Forthcoming increases in rents will ...

cells

I think westernpromise has something here but hasn't explained it well

If we look at a house in 1995 for Birmingham the average price was £51,330 and a 15 year mortgage could be had for 8.8%

The 15 year mortgage rate is now 3.1% so the house should be worth £74,000 for the same affordability.

Add 3.0% a year for wage inflation £133.6k

The actual house price in Birmingham is actually now November 2015 £122,603

So prices are cheaper and more affordable now in Birmingham than they were 20 years ago

Graham_Devon

Lots of randomly made up numbers and you have the result you wanted!

The average semi in 1995 in Birmingham was £49,950. In October 2015 it was £159,995. So your prices seem a little out.

You'll need to move some goalposts again.

Generali

Jon_B wrote: »

90 minutes train to London
M4 for East and West road connections
M5 for North and South road connections
Growing financial sector
"Trendy"
Outspill from Bath (10ish miles away)
Airbus
Rolls Royce
MOD
Avonmouth docks
Within 20 miles of beach
Close to Wales and Cotswolds a.k.a picturesque.
Green capital of EU 2015
Has its own Mayor now

I feel like I'm pitching for Bristol, but IMO it is an incredible place to live.

Okay, but none of those things have changed over the last few years (I am making an assumption here).

mwpt

cells wrote: »

I think westernpromise has something here but hasn't explained it well

If we look at a house in 1995 for Birmingham

I do not give a flying !!!! about Birmingham! The whole sub-thread was in response to a post from some blog about buying a studio in London. Yet another move in the desperate attempt to avoid my conclusion.

mwpt

cells wrote: »

The UK doesnt really have long term mortgages but the USA does have and has historically had 30 year fix mortgages.

So you have these options

£200,000 house you put down £20,000 and pay £855 per month for 30 years paying 3.96% interest

£116,000 house you put down £20,000 and pay £855 per month for 30 years paying 10.16% interest

Same deposit, same monthly payment for 30 years. £200k house vs £116k house


So the interest rate does have a significant impact on what is or is not affordable. In this example a house costs significantly more (~72% more expensive) but affordability is the same

So you don't like the fact that I used the 17% rates and supposed low multiples from the article I was actually responding to, so you made up your own figures to suit your view. And on top of that, you still ignore the point I was trying to make that it's easier to overpay and pay down a low multiples property than the other way round.

Why am I not surprised.

wotsthat

mwpt wrote: »

I do not give a flying !!!! about Birmingham! The whole sub-thread was in response to a post from some blog about buying a studio in London. Yet another move in the desperate attempt to avoid my conclusion.

Could also be seen as a desperate attempt to make general conclusions about a single studio flat in London.

mwpt

wotsthat wrote: »

Could also be seen as a desperate attempt to make general conclusions about a single studio flat in London.

Have you got anything numerate to contribute?

wotsthat

mwpt wrote: »

Have you got anything numerate to contribute?

Only that you can't conclude much from a single property written about in an article where we both suspect the author is an idiot/ lying.

MEM62

padington wrote: »

Forthcoming increases in rents will.... More than mitigate BTL tax rises ...

For some single-property landlords they may have to. Looking at some of the quoted examples in the press where individuals are now placed in a loss-making situation there will naturally be additional upward pressure on rents to compensate. After all, these are effectively businesses and if costs are forced up revenues have to increase also.

westernpromise

Graham_Devon wrote: »

Lots of randomly made up numbers and you have the result you wanted!

The average semi in 1995 in Birmingham was £49,950. In October 2015 it was £159,995. So your prices seem a little out.

You'll need to move some goalposts again.

Not really, Graham. The OP cited an article in which a blogger had pointed out that on a like-for-like basis, buying a flat in London was every bit as hard in the 1970s as it is now. There is a shrill body of opinion that denies this, and insists that things are uniquely hard for FTBs today. I provided details of an actual trade you could do in 1988 and now, and the 1988 case was demonstrably worse on every count: your mortgage consumed more of your income, you paid off capital at a snail's pace, you were trapped by a smaller fall in price, and you couldn't remortgage either.

This is not a message certain people want to hear because they are unvested interests who want the market talked down. Showing that it's in line with historicals is exactly what they want not to hear.

The defining characteristic of the thwarted FTB from whom we hear so much online is a towering sense of entitlement. Many want both the low prices of 25 years ago, but also the low mortgage costs of today, and it's an outrage that this combination is not available. Anyone who does the maths properly, however, can see that buying today is a cinch compared to buying in the past. Such people duly do so. Those who can't add up properly concoct all kinds of straw men to prove it's not faaaaaaair. Meanwhile the world and the market move on, without them.

If there's one thing we can be sure of, it is that anyone who won't buy now, because houses are too expensive, won't buy in the next cyclical house price downturn either, because houses are still too expensive. They'll wait for them to get even cheaper and will then miss out. Or they'll lose their job and miss out. Or their rent rise will consume all their savings and they'll miss out - but they'll miss out.

If you want to know who'll own houses after the next downturn, look at who owned them before.