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Debate House Prices
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House prices to fall 5% in 2013
Comments
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Increased prices implies FTB's will be paying more for housing.
No, they'll be paying less for housing over their lifetime if they're able to buy sooner and avoid years in rented.
And that holds true even with rising prices, for the most part.“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: »No, they'll be paying less for housing over their lifetime if they're able to buy sooner and avoid years in rented.
And that holds true even with rising prices, for the most part.
Doesn't higher prices mean higher deposits which seems to be what you don't want ?
You can't have higher prices and lower deposits.0 -
HAMISH_MCTAVISH wrote: »Of course they'd only need to save a quarter of that amount if historically normal, prudent, and sensible 5% deposit mortgages were readily available to FTB-s again.
I agree that would be prudent and sensible. As long as it was on a historically normal repayment mortgage of a maximum of 3.5x earnings.
Small or non-existent deposits & mortgages based on 6x made-up earnings turned out to be not such a good idea after all.0 -
Doesn't higher prices mean higher deposits which seems to be what you don't want ?
You can't have higher prices and lower deposits.
Sure you can.
A 25% deposit of 100,000 is £25,000
A 5% deposit of 150,000 is £7500
Get lending moving at historically normal, prudent and sensible deposit levels of 5%, and more people will be able to buy, much earlier, even if prices rise.
And the fact they avoid a decade in rented will mean it's still cheaper for them, even if prices rise.“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 -
I agree that would be prudent and sensible. As long as it was on a historically normal repayment mortgage of a maximum of 3.5x earnings.
The average earnings multiple for FTB mortgages never exceeded 3.5 times income even at peak.Small or non-existent deposits
The average FTB deposit in 2007 was 10%.mortgages based on 6x made-up earnings
And when self cert was removed, the income multiple actually fell, instead of rising like you'd expect. So it was obviously not such a big issue after all.“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 -
We should have a random pet to decide what way house prices will go.....like when that lobster was picking winners at the last Euro football championships.''He who takes no offence at anyone either on account of their faults, or on account of his own suspicious thoughts, has knowledge of God and of things devine.''0
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HAMISH_MCTAVISH wrote: »Sure you can.
A 25% deposit of 100,000 is £25,000
A 5% deposit of 150,000 is £7500
Get lending moving at historically normal, prudent and sensible deposit levels of 5%, and more people will be able to buy, much earlier, even if prices rise.
And the fact they avoid a decade in rented will mean it's still cheaper for them, even if prices rise.
Your (purposely) missing the point.
LTV requirements are not going to change as you suggest.
I , as a FTB would I love them to.
The fact remains price rises isn't going to help FTB's. Period. LTV's aren't going to change as the prices rise.
Are you saying price rises in the current climate are a good thing for a FTB?0 -
HAMISH_MCTAVISH wrote: »The average earnings multiple for FTB mortgages never exceeded 3.5 times income even at peak.
And yet I know FTBers who borrowed way more than that. How could that possibly have happened then?HAMISH_MCTAVISH wrote: »
The average FTB deposit in 2007 was 10%.
So half of them were less than 10%?HAMISH_MCTAVISH wrote: »
And when self cert was removed, the income multiple actually fell, instead of rising like you'd expect. So it was obviously not such a big issue after all.
Post hoc ergo propter hoc0 -
Your (purposely) missing the point.
LTV requirements are not going to change as you suggest.
I , as a FTB would I love them to.
LTV's aren't going to change as the prices rise.
LTV requirements already are changing.
Far too slowly to help the generation locked out of homeownership thanks to mortgage rationing, but they are changing nonetheless.The fact remains price rises isn't going to help FTB's. Period. Are you saying price rises in the current climate are a good thing for a FTB?
You have it back to front.
Prices are rising because more people can buy.
So rising prices are not hurting FTB-s either. Quite obviously, as FTB prices rose 3% last year yet 12% more FTB-s were able to buy.
It's not prices that are the problem. And it wasn't in 2007 either, when twice the number of FTB-s could buy as can today, despite prices and interest rates being far higher.
What is stopping FTB-s from buying is mortgage rationing.“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: »The average earnings multiple for FTB mortgages never exceeded 3.5 times income even at peak.
My missus currenlty has an AIP with a high street lender touching 5 times.0
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