Do you want house price to rise or fall?

ukcarper

GreatApe wrote: »

Good thing the good people of Guildford also have a credit card to tap into their portion of the £10 trillion national wealth to help them afford property.

How do you think Guildford property got more and more expensive over the last 5 years? Surely your unaffordability argument held true in 2013 Guildford too. If you claimed give years ago Guildford was unaffordable yet five years have passed of people affording to buy in Guildford. How so?

Actually in Guildford average price has fallen from £454k over last year.

GreatApe

chucknorris wrote: »

I didn't say that it was 'nearly impossible' or that they were 'having a hard time' (although some of course would be, but then again that was probably always true). I simply said that it was harder now than it was before, and I don't think that there is anything that you could say that would convince me otherwise. I should of course qualified and limited my statement to the more expensive regions of the South East.

I would ask you to stop looking at one variable, income vs price, and look at the overall picture.
This is a many variable problem and I would say the best indicator of affordability would be ownership rates. Or even better yet ownership rates for UK born brits and long term migrants minus short term migrants.

2017 ownership went up by about quarter of a million homes. If prices were affordable or too expensive that would not be the case.

If you look at UK born ownership rates they didn't fall by much at all
Despite a big recession and a big change in mortgage regulations

When all forms of wealth and ways to buy property are included affordability is near peak levels which is why ownership is also near peak levels (for uk born brits). There has been a general dilution in overall ownership rates from 2004-2016 due to recent migrants mostly renting privately. This also explains why even some of the cheapest parts of the country like middlesborough have also seen lower ownership and higher rentals

Generally speaking homes are a stock of capital.
It is hard for them to become unaffordable because if prices go up so does corresponding wealth. Or to put it another way for each £1 homes go up in price there is more or less a £1 increase in inheritances and gifts

The average uk born brit is born long housing. They will inherit more homes than they will need as british women have something like 1.5 kids

GreatApe

Graham_Devon wrote: »

Oh sorry, my bad, I forgot most people had land, gold and art lying around.

Apologies.

Play dumb all you want

UK net wealth exceeds £10 trillion.
UK annual gifts and inheritances probably exceeds £200 billion
UK earnings outside of working are around £600 billion annually

Pretend all you like that those sources of wealth do not exist.
It will just lead you to another decade or two of scratching your head and watching the market not crash

Graham_Devon

GreatApe wrote: »

Play dumb all you want

UK net wealth exceeds £10 trillion.
UK annual gifts and inheritances probably exceeds £200 billion
UK earnings outside of working are around £600 billion annually

Pretend all you like that those sources of wealth do not exist.
It will just lead you to another decade or two of scratching your head and watching the market not crash

I'm not pretending these sources of wealth don't exist.

I'm just not assuming, as you are, that the majority, especially those buying their first home or family home have access to such capital.

You, on the other hand, are.

The average inheritance is claimed at age 60+ (no good for a FTB or younger family). The majority of the UK's wealth is held by the top 10% richest people in the country. I.e, not the majority.

People who have fine arts, gold, land that is worth anything....they already have the house(s) too.

Why keep assuming that everything is spread equally? It's not. So your point's are completely worthless.

The thing that matters to the vast majority of FTB's and younger families is income vs house price. That's an undeniable, irrefutable fact.

chucknorris

GreatApe wrote: »

My guess is over the next 5 years ownership pool will grow by 1 million and private rental will be flat.

If brexit (or other economic factors) reduces migration levels by a lot, then by the late 2020s we will be back towards 68-70% ownership which is more or less the max achievable while we maintain a social stock of 17%

Where do you see London property prices going in the next 10 years? I'm not sure that they can go up much more in real terms (about inflation), and if I was planning to stay in the (letting) market that long (I'm not), I would be concerned about what a Labour Gov might try to do. They are already talking about limiting damage deposits to 3 weeks, which is ridiculous.

chucknorris

GreatApe wrote: »

I would ask you to stop looking at one variable, income vs price, and look at the overall picture.
This is a many variable problem and I would say the best indicator of affordability would be ownership rates. Or even better yet ownership rates for UK born brits and long term migrants minus short term migrants.

2017 ownership went up by about quarter of a million homes. If prices were affordable or too expensive that would not be the case.

