House Prices Up....

pop_gun

Surely the point of buying a property is that one day you'll own it. No average buyer will ever own a home brought in greater London and one wonders how much equity they have in their homes.

The banks are the new landlords and the mortgage owners are the new tenants.

Out,_Vile_Jelly

pop_gun wrote: »

Surely the point of buying a property is that one day you'll own it. No average buyer will ever own a home brought in greater London and one wonders how much equity they have in their homes.

.

I bought a distinctly average London zone 4 property nearly 3 years ago. The equity allowed me to re-mortgage at a deal that means I pay less than I did renting a 1 bed zone 3 flat nearly a decade ago. I am overpaying by the maximum amount (up to 10% of the balance each year). Why am I not likely ever to own it outright?

mwpt

pop_gun wrote: »

Surely the point of buying a property is that one day you'll own it. No average buyer will ever own a home brought in greater London and one wonders how much equity they have in their homes.

The banks are the new landlords and the mortgage owners are the new tenants.

A single person doesn't need a three bedroom house and probably the average earner never really could afford a three bedroom house by themselves.

But if an average earning couple want a three bedroom house, how about saving £40k (four years of saving £5k each a year, very doable) then buying this with 10% down:

http://www.rightmove.co.uk/property-for-sale/property-43295649.html

2.5% repayment over 30 year term means repayments of £1351 pm which is about the same as rent or possibly slightly less, and they're paying capital off. So, yes, they will own this in 30 years or under.

I admit, it isn't really an inspiring thought but your statement is factually incorrect.

MobileSaver

pop_gun wrote: »

Surely the point of buying a property is that one day you'll own it. No average buyer will ever own a home brought in greater London

I don't think you quite understand how mortgages work.

Most mortgages are repayment and 90% of interest-only mortgage borrowers have a repayment strategy which means the vast majority of people will own their own home outright after 25 or 30 years.

lisyloo

No average buyer will ever own a home brought in greater London

Plenty of affordable homes in Croydon/Luton for average buyers in couples (and someone's even done an example to show you how it's done).
Of course we all would like to live in the nicer boroughs but when starting out people have never been able to compete with rich foreigners or highly paid city bankers for the nicer areas.
Older people are not greedy or over-privileged, we just mostly simply had longer to save up. That's a chronological certainty.

I used to moan a bit but now I've grown up and accepted there are enough people richer than me to buy the houses I'd ideally like.

Have you considered that there might be somewhere better to live?
If you're on an average salary then you can probably work in other towns.

p1212

lisyloo wrote: »

A number of commentators including nationwide have said the data is at odds with the signs.
The only sense that I can make of this is that it's a lagging indicators and other signs such as mortgage approvals may not be quite so lagging.

A few houses sold on whatever price, but transaction numbers did fall big time.

Its no good for them, but they try to talk up the market, due to vested interest, they are selling mortgages ye? Last month Nationwide had graphs etc... about transaction numbers, this month when it did fall like a stone they've left it out and try to talk up the market.

If you want to see the truth, check these graphs below:

About "increasing" prices:
http://www.home.co.uk/guides/asking_prices_report.htm?location=london&startmonth=01&startyear=2016&endmonth=08&endyear=2016

Increasing number of properties unsold on the market, a bit zoomed out (bottom graph):
http://www.home.co.uk/guides/asking_prices_report.htm?location=london&startmonth=01&startyear=2007&endmonth=08&endyear=2016

As you see the falls started since january and they will stay with us unless major changes in politics.

p1212

lisyloo wrote: »

Older people are not greedy or over-privileged, we just mostly simply had longer to save up.

Ok, then prices being 3-4 times cheaper compared to your wages did not help at all. Or that your debt got inflated away sometimes at a rate of 10-15% per year.

pop_gun

mwpt wrote: »

A single person doesn't need a three bedroom house and probably the average earner never really could afford a three bedroom house by themselves.

But if an average earning couple want a three bedroom house, how about saving £40k (four years of saving £5k each a year, very doable) then buying this with 10% down:

http://www.rightmove.co.uk/property-for-sale/property-43295649.html

2.5% repayment over 30 year term means repayments of £1351 pm which is about the same as rent or possibly slightly less, and they're paying capital off. So, yes, they will own this in 30 years or under.

I admit, it isn't really an inspiring thought but your statement is factually incorrect.

You present a highly idealised scenario. No job insecurity, no redundancies, no zero hour contracts, no outsourcing, no pitter-patter of tiny feet, no wage increases, no separation of the couple (divorce), no council tax, water rates, gas and electric, work travel expenses or monthly shop.
No interest rate rises. Although I must admit I doubt they ever will.

The house is unaffordable in this economic climate. Someone will buy the place with 10% deposit and pray like crazy it doubles in value over the next 5 to 10 years. When their work situation deteriorates they'll change to an interest only mortgage.
Meaning little equity in the house and the inability to repay the capital.

Soon we'll have 50 to a 100 year inter-generation mortgages like they do in Japan. Anything to keep the property ponzi scheme going.

Conrad

pop_gun wrote: »

Surely the point of buying a property is that one day you'll own it. No average buyer will ever own a home brought in greater London s.

They will and the do

Conrad

p1212 wrote: »

A few houses sold on whatever price, but transaction numbers did fall big time.

Its no good for them, but they try to talk up the market, due to vested interest, they are selling mortgages ye? Last month Nationwide had graphs etc... about transaction numbers, this month when it did fall like a stone they've left it out and try to talk up the market.

If you want to see the truth, check these graphs below:

About "increasing" prices:
http://www.home.co.uk/guides/asking_prices_report.htm?location=london&startmonth=01&startyear=2016&endmonth=08&endyear=2016

Increasing number of properties unsold on the market, a bit zoomed out (bottom graph):
http://www.home.co.uk/guides/asking_prices_report.htm?location=london&startmonth=01&startyear=2007&endmonth=08&endyear=2016

As you see the falls started since january and they will stay with us unless major changes in politics.

For years Ive read tsunamis of nonsense and people over complicating things and seeking to find any sign of price falls. They produce dossiers of evidence, graphs, spread sheets, all total hogwash

There is only one question to ask. Is the general trend up or down in light of the fundamentals. Everything else is background noise.

Prices are on an upwards trend, the fundamentals all support this view and it won't change for years to come aside for a sudden and catastrophic shock. BTW Brexit when it comes will see no change at all other than general improving prosperity. Continued established tariff free trade will not be altered as it would harm all concerned, but us the least

Edit - of course the market has lulls and rushes, and the stamp duty deadline certainly contributed to the expected dynamic.