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Mse Readers Predict House Price Rises

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http://www.moneysavingexpert.com/news/mort...dicted-by-money

Seriously though, this is probably a good measure of current sentiment, which as we all know should not be dismissed.

Stupidity loves company. I feel that I'm living in a parallel dimension, because I can't stop thinking that a 2 bed terraced for £100K in an area where most earn under £20K, is overpriced, not 'a bargain'. Perhaps I'm psychotic and deluded :lol:

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http://www.moneysavingexpert.com/news/mort...dicted-by-money

Seriously though, this is probably a good measure of current sentiment, which as we all know should not be dismissed.

Stupidity loves company. I feel that I'm living in a parallel dimension, because I can't stop thinking that a 2 bed terraced for £100K in an area where most earn under £20K, is overpriced, not 'a bargain'. Perhaps I'm psychotic and deluded :lol:

Maybe, though a couple could afford that at sensible lending: 2.5 x (17k + 13k say) = 75 + 25 deposit = 100k

Not saying it's right, or won't come down, but it isn't ridiculous.

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Maybe, though a couple could afford that at sensible lending: 2.5 x (17k + 13k say) = 75 + 25 deposit = 100k

Not saying it's right, or won't come down, but it isn't ridiculous.

Fair point but they will be in a precarious position if one of them loses their job or they spit up.

Also, not sure if the sort of mentality that drives people into £17/13k jobs is the same one that will allow the accumulation of a £25k deposit.

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Maybe, though a couple could afford that at sensible lending: 2.5 x (17k + 13k say) = 75 + 25 deposit = 100k

Not saying it's right, or won't come down, but it isn't ridiculous.

It's the small matter of the £25K deposit, and the fact that 8 years ago, the same properties were going for under £40K tthat tells me we're still in a bubble.

I accept that a couple in that position could just about afford it, but it's a bl**dy rip off. I could pay £2 for a mars bar, but I'd be pretty miffed if that was what they cost.

Been looking at Canada recently (NS) - look what you can get for £80K in a decent area, close to a major city

http://www.realtor.ca/propertyDetails.aspx...pertyId=8501220

I know Canada's a bigger place, and there are other factors bearing down on house prices everywhere, but there is just no value in the UK at all as far as house prices are concerned.

With my STR fund I can basically buy a massive place with hardly any debt in Canada - am looking into emigration at the moment.

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It is so frustraiting but I think the famous bubble graph is still spot on "back to normal".

I thought I would live in Tunisia and buy a "cheap" house here whilst waiting for things to cblow over in the UK but guess what? They are now the same price in norwich for houses that I 50% of the quality (average wage 300 quid a month).

We are all in limbo whilst we wait for the rates to go up =crash, or a Japan = long death crash.

Both roads point to crash.

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not sure if the sort of mentality that drives people into £17/13k jobs is the same one that will allow the accumulation of a £25k deposit.
It's the small matter of the £25K deposit, and the fact that 8 years ago, the same properties were going for under £40K that tells me we're still in a bubble.

Yes, a 25k deposit is not at all easy to save up for a couple earning £30k between them. But even if prices fell 50% from here they would still need a sizeable £12.5k deposit (or to borrow more - remember I'm assuming 1960s style credit of a 25% deposit and 2.5 x joint income mortgage).

As I said, I am not trying to argue that the current price is "right" and that it won't fall. In fact, personally I believe it will fall (at least a bit).

But if I were not an HPC.co.uk reader, but instead were that couple, listening to their friends, reading the news, and I did have a 25k deposit (whether saved, loaned by granny or however), I'd be sorely tempted to buy now for £100k.

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They are now the same price in norwich for houses that I 50% of the quality (average wage 300 quid a month).

Sorry, I don't understand that?

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Guest happy?
http://www.moneysavingexpert.com/news/mort...dicted-by-money

Seriously though, this is probably a good measure of current sentiment, which as we all know should not be dismissed.

Stupidity loves company. I feel that I'm living in a parallel dimension, because I can't stop thinking that a 2 bed terraced for £100K in an area where most earn under £20K, is overpriced, not 'a bargain'. Perhaps I'm psychotic and deluded :lol:

One thought which this site has never entertained and is worthy of serious consideration - namely that property ownership is a mid 20th century aberration. Everyone on here cites that the historical norm for property is 3.5x average income. This is not strictly true - it is correct for a particular period in history - but that period was a relatively short run. For most of all other historical periods very few - the wealthy - owned property.