If you look at UK born ownership rates they didn't fall by much at all
Despite a big recession and a big change in mortgage regulations

When all forms of wealth and ways to buy property are included affordability is near peak levels which is why ownership is also near peak levels (for uk born brits). There has been a general dilution in overall ownership rates from 2004-2016 due to recent migrants mostly renting privately. This also explains why even some of the cheapest parts of the country like middlesborough have also seen lower ownership and higher rentals

Generally speaking homes are a stock of capital.
It is hard for them to become unaffordable because if prices go up so does corresponding wealth. Or to put it another way for each £1 homes go up in price there is more or less a £1 increase in inheritances and gifts

The average uk born brit is born long housing. They will inherit more homes than they will need as british women have something like 1.5 kids

Graham has already raised the points that I would have responded with, mainly the one about most FTB will not have access to large inheritances, although the BOMAD is more prevalent these days. I have helped a few of my friends in the past with their deposits (not gifts, just interest free loans).

chucknorris

ukcarper wrote: »

Actually in Guildford average price has fallen from £454k over last year.

We've just bought a house (subject to contract) in Ashtead, where prices have definitely dipped. But I'll probably find that my house has dipped too, in Dorking when I sell it, we won't be selling until after we have completed on the new home.

GreatApe

Graham_Devon wrote: »

I'm not pretending these sources of wealth don't exist.

I'm just not assuming, as you are, that the majority, especially those buying their first home or family home have access to such capital.

You, on the other hand, are.

The average inheritance is claimed at age 60+ (no good for a FTB or younger family). The majority of the UK's wealth is held by the top 10% richest people in the country. I.e, not the majority.

People who have fine arts, gold, land that is worth anything....they already have the house(s) too.

Why keep assuming that everything is spread equally? It's not. So your point's are completely worthless.

The thing that matters to the vast majority of FTB's and younger families is income vs house price. That's an undeniable, irrefutable fact.

Of the £200 billion annually that is inherted/gifted how much do you think flows into property? None?

Young or old, the persons I know that get gifted wealth seem to just buy a bigger or better house or extend their current ones

Of the £600 billion annually gained by non working income (eg dividends and business income) how much flows into property? none? Again a lot of business owners I know have nice big homes its flowing into property

The hpc saying of the average man on the median wage (including part timers and kids) should be able to afford the average house is just wrong.

At a minimum to get a better model you need to split the housing market into three tiers

Those who only buy with income (mostly FTBs)

Those who buy with income + a few decades of saved money (Typically second time buyers eg a 50 year old that paid off their mortgage buying their second home using that equity + another new mortgage)

Those who buy with the above + inherted/gifted wealth/business-wealth

If you do that you should say the bottom 1/3rd of properties, nationally, should be affordable for FTBs who only really have income

When you do that what do you think you find?
Well you find the cheapest 1/3rd of proeprties (mostly in the cheaper regions) are very affordable for FTBs. So much so that I know couples on the minimium wage who have bought. Sure they bought a three bed house but it was in a cheap region which means it was nationally well within the bottom 1/3rd of proeprties

Again when you do a proper model of things things look sustainable normal and logical

How could I be wrong i've been saying this for a decade now and for a decade I have been right. Your models of unaffordable ponzi have failed so long you need to take a step back and see if your confirmation bias has screwed up all your thinking

GreatApe

chucknorris wrote: »

Graham has already raised the points that I would have responded with, mainly the one about most FTB will not have access to large inheritances, although the BOMAD is more prevalent these days. I have helped a few of my friends in the past with their deposits (not gifts, just interest free loans).

Sure see my post above

The housing market would be better modeled as follows

Those with just income buying the bottom 1/3rd of properties, typically FTBs

Those with income + a couple of decades of joint savings buying the middle 1/3rd of properties (typically second time buyers who have cleared the mortgage and are stepping up to a bigger/better house using the equity on the house plus another mortgage)

Those with income + inheritance/gifted/business/other wealth buying the top 1/3rd of properties. Typically people like you or people who have income + couple of decades of joint savings + gifts/inheritances

If you look at the market that way you see FTB affordability is good. Look at the cheaper half of regions and the cheaper half of properties in those regions and can FTBs with income only buy there? Yes. Something like 350,000 FTBs bought last year (or more like 700,000 if you assume most were couples) that is a large number.

The problem was never that house prices were or are too expensive.
The problem is the ridiculous models the crash cheerleaders use. An average man all by his lonesome earning the median wage of £26k which includes children and part time workers should be entitled to buy the average home in any and ever region.

ukcarper

chucknorris wrote: »

We've just bought a house (subject to contract) in Ashtead, where prices have definitely dipped. But I'll probably find that my house has dipped too, in Dorking when I sell it, we won't be selling until after we have completed on the new home.

Where I am west of Guildford thing have certainly slow down, Daughter put her house in Hampshire on market last week no viewers yet.