in the south west apparently, yet other ONS figures put it down as £17k, generally because it takes all jobs into account.

ukcarper

ILW wrote: »

That would make average salary over £40k. Is that correct?

The latest release shows ratio as 4.25 not 4.04 the average price is £159.5k which is roughly 4.25x mean male full time salary the figure historically used.
.

ILW

Graham_Devon wrote: »

Pretty much.

Makes the average salary in London £78k too.

£37.5k in the south west apparently, yet other ONS figures put it down as £17k, generally because it takes all jobs into account.

ONS seem to be quoting £501 per week average full time salary.