We have not yet entertained the notion that we may be departing from the 3.5x income model on a permanent basis.

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One thought which this site has never entertained and is worthy of serious consideration - namely that property ownership is a mid 20th century aberration. Everyone on here cites that the historical norm for property is 3.5x average income. This is not strictly true - it is correct for a particular period in history - but that period was a relatively short run. For most of all other historical periods very few - the wealthy - owned property.

We have not yet entertained the notion that we may be departing from the 3.5x income model on a permanent basis.

the lending of pre 2007 was unsustainable as it brought the lenders down.

Banks themselves STILL claim to use multiples for evaluating a loan.

Its never gone away, except in the minds of brokers and Liar Loners.

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Sentiment is widely reverting back to that of pre-bust, and is sounding extremely 'positive' on house prices. The general public belief is that the bottom has long passed and prices are one their way up again - and may actually rocket again soon.

There's a thread on DigitalSpy that's a good example of this. A first-time buyers who believes the crash is over, house prices are "improving" and it's "now or never".

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the lending of pre 2007 was unsustainable as it brought the lenders down.

Banks themselves STILL claim to use multiples for evaluating a loan.

Its never gone away, except in the minds of brokers and Liar Loners.

But have we entered a period where property now is simply unaffordable? Was the period during the mid/late 20th century an aberration?

It was the norm prior to WW1 for people to live in cramped, crowded conditions with 10-15 people in one room. Liberal legislation of this period removed the over-crowding and gerry-building. The post WW2 period saw a massive social house-building increase. The 80's saw most of that housing removed permanently from the market - with those buying it only able to do so at massive state-discounts.

The private sector has never built sufficient property to meet demand.

My question - is affordability the exception and not the norm: and, has the period of affordability now passed?

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Well I only read probably about 2% of the forum and I have seen this idea mentioned at least a few times.

Who knows about the future - declining natural resources and war could change absolutely everything.

One thought which this site has never entertained and is worthy of serious consideration - namely that property ownership is a mid 20th century aberration. Everyone on here cites that the historical norm for property is 3.5x average income. This is not strictly true - it is correct for a particular period in history - but that period was a relatively short run. For most of all other historical periods very few - the wealthy - owned property.

We have not yet entertained the notion that we may be departing from the 3.5x income model on a permanent basis.

Edited by waitingscot

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Well I only read probably about 2% of the forum and I have seen this idea mentioned at least a few times.

Who knows about the future - declining natural resources and war could change absolutely everything.

It's perfectly possible to enter a post-ownership phase without declining resources. People on here regularly advocate the idea that we return to the norm (and it's an assumption I've accepted previously) but what if we don't return to that position?

That banks aren't lending to new buyers without significant deposits - which effectively means they've stopped lending to first-time buyers. We previously had a society in which rental was the only option and in the last decade first-time buying has mostly been achieved by parental support.

Perhaps we are coming to the end of home ownership.

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i find it interesting how on here the 3.5x is bandied about too.

it's also on here that women going into fulltime work (roughly 1970's+) has driven down the mans wage.

why then should 3.5x the joint wage not be the norm?

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i find it interesting how on here the 3.5x is bandied about too.

it's also on here that women going into fulltime work (roughly 1970's+) has driven down the mans wage.

why then should 3.5x the joint wage not be the norm?

indeed. it should of course fall, as we are seeing more dependents and less workers. as should rents, which are.

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Sentiment is widely reverting back to that of pre-bust, and is sounding extremely 'positive' on house prices. The general public belief is that the bottom has long passed and prices are one their way up again - and may actually rocket again soon.

There's a thread on DigitalSpy that's a good example of this. A first-time buyers who believes the crash is over, house prices are "improving" and it's "now or never".

This is actually good news.

We are in bounce that will suck the last of the bulls money into the property market before the final crash.

The last of the support is now gone and a BTL tsunami is assured.

Once the downtrend resumes it will be a bloody.

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Guest theboltonfury
http://www.moneysavingexpert.com/news/mort...dicted-by-money

Seriously though, this is probably a good measure of current sentiment, which as we all know should not be dismissed.

