"Housing Market Slumps"

ukcarper

GreatApe wrote: »

Multiple reasons but I think the four big reasons are

1 many more EU migrants and non EU migrants over the last 10-15 years and few of these migrants can come into the UK on day one and buy a house. They rent. How much of the increase in renting can be attributed to the 3-4million additional migrants?

2. Removal of self cert mortgages meaning that the grey and black market were kicked out of owning. This wasn't an overnight thing it was a gradual change as the previous grey/black market owners die off or sell up and the new ones are unable to buy

3. Demographic changes both in people starting work later in life and getting married later to not partnering up at all.

4. Job market has changed fewer and fewer jobs for life meaning people need or want to move. I could have bought at any age from 21 onwards but since I moved around half a dozen times in my 20s I never did buy then. Actually I did buy in my late 20s but it was an outright purchase that was put up for rent while I was working in distant regions but most people wouldn't have the finances or risk apatite to do that.


These ideas seem to fit reality.
The idea that higher prices = lower ownership doesn't fit reality because we can point to towns that have seen prices fall and ownership has fallen irrespective of that. Eg Middlesborough

It's not just the overall owner occupation rates that have fallen sales volumes are lower.

According to nationwide average price to earnings ration is now just over 6x compared to the long term average of just over 4x and a maximum of 5x prior to 2000s boom so obviously more people are priced out.

GreatApe

ukcarper wrote: »

It's not just the overall owner occupation rates that have fallen sales volumes are lower.

According to nationwide average price to earnings ration is now just over 6x compared to the long term average of just over 4x and a maximum of 5x prior to 2000s boom so obviously more people are priced out.

What have sales volume to do with ownership levels you are jumping from one place to another.

Why don't you look at the regional prices or even prices of individual towns like middlesborough. For instance why has ownership fallen in the north east a place where prices are lower vs incomes than a decade ago and where prices are so low that a mortgage to purchase a home costs less than the locals social home rents

GreatApe

Windofchange wrote: »

Yup because not even the rich in London can afford to move up the ladder. We'd rather a house than a loft conversion but unfortunately that means getting out of London which the other half won't entertain. So, I'm stuck.

There is no ladder and there never was, the housing market is only a step at best

The average house transacts only once every 25 years this can be seen from annual transactions divided by the total stock

So on average if a person buys at age 30 then the next step is at age 55 and that is it.

Its actually probably even more dramatic as some people don't step up but move sideways and some people move because they have to rather than they want to eg divorce or job relocation.

So the housing market was never really a ladder with half a dozen steps up. Its always been that you buy one house and live in it for life or that you have one step up if you are lucky. This isn't new either its been the case forever

Of all the homeowners I know, who bought decades ago most of them have only ever bought one house and not moved while a smaller number had one step up in their 50s

But anyway we are back to the observation that homes get bigger and better so some of the house price growth is down to capital expenditure on the stock each and every year.

System

Windofchange wrote: »

JoeSkeppi is that you!?

I'm obviously not the only one that thinks it's strange you went from £7k in debt and deciding to leave the country to £7.2k in debt 2 years later but suddenly in possession of a house, while complaining about the morality of everyone else who may have profited from property.

Posts like this don't add up http://forums.moneysavingexpert.com/showpost.php?p=72160525&postcount=857
A loft conversion on £1000. Impressive. Spending mummy and daddy's money again?

I don't know what your real story is but something stinks. You're caught in a web of your own lies and nothing makes sense any more.

Anyway, if you don't want my opinion I'd suggest not dragging me into threads. ttfn.

chucknorris

economic wrote: »

Or more like let's be practical and smart about this, we need to upsize and moving will cost more so even though we can afford let's just extend our current house to save some money.

We've just settled for doing that this weekend, again, we've been at this stage before. We've looked at a couple of houses in the last month, and extending is the obvious way to go, we end up with so much more for our money. Personally I would rather relocate to somewhere on the South coast, where your money goes much further than in Surrey. But the trouble with being married is the compromise that comes with it, and my wife will not entertain the idea relocating so far from London.

mayonnaise

Joeskeppi wrote: »

I'm obviously not the only one that thinks it's strange you went from £7k in debt and deciding to leave the country to £7.2k in debt 2 years later but suddenly in possession of a house,

The most plausible explanation is the Geneer Time Machine™.

ukcarper

GreatApe wrote: »

What have sales volume to do with ownership levels you are jumping from one place to another.

