Nationwide +1.6% August

[Dr Renter]

I just went to the HSBC website to check this, they are happy to give a couple on 34K each a mortgage for 240K if they have a 20% deposit on a 300K house.

HSBC are a conservative lender, some other lenders will probably lend more.

Take home salary for a couple on 34K is 4200 a month, monthly repayment at current variable rates is 1100 a month, at 5% the repayment is 1400 a month.

4200 take home.

1400 mortgage.

Thats quite high but not insane, it wouldnt stop me from getting on the housing ladder if i desperately wanted my own place.

Oh well, if a bank says it's affordable then it must be. And your couple seem to have both had a 4k payrise. Or is this what they told the bank they earn to get the required mortgage? At £30k they take home £3,900 a month and when she goes part time, more like £3,000 a month. Wow, that £1,400 mortgage is looking expensive.

[Mammon]

I just don't believe the haliwide data any more, I may just be in denial but I was doing my customary weekly rightmove search with the bee and it struck me that there are no asking price increases but there is a sea of red so if the haliwide data is to be believed it's buyers who are now saying "actually, the crash is over, yes I'll pay whatever you ask" , but that makes no sense, it should be sellers who are saying it's over "we want more" and then the buyer will get thier money off asking but the average would be up. As play stands haliwide are implying that those who were savvi enough not to have been lumbered with a big debt at the top of a bubble have lost it in the last couple of months and splurged and just to be generous threw in a handy incresed offer meanwhilst Ea's offices look like mortuaries at midnight!!!

Nationwide data has always looked accurate to me.

Oct-07 £186,044

Nov-07 £184,099 DOWN

Dec-07 £182,080 DOWN

Jan-08 £180,473 DOWN

Feb-08 £179,358 DOWN

Mar-08 £179,110 DOWN

Apr-08 £178,555 DOWN

May-08 £173,583 DOWN

Jun-08 £172,415 DOWN

Jul-08 £169,316 DOWN

Aug-08 £164,654 DOWN

Sep-08 £161,797 DOWN

Oct-08 £158,872 DOWN

Nov-08 £158,442 DOWN

Dec-08 £153,048 DOWN

Jan-09 £150,501 DOWN

Feb-09 £147,746 DOWN

Mar-09 £150,946 UP <- Prices start to head up on the very month interest rates are cut to 0.5%

Apr-09 £151,861 UP

May-09 £154,016 UP

Jun-09 £156,442 UP

Jul-09 £158,871 UP

Aug-09 £160,224 UP

[Mr Punter]

In surveys Sibs the majority of people actually want cheaper house prices. Makes sense. If you own a house and have kids you want them to be able to buy one day.

And if you don't see the total stupidity of "Most of the UK economy depends on HPI" then I really feel sorry for you. Do you really think you can build an economy on house price inflation?????

Most people would also like cheaper food, petrol, cars, holidays, higher salaries etc. These things have never been easy to achieve for the average person. Historically a first time buyer on average wages will rarely afford an average house. They will start at the bottom and move up. I am sorry that you guys, in spite of you excessive research, have been unable to bag the bargain that you desired, but if you are determined to buy (rentals are still good value) you may have to set your sights a bit lower.

[Mammon]

but if you are determined to buy (rentals are still good value) you may have to set your sights a bit lower.

Either that or work harder, overtime or second job so you can aim a bit higher.

I know that sounds condescending. But its what i had to do to get on the housing ladder in 2001.

Prices in london were already up over 100% from 1996 in 2001. 70K houses were now selling for 150K+.

I was earning 37K a year as a permie in IT, i could just about afford a 150K 3 bed semi in a ok area, but i wanted a 250K detached house in a better area.

So i quit my safe permie job in mid 2000 and went contracting, started to work 50+ hours a week, i was getting paid by the hour not day so worked every hour i could get. Was able to save a good deposit within 12 months.

This wasnt without its risks as when the IT contract market collapsed in late 2001, dot com crash, i was out of work for over six months and my next job paid much much less, but i had bought a decent place so the risk was worth it.

Edited August 27, 2009 by Mammon

[Oh Dear]

IMHO It was once the case where a young person would rent a property until they met their percieved life partner, they would then buy a house/flat on joint wages with the intention of having children. Alternatively, they would rent together and buy a house- when they were going to have a baby. This was due to security (not having to move all the time).

