Wednesday, Aug 19, 2009
Upbeat downbeat article.
Timesonline: The mid-lifers’ deadly grip on the market
Last week a middle-aged man bought a home. Why the interest? It’s partly to do with the buyer’s identity and partly because he neatly illustrates the tightening grip of the mid-lifer demographic on the emerging property market.
"Banks should see a deposit of 15 per cent as an adequate cushion against another collapse in prices — which not even the arch-miserabilists think is a possibility." Hmmmmm!
Posted by flintster1994 @ 08:26 AM (1629 views) Add Comment
18 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. paul said...
As one of the commenters points out, the banks will lose either way.
Worth remembering that the property market is a pyramid, so middle-aged third and second home buyers cannot make the market levitate above and beyond first time buyers - the pyramid will collapse as more and more chains fail (as is happening right now).
2. uncle tom said...
Paul - correct.
When will people realise that in the long run, letting is not an effective route for housing those who are priced out.
In a price stable market, an economic rent (from the landlord's standpoint) is not far removed from an interest only mortgage.
And I'm sorry Ms Ashworth, but prices have yet to fall by a good deal more than 15%..
3. monty032 said...
Anne Ashworth either doesn't read this web site, or she is purposely misrepresenting us when she claims that not even we arch-miserabilists think that a further 15% house price fall is a possibility. I would say the median view here is for a further 20-25% fall, with a few outliers such as Japanese Uncle going for 70%+ overall. According to the Nationwide data I just downloaded, the first time buyer PE ratio touched 2.1 in 1995 Q4, reached 5.4 for three quarters in 2007, and is now down to 4.2. So either earnings are going to rise a lot, which doesn't seem very likely given Gordon Brown's train wreck of an economy, or house prices are going to have to fall much further.
Has anyone else noticed that the vocabulary in Anne Ashworth's article is much more intellectual than usual? Maybe she is on holiday and the intern wrote it.
4. george monsoon said...
Anne Ashworth shares the view of most people who are not FTB's
There appears to be a grey cloud of mist that seperates reality from those who are either outright homeowners, or by sheer LUCK, bought many years ago, before the onset of our recent property bubble.
So as Paul says (and I agree completely) without a chain, nobody is going anywhere fast and the situation will gravitate lower as time goes on.
I say stop, with immediate effect, any government assistance to the banks. Let them fall, split, reform and become robust. After all , they are not passing on the lower interst rates. They aren't lending to FTB's unless underwritten by the Queen herself, so let em all fail I say, so that joe public can go about his business of managing the real british economy down here, at the ground level.
5. mrmickey said...
As I keep on banging on about there is a demographic timebomb building as our population ages & refuses to have children, who will they pass all this debt on to, I propose a "Logan's Run" style solution encouraging people to take up dangerous sports at the age of 60.
6. uncle tom said...
mr mickey,
People would be more likely to have children if they could afford to buy a decent family home and live on a single income.
7. mark wadsworth said...
Uncle Tom "In a price stable market, an economic rent (from the landlord's standpoint) is not far removed from an interest only mortgage"
Exactly. Rents are fairly stable and they are the maypole around which house prices dance.
But I could rephrase that slightly:
"In a price stable market, land value tax (from the owner's standpoint) is not far removed from an interest only [non-repayable] mortgage [on the land element], on which the rate is fixed but the underlying taxable amount varies; as opposed to an interest-only mortgage which is a variable rate on a fixed amount"
8. uncle tom said...
Mark,
Give up on LVT - you know it's not going to happen.. ;(
BTW how do some of you put bold or italic text formatting on your posts? Nothing seems to work on my 'puter..
9. mark wadsworth said...
The fact that LVT is a lost cause is neither here nor there. I just enjoy campaigning :)
As to italics, you have to do an html tag which is < i > (only without the spaces) at the beginning and then < / i > at the end (again, without the spaces). For bold use "b" and for underline use "u" (I think).
10. alan_540 said...
uncle tom
View the page's source (Ctl-U) in Firefox to see the underlying html
11. uncle tom said...
I'm just using a steam age version of IE - can't find any menu options that will allow me deeper into the page..
12. 51ck-6-51x said...
UT said, "BTW how do some of you put bold or italic text formatting on your posts?"
( I hope this post shows it right, have to post special characters... )
bold face: <b>bold face</b>
italic face: <i>italic face</i>
13. 51ck-6-51x said...
( ... oh YEAH! I rule :) )
14. 51ck-6-51x said...
or maybe...
15. tenyearstogetmymoneyback said...
uncle tom @ 2.
I have suggested in several previous posts that buying (with an interest only mortgage) SHOULD actually
be CHEAPER than renting.
Think about the extra expenses that a Landlord has such as lettings agency fees, void periods, gas safety checks etc,
which a owner occupier doesn't. They all have to be paid for. The problem is that in the past decade they have been
completely overshadowed by House Price Inflation. In fact the landlord would probably still make a profit without any
tenants.
If you go back twenty years to only function of Private Lettings was to cater for people on short term relocation, who usually
worked for a company or organisation who was prepared to pay towards their rent.
16. uncle tom said...
@15
I've done the numbers on this countless times. Some landlord expenses are proportionate to the value of the property, while others are essentially the same whether the house is worth £50k or £5m.
Those landlords that own outright can (in theory) accept a lower return than those using borrowed funds.
The real cost of borrowing money, after inflation has been stripped out also varies; and in practice, a person borrowing on interest only will find little compasssion when the inflation rate runs high.
So there's no hard comparison.
However, the bottom line is essentially the same (and I'll try some of 666's formatting here..)
Renting does not make property significantly more affordable
17. uncle tom said...
Hey! - it worked!! thanks 666
18. This comment has been removed as it was found to be in breach of our Blog Policies.