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Crash postponed?
baby_boomer
Posts: 3,883 Forumite
Today's Times suggests that house prices could grow from an unaffordable 7X earnings to an even more unaffordable 10x earnings.
My generation can therefore sit back smugly.
The formation of new households was 209,000 pa before the Eastern European migration.
We need to double current building levels to meet this deadly dual combination which is adding to demand.
But vested interests - swing voters, banks, estate agents, NIMBYs stand against reform.
And the current government is unlikely to make a big difference in order to not to highlight 10 years of neglect and policy failure in the area of housing.
Tripled house prices 1997-2009 would be worth more votes.
My generation can therefore sit back smugly.
The formation of new households was 209,000 pa before the Eastern European migration.
We need to double current building levels to meet this deadly dual combination which is adding to demand.
But vested interests - swing voters, banks, estate agents, NIMBYs stand against reform.
And the current government is unlikely to make a big difference in order to not to highlight 10 years of neglect and policy failure in the area of housing.
Tripled house prices 1997-2009 would be worth more votes.
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Comments
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baby_boomer wrote: »Today's Times suggests that house prices could grow from an unaffordable 7X earnings to an even more unaffordable 10x earnings.
My generation can therefore sit back smugly.
The formation of new households was 209,000 pa before the Eastern European migration.
We need to double current building levels to meet this deadly dual combination which is adding to demand.
But vested interests - swing voters, banks, estate agents, NIMBYs stand against reform.
And the current government is unlikely to make a big difference in order to not to highlight 10 years of neglect and policy failure in the area of housing.
Tripled house prices 1997-2009 would be worth more votes.
YAWN :rolleyes:0 -
dont know where they are getting 10x salary from, unless interest rates hit 0-1% i doubt there would be enough left over to eat let alone pay stuff like council tax, cloths etc.
there is a limited amount of their salary people can devote to housing, they also need to eat and live so unless the interest rates do a japan i dont see it.0 -
Nah. It's a straight line on a piece of paper prediction.0
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This sounds rather like a "new paradigm" argument, either that or the report has been funded by the housebuilders to encourage the government to relax the planning regime.0
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I think it's just a prediction by someone who really hasn't thought it through. If you borrow 10x your income at 6% your interest bill is 60% of your gross income. Take another 23% in basic rate tax, 11%(?) NI and something at the top rate makes 94% of income. 6% left for extras like food, clothes, heating etc.
Either the young house buyer is facing a miserable future, things will be so cheap that the 6% can cover all other expendtiture or the report is balderdash.
You decide.0 -
I think it's just a prediction by someone who really hasn't thought it through. If you borrow 10x your income at 6% your interest bill is 60% of your gross income. Take another 23% in basic rate tax, 11%(?) NI and something at the top rate makes 94% of income. 6% left for extras like food, clothes, heating etc.
Either the young house buyer is facing a miserable future, things will be so cheap that the 6% can cover all other expendtiture or the report is balderdash.
You decide.
How did you calculate that if you borrow 10x your income at 6%, that your interest bill is 60% of your gross income?0 -
Just wait until you are really old baby_boomer...
Do you think the generation that you have robbed from are going to pay for your care...
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10x income stuff is rubbish.
My colleague - a finance analyst too, of all people - has just been whining about this. I gave her my view that prices won't increase to that extent becaue people can't afford them, and there would be a crash otherwise. She blames the banks lending 6x and 8x mortgages - but this is very very rare, I know of no examples like that, although I'm sure a few exist.Errors of opinion may be tolerated where reason is left free to combat it. - Jefferson0
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