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Everything posted by abharrisson

  1. Ref your final point...actually I am not trying to over egg the pudding as I have made upfront all the comments about it varying based on income etc and being based on affordability..... within band it looks that way but the varience is based on credit score.... with an avergae credit score and average earnings within each band you'd get somewhere near the middle of each band....... so actually its a pretty fair picture provided becasue I was asked.
  2. Don't understand the coding.... anyway... I'd agree with you the risk when lending on joint earnings of one party getting ill, stopping to have a baby etc is large, but I suppose they factor it in.... in a way though its not necessarilly greater than the say a situation where theres a main earner and he/she earns £75k, with a partner in part time earning £15k... and then main earner, gets ill, loses his job, decides to quit etc etc. Whichever way we cut it high multiples (certianly much higher than 2.5) are like it or not generally available..... although I think to some degree... more expensive mortgages and penal rates for over 75% will mean there are more limiting factors now in terms of what people will borrow.
  3. Actually I would... I have been forceful... deservedly so... in response to your insistence. Look at the sequence and ask yourself who went in what direction first... you reap what you sow.
  4. I've always wondered though with these guys who say they charge for their time.... if I came along and said I had a set of objectives and £300k to invest (lets assume I have sufficient life cover, pensions and short term savings, and no mortgage.. in other words this is say a long term 15 year plus investment looking for growth with an average approach to risk).... and say they said the cost of the work would be £x... I then turned round and said actually I have £1m to invest.... I wonder if the cost would rise... as otherwise fee based practices would seem to be earning less per £ invested than commisison based practices.... the cynic in me thinks fee based providers work out what the commission would have been and adjust their fees accordingly.... they never charge for straight hours... maybe though I am being unfair.
  5. Personally I think the future is potentially so bleak cameron may actually campaign for Brown to win the next election .... taking over a mess with no route out is no ones dream job....and two years to go until we get to an lection I am not convinced we will be at the bottom of things by then.
  6. Heres a brief list.... the rider to which is that some lenders scale this according to income level so for instance Abbey offer 5.1 if you earn joint over £80k but only 3.8 for joint less than £20k.... so they will lend a higher multiple to someone earning more (makes sense becasue there is a basic cost of living).... I would also say the published figures in some but not all cases are "sample" as the decision is actually based on "affordability" but by my reconing the figures are a good steer. I have just written down a few... there are many more... I don't want to say everyones the same as they are not, some higher than 4 some lower than 3.5.... not in my list but some are still at 2.5... but I think the list is enough to qualify 3.5 being normal, its certainly not unusual. The list is deliberatley a mix of large, medium and small providers. All multiples are for joint incomes. chelsea 3.75 n and p 3 west brom 3 c and g 4.75 a and l 4.5 post office 4 abbey 4.6 principality 3.25 nationwide 4.25 yorkshire 4.5 std life 4.3 beverley building soc 3.5 tipton and crosley 4 woolwich 5 brittania 3.75
  7. Gosh getting hot under the collar aren't we .. actually I have said your figures (take any version you like) are probably right BUT used an example of a couple earning £25,000 each living in an averagely priced home as an example of why using multiples is the wrong approach....... as I said read it first, and please don't tell me what to do, I post as I like.
  8. I wonder if all the banks will seek some sort of rights issue or dividend cut .... I had heard that lloyds might not do... but then again I also heard that if the economic downturn gets much worse in a consumer sense then they will be one of the most exposed to UK consumer bad debts... so whilst US mortgage debt was not their issue... UK bad debt in all its forms may well be. In some ways I think the banks crudely speaking are stuck between a rock and hard place.... making credit more expensive has been necessary for some because they don't have much if any cash to lend, for others its been necessary to avoid sinking their operations (but they are milking it profit wise)... problem being of course is that restricting debt for too much longer will lead to worse impairment (and therefore accruals), worse real bad debt through repossessions, IVA's, bankruptcies etc........ they can't make credit cheaper and more readily available but will surely recognise that by not doing so they risk having a serious impact on their balance sheets throuh bad debts that to some degree they have been the cause of through tighter lending... I do think they are truly between a rock and hard place on this issue.
