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Natwide Q4 2010 -3.4% / -8.9% Yoy

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Belfast remains the country’s most expensive area and

also saw the best performance this quarter, with prices

down only 1% year-on-year. The North East saw the

weakest house price performance.

The Belfast bubble still to burst?

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Lies, dam lies and statistics...

“Northern Ireland has seen the greatest improvement in affordability since 2007, thanks to the large price falls experienced over the past few years. The average house price to earnings ratio in the province is now 4.6, down from a peak of 9.2."

I dont have time to look up the data and do the calculations now, but something smells about the above paragraph in the report.

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The Belfast bubble still to burst?

Prices around my part of Belfast seem to be coming within shouting distance of 'reasonable' though I'd expect at least another 10% off before I'd start dusting down the deposit.

They're about 40% off of mid-2007 peak and back then I would have said that a 50% correction was in order to bring them into line with reality. For the patient, probably a good chance they'll over-correct too (helped by public sector cuts) and so bargains to be had.

Annoyingly but possibly predictably, prices of things like 3-bed semis holding up better than terraced and 2-bed.

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Lies, dam lies and statistics...

“Northern Ireland has seen the greatest improvement in affordability since 2007, thanks to the large price falls experienced over the past few years. The average house price to earnings ratio in the province is now 4.6, down from a peak of 9.2."

I dont have time to look up the data and do the calculations now, but something smells about the above paragraph in the report.

OK...

Peak price Q3 2007 - £227,970 / 9.2 = average earnings of £24,779.

Nationwide Q4 2007 - £125,637 / 4.6 = average earnings £27,312.

Edit: to add my point... Nationwide seem to be using the UK average earning when doing the calculations and not the regional average income which is much lower and makes the ratio look less affordable.

Edited by Belfast Boy

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Houses are still far too expensive in NI as far as I'm concerned; I've done the sums and it still makes sense for me to rent.

Adjusted for inflation, the house that my parents as FTB's bought for the equivalent of £40,000 30 years ago is £100,000 at the moment. It's cheaper than it was 3 years ago, but it's still too expensive.

I rent a flat in Belfast, and when rates and maintenance fees are taken into account, it would cost aleast twice as much per month to buy compared to renting.

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I think we are still way above sensible pricing. With a good deposit & good salary, I am still stuck either gambling on rates staying low (which they wont) or buying a little terrace in a decidedly average area. Sorry, but not happening!

The nice thing to take out of these results is that 2010 was considered to be surprisingly good and it is likely that 2011 will be worse. So if we went down about 10% last year, where might we be a year from now...

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Lies, dam lies and statistics...

“Northern Ireland has seen the greatest improvement in affordability since 2007, thanks to the large price falls experienced over the past few years. The average house price to earnings ratio in the province is now 4.6, down from a peak of 9.2."

I dont have time to look up the data and do the calculations now, but something smells about the above paragraph in the report.

If the provinence has experienced the largest price drops of all the regions (which is clearly the fact, by quite a long shot) then it is obviouse that it would also see the greatest improvement in affordability.

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If the provinence has experienced the largest price drops of all the regions (which is clearly the fact, by quite a long shot) then it is obviouse that it would also see the greatest improvement in affordability.

Not really. Rising unemployment, wage cuts and decreased profits for the self-employed will mean affordability has not improved as quickly as prices have fallen.

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Not really. Rising unemployment, wage cuts and decreased profits for the self-employed will mean affordability has not improved as quickly as prices have fallen.

Depends what factors you put into your calculation. Most people would consider affordability in terms of how affordable for a certain salary.... that is an easy thing to quantise. Roll in the next level and it gets more difficult since there is no nice number to associate with them....

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Not really. Rising unemployment, wage cuts and decreased profits for the self-employed will mean affordability has not improved as quickly as prices have fallen.

Are you trying to tell us the average income for northern Ireland has fallen over 45%?

Recent releases, rather surprisingly show that the average income for Northern Ireland has actually risen whilst the average house has fallen 45%. Whilst there are many other more important factors such as the availability of credit and good old sentiment this rather crude measure of affordability has shown a dramatic improvement.

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Are you trying to tell us the average income for northern Ireland has fallen over 45%?

Recent releases, rather surprisingly show that the average income for Northern Ireland has actually risen whilst the average house has fallen 45%. Whilst there are many other more important factors such as the availability of credit and good old sentiment this rather crude measure of affordability has shown a dramatic improvement.

if you adjust for inflation average income has actually fallen not risen or stayed the same.

Edited by 2buyornot2buy

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if you adjust for inflation average income has actually fallen not risen or stayed the same.

We can discuss Real or Nominal value if you like. The reduction in house prices of 45% is taken in nominal value.

However, you statement "affordability has not improved as quickly as prices have fallen" in either Real or Nominal values, is completly wrong and misleading.

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The 'affordability' debate is an interesting one. For me its a bit like the glass is either half full, or half empty - depending on how you want to view it

Yes ... compared to the peak, houses are more affordable. The word 'affordable' I dont like to use however as it suggests they are affordable :blink: at current prices, which they are not.

An article in The Times suggests that more than two million people used their credit card to pay their mortgage or rent last year according to alarming figured from Shelter. Nearly one in ten of those in private rented accommodation used their credit card to cover the housing bill in the year to August 2010, while about 8 per cent of mortgage borrowers did the same, the housing charity said. In many cases, residents struggling to make ends meet have withdrawn cash from their card to pay housing costs, pushing them deeper into debt.

