House Price Crash Discussion Thread

Mr._H_2

wolvoman, you should get your facts straight before you start making ludicrous suggestions.

The higher-rate tax bracket actually starts at £34,600, and the median salary (i.e., 50% earn less, 50% earn more) in London in 2007 was £30,212, whilst at least 10% of people in this country working full time earn less than £13,104 per year.

Why is it that the top earners in the country should benefit from your proposed "stimulation" package and not the bottom ones?

wolvoman

Mr._H wrote: »

Damn it! Why is the "thanks" button right next to the "quote" button and why can't I "unthank" people?

£39K is a huge salary. If you are earning that and aren't rich, you're doing something wrong.

There are threads elsewhere on this site dedicated to people living on £4k per year after essential bills. I don't care what your job title is, earning anywhere close to £39K makes you very well off.

I did think your thanks was a bit bizarre!
£39K in some parts of the country would be ok. If you live in London it isn't so great.

£39K equates to about £2,300 per month take home.

Rent on a reasonable 1-bed flat in a reasonable part of London will cost £900 a month.
Pension/savings £300
Council tax will be £90
Commuting will be £100
Utilities will be £100
Insurances will be £30
Furniture £60
Mobile phone £50
Food will be £130
Clothes £100
Eating and drinking out £250
Gym £70
Gifts £30
Days out £30
Dry cleaning/laundry £10
Hobbies £50

So according to your theory someone who rents a 1 bedroom flat and cannot afford any holidays or a car is rich? Hmmmm

Don't get me wrong, I know how many people struggle to make ends meet on a LOT less than £39K (I am a member on a money saving website after all), but let's not pretend that earning £39K a year makes you rich.

hgllgh

!!!!!!? wrote: »

Never say never. Most of the economy is dependent on the credit/house price bubble continuing apace. Inflation is a decades old memory these days for many economists and city bods and there are already rumblings about 'relaxing' monetary policy in favour of stimulating the economy. (Like 7-8 years of intense over-stimulation hasn't been enough...)

Don't forget, now that NR is nationalised the government has a very direct interest in keeping house prices rising in addition to their addiction to pampering the financial services sector and encouraging retail spending. Falling prices would hurt them through increased defaults on the NR mortgage book.

Just like the Fed in the US, they will throw sensible economic policy to the wind when crunch time comes and we'll be paying the price for years to come.

But the BofE is not the government, or controlled by the government anymore so the setting of IR should not take into account the asset situation of a nationalised bank? Their focus is solely on inflation and controlling it and as far as I can make out that is what Kate Barker is saying ... "we are not here to bail out the housing market" ???

Mr._H_2

wolvoman wrote: »

Utilities will be £100

Ludicrously expensive for a one-bed flat. I live in a 2-bed flat with sash windows (relatively draughty despite funky draught-excluding beading), and my utilities are £48/month

wolvoman wrote: »

Furniture £60

Who needs to spend £60 a month on furniture?

wolvoman wrote: »

Mobile phone £50

Crazy. I spend £5/month

wolvoman wrote: »

Food will be £130

That's actually not bad

wolvoman wrote: »

Clothes £100
Eating and drinking out £250
Gym £70
Gifts £30
Days out £30
Dry cleaning/laundry £10
Hobbies £50

All luxuries. (obviously, clothes aren't a luxury, but spending £100 a month on clothes certainly is. I probably average about £100/year, maybe less. Once you've stopped growing, why do you need to keep on buying clothes? Just wear stuff until it's got holes in).

Perhaps you do not like the word "rich". I can deal with that. Let's use "well-off" instead. I can see no possible justification to giving the most well-off in society a tax break.

Also, let's be quite clear that whilst I don't spend much money, and my income is currently quite low, I certainly wouldn't consider myself as being poor (I own my own flat and prices could crash by almost 75% and I still wouldn't be in negative equity), so this isn't about self-interest.

wolvoman

I should resist but I'm taking the bait

Mr._H wrote: »

Ludicrously expensive for a one-bed flat. I live in a 2-bed flat with sash windows (relatively draughty despite funky draught-excluding beading), and my utilities are £48/month

Gas and elec in a 1 bed may be around £40. Water is £20, TV/Phone/broadband £30, TV licence £10, TOTAL = £100

Who needs to spend £60 a month on furniture?
Where does furniture come from then? Bed (£300), Mattress (£250), Wardrobe (£300), Draws and bedside cabinet (£250), Duvet and sheets and pillows (£100), TV (£750), Hi-fi (£250), Rug (£100), Cabinet/bookcase (£200), Mirrors (£200), Pictures (£200), Sofa (£500), Coffee table (£200), Side tables (£100), Dining table and chairs (£300), Lamps and light fittings (£200), TV stand (£100), Curtains and poles (£100), Kitchen equipment (£200), towels/throws/blankets (£100), Crockery/cutlery (£100), Computer desk (£100), Laptop/printer/camera/iPod/telephone (£1000), Vacuum cleaner/iron/board (£100),
Total: £6000 and an average lifespan of what.... 10 years? There's your £60 a month - well maybe £50. Still it's close.

