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MSE News: House prices fell in October, says Halifax

Former_MSE_Helen
Former_MSE_Helen Posts: 2,382 Forumite
in House buying, renting & selling
"Prices dropped 0.7% month-on-month in October, taking average house prices to £158,426..."
Read the full story:

House prices fell in October, says Halifax

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Comments

  • brit1234
    brit1234 Posts: 5,385 Forumite
    Good news. The sooner property prices fall back to 3.5 times salary the better for our economy and more importantly future generations.
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  • ukcarper
    ukcarper Posts: 17,337 Forumite
    Name Dropper First Post First Anniversary
    brit1234 wrote: »
    Good news. The sooner property prices fall back to 3.5 times salary the better for our economy and more importantly future generations.

    I'm not sure if a big fall will be good for economy.
  • Turnbull2000
    Turnbull2000 Posts: 1,807 Forumite
    brit1234 wrote: »
    Good news. The sooner property prices fall back to 3.5 times salary the better for our economy and more importantly future generations.

    Why do you still persist with this magical 3.5 times salary benchmark when it's quite clearly obsolete - and has been for some time.

    Two-full time earners, mortgage terms of 30 years and rates below 5%* are now pretty much standard, therefore the salary multiple has established itself at 5-6 and will remain there.

    *as opposed to a single earner, 25 years and 8% or higher rates in days gone by.
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  • Turnbull2000
    Turnbull2000 Posts: 1,807 Forumite
    ukcarper wrote: »
    I'm not sure if a big fall will be good for economy.

    Yup, would be highly destructive in the short-term and will be avoided at all costs. In fact, you could argue they've already achieved this, with price stability currently being maintained until the credit taps open again.
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  • brit1234
    brit1234 Posts: 5,385 Forumite
    Turnbull2000 wrote: »
    Why do you still persist with this magical 3.5 times salary benchmark when it's quite clearly obsolete - and has been for some time.

    Because it is the historical lending criteria.

    During the boom banks resulted in irresponsible lending to gain market share. Each bank tried to out do each other leading to a massive house price bubble and banking collapse. Now banks are back to responsible lending, people can't now afford inflated prices and values as well as transaction levels are falling.

    Turnball do the maths and you will see I am right. ;)
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  • Turnbull2000
    Turnbull2000 Posts: 1,807 Forumite
    edited 6 November 2012 at 11:45PM
    brit1234 wrote: »
    Because it is the historical lending criteria.

    During the boom banks resulted in irresponsible lending to gain market share. Each bank tried to out do each other leading to a massive house price bubble and banking collapse. Now banks are back to responsible lending, people can't now afford inflated prices and values as well as transaction levels are falling.

    Turnball do the maths and you will see I am right. ;)

    So you believe we'll revert to single earner buyers, 25 year terms and 8% interest rates? Think you'll find yourself in a very, very small minority with that one!

    The current biggest obstacle for most buyers are deposits. In terms of repayments, a £160,000 house is quite affordable on two salaries of £20,000. Once 95-100% mortgages make a comeback, the buyers will return.
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  • ukcarper
    ukcarper Posts: 17,337 Forumite
    Name Dropper First Post First Anniversary
    brit1234 wrote: »
    Because it is the historical lending criteria.

    During the boom banks resulted in irresponsible lending to gain market share. Each bank tried to out do each other leading to a massive house price bubble and banking collapse. Now banks are back to responsible lending, people can't now afford inflated prices and values as well as transaction levels are falling.

    Turnball do the maths and you will see I am right. ;)

    That's not right is it the long term average for house prices is just over 4x male full time earnings it's now 4.22 or 5x depending on which figures you believe.
  • DRP
    DRP Posts: 4,272 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    MSE_Helen wrote: »
    month-on-month

    pffffff :rotfl:
  • brit1234
    brit1234 Posts: 5,385 Forumite
    Turnbull2000 wrote: »
    The current biggest obstacle for most buyers are deposits. In terms of repayments, a £160,000 house is quite affordable on two salaries of £20,000. Once 95-100% mortgages make a comeback, the buyers will return.

    No the biggest obstacle is high prices. Those of us in the South East with big deposits are still priced out. The reason deposits are so big is due to the lenders expecting prices to fall. High deposits greater protection for them.

    Low deposits will only come back when the housing market has bottomed out.

    You stating property is affordable based on record low interest rates, both working on high wages and not ever having a family is hogwash. All you are trying to do is stoke the bubble and a bubble we have.

    images?q=tbn:ANd9GcQ-nVWegFMdq859P7d57mlBxLmAyjCGy7E3XLbyacUFRT8Yt723
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  • mr_fishbulb
    mr_fishbulb Posts: 5,224 Forumite
    First Anniversary Combo Breaker
    Turnbull2000 wrote: »
    Why do you still persist with this magical 3.5 times salary benchmark when it's quite clearly obsolete - and has been for some time.

    Two-full time earners, mortgage terms of 30 years and rates below 5%* are now pretty much standard, therefore the salary multiple has established itself at 5-6 and will remain there.

    *as opposed to a single earner, 25 years and 8% or higher rates in days gone by.
    And where does it go from there? Will my children need to live with 2 partners each so they can afford to buy a house?
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