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Jimmy_James

Nice Coverage In The Guardian

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http://www.guardian.co.uk/money/2011/feb/11/house-prices-fall-first-time-buyers-plummet

Including:

Continued evidence of a faltering housing market emerged today with Council of Mortgage Lenders (CML) figures showing the number of first-time buyers plummeted by 42% year-on-year to 14,500 in December. ...

But Matt Griffith, who runs the PricedOut website, which campaigns for first-time buyers and cheaper housing, says first-timers are facing an immovable problem. "House prices remain too high – prices are way out of line with earnings and banks simply do not have the funds to maintain lending at 2007 levels. An adjustment is needed.

"Whilst prices stay where they are, homeownership will remain a perogative of the wealthy, and first-time buyer numbers will remain at these historic lows. No amount of fiddling around the margins with gimmicky schemes like shared ownership, or public pleading with banks to lend more to first-time buyers can change this.

"With transactions at such low levels and banks unable to lend, sellers would have had to have taken a new year's resolution in positive thinking to be optimistic of what 2011 holds. First-time buyers are still sitting on the sidelines, and to be honest this is the safest place for them."

But an average LTV of 59% will do little to encourage struggling first-time buyers, and the fear is that a generation is being priced out of property ownership. As Griffith says, many people are putting off having families and paying a good chunk of their income to landlords as a result.

Indeed, UK private rental properties are being let within 15 days on average – five days quicker than a year ago, according to letting agent and property services group Countrywide. Its quarterly survey, out today, shows there are an average of 4.4 tenants vying for each property across the UK, with the south-west generating the greatest demand with an average of 5.9 tenants.

Housing minister Grant Shapps is holding a first-time buyer summit next week in a bid to improve conditions for those struggling to get a foot on the housing ladder. But many mortgage providers we spoke to had not been invited and invitations have not been extended to the media either – first-time buyers will be praying their concerns face a better reception from the coalition government.

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Housing minister Grant Shapps is holding a first-time buyer summit next week in a bid to improve conditions for those struggling to get a foot on the housing ladder. But many mortgage providers we spoke to had not been invited and invitations have not been extended to the media either – first-time buyers will be praying their concerns face a better reception from the coalition government.

Schnapps has no brief to lower house prices (the only realistic way to help priced out people) and he couldn't bring on a crash even if he wanted to. All the Koalishon will be willing to do is to force the banksters to give a few sops for shared ownership to "help" FTBs onto the bottom of the Pyramid--just as it is crumbling under their feet.

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A FTB buyer summit? I've heard it all now. With interest rates having nowehere to go but up why would banks lend money when those that get it (who have litle or no deposit) might not be able to pay it back when interest rates rise?

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A FTB buyer summit? I've heard it all now. With interest rates having nowehere to go but up why would banks lend money when those that get it (who have litle or no deposit) might not be able to pay it back when interest rates rise?

We could always have a

LIAR LOAN SUMMIT.... ;)

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Grant Shapps's cunning plan is that house prices rise, but by less than the increase in average wages. So no negative equity for home owners but housing becomes more affordable nonetheless.

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Grant Shapps's cunning plan is that house prices rise, but by less than the increase in average wages. So no negative equity for home owners but housing becomes more affordable nonetheless.

Yes .. I heard that on Radio 4 a while ago too. Well, that will only take about 20 years to start showing fruit and it's only one generation priced out of home ownership!

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Grant Shapps's cunning plan is that house prices rise, but by less than the increase in average wages. So no negative equity for home owners but housing becomes more affordable nonetheless.

The trouble is that average wages are static at best, and falling in many types of employment.

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I've signed up for the Guardian website - posted:

*** SNIP

House prices must fall to sensible earnings:price multiples. Mr Shapps thinks we have enough time to continue house price inflation but 2% below