Afforable if you rob Peter to pay Paul ... the s$%t will hit the fan again and when it does it could be a landslide. We need to get real and start thinking of £100k as a hell of a lot of money again. Mindsets still havent fully changed, this is part of the problem.

Edited by tinbin

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We can discuss Real or Nominal value if you like. The reduction in house prices of 45% is taken in nominal value.

However, you statement "affordability has not improved as quickly as prices have fallen" in either Real or Nominal values, is completly wrong and misleading.

When did I say the above? I simply said if you adjust for inflation wages have actually fallen. You said they have risen or stayed the same. I was adding a bit of balance to this assertion. The cost of purchasing other items apart from houses has increased due to inflation. Wages have not increased therefore a larger percentage of pay will be spent on essentials with less left over for housing.

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When did I say the above? I simply said if you adjust for inflation wages have actually fallen. You said they have risen or stayed the same. I was adding a bit of balance to this assertion. The cost of purchasing other items apart from houses has increased due to inflation. Wages have not increased therefore a larger percentage of pay will be spent on essentials with less left over for housing.

Sorry, it was Yadayda.

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A point which may have already been made with regards to the 'average income figures' that these reports produce and which so much debate is then made on. Just how much influence have the liar loans (self cert) mtg's had on these figures over the last few years.

The FSA have carried out detailed analysis of past lending decisions for Mortgages, looking at the causes of arrears and repossession since 2005 and found that:

• 46% of households either had no money left, or had a shortfall after mortgage payments and living costs were deducted from their income;

Almost half of new mortgages between 2007 and the first quarter of 2010 were provided without a customer having to verify their income;

• The share of interest-only mortgages has been increasing. At the peak of the market, over 30% of all mortgages were interest-only;

• Many consumers with no repayment vehicle count on future house price rises or uncertain life events to repay their mortgage and some have no plan at all;

Edited by tinbin

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A point which may have already been made with regards to the 'average income figures' that these reports produce and which so much debate is then made on. Just how much influence have the liar loans (self cert) mtg's had on these figures over the last few years.

The FSA have carried out detailed analysis of past lending decisions for Mortgages, looking at the causes of arrears and repossession since 2005 and found that:

• 46% of households either had no money left, or had a shortfall after mortgage payments and living costs were deducted from their income;

Almost half of new mortgages between 2007 and the first quarter of 2010 were provided without a customer having to verify their income;

• The share of interest-only mortgages has been increasing. At the peak of the market, over 30% of all mortgages were interest-only;

• Many consumers with no repayment vehicle count on future house price rises or uncertain life events to repay their mortgage and some have no plan at all;

Quote from the latest CML ReportCML Dec 10 Report

The take-up of repayment mortgages in October was the highest in more than five years for both home-buyers and those remortgaging. 93% of first-time buyers took out a repayment mortgage in October, the highest proportion since records began in 1974, showing a clear shift away from a pre-2007 norm of around 30% of first-time buyers opting for interest-only mortgages. This shift shows lenders have been adjusting their loan criteria in anticipation of possible regulatory changes, and a recognition that repayment mortgages may be in the best interests of less experienced borrowers such as first-time buyers.

We can all look back at the madness of the banks, during the boom. However, one thing is for sure they certainly are not repeating it at the moment. As someone that has been involved in 100's of house sales over the last few years I simply cannot accept that people, today are obtained mortgages without proof of income. I challenge anyone to go to a bank or building Society and prove me wrong on this one.

Edited by BelfastVI

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Quote from the latest CML ReportCML Dec 10 Report

We can all look back at the madness of the banks, during the boom. However, one thing is for sure they certainly are not repeating it at the moment. As someone that has been involved in 100's of house sales over the last few years I simply cannot accept that people, today are obtained mortgages without proof of income. I challenge anyone to go to a bank or building Society and prove me wrong on this one.

they arent giving anything away cheaply at the minute. In fact, i would go as far to say the banks are being a real pain in the ass regarding checking every single little detail up at the minute. Id bet my house deposit that you couldnt get a regular mortgage completed at minute without proof of income.

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Quote from the latest CML ReportCML Dec 10 Report

We can all look back at the madness of the banks, during the boom. However, one thing is for sure they certainly are not repeating it at the moment. As someone that has been involved in 100's of house sales over the last few years I simply cannot accept that people, today are obtained mortgages without proof of income. I challenge anyone to go to a bank or building Society and prove me wrong on this one.

Im not suggesting that Banks are at present, and to be fair not all the banks went mad during the boom (just most of them). IFA's for me pushed through more MTG applications and self certs etc than theactual banks themselves.

It is quite a read though this report from the FSA which covers up to the first quarter of last year. This is what they have found after their own investigations.

I think it shows more clearly the problems with affordability.

Check it out and see what you make of it, I dont recall it being posted before

This should be the link to the PDF document on FSA website...

http://www.fsa.gov.uk/pubs/cp/cp10_16.pdf

web page if the link doesnt work

http://www.fsa.gov.uk/pages/Library/Policy/CP/2010/10_16.shtml

Edited by tinbin

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they arent giving anything away cheaply at the minute. In fact, i would go as far to say the banks are being a real pain in the ass regarding checking every single little detail up at the minute. Id bet my house deposit that you couldnt get a regular mortgage completed at minute without proof of income.

I have to agree with this - on our recent mortgage application with santander every part of our income was checked both with payslips and by checking our bank statements for last 6 months to make sure said amounts actually went into the account.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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