Gvment to announce new desperate measures to help poor people afford expensive houses

ukcarper

Rich2808 wrote: »

What absolute nonsense.

Prior to about 1997 it was perfectly possible for someone on an average wage to buy a house in the vast majority of London outside the exclusive areas of zone 1. Average prices then were less than £70k and wages really haven't gone up that much in real terms since then.

My dad managed to buy a house in London on a postal workers salary on a single wage with a 1.5 times salary mortgage. Not Knightsbridge or Belgravia I admit but until the early 2000s property in London was relatively affordable even for average earners.

No you are both talking nonsense prices in relation to earnings in 1997 were at the lowest they have been. I couldn’t buy in outer southwest London in the 70s and I was earning more than a postal worker.

GreatApe

Windofchange wrote: »

This reminds me, I'm still waiting for your response on this from the other day when I asked you how you know 100% of migrants are shoe shine boys or illegal kitchen workers?

You are saying look, 50% of migrants can buy a house in the UK, but as highlighted, you seem to think that migrant = Sub Saharan refugee. Do you not understand that migrant can mean Dubai oil executive, professional footballer, Project Manager etc etc? What if I give you 100 migrants who are premier league footballers and say hey look, they have all brought Chelsea penthouses, look how cheap Chelsea is!

Has crashy bitten you and you cought his rabies?

Shall we revisit this in depth for you as you seem to need things spelling out. As you won't open the below report as it's not in your nature to actually research things you post here - the summary from Figure 7.

http://www.migrationobservatory.ox.ac.uk/resources/briefings/characteristics-and-outcomes-of-migrants-in-the-uk-labour-market/

"For example in 2015 the real hourly wages for female UK-born and foreign-born were £12.4 and £12.5 respectively, while those for the male UK-born and foreign-born were respectively £15.3 and £14.8. Female migrants’ hourly earnings were higher than those of UK-born women during the entire period under consideration. There has, however, been a trend of convergence in recent years."

So, for this report from 2017 (pretty up to date), female migrants earned more than their UK counterparts, and male migrants earned 50p per hour less.

So, now we have covered the above with actual figures as opposed to ones you have pulled out of your behind, let's see if you can expand on your theory that because 50% of migrants can buy housing it means that it is affordable and cheap?

No listen crafully

Houses in most the country are affordable/cheap because

1 the cost to buy the house is equal to or less than or just a little above the reinstatement value (do you know what that means?)
2 the cost of a repayment mortgage to buy a starter home is less than, equal to, or just a little above the cost of renting the local social stock nearby.
3 Even a couple working full time on the min wage can afford the repayments on a mortgage on a local starter home.


Those are the reasons I think housing in most the country are affordable/cheap.

I mentioned that nearly 50% of recent migrant arrivals are now homeowners to point out the fact that people get on with their lives that they can and are affordabing to buy homes. I am not surprised migrants earn marginally more than the locals the reason is likely because migrants disproportionatelly live in London and the SE where wages are higher. Take that into account and their wages are likely lower. Also I was talking about recent migrants not a migrant that has been here for 35 years which wioo flatter the figures more. Long term migrants in the UK have an ownership rate closer to 70%

Since you have got the rabid crashy bite if you have to concentrate on one thing I'd say look at reinstatement costs vs local house prices. To give you an idea my parents just had a structural survey dine the reinstatement cost was estimated at £350k while their house is worth about £450k and they are in the south. Tell me what that means

Filo25

To go back to the first post in the thread, I think you can certainly make the case that the early days of Help to Buy were certainly driven by a desire to help the builders out and boost the housing market to support the wider economy. Recently though there does appear also to be an attempt to rebalance the Housing market away from BTLs and in favour of FTBs

Certainly if policy was as simple as just pumping up the housing market at all costs we wouldn't have seen some of the measures penalising BTLs brought in.

GreatApe

Rich2808 wrote: »

What absolute nonsense.

Prior to about 1997 it was perfectly possible for someone on an average wage to buy a house in the vast majority of London outside the exclusive areas of zone 1. Average prices then were less than £70k and wages really haven't gone up that much in real terms since then.

My dad managed to buy a house in London on a postal workers salary on a single wage with a 1.5 times salary mortgage. Not Knightsbridge or Belgravia I admit but until the early 2000s property in London was relatively affordable even for average earners.

Yes the 1990s was an abnormal low in London house prices were too undervalued then. Anyone who bought then was lucky or very smart. Most of them were just lucky.

There are lots of reasons why London was grossly undervalued then. Quickly I'd say

Population decline from 1951-1991
Mass house building despite population decline
Inner London grossly overbuilt social hosuib so much so some areas were more than 50% social
Much higher crime and more violent crime meant people were leaving inner London to go to putter or even further

The surprising thing isn't why London is expensive today its why it was so so cheap in the 1990s
You could buy flats for less than the cost of a new car in the mid 1990s
In fact my father kicks himself when I remind him he decided against buying a London flat for £15k in 1995 and instead bought himself a 1 year old Nissan. The car was long ago skipped and each time we pass the flat I remind him its now worth more than £300k. The amazing part is not why a flat in zone 2 London costs £300k today its his a flat in zone 2 London was cheaper than a used car in 1995.