Stupidity loves company. I feel that I'm living in a parallel dimension, because I can't stop thinking that a 2 bed terraced for £100K in an area where most earn under £20K, is overpriced, not 'a bargain'. Perhaps I'm psychotic and deluded :lol:

Of course they do, they're all skint.

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i find it interesting how on here the 3.5x is bandied about too.

it's also on here that women going into fulltime work (roughly 1970's+) has driven down the mans wage.

why then should 3.5x the joint wage not be the norm?

Because then you are screwed when the wife get's up the duff.

Until very recently (last seven or eight years) it was 3 times single, or 2.5 times one + 1 times the other, which allowed for life's little bumps.

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But have we entered a period where property now is simply unaffordable? Was the period during the mid/late 20th century an aberration?

Interesting idea. May be true. Hope not, and if it does become the case, I'll scarper off out of the UK for good, taking my state provided qualifications with me. I suspect that a lot of skilled workers under 40 would do the same, leaving the UK to become a more or less feudal society again. What a comforting thought.

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One thought which this site has never entertained and is worthy of serious consideration - namely that property ownership is a mid 20th century aberration. Everyone on here cites that the historical norm for property is 3.5x average income. This is not strictly true - it is correct for a particular period in history - but that period was a relatively short run. For most of all other historical periods very few - the wealthy - owned property.

We have not yet entertained the notion that we may be departing from the 3.5x income model on a permanent basis.

I have been receiving some flack because of my pro inflation stance but it is no suprise to me house prices are shooting up its low interest rates

Think the 80s or 90s interest rates was what well above 6% and regularly in double didgits so a person earning lets say 10K and a terraced was 40K thats 4k interest on that property now look today 100k terraced HSBC bank now offering a 90% LTV mortgage at 3.89% and the persons now earning 20k its a no brainer during the 2000s 5% has been the average and now look

Interest rates are too low and 100k for a crap terraced is to high but if rates stay this low for a long time the next bubble will be 150k for a crap terraced within 3 years subject to banks letting rip again high multiples etc and at less than 4% @ 5x earnings is a lot less to the buyer than 3x at 10%

The smart thing the BOE should do is raise rates NOW a quarter % up each month up to 4 or 5% and try to contain house prices flat currently HPI is 20% yoy looking at the past 6 months the powers that be never learn but if the BOE wants to remain independant i assume it must do as its told and inflate things before the next general election so if you own a house wait a few months and get out catch the bubble if you dont own one possibly buy REITs for 6 months should be a good earner but after the next election then problems will probably start with severe deflation again much worse than last time

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But have we entered a period where property now is simply unaffordable? Was the period during the mid/late 20th century an aberration?

It was the norm prior to WW1 for people to live in cramped, crowded conditions with 10-15 people in one room. Liberal legislation of this period removed the over-crowding and gerry-building. The post WW2 period saw a massive social house-building increase. The 80's saw most of that housing removed permanently from the market - with those buying it only able to do so at massive state-discounts.

The private sector has never built sufficient property to meet demand.

My question - is affordability the exception and not the norm: and, has the period of affordability now passed?

you cant have a 70% "overclass" in any market...the market base is determined by the entry level.

IF, as you propose, most cant buy because they are priced out, either the market will fall to meet them, or there is little market.

at the moment, the average mortgage on a buy is £139,000...clearly out of reach of the average earner.

If the market is to continue, then it can only come down. 70% of the homeowning population are not rich enough to sustain this cash buyers and rich earners market....there simply arent enough of them.

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you cant have a 70% "overclass" in any market...the market base is determined by the entry level.

IF, as you propose, most cant buy because they are priced out, either the market will fall to meet them, or there is little market.

at the moment, the average mortgage on a buy is £139,000...clearly out of reach of the average earner.

If the market is to continue, then it can only come down. 70% of the homeowning population are not rich enough to sustain this cash buyers and rich earners market....there simply arent enough of them.

This is perfectly true if you accept the paradigm. But prior to the 1930's home ownership was a fantasy - renting was the norm. I can think of whole areas where I live which are now owner-occupied but the same houses were rented prior to the 1950's. We had a rentier class previously - the Wilsons are trying to sell-out to big corporations if they are successful these properties are permanently lost to individuals. What's to stop this model taking-off?

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