House buying affordability now best since 1997

HAMISH_MCTAVISH

Just 26.1% of average income for the average house, versus a peak of 65% in 1989...

http://www.lloydsbankinggroup.com/media/excel/2012/HPI_Quarterly/AffordabilityQ32012.xls

nollag2006

Interesting article.

Thanks for posting

the_flying_pig

read another way:

house prices are still so high that, even with prices 20% down from peak & even if you choose to focus on a super-myopic 'mortgage affordability' measure [that also by the way conveniently ignores female wages & the millions of people working PT who'd prefer to be FT, in other words even if you're one of Halifax's mythical 'male, FT' earners], it was easier to service a mortgage at 6.5% base rate in early 1997 than it is to do so at 0.5% base rate in late 2012. hold on to your hats if & when rates go up.

[Deleted User]

.. Unless you live within the M25

Houses in the north are definitely affordable

chewmylegoff

This article should be titled "mortgage payments at their most affordable as % of income since 1997". Just because you could pay the mortgage doesn't mean you can afford the house, as you need someone to lend you the money first and if you haven't got a large deposit they won't lend.

the_flying_pig

chewmylegoff wrote: »

This article should be titled "mortgage payments at their most affordable as % of income since 1997"...

what "article"?

i think you'll find that this thread title is all the work of a certain scotch estate agent, regularly of these forums. he just references a spreadsheet, although as his wont uses pseudo-journo language to imply that he's referencing something published rather than his own drivel. i doubt that even Halifax would publicly come out with something so blatant.

incidentally the methodology is a bit dubious since it assumes 70% LTV and that the other 30% magically comes out of nowhere. this assumption clearly understates the extent to which high prices, as opposed to high rates, represent a hurdle to buying.

custardy

ringo_24601 wrote: »

.. Unless you live within the M25

Houses in the north are definitely affordable

last I looked,Edinburgh was in the top 10 for most expensive cities in the UK

Zekko

custardy wrote: »

last I looked,Edinburgh was in the top 10 for most expensive cities in the UK

The ten most expensive cities based on price per square metre:
1. Westminster, London, £7,586
2. St Albans, South East, £3,227
3. Oxford, South East, £2,821
4. Winchester, South East, £2,813
5. Chichester, South East, £2,638
6. Cambridge, East Anglia, £2,634
7. Brighton, South East, £2,549
8. Bath, South West, £2,376
9. Edinburgh, Scotland, £2,125
10. Salisbury, South West, £2,060

The least expensive cities based on price per square metre:
1. Londonderry, Northern Ireland, £817
2. Lisburn, Northern Ireland, £945
3. Hull, Yorkshire and Humberside, £1,027
4. Bradford, Yorkshire and Humberside, £1,042
5. Swansea, Wales, £1,063
6. Belfast, Northern Ireland, £1,064
7. Durham, North, £1,104
8. Stoke On Trent, West Midlands, £1,126
9. Sunderland, North, £1,129
10. Newport, South Wales, £1,134

http://www.telegraph.co.uk/property/propertynews/9606367/Most-expensive-and-cheapest-floor-space-in-houses-revealed.html

[Deleted User]

custardy wrote: »

last I looked,Edinburgh was in the top 10 for most expensive cities in the UK

Nice place it is too

I live in St Albans... We also get screwed as commuters here

grizzly1911

ringo_24601 wrote: »

Nice place it is too

I live in St Albans... We also get screwed as commuters here

You've got the one of best chances of FT well paid job too.

IveSeenTheLight

the_flying_pig wrote: »

read another way:

house prices are still so high that, even with prices 20% down from peak & even if you choose to focus on a super-myopic 'mortgage affordability' measure [that also by the way conveniently ignores female wages & the millions of people working PT who'd prefer to be FT, in other words even if you're one of Halifax's mythical 'male, FT' earners], it was easier to service a mortgage at 6.5% base rate in early 1997 than it is to do so at 0.5% base rate in late 2012. hold on to your hats if & when rates go up.

There is no reading it another way.
It's the same measure used throughout the housing cycle.

Your attempt to pick a point at the bottom of the previous cycle and consider that as the house price normality is quite desperate really.

You would have had a better argument if you had simply stated that the reason they were so affordable was because of historically low base rate feeding into lower mortgage rates

the_flying_pig wrote: »

hold on to your hats if & when rates go up.

"If and when"
I think there is no doubt they will at some point rise, however the longer it ramins low, the longer people have the opportunity to reduce their mortgages and the greater chance they will have increased their income over the years.

When rates rise, it's unlikely to be that blustery that you need to hold on to your hat