[Deleted User]

Quick question..... I have been "out" last night/this morning ..... so coherence may not be my strong point, but here goes....

Can somebody explain to me how artificially helping people to afford something that they cannot actually afford "solves" a problem in a market where demand exceeds supply? Are there any other examples where/when that approach has worked?

Thank you!

WR

GreatApe

Windofchange wrote: »

Absolute nonsense. You reckon there are no low / medium income people in London who have brought houses / flats? You couldn't give houses away in Brixton as an example back in the 80's when the riots were in full swing. My assistant at work owns a 3 bed house in S.E. London, and she has done that job for the past 24 years. She is paid at Band 3 level in the NHS if you want to look up the salaries - around £20k per year currently.

Before the usual suspects pile in with it was never easy etc etc, this isn't an attempt at saying buying was easy back in the day, this is purely a response to cake guts.

Buying in London in the mid 1990s was easy and it was extremely cheap

But that dies not necessarily mean today is expensive
It means 1995 when ex council flats in zone2 were trading for less than the cost of second hand cars was extremely oddly unsustainably cheap house proces

Of course what happened was that prices more or less doubled from 1995 to 2000 and doubled again from 2000-2005 to being them to more sustainable levels

Inner London did twice as well as outer London.
Eg hackney zone 2 went up 10x since 1995 while Enfield zone 4 is up 5x since 1995

ukcarper

Wild_Rover wrote: »

Quick question..... I have been "out" last night/this morning ..... so coherence may not be my strong point, but here goes....

Can somebody explain to me how artificially helping people to afford something that they cannot actually afford "solves" a problem in a market where demand exceeds supply? Are there any other examples where/when that approach has worked?

Thank you!

WR

I suppose the theory is that the people can afford to pay mortgage but can’t save deposite so it could work, but as already pointed out if supply doesn’t increase prices will increase.

Cakeguts

Filo25 wrote: »

To go back to the first post in the thread, I think you can certainly make the case that the early days of Help to Buy were certainly driven by a desire to help the builders out and boost the housing market to support the wider economy. Recently though there does appear also to be an attempt to rebalance the Housing market away from BTLs and in favour of FTBs

Certainly if policy was as simple as just pumping up the housing market at all costs we wouldn't have seen some of the measures penalising BTLs brought in.

You have to start by working out how you increase housing. You don't increase housing just by building more houses. You can build as many houses as you like but if no one buys them you don't have an increase in places for people to live.

In order to increase the number of places for people to live you have to be able to sell the houses that you build. So in order to shift more of them quickly Help to Buy was introduced to help the builders sell more properties and therefore increase the number of places for people to live.

So starting from property has to be sold to increase the amount of housing for people to live in you then get to the fact that you get a faster increase if you make it easier for people to buy the property. All these schemes look as if they are supposed to help buyers but what they are actually there for is to get the houses sold as fast as possible so that the builders can build more to increase the housing supply.

Windofchange

GreatApe wrote: »

I mentioned that nearly 50% of recent migrant arrivals are now homeowners to point out the fact that people get on with their lives that they can and are affordabing to buy homes.

No you didn't. You said that of migrants who come here with nothing but the cloth on their back, 50% can afford to buy, therefore what is the problem. You've been pulled up on this and can't think of a way out so as per usual are just confusing everything. Once again, you assumed that migrant = poor, but actually as I have pointed out to you it means everything but for a lot of these people. So, the fact that migrants can buy houses does not prove your point. Until you recognise the problem with your initial statement this is going nowhere.

GreatApe

Windofchange wrote: »

No you didn't. You said that of migrants who come here with nothing but the cloth on their back, 50% can afford to buy, therefore what is the problem. You've been pulled up on this and can't think of a way out so as per usual are just confusing everything. Once again, you assumed that migrant = poor, but actually as I have pointed out to you it means everything but for a lot of these people. So, the fact that migrants can buy houses does not prove your point. Until you recognise the problem with your initial statement this is going nowhere.

I love the crash cheerleader logic

Migrants can't buy homes = houses too expensive 50% crash needed
Migrants can buy homes = proves nothing houses too expensive 50% crash needed

UK born ownership near 70% = proves nothing 50% crash needed
>75% of private renters buy within 10 years or less = proves nothing 50% crash needed

House prices near reinstatement value in most the country = proves nothing 50% crash needed
Mortgage repayments near social rents in most the country = proves nothing 50% crash needed

Ownership is higher than a generation ago = proves nothing 50% crash needed
We have more residential space per capita than ever = proves nothing need 50% crash


And yes I am aware not 100% of migrants come here poor.
But many do I know one migrant who came here when he was about 16 he was a goat herder from about the age of 10-16. He came to London worked hard and studied and now owns his own home. Proves nothing 50% crash needed!!!