Jump to content
House Price Crash Forum

Hpc In Now On! S&p Say Uk 17% Overvalued


Gman
 Share

Recommended Posts

  • Replies 56
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

This whole income mulitple thing in my view flawed also, by stating that 3.5 x income in a norm. Are we not using a brief historical moment in time to use as a benchmark, I have always struggled to see why this is the 'norm', but I am open to being convinced. I suspect that dual income and longer repayment periods will go some way to ensure that we do not see the 'norm' return.

I still feel that the market is on the edge at the moment, higher interest rates/taxation, lack of mortgage avaiablitly and increased stock and more 'sensible' affordabilty based income models, but I really think siply using income mulitple as a guide to HPC is a bit of a red herring. i would love it to be the case and I hope i am proved wrong as it will only ensure great HPC.

Link to comment
Share on other sites

Which scenario causes a HPC:

A. Income multiple at 3.5x interest rates at 18%?

B. Income multiples at 5x, and interest rates at 0.5%?

Affordability is important, because most of the population outside of HPC world, only looks at day to day costs, they dont think about the future it is all about todays cashflow. For the majority property is almost at historically affordable levels. Income multiples are too simplistic...

That is an interesting point.

My mum and I were discussing this and she talked about what happened to her and my dad in the 70's when inflation and IR's whet ballistic. Their house was so much cheaper back then and they had it at an average of 2.5x dad's income. But they were nearly repo'd because of what the IR's were doing to the repayments.

Link to comment
Share on other sites

This whole income mulitple thing in my view flawed also, by stating that 3.5 x income in a norm. Are we not using a brief historical moment in time to use as a benchmark, I have always struggled to see why this is the 'norm', but I am open to being convinced. I suspect that dual income and longer repayment periods will go some way to ensure that we do not see the 'norm' return.

I still feel that the market is on the edge at the moment, higher interest rates/taxation, lack of mortgage avaiablitly and increased stock and more 'sensible' affordabilty based income models, but I really think siply using income mulitple as a guide to HPC is a bit of a red herring. i would love it to be the case and I hope i am proved wrong as it will only ensure great HPC.

In the future 2 x joint and heavy checks will probably be the norm? Surely the point is that 12 X joint Liar loan and a Mew to go is not the norm! The 2000 to 2007 period was a one off, it is not coming back, no matter how much some might think things have changed for good, if anything the average person will never be as "rich" again as during those few years?

Link to comment
Share on other sites

Last time I applied for a mortgage 3.5 times salary seemed to be the norm, don`t have the paperwork, sorry it was 1997.

What's that got to do with anything?

You said average person average wage average house.

It's not the same as you can borrow 3x (or 3.5x) salary.

Link to comment
Share on other sites

In the future 2 x joint and heavy checks will probably be the norm? Surely the point is that 12 X joint Liar loan and a Mew to go is not the norm! The 2000 to 2007 period was a one off, it is not coming back, no matter how much some might think things have changed for good, if anything the average person will never be as "rich" again as during those few years?

I'd agree with you that some of the practices of the period 2000-2007 are gone for good... eg the high loan to value no checks whatsoever loan...... but I really do think things have moved on for the most part and I think some form of affordability is with us to stay. It probably will involve greater checks than have been missing in the past to not only prove income but also ( and just as importantly) assess outgoings...... that being said though I think we will continue to see household income being assessed together ( rather than 3.5 times one plus the second), and if you were to equate it to income multiples ( which isn't always relevant I'd be surprised if 3.5 times joint was not within reach for many going forwards. Things have changed both in how banks process loans and assess them, gone in a firestorm of IT devlopement has gone personal underwiriting etc and banks now simply want models that work for them... by in large assessment by affordability has been a development which works.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

  • Recently Browsing   0 members

    No registered users viewing this page.





×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.