House prices to fall 5% in 2013

Thrugelmir

droiderm wrote: »

My missus currenlty has an AIP with a high street lender touching 5 times.

May have little bearing to the mortgage offered though.

IveSeenTheLight

shortchanged wrote: »

You know perfectly well that I want house prices to fall so people don't waste so much of their money servicing a massive mortgage debt.

What is the most likely way to achieve this?

Praying and hoping for price falls amidst increased population

or

Lobby for more houses to be build to meet the desire of the masses to own.

To be fair, the second option is just as unlikely as who will fund said building programme?

shortchanged_2

HAMISH_MCTAVISH wrote: »

No, it's really not.

The distribution of the vast bulk of those loans around the median is a pretty tight bell curve, much as you'd expect.

The overwhelming majority of borrowers, even at peak, borrowed between 2.5 and 4.5 times income. A few borrowed less, and a few borrowed more.

But the amount of reckless lending in the UK was vanishingly small.

The thing is Hamish the figures don't really add up do they.

We know house prices rose by around 200% in some places.

So for example pre boom a FTB who earned £20K a year buys a £100K house with a 20K deposit and a has a 4 times income mortgage.

Now a couple of years later that same house is now selling for £200K. So that same person would then need a 40K deposit and would need to be earning £40K a year to get a 4 times income mortgage.

So question is Hamish. Do you honestly believe that earnings rose by that much in a couple of years?

shortchanged_2

IveSeenTheLight wrote: »

Lobby for more houses to be build to meet the desire of the masses to own.

To be fair, the second option is just as unlikely as who will fund said building programme?

Yes of course build more houses. Everyone knows this will help the problem.
Unfortunately there are too many VI's either in high places or have the ear of those in high places for it to happen.

Fella

It's very disingenuous to compare current lending practices to the short period when lending was far far too lax & conclude that mortgages are currently being rationed (or that that's what's affecting house prices).

Since you're not an idiot you know very well that if there was good business to be done by lending money at low deposit rates to FTBers then someone would be doing so. Most UK banks may be skint but there are plenty of business & banks around the world who are not & if there was business worth doing they'd be over here doing it.

droiderm

Thrugelmir wrote: »

May have little bearing to the mortgage offered though.

May have a bearing to the mortgage offered too.

IveSeenTheLight

shortchanged wrote: »

Yes of course build more houses. Everyone knows this will help the problem.
Unfortunately there are too many VI's either in high places or have the ear of those in high places for it to happen.

So what's your conclusion?
If your not able to convince substantially more houses to be built, what's the likelyhood of you achieving your desire for property to be more affordable to more people?

Conrad

shortchanged wrote: »

So question is Hamish. Do you honestly believe that earnings rose by that much in a couple of years?

No, but your'e missing some key factors as follows;

+ Many more households became dual income, and no the world does not end when kids come along


+ People diverted money away from traditional savings vehicles and into bricks n mortar


+ If property was unafordable we'd see far higher repossesions over time


+ Many parts of the S/East let alone the rest of the nation are still cheap

shortchanged_2

IveSeenTheLight wrote: »

So what's your conclusion?
If your not able to convince substantially more houses to be built, what's the likelyhood of you achieving your desire for property to be more affordable to more people?

Very little unfortunately apart from be able to rant and rave about things.

There are things the government can do but instead they put all their efforts and schemes in place in order to prop up prices as much as they can.

shortchanged_2

Conrad wrote: »

+ If property was unafordable we'd see far higher repossesions over time

Yes we would if normal market conditions were allowed to play out and all the forbearance schemes were not in place.