House prices to SURGE beyond peak thanks to Help to Buy

ruggedtoast

IveSeenTheLight wrote: »

Society needs to learn to budget and have the desire / willpower to achieve what they want.

My son is 4, he is currently into Skylanders and he knows that he has to buy them from the shops.
He gets pocket money: -

• 20% is "taxed" (goes into a savings account for him in the future)
• 20% he has to put into his visible savings.
• The remaining 60% is still not enough so he knows it will take 3 weeks to save up enough to buy a new Skylander and now passes on other things he used to buy (childrens magazines) so he saves up quicker.

If only much more of society had been brought up with this realisation and saving culture.

Of course a better range of mortgage products with higher LTV availability would also help

And I thought the Midland Bank 'calculator-ruler' made finance fun for children. Little did I know...

wymondham

IzzyFreedman wrote: »

A lot of assumptions everywhere.

for example what is any different about this new scheme? This is just the latest in the long string of government schemes to keep property overvalued. I doubt this will be the last before property reverts to true value.

I don't now think this Government will ever allow houses to find their true value as this has now gone on for too long to be stopped without massive problems. It's all now so distorted with Government interference in houses ingrained into culture almost. Too many people who have been taken in with the 'asset/got to buy/my right to buy' mentality will be effected by prices falling to their natural level - something a Government desperate for popularity wont cope with (popularity as ever rules over leadership).

The endless ill thought out hopeless scheme after scheme I think shows their mindset and determination. Not sure how this can now end without large scale 'financial realisation' for recent budding home owners!

IveSeenTheLight

IzzyFreedman wrote: »

How do you calculate that property is undervalued?

I never calculated or said that it was, I asked you

Originally Posted by IveSeenTheLight
Why do you think they are on the way to becoming undervalued?
Most indices are showing nominal stagnation.
Indeed, looking at LR / Halifax / Nationwide, they are effectively similar to 2004 / 2005 nominal prices.

Could they not already be considered undervalued?

When you look at the HBOS Affordability stats, the mortgage repayments as a percentage of income is currently at 28.1% with a 30 year low of 23.6% an average of 36.3% and a high of 65.5%
http://www.lloydsbankinggroup.com/me...lityQ42012.xls

See I also gave a link showing that mortgage repayments as a percentage of property is under the 30 year average

It's nice to have a link to back up a stat

IzzyFreedman wrote: »

I would say that without going into details my valuation holds more water.

How would we know as you've not decalsred or shared your calculations of your opinion.

Certainly in comparison, I've shown statistics to make a debateable point, there is so far nothingto debate against your seeming randomly plucked percentage.

IzzyFreedman

Well for one thing FTBers can not easily get on the ladder. The government needs to come up with all sorts of help to buy schemes this tends to indicate property is still over valued.

For the record you have tried to argue that property is actually undervalued are you changing on this?

IveSeenTheLight

IzzyFreedman wrote: »

Well for one thing FTBers can not easily get on the ladder. The government needs to come up with all sorts of help to buy schemes this tends to indicate property is still over valued.

Hmmmmm, seems this is a soundbite.
http://www.cml.org.uk/cml/media/press/3456

First-time buyers

A total of 15,900 loans (worth £2 billion) were advanced to first-time buyers in January, up by 24% compared to January last year (12,800 loans), but an 18% fall from December 2012 (19,500 loans).

It was the largest January total since January 2008 when 17,700 loans were advanced.

For the third consecutive month, first-time buyer activity accounted for 42% of all house purchase loans, suggesting that the market remains more favourable for first-time buyers.

There was also a slight shift towards cheaper properties among first-time buyers with a small increase in the proportion of properties bought for less than £125,000. This increase is likely to reflect monthly variation and is largely in line with recent months.

Associated with this, first-time buyers typically borrowed a smaller amount in January than in December - both in absolute terms and relative to their income. First-time buyers typically borrowed 3.2 times their income in January, down from 3.28 times in December and 3.23 in January last year.

The average loan-to-value ratio remained at 80% for first-time buyers in January - essentially unchanged for over two years

See links can back up many debated facts.

Where's your links?

IzzyFreedman wrote: »

For the record you have tried to argue that property is actually undervalued are you changing on this?

No, for the record you have claimed that property is 20% overvalued and have yet to show your calculations why you think so nor have provided any links to others that concur with you

I await anticipatingly

IveSeenTheLight

IzzyFreedman wrote: »

Well for one thing FTBers can not easily get on the ladder. The government needs to come up with all sorts of help to buy schemes this tends to indicate property is still over valued.

Here's a couple of more links from recent articles

http://www.cml.org.uk/cml/media/press/3438

Number of first-time buyers rise by 15% in London in 2012; largest annual total since 2007

http://www.cml.org.uk/cml/media/press/3435

First-time buyers in Scotland reach highest yearly total since 2008

http://www.cml.org.uk/cml/media/press/3436

Number of first-time buyers in Wales rises to highest point since 2007

http://www.cml.org.uk/cml/media/press/3437

Northern Ireland sees highest yearly total of first-time buyers in 5 years

HAMISH_MCTAVISH

IzzyFreedman wrote: »

Well for one thing FTBers can not easily get on the ladder. .

Only because of mortgage rationing.

Mortgage payments are cheaper than rent in most places.

Affordability isn't the problem.

marathonic

HAMISH_MCTAVISH wrote: »

Only because of mortgage rationing.

Mortgage payments are cheaper than rent in most places.

Affordability isn't the problem.

Exactly... the interest on my recently obtained mortgage, together with a 1% of house cost allowance towards annual maintenance, works out at slightly less than the cost to rent a comparable house.

I know that I have to pay capital too but I've got an asset to back that up - so I look at it as an enforced savings plan.

For people in the area who haven't yet bought, they are paying rent at a similar level to my (interest + maintenance) and would still need to save towards a deposit - and probably at a higher rate than what I'm paying down in capital (otherwise, they can expect it to be 5+ years before they have a deposit in place).

Basically, by having a mortgage, my capital repayment mortgage is costing me less, even after adding maintenance, than my next door neighbour who is paying rent and saving towards a deposit for their own place. If the bank were to offer them a mortgage tomorrow, I have no doubt that they would be signing on the dotted line without a further thought.