Why don't you look at the regional prices or even prices of individual towns like middlesborough. For instance why has ownership fallen in the north east a place where prices are lower vs incomes than a decade ago and where prices are so low that a mortgage to purchase a home costs less than the locals social home rents

It's you that is looking at ownership level I am looking at how difficult it is to buy now and fewer people can buy.

As for the north go back 15 years not to the last peak

BikingBud

Great Ape -
Of all the homeowners I know, who bought decades ago most of them have only ever bought one house and not moved while a smaller number had one step up in their 50s

So they bought many years ago and since then crazy house price inflation also means many of them can no longer afford to move in and around London, they can only take their inflation profits downsize and move out.

Perhaps you would consider this:

ONS first attempt at affordability and they advise that housing affordability has worsened in all local authority districts.

1. Main points
On average, working people could expect to pay around 7.6 times their annual earnings on purchasing a home in England and Wales in 2016, up from 3.6 times earnings in 1997.
The median price paid for residential property in England and Wales increased by 259% between 1997 and 2016; median individual annual earnings increased by 68% in the same time period.
The most affordable local authority in 2016 was Copeland, with house prices being on average 2.8 times greater than annual earnings, whereas Kensington and Chelsea was the least affordable with house prices being 38.5 times greater than annual earnings.
The gap between the least affordable and most affordable parts of England and Wales has increased over the last 2 decades; housing affordability has worsened in all local authority districts.
Housing affordability has worsened fastest in London boroughs over the last 2 decades.

2. Things you need to know about this release
Housing affordability is calculated by dividing house prices by annual earnings. House prices are taken from the House Price Statistics for Small Areas (HPSSAs) produced by the Office for National Statistics (ONS) and refer to the median and lower quartile price paid for residential properties in England and Wales. They are calculated using open data from the Land Registry, a source of comprehensive record level administrative data on residential property transactions. Earnings data are from the Annual Survey of Hours and Earnings (ASHE) and refer to median and lower quartile gross annual earnings for full-time employees.

These housing affordability statistics transferred to ONS from the Department for Communities and Local Government (DCLG) in March 2017, with Tables 576 to 578 being discontinued and replaced by the data in this release. This is the first housing affordability release by ONS, which is accompanied by data tables and will be updated on an annual basis.

3. House prices increasing faster than earnings
In England and Wales overall, the housing affordability ratio more than doubled between 1997 and 2016

Since 1997, the median price paid for residential property in England and Wales increased by 259% whereas median annual earnings increased by 68%. Housing affordability has therefore worsened over time.

Copeland in Cumbria was the most affordable local authority district in England and Wales to buy a property in 2016, with house prices being on average 2.8 times the median gross annual earnings. This has increased since 1997 when house prices were on average 1.96 times earnings. Although Copeland is the most affordable local authority in England and Wales, it does not mean that this local authority has the lowest house prices or the highest earnings; rather it has the highest earnings in relation to the house prices. All 338 local authorities in England and Wales for which data are available have had an increase in the affordability ratio between 1997 and 2016, and so housing affordability has worsened over time.

I could go on C+P but the facts are there from the ONS, no comment about what nurses or others should be able to buy, as they may or may not be nice people.

A simple set of data that indicates increasing affordability ratio, i.e. they are less affordable.

GreatApe

BikingBud wrote: »

So they bought many years ago and since then crazy house price inflation also means many of them can no longer afford to move in and around London, they can only take their inflation profits downsize and move out.

Perhaps you would consider this:

ONS first attempt at affordability and they advise that housing affordability has worsened in all local authority districts.