  9. Try south yorkshire.... decent two bed houses (not in the best areas but OK) can be found for anything from £60k to £85K, with three beds rising to tops £100k
  10. The problem you identify is correct... take for instance the tory stance on sharing the proceeds of growth... if they had followed this path through the last Bull run then what we would have had naturally had would have been less "investment " in public services, lower borrowing and probably lower taxes..... and no doubt we would have been in a better position to "react " now.... but I don't think it would have worked like that because labour would have defeated them in one of the general elections offering to double expenditure on services.... in other words their mainifesto would have been built on tory prudence.... of course the tories would have seen this coming so would have cut taxes further and given away all the slack thus stopping labour from being able to do anything without also coming clean about raising taxes........ in other words labour governments seem to overspend and over tax, tory governments tend to under spend and under tax... neither can afford not to take their respective strategies to the max as otherwise they leave room for the opposition..... as you say with either party you just a different flavour its the same product.
  11. And what claim exactly do you think I was making..... the central point was that earnings and multiples aren't of any help in guaging prices... the point being there are plenty of couples earning £25,000 each (average) living in average accomodation (£180k odd) who would already fall within most peoples understadning of reasonable multiples eg 3.5... and yet theres downward pressure on those prices. I used it to illustrate the fact that for those who think multiples are useful there are plenty of examples where prices shouldn't fall... but they probably will which shows why the multiples argument is flawed. If you want to go out on a tangent fine... personally its better to read a post first before responding.I think you thought I was trying to make a point as to why houses are fairly priced currently vs multiples... in fact the opposite was the point I was making.... as I said I think you didn't read it before you posted
  12. And how is reponding to unsolicited insult with an equivalent insult "losing it"... look to yourself first... you respond strongly to me you get a strong response back... and your arrogance deserves it. as you appear to be all high and mighty lets see your regional earnings info then?.... I doubt in central england its going to be far off £25,000...... and if it is anything around that figure where does that leave your point of view exactly... nowhere I suspect.
  13. Tetchy eh... in most cases I think you will find mortgage companies sit today at somehwere between 3 and 4.25 joint income.... so taking 3.5% of joint is not a ludicrous figure... go check your facts before you try and criticise others I suggest. In any event you clearly suffer from an inability to read, I am using this not to make a point about house prices not falling, in fact the opposite... I am saying I think they will fall farther than averge income multiples suggest they might. try reading things in future and checking your facts before posting.
  14. I had you pegged as someone who could actually read... obviously I was wrong... have a look at the second example which you edited out... it uses national income figures and national house price figures....... now who's thick !
  15. Try repsonding to my post.... I am not disputing the various numbers on average household income... I am disputing their relevance in the real world. The whole point is average income figures are of little help in understanding what a fair value in an even market might be for a house.
  16. Were you and bloo loo bron stupid or did you have to work at it. The point I am making is that multiples of income is not a very good way of getting to an understanding of what level house prices should be. You keep wittering on about the so called average household income figure (saying its robust and then giving diverging figures lile... between £30k and £35k , others have said £41k). Lets look at the two points I have made to illustrate how stupid both yourself and Bloo loo seem to be over this. 1/ Average single income £25,000... correct or incorrect. (I'll accept £23,000 if you wanted to be pedantic).... you could buy a very decent 2 or 3 bed house in a lot of northern towns for £100,000 or less currently, in many areas the starting price might well be as low £60,000 or £55,000. Now for soemone like that..... will their house price fall... it shouldn't based on your idiotic and simplistic approach.... but personally I think it will. It just geos to show that from my point of view using income is simplistic 2/ Take my second example.... are you denying that there are probably loads of people who live as couples /families with two earners both earning average incomes (you seem to be denying this) if there are then its also probable that loads of them are living in houses at or around the average level of say £185k..... based on todays multiples of say 3.5 joint (and yes bloo loo this is normal and has been for ages... get over yourself)... this would indicate a price of around £175k would be right ... in other words a very minor fall.... personally I think it will be worse than that... but using your simplistic approach you seem not to. One final thing which of course you failed to respond to..... the reason the average figures don't work in my view and are not usefull in this regard is that the average household income figure includes all sorts of people including say the unemployed, those on benefits and the retired.... in other words those who are not in the business of having a mortgage.... so to try and use the average figures to try and assess the what the correct value of housing should be is amssively overly simplistic as I have said all along.... if there was such a measure then incomes of those in full time employment aged between 25 and 65 might give you a better feel for it broken out at a personal level and at a household level. I believe house prices will fall further than sensible income multipliers would suggest and I don't feel income multipiers are usefull at arriving at a measure for house prices because of the way the stats are built up.... you clearly as does bloo loo in your own simplistic way... feel they are of great use... more fool you.
