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Debate House Prices
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When will the correction come to house prices?
Comments
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Asking prices have certainly got ahead of themselves. I don't think the mortgage rules causing a delay in the market has helped. Once the sales prices catch up and the blockage from the mortgages rules passes then the asking prices will go again.0 -
Graham_Devon wrote: »What is HTB (specifically the 2nd programme) if it's not increasing credit and therefore demand?
But credit is not being "ramped up" despite HTB. (Or despite what you 'hope' HTB should be doing.)
Mortgage lending grew at a rate of 1.14% in the year to March 2014. M4 money supply fell by 0.3% over the same period.
Credit is not being ramped up, for the simple reason that is not going up.0 -
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Graham_Devon wrote: »What is HTB (specifically the 2nd programme) if it's not increasing credit and therefore demand?
Mortgage credit is decreasing despite HTB2.
It's a tiny proportion of total lending.0 -
The “market” will imho never deliver the level of housebuilding required, and only direct public sector involvement will do so. Indeed, the only time that we have built enough homes in the post war period has been when the public sector steps in
although oft repeated, did we really build enough housing in the 60/70s?
was it really a period of housing sufficiency?
is immigration, with the subsequent increase in population, the sole cause of our current housing shortage?0 -
Using salary multiples has to be the worst way to control borrowing as it has zero reference to affordability. If you have two people earning £40k, one who has car loans, credit card debts and an expensive lifestyle and another who has zero debts and lives well within his means, both can borrow £160k. However, the financial realities of these two individuals could mean that the former could really only afford a 3x salary mortgage and the latter could easily afford a 5x salary.
Much better to look at someone's income and outgoings to determine how much someone could afford to borrow.
I agree, to an extent.
What I wouldn't like to see is an over complication of a simple aim.
I realise that 4x income is arbitrary. BUT, I'm not sure any other solution can provide the answer as successfully as a 4x cap (could be 4.5 or 5x).
So, what happens to that person who has the car loans etc? The answer here too, is simple. If they find themselves unable to afford to pay the mortgage, they deal with that, sell the car, get rid of the loans, or ultimately, lose the house. It comes down to personal responsibility.
What you appear to be suggesting is the MMR. Which is fine to an extent. The problem with the MMR is that as soon as you have your mortgage there is absolutely nothing stopping you getting those loans you speak of and being in the exact same position.
The MMR does, to an extent what I am suggesting. However, it's cumbersome, holds things up and is steeped in problems. The cap just seems very much simpler and over the long term, should address risk across the board.
Theres never a "best way" of doing these things, and there are always going to be people who fall foul of any regulation. There are peopel falling foul of the solution you put forward who wouldn't fall foul of a 4x cap, for example.
My issue on threads like this is we lose sight of the overall picture, and instead pick apart minute details of posts.0 -
Asking prices have certainly got ahead of themselves. I don't think the mortgage rules causing a delay in the market has helped. Once the sales prices catch up and the blockage from the mortgages rules passes then the asking prices will go again.
Can't see it. It's an affordability issue. Where does the money come from once bank of mum and dad has been used up and pent up demand has been released?0 -
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I haven't noticed any drop off in buyers, just waiting from the people I know who are currently buying.
There've been far fewer prospective buyers in the last 1-2 months compared to the start of the year where I'm looking Lambeth, and where friends have been looking. This is backed up by the RICS report last week.
But again, where does the money come from to keep prices going up? If no-one can join the bottom rung of the ladder, then the ladder is stuck0
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