Crazy. I spend £5/month
I spend an average of about £40 per month on my mobile, but many of my London friends easily spend £60+

VFR-Rider

Hmmm interesting.
Okay this is completely off topic now but hey-ho!
I disagree with this:

Mr_H. wrote:

£39K is a huge salary. If you are earning that and aren't rich, you're doing something wrong.

and this:

wolvoman wrote:

£39K in some parts of the country would be ok. If you live in London it isn't so great.

Not going into figures (mine).

But my disagreements are: 39k for some is huge for others it is not, there are some jobs where you have to spend a reasonable amount or it will hurt your career. Yes ideally we would be employed entirely for our skills, however if I turn up to a clients site and charged my hourly rate without "looking the part" you can be damn sure that the engagement may run shorter than planned! Because I'm not rich or even well off does not mean I am bad with money (it may do but I don't think so!), it could simply mean I have different expenses, bills, or it could just mean I'm quite young and may eventually be comfortable...

39K is way above average, I'm not going to kid myself and neither should you. But as above your expenditure may need to be above average.

Money is a very emotive subject and it's difficult to not take peoples views on salary/ expenditure personally. But the only facts we do know are the national average and the fact that big cities (London in particular) are a law unto themselves and applying averages may mean nothing.

Also wolvoman...where the heck do you live if £900 will get you a 1 bed?! (I'm assuming 1 bed, not studio?) Or is that exclusive of council tax?

Anyway guys back on topic please as I have a vested interest in this one

WTF?_2

Anyone still deluding themselves into thinking that the housing market is just tickety-boo should read this thread, elsewhere on the MSE boards:

http://forums.moneysavingexpert.com/showthread.html?t=752217

With that in mind, two points come across:

1) Mortgage lenders have seen the writing on the wall regarding home equity. If they thought prices were going to continue going up there wouldn't be a problem.

2) With lower and harder to get mortgage deals, buyers will be unable to borrow the sort of silly sums that they have grown accustomed to throwing at vendors over the last few years.

and that leads to the conclusion:

3) This whole thing will feed back on itself, pushing prices even lower.

van_persie

!!!!!!? wrote: »

Anyone still deluding themselves into thinking that the housing market is just tickety-boo should read this thread, elsewhere on the MSE boards:

http://forums.moneysavingexpert.com/showthread.html?t=752217

With that in mind, two points come across:

1) Mortgage lenders have seen the writing on the wall regarding home equity. If they thought prices were going to continue going up there wouldn't be a problem.

2) With lower and harder to get mortgage deals, buyers will be unable to borrow the sort of silly sums that they have grown accustomed to throwing at vendors over the last few years.

and that leads to the conclusion:

3) This whole thing will feed back on itself, pushing prices even lower.

Absolutely right.
And the reason why, IMHO, we can't have stagnation. It's contraction or expansion. Boom or bust. A cyclical market. Why do so many people have difficulty in accepting this? When they do, of course, it's often too late and they've already over-borrowed for a rabbit hutch. And for those who believe this is a small dip before HPI resumes its upward course, aside from the obvious financial implications, consider sentiment; the biggest factor of all. "Why buy now when it'll be cheaper tomorrow?"

Castleman

Living in London til Christmas, your figures seem very high.

wolvoman wrote: »

Rent on a reasonable 1-bed flat in a reasonable part of London will cost £900 a month.
.

2-bed for 1000 in a reasonably nice part of London.

and as for:

Pension/savings £300 thats pretty good savings per month
Council tax will be £90 ok
Commuting will be £100 get on your bike...I did 15miles each way 2/3 a week and saved £60 a month and got fit in the meantime. Combine that with running outdoors and swimming at local pool, + cheap set of weights, means you don't need to spend gym money either!
Gym £70 not needed

Utilities will be £100 ish
Insurances will be £30 ours was about £10 a month
Furniture £60 already discussed above
Mobile phone £50 £20 a month tops...otherwise you obviously have money to burn!
Food will be £130 ok
Clothes £100 maybe up to 100 every 6months
Eating and drinking out £250 it is london but just learn to cook better and encourage friends to do the same!

Gifts £30 ok
Days out £30 ok
Dry cleaning/laundry £10 luxury!
Hobbies £50 ok, but that would normally include cinema, swimming, etc

39k could support 2 people easily enough.

Generali

Castleman wrote: »

Living in London til Christmas, your figures seem very high.



2-bed for 1000 in a reasonably nice part of London.

and as for:

Pension/savings £300 thats pretty good savings per month
Council tax will be £90 ok
Commuting will be £100 get on your bike...I did 15miles each way 2/3 a week and saved £60 a month and got fit in the meantime. Combine that with running outdoors and swimming at local pool, + cheap set of weights, means you don't need to spend gym money either!
Gym £70 not needed

Utilities will be £100 ish
Insurances will be £30 ours was about £10 a month
Furniture £60 already discussed above
Mobile phone £50 £20 a month tops...otherwise you obviously have money to burn!
Food will be £130 ok
Clothes £100 maybe up to 100 every 6months
Eating and drinking out £250 it is london but just learn to cook better and encourage friends to do the same!

Gifts £30 ok
Days out £30 ok
Dry cleaning/laundry £10 luxury!
Hobbies £50 ok, but that would normally include cinema, swimming, etc

39k could support 2 people easily enough.

Plus extra if you want kids. If they're £200/week each (bigger house, car etc) then 2 kids = another £36k you need to gross.