  17. In a house where two people work and earn an average salary each indeed.... or are you saying such households do not exist ?.... I think its a fair assumption to say that where average salaries are £25,000 there are probably very many households where a couple both work and both earn around the average salary mark. Its probably also fair to say that many of these might well live in a averageish house. If you follow the mantra (which it appears you do) that there is some magic formula of around 3.5 times income for house prices (I don't) then you end up conceding that £175k would be about right for the price of the house..... surely you think average house prices will fall further than this don't you, I do. At least I am honest enough to say once they start falling you can throw out any simplistic ideas of how a price should best be calculated and indeed I am honest enough to say that there is little basis in using average earnings as a correlation to average house prices... you seem convinced there is.
  18. Equally nor can you take an average national household income figure that includes pensioners, singletons, couples, recent school leavers etc and try to make out that the figure has any really meaningful relevance when discussing this issue. As I said if you believe there is some simple formula using national stats regarding prices of homes vs incomes then I am afraid you are dead wrong.
  19. All those who voted Labour since 1997 need to remind themselves they are to blame. The "evil eyes" poster of Blair from 1997 seems about right now. Bloated civil service Botched pay deals eg GP Iraq war Stealth taxes Massive reduction in NHS productivity Deflation of school results Massive wastage Etc etc They have done a few good things, and have always talked a strong game but have delivered very little of any value at the same time as ruining the finances of the country.
  20. You may well be that simple but the issue isn't... I refer you to my response above.
  21. I have only seen reliable stats for average income which is something like £25,000 so two earners = £50,000. You can argue the stats anyway you like... eg do you have stats for household income where there are two earners or only an average household income... which includes those just starting out and indeed pensioners and indeed the unemployed and those on benefits..... I suspect if one looked at the actively working population then your figure of £35,000 would be astray by a good margin. So I come back to this.... you can buy a decent house for a singleton for £85,000 in lots of places (not the southeast admittedly) and this is already below 3.5/4 times average single income. Equally for dual income households £175k is about right. Now I am not saying house prices will not fall, but simply making the point that multiples of income especially when they averaged up is not a good place to start when trying to work out what the values should be. if you did then you could make a very strong case to say prices will not have far to fall which I am sure is not going to be right.
  22. I think thats a little simplistic... let me explain... average these days is possibly a dual income household with a combined income of circa £50,000 (£25,000 average salary)... £50,000 times say 3.5 is £175,000 which is not far off the average price currently. Single income households where there are single occupants would result in £25,000 times 3.5 = £87500... difficult currently in the soth east, impossible in london, but doable on current prices in other regions. So why the need for house prices to fall... in a lot of areas these numbers work... so fall they will but I think the fall has little basis on multiples really. taking the BTL yield example... not a bad start point in my view... but again fraut with difficulties becasue the investor measure referred to of 8% only applied to certain types of housing... family housing (ie decent detached house in a decent area) never acheived this figure even in 2000..... having said that theres plenty of terraced housing in northern towns where the original BTL started that still yield 8%... of course plenty of the new builds yields nothing like that. My own view is that theres no magic measure either based on multiples of income, rental yields, analysis vs inflation historic trend , build and land cost etc.... probably the closest is utilisation of disposable income using a measure of something like 35% for a repayment mortgage.... but once you drill down even that is massively complicated... even arriving at an "average " for disposable income by household is complicated becasue you cannot base it on just one earner, the average figure is probably much closer to 2 and with some families having "older" children who work and also contribute the picture is further clouded, equally where do you set the bar in terms of % borrowing... 100%, 90%,80%,70%, 60%.... House prices are falling and will continue to fall, where they stop who knows, I don't think theres an a magic formula for assessing what a fair level might be, the long stated return to historic trend may even be a mile off as life has moved on and the trend is more greatly affected by history than current reality.
  23. Retirement issues have been around for years and will get much much worse where there is a housing slowdown leading to a recession... which looks likely. While there is now a little more coverage for private retirement funds it won't be enough. If (and when in my view) the stock market turns down we'll see the value of these retirement funds sink. No one (or mosts anyway) do not save enough, nothings going to change on that front other than its going to be tougher and tougher to do so with the current inflation in basic items. There are really really tough times ahead for everyone..... a house price slow down rather than a crash might help but I suspect it will get driven to the bottom and with it there will be economic pain all round to homeowners and non-home owners alike. And on that cheery thought I am signing off for good. I have seen the exciting turn in the market with you guys but now have to spend my time actually making some money. Good luck to you all however it turns out.
  24. Sadly then i fear we have just ourselves, as the banks are being taken away, and the chinese make things more economically than we seem to be able to..... I'll have to get back to making my stinging nettle soup (an old wartime receipe).
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