How much can house prices keep rising ?

ukcarper

Philuk wrote: »

I am not saying it is impossible, I was trying to reply indirectly to the OP on whether price can keep rising.

Not only is it not impossible it's normal and has been for the last 50 years.

I don't think you have answered the OPs points. People can obviously afford the prices in London as property is selling, once they reach the point where people can't afford them prices will stall. As to when or if that happens is any bodies guess but all the time demand outstrips supply it only needs the better off to be able to buy.

Miss_Samantha

_CC_ wrote: »

While prices to incomes are high across much of the country, mortgage affordability is well within historic norms (except for the likes of London) thanks to very low borrowing costs.

Those very low borrowing costs are not within historic norms, though.

But beyond that, being able to purchase your own house is not a historic norm, but a recent development.

AdrianC

Philuk wrote: »

I am sure they are some very deprived area where you can get a pad for that budget, but with probably also the most socially distressed people that London has to offer.

Outside London. London != M25.

Cakeguts

iantojones40 wrote: »

Incorrect.

Those parts of the country where houses can be found that are ''only 3 times average salary'' are places where the vast majority of the local population are earning nothing close to the ''average salary'' of £26k.

And even those houses that are ''only 3 times average salary'' ie £78k will be run down houses needing large amounts spending on them in the most undesirable areas.

http://www.rightmove.co.uk/property-for-sale/property-40494966.html This is what I often find when people only know about what is in the media and usually referring to the south east.
The house in the link is not in a run down area. This is a popular area with good rail links to Manchester.

Jack_Johnson_the_acorn

Lloyd90 wrote: »

Probably one of the big issues, I am 26 and MANY young people I know buy a brand new car and are out drinking 3+ nights a week, eating out a lot of the time, all have the latest iphones, and off on holidays every year.

Maybe I'm just tight but I hate spending money lol, why spend £30+ EACH in restaurant when I can buy the ingredients for £10 for us both (me and the gf) and cook very well (I love cooking)

It's called "having a life", I do all those things (apart from the Drinking 3+ nights, too busy on here ) plus we own a property. £115k-£140k can buy an decent FTB house or an even better do-er upper in the NW.
HH income of £50k excluding overtime.

So it depends where you live, we had no family help, but we did save like mad when we finally decided to buy.

Philuk

ukcarper wrote: »

Not only is it not impossible it's normal and has been for the last 50 years.

I don't think you have answered the OPs points. People can obviously afford the prices in London as property is selling, once they reach the point where people can't afford them prices will stall. As to when or if that happens is any bodies guess but all the time demand outstrips supply it only needs the better off to be able to buy.

Again, I am not debating the fact that people commute, my point is that prices in London are out of reach for the vast majority of FTB (regardless of their lifestyle). Price are contagious, it s practically the entire commuters belt that has become extremely poor value for money. From a property market perspective, the FTB are needed for the price to keep climbing until we find a way to prevent death, divorce and debt.

We are now at the stalling stage you mentioned (at least in central London) , transactions volumes are historically low and prices in prime central London are already 8-15% down yoy. As I said, price movements are contagious, we shall
See if it spreads to rest of the market.

wymondham

Lloyd90 wrote: »

I was talking this over with a friend the other day.

Considering the average UK Salary now is £26,000, and to get a mortgage I am under the impression that you can lend up to five times your income (now minus expenses, so even less than before), that assuming the average couple is on a household income of £50,000 (which I think is generous) then how long before people are totally priced out of the housing market ?

Can property continue to climb and climb?

yes it can - Government policy as high house prices mean we're all doing really well......

ukcarper

Philuk wrote: »

Again, I am not debating the fact that people commute, my point is that prices in London are out of reach for the vast majority of FTB (regardless of their lifestyle). Price are contagious, it s practically the entire commuters belt that has become extremely poor value for money. From a property market perspective, the FTB are needed for the price to keep climbing until we find a way to prevent death, divorce and debt.

We are now at the stalling stage you mentioned (at least in central London) , transactions volumes are historically low and prices in prime central London are already 8-15% down yoy. As I said, price movements are contagious, we shall
See if it spreads to rest of the market.

I agree it is harder for FTB to buy and the number of people able to buy is lower than it has been but I don't think you can say that we are at the stalling point. Prime central London is not relevant to FTBs as it has always been out of reach for normal buyers in my area outer commuter belt property is selling quickly at prices much higher than I envisaged a few years ago.

CLAPTON

Philuk wrote: »

Again, I am not debating the fact that people commute, my point is that prices in London are out of reach for the vast majority of FTB (regardless of their lifestyle). Price are contagious, it s practically the entire commuters belt that has become extremely poor value for money. From a property market perspective, the FTB are needed for the price to keep climbing until we find a way to prevent death, divorce and debt.

We are now at the stalling stage you mentioned (at least in central London) , transactions volumes are historically low and prices in prime central London are already 8-15% down yoy. As I said, price movements are contagious, we shall
See if it spreads to rest of the market.

FTB aren't required to maintian house prices in London and the SE: what is required is increasing demand. Currently that increasing demand comes from London's increasing population who primarily rent : it only needs landlords to be able to buy and subdivide houses to meet the renting demand.

Philuk

CLAPTON wrote: »

FTB aren't required to maintian house prices in London and the SE: what is required is increasing demand. Currently that increasing demand comes from London's increasing population who primarily rent : it only needs landlords to be able to buy and subdivide houses to meet the renting demand.

BTL by amateur landlord has been virtually terminated by the recent changes to be introduced this April (S24). Yea you will still have "investors" in the rental market but in far smaller proportion than the last decade where virtually any 45+ had a second property for pension purpose. I don't think institutional investors will pick up the ball to the same extend and certainly not at current abysmal yields.