1. Main points
On average, working people could expect to pay around 7.6 times their annual earnings on purchasing a home in England and Wales in 2016, up from 3.6 times earnings in 1997.
The median price paid for residential property in England and Wales increased by 259% between 1997 and 2016; median individual annual earnings increased by 68% in the same time period.
The most affordable local authority in 2016 was Copeland, with house prices being on average 2.8 times greater than annual earnings, whereas Kensington and Chelsea was the least affordable with house prices being 38.5 times greater than annual earnings.
The gap between the least affordable and most affordable parts of England and Wales has increased over the last 2 decades; housing affordability has worsened in all local authority districts.
Housing affordability has worsened fastest in London boroughs over the last 2 decades.

2. Things you need to know about this release
Housing affordability is calculated by dividing house prices by annual earnings. House prices are taken from the House Price Statistics for Small Areas (HPSSAs) produced by the Office for National Statistics (ONS) and refer to the median and lower quartile price paid for residential properties in England and Wales. They are calculated using open data from the Land Registry, a source of comprehensive record level administrative data on residential property transactions. Earnings data are from the Annual Survey of Hours and Earnings (ASHE) and refer to median and lower quartile gross annual earnings for full-time employees.

These housing affordability statistics transferred to ONS from the Department for Communities and Local Government (DCLG) in March 2017, with Tables 576 to 578 being discontinued and replaced by the data in this release. This is the first housing affordability release by ONS, which is accompanied by data tables and will be updated on an annual basis.

3. House prices increasing faster than earnings
In England and Wales overall, the housing affordability ratio more than doubled between 1997 and 2016

Since 1997, the median price paid for residential property in England and Wales increased by 259% whereas median annual earnings increased by 68%. Housing affordability has therefore worsened over time.

Copeland in Cumbria was the most affordable local authority district in England and Wales to buy a property in 2016, with house prices being on average 2.8 times the median gross annual earnings. This has increased since 1997 when house prices were on average 1.96 times earnings. Although Copeland is the most affordable local authority in England and Wales, it does not mean that this local authority has the lowest house prices or the highest earnings; rather it has the highest earnings in relation to the house prices. All 338 local authorities in England and Wales for which data are available have had an increase in the affordability ratio between 1997 and 2016, and so housing affordability has worsened over time.

I could go on C+P but the facts are there from the ONS, no comment about what nurses or others should be able to buy, as they may or may not be nice people.

A simple set of data that indicates increasing affordability ratio, i.e. they are less affordable.

I agree if you look at 1997 it was more affordable than 2017 (part of the reason is the part of the cycle we are in, I would say it was more fair to compare 1997 with 2014 but lets not split hairs I agree 1997 was more affordable than 2017)

HOWEVER That does not mean 2017 is not affordable , nor does it mean 2017 is not cheap

2017 can be affordable and even cheap, which it is for at least 8 of the UK regions, yet be more expensive than 1997

What do you make of my metric, that homes are cheap if the mortgage on said home is cheaper than the local social poor stock? which seems to be the case for more than half the country.

GreatApe

BikingBud wrote: »

So they bought many years ago and since then crazy house price inflation also means many of them can no longer afford to move in and around London, they can only take their inflation profits downsize and move out.

That is a bad guess, however we do not need to guess we have data that shows annual transactions going back more than 2 decades and if you look at those transactions it clearly shows there was no housing ladder only a housing step even twenty years ago

For instance just reading off a graph it looks like the transactions twenty years ago were about 900,000 homes for a stock of about 20 million private homes (not including social). Thus on average homes were chaining hands roughly once every 22 years.

So if someone bought at age 28, they would buy their second property at age 50 (the housing step) and they would then die in that house.

Actually its likely even less than that as it does not take into account sideways moves, moves for necessity like moving from a 3 bed to a 3 bed a hundred miles away due to job relocation, or selling/buying due to divorce. So it looks most likely that people buy on average less than 2 homes in a lifetime with most homeowners possibly only ever buying one and that holds true today and it held true two decades ago

PS this shows the difference between myself and the crash cheerleaders. I look at data find something interesting and post about it. The cheerleaders go and group think and come back with nonsense to show why i must be wrong without even realizing I am just interpreting actual data