Do you want house price to rise or fall?

GreatApe

I do understand why people feel property is too expensive but I would wager people have more or less always thought that probably even in the bottoms of cycles. Like WP points out there were people posting on forums in 1996 saying London is too expensive and about to crash. In fact I dont know anyone who has ever said they thought the property they bought was too cheap almost always they say when viewing or looking to buy that prices are too expensive

Recently I have been looking at upgrading and I too feel prices are too expensive. This is natural as we always look at properties more expensive than we can afford so the natural reaction and reasoning is that things are expensive. I dont sit down and think hey greatape there are plenty of people richer than you and they are outbidding you and this is a normal and a logical functioning market. No... just like the crash wishers I think dam I wish this was 20% cheaper prices seem so high....

The only difference is I accept there are people more able to bid on the properties I would like so I only have two choices, accept something lessor or up my game.

ukcarper

GreatApe wrote: »

People do not buy property with just earned income they also have capital and other sources of income. These are much higher today than when you bought your home so prices are still affordable.

This is clear by the fact that ownership is higher today than in 1972 when you bought even if prices are higher relative to incomes. Whats more ownership is increasing again now at these prices so the idea that property is unaffordable is just wrong. More people own now and even more will own this year and next year.

Like I keep saying, whats the problem?

You keep saying that but is not correct and it's not the overall ownership but the rate of increase that indicates how difficult it is to buy.

GreatApe

ukcarper wrote: »

You keep saying that but is not correct and it's not the overall ownership but the rate of increase that indicates how difficult it is to buy.

By that logic if we were at 99% ownership and the rate was increasing by a tiny 0.05% a year that would show a terrible unaffordable mess because the rate of increase is tiny compared to the 1970s? Does not sound of good reasoning to me

ukcarper

GreatApe wrote: »

By that logic if we were at 99% ownership and the rate was increasing by a tiny 0.05% a year that would show a terrible unaffordable mess because the rate of increase is tiny compared to the 1970s? Does not sound of good reasoning to me

You obviously reach a time when the rate of change fall but it has gone into reverse, but you are trying to say that because home ownership was lower in 70s it was harder to buy but that is obviously not the case.

GreatApe

ukcarper wrote: »

You obviously reach a time when the rate of change fall but it has gone into reverse, but you are trying to say that because home ownership was lower in 70s it was harder to buy but that is obviously not the case.

How can you say that as someone who lived in the 70s?

Sure a house might have been cheaper but how much did you have after meeting your needs. Food was about 3x the cost in real terms. Cloths shoes cars electrical furniture almost everything was much more costly so yes housing took up less of your income because other things took up more of your income the end result was that ownership was lower than today.

And I repeat for the 10th time you are only looking at income and not reality which is income + capital. House prices have not gone up so much if you look at income + capital especially on a regional basis rather than toeing the crash cheerleader line of income only.

Graham_Devon

GreatApe wrote: »

And I repeat for the 10th time you are only looking at income and not reality which is income + capital. House prices have not gone up so much if you look at income + capital especially on a regional basis rather than toeing the crash cheerleader line of income only.

Repeat it as much as you like.

In 2014 (I'm sure newer stats are available), the average savings per household across all households in the UK was £10,400.

In 2017, another study showed that savings were falling, and one in four families in the UK had an average of just £95 in savings.

Interestingly, the "highest income" households savings jumped from an average of £50k, to £65k in a single year, while the lowest earning families dropped from £136 to £95 in the same year.

The £10,400 average obviously includes the super wealthy, so once they are removed from the figures, things look pretty stark for the majority of households in the UK.

Average debt per household though, outweighs savings, at £17,600 per household. Personal debt, which is more relevant as we can strip out mortgages was £2,770 per household.

I don't know why you are fixated on this assumption that the majority have capital lying around. Facts very clearly show this is not the case. If you won't accept outright facts from the ONS, then this is a lost cause.

chucknorris

Graham_Devon wrote: »

In 2014 (I'm sure newer stats are available), the average savings per household across all households in the UK was £10,400.

Just curious, about how they defined 'savings'? Did they mean anything put aside, but not necessarily immediately and easily available, or did they mean absolutely anything put aside? By this I mean investments that are not easily accessible without consequences. For example, I could access quite a bit immediately from my equities. But it would mean either having to pay 20% capital gains tax (over the CGT allowance, which I tend to use up anyway) or even worse losing either the ISA or SIPP tax free wrapper.

ukcarper

GreatApe wrote: »

How can you say that as someone who lived in the 70s?

Sure a house might have been cheaper but how much did you have after meeting your needs. Food was about 3x the cost in real terms. Cloths shoes cars electrical furniture almost everything was much more costly so yes housing took up less of your income because other things took up more of your income the end result was that ownership was lower than today.

And I repeat for the 10th time you are only looking at income and not reality which is income + capital. House prices have not gone up so much if you look at income + capital especially on a regional basis rather than toeing the crash cheerleader line of income only.

I can say that as someone who lived and bought in 70s and yes at times it was hard but I can see that if I was in the same position now I would not be able to buy a similar property. The thing you completely ignore is that what you can buy is limited by what you can borrow which is determined by what you earn.

chucknorris

ukcarper wrote: »

I can say that as someone who lived and bought in 70s and yes at times it was hard but I can see that if I was in the same position now I would not be able to buy a similar property. The thing you completely ignore is that what you can buy is limited by what you can borrow which is determined by what you earn.

I definitely think that it is much harder for FTBers to buy now, and I do have a lot of sympathy for them, especially the ones that get on with it, and struggle through and do it. Not so much for the ones that constantly moan and whinge about how earlier generations had it so much easier (it isn't a constructive thing to do).

ukcarper

chucknorris wrote: »

I definitely think that it is much harder for FTBers to buy now, and I do have a lot of sympathy for them, especially the ones that get on with it, and struggle through and do it. Not so much for the ones that constantly moan and whinge about how earlier generations had it so much easier (it isn't a constructive thing to do).

I agree a couple of things that annoy me is being told I had it easy and didn't have to make any effort or sacrifice to buy which I certainly did. Also people that earn enough to get the mortgage complaining they can't save deposit when by altering their lifestyle and making sacrifices they could. But that doesn't alter the fact that ithe ncrease in prices have priced more people out than any time in recent past.