This seemed a sensible policy until HPI really took off. Now what option do the young couples have. A mortgage of £1400 is utter lunacy for a young couple on what I would consider very good wages (34k). There is no security in purchasing a property at the inflated prices of the last few years, one short employment gap, a child or change in interest rate all but wipes you out.

Around my neck of the woods, over 30k is a fantastic wage. My observations give me the impression that there has been almost no movement in the cost of housing since 2004. Some very small gains to 2007 and some very small reductions since then, but pretty much no change.

House prices need to stay at these nominal levels for the next 10 years or significant drops are required to bring the housing market back to a cost that will enable a normal (no BOM&D or very high earner) FTB to enter the market. Either that or waiting until all the childless couples who have managed to buy pass away leaving the house to nobody.

[Oh Dear]

Just to add. I believe houses will be cheaper (income multiplier) this time next year, and could not care less if they went up or down in the Nationwide index.

[Guest The Relaxation Suite]

Interest rate rises are a-comin', trust me. They're imminent in healthier economies like Australia, and they won't be far behind even in economic basket cases like Britain. Right now we have absolute, unmitigated morons buying houses that are 40% over-valued and they are doing this in a crashing economy. They get their cheap loan - the very thing that caused all of this - (although I would bet that most buyers now are cash buyers) and they get the house. IN 20 months' time rates will be 4% - you do the maths. All they are doing is kicking the housing collpase down the road for the Tories to deal with.

Edited August 27, 2009 by D-503

[Mammon]

Interest rate rises are a-comin', trust me. They're imminent in healthier economies like Australia, and they won't be far behind even in economic basket cases like Britain. Right now we have absolute, unmitigated morons buying houses that are 40% over-valued and they are doing this in a crashing economy. They get their cheap loan - the very thing that caused all of this - (although I would bet that most buyers now are cash buyers) and they get the house. IN 20 months' time rates will be 4% - you do the maths. All they are doing is kicking the housing collpase down the road for the Tories to deal with.

I really hope you are right, i hope that you can buy a house at 50% off peak and economy doesnt go into depression if that happens. But i think there is much higher chance it wont happen, i think they will keep printing money to stop it from happening regardless of the consequences. However you might get another chance to buy at 25% off peak if we get a W shaped recovery. But i wouldnt count on that either..

[Guest The Relaxation Suite]

I really hope you are right, i hope that you can buy a house at 50% off peak and economy doesnt go into depression if that happens. But i think there is much higher chance it wont happen, i think they will keep printing money to stop it from happening regardless of the consequences. However you might get another chance to buy at 25% off peak if we get a W shaped recovery. But i wouldnt count on that either..

Excessively high house prices benefit no one apart from banks and governments, so sensible prices are better for the majority of hard-working people. However, the British economy seems now to revolve around the money generated in one form or another from house sales, so the drastic correction on the way may have a negative effect on the wider economy, I suppose. But in the long run it is central to British prosperity that hard-working young people can borrow a sensible amount of money to buy a house, and right now that ain't happening.

Currently so ,much of their income goes on rent/mortgage that there isn't the money to spend down the shops, so they all go bust, and unemployment goes up, etc. It's a negative cycle always reinforced by excessively high land prices. Luckily for us the data showing price rises is just lies and propaganda to maintain public order, and in reality prices are coming down.

Edited August 27, 2009 by D-503

[whyohwhy]

Right lets have a reality check.

A year or so ago, this site was hot. The way things were balanced all the bad news on here might have tipped the media over the edge and there actually might have been a HPC.

Then trouble. Well for you anyway.

Most of your plans were scuppered when the government started helping homeowners stay put. Repossessions were the big part of your strategy.

Next low interest rates and GE.

The government, homeowners and 90% of the general public didn't want house prices to go down. The rules were changed to suit. The battle was over.

We did not and will not let house prices crash not matter what the cost to you. Too much is at stake. Most of the UK economy depends on HPI.

I'm not an intellectual. I'm a working man and although my views don't wear well with you lot they are actually the normal man on the streets. You keep harping on about HPC,debt etc when I work with loads of homeowners. HPC is NEVER mentioned at work. Nobody but you lot cares about house prices because we all know unless you're selling or buying now it's nothing to you.

When I spoke to a BTL merchant this week and saw how genuinely happy he was with low interest rates I knew that was the final nail in your coffins.

It's over. The was or will not be a HPC.

You possibly could have got one until the goal posts moved.

Stop living in denial. A FTB is a 1 bed flat or like not a 4 bed detached what some lead you to believe on here.

But there was a HPC Sibley, it's just that the magnitude expected on here hasn't materialised in all but some of the most precarious parts of the country (Midlands new builds and Thamesmead)

I think QE and "zero" rates killed the theory of a crash similar to the 90s when there were high rates and little government involvement. I've been saying for several months that I think we hit the bottom for both equities and property, except this time I've invested in equities to catch the rise as so many property sellers are playing a game of show and hold out.

It's so obviously not in the country's interests for property prices to fall by 50% unless we decided to do a Fight Club and wipe people's debts overnight to avoid neg eq.

I for one am applauding the fact that there is some stability returning which will hopefully lead to a shorter recession and a shorter dole queue. Call me selfish, eh

[DementedTuna]

I just went to the HSBC website to check this, they are happy to give a couple on 34K each a mortgage for 240K if they have a 20% deposit on a 300K house.

HSBC are a conservative lender, some other lenders will probably lend more.

Take home salary for a couple on 34K is 4200 a month, monthly repayment at current variable rates is 1100 a month, at 5% the repayment is 1400 a month.

4200 take home.

1400 mortgage.

Thats quite high but not insane, it wouldnt stop me from getting on the housing ladder if i desperately wanted my own place.

Your argument is flawed, because of your assumption of a couple earning £34k each being "average". When you have had a high income it's important to make sure that it doesn't cloud judgement in the same way that a poor person is more likely to be a bear.

I'd encourage you to look beyond your own personal circumstances as a very hard-working high-earning individual and consider the situation mathematically.

In reality, having a salary that high means you are nearly in the top 10% earners in the uk (source:http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom)

Let's call it the top 12%, for arguments sake.

Now, the odds of both couples both having a salary of that magnitude are slim. Mathematically speaking, the odds of both couples earning this amount or above is 100*(0.12*0.12) = 1.44% = 854000 people buying 427000 houses.

There are factors that push this figure up (inheritance, social factors meaning the wealthy are more likely to marry each other, one partner earning significantly more), and factors that have a negative impact (one partner already owning a home with no need to buy, personal debt etc.) but they're too varied to quantify.

Even if the positive factors boosted the number by 500%, it would still be very small.

This is reflected in the current very low transaction rate... very, very difficult to buy a property at this point in time, even the reasonably wealthy people, not just first time buyers are finding it hard.

Around my neck of the woods, over 30k is a fantastic wage.

Your neck of the woods is pretty representative of the country as a whole.

Right lets have a reality check.

Well, for what it's worth my signature still stands. Not removing it on account of not liking it. I see it as a testament to the dangers of complacency. After the crash was underway, (2008+) the quality analysis that accurately predicted it dropped off sharply... the smart bulls who knew about numbers left out of shame, the smart bears left as they considered their point proven.

I have to agree on interest rates, if the BoE keeps them where they are, then house prices aren't going down anytime soon. Low transactions aren't a major problem as long as the current (very expensive) anti-repo measures are in place. I don't personally see the current state of affairs lasting beyond the next general election.

Edited August 28, 2009 by DementedTuna

[Take Me Back To London!]

More Green Shoots of Disaster.

The sharpest fall in business investment in 44 years shocked economists yesterday who said it increased the risk that figures released today will show the economy shrank by more in the second quarter than the 0.8pc initially thought

http://www.telegraph.co.uk/finance/finance...ment-falls.html

More pain is in store for Britain's beleaguered manufacturing sector in 2009, with 2,460 companies expected to fail this year, despite signs that the economic outlook is improving.

http://www.telegraph.co.uk/finance/economi...es-to-soar.html

[deadman]

Interest rate rises are a-comin', trust me. They're imminent in healthier economies like Australia, and they won't be far behind even in economic basket cases like Britain. Right now we have absolute, unmitigated morons buying houses that are 40% over-valued and they are doing this in a crashing economy. They get their cheap loan - the very thing that caused all of this - (although I would bet that most buyers now are cash buyers) and they get the house. IN 20 months' time rates will be 4% - you do the maths. All they are doing is kicking the housing collpase down the road for the Tories to deal with.

Great post.

[winkie]

I just went to the HSBC website to check this, they are happy to give a couple on 34K each a mortgage for 240K if they have a 20% deposit on a 300K house.

HSBC are a conservative lender, some other lenders will probably lend more.

Take home salary for a couple on 34K is 4200 a month, monthly repayment at current variable rates is 1100 a month, at 5% the repayment is 1400 a month.

4200 take home.

1400 mortgage.

Thats quite high but not insane, it wouldnt stop me from getting on the housing ladder if i desperately wanted my own place.

There is a very important point you forgot to consider....there are far more houses with an asking price of £300k on the market than there are couples both on £34k pa with £60k in savings...you are living in cloud cuckoo land.

Edited August 28, 2009 by winkie

[twatmangle]

I think most people can pay off 50% their mortgage within the first five years if they try, take all the overtime they can get, cut back costs, take a second job if possible etc.

I said that the other day on another thread an nobody believed me.

I anticipate paying off more than 50% of my mortgage within 5 years, hopefully all paid off in 10.

[Wires 74]

Even I have started to doubt now especially seen the number of sold signs I`ve seen go up in the last couple of weeks - lifes moves on I guess and maybe STR`ing wasn`t the best move but our day will come I`m sure .

[Mammon]

There is a very important point you forgot to consider....there are far more houses with an asking price of £300k on the market than there are couples both on £34k pa with £60k in savings...you are living in cloud cuckoo land.

20% of households have take home income > 4K per month.

What percentage of homes are priced over 300K?

[Wires 74]

All the arguments about renting are fine but at least with a mortgage you can pay it off and enjoy old age. I wouldn't want to be renting forever. You'll never have anything.

For once I find myself agreeing with Sibley - renting is fine when your young - not so clever when your coming up to retirement and your pension has been stolen by Gordon Brown ...

The reason the Continentals manage it is because of rent controls but we don`t have any such protection ( I know of a elderly couple who pay only 200Euro a month for a apartment more or less in the centre of Vienna - reason it`s so low is they have lived there for over forty years -same type of place in the Centre of London would be ten times as much )

[BrickandMortar]

Interest rate rises are a-comin', trust me. They're imminent in healthier economies like Australia, and they won't be far behind even in economic basket cases like Britain. Right now we have absolute, unmitigated morons buying houses that are 40% over-valued and they are doing this in a crashing economy. They get their cheap loan - the very thing that caused all of this - (although I would bet that most buyers now are cash buyers) and they get the house. IN 20 months' time rates will be 4% - you do the maths. All they are doing is kicking the housing collpase down the road for the Tories to deal with.

Well a great deal of people were on this rate or thereabout before the credit crunch hit and were doing fine.

What makes you think they will all of the sudden default on their mortgage once IRs get back to that level (especially when they would have paid off quite a bit of capital?)

[Bloo Loo]

20% of households have take home income > 4K per month.

What percentage of homes are priced over 300K?

households..households....do you enjoy inflation you doomer?

[winkie]

20% of households have take home income > 4K per month.

What percentage of homes are priced over 300K?

Not according to IFS.

http://www.ifs.org.uk/wheredoyoufitin/

Looking at freehold houses in the Greater London area most of them.

[kilroy]

Just to add. I believe houses will be cheaper (income multiplier) this time next year, and could not care less if they went up or down in the Nationwide index.

I think the income multipliers may be greater than now, but due to big YoY falls in wages, not increases YoY in HPI

[Mammon]

households..households....do you enjoy inflation you doomer?

No i dont, but its a fact of life since the world adopted fiat money and went off the gold standard.

Houses are a good hedge against inflation. Newly printed money tends to flow into assets like real estate.

[Prof]

Problem is on here is that most people haven't got what it takes to do that.

They believe they should buy a first time buy 4 bed detached and work 40 hours.

The HPC gang can say what they like but they ain't in a house yet are they? Crash or no crash they are still renting.

First comment : Are you sure about that ? I suggest that you are exaggerating.

Second comment : Some of us are, and mine is paid for. That doesn`t mean I want HPI, it means that I understand how the next generation will struggle to buy a house, or not even be able to. We`re not all wanting a cheap house at someone else`s expense, some of us simply have a sense of "fair play".

[TheEmperorHasNoClothes]

20% of households have take home income > 4K per month.

What percentage of homes are priced over 300K?

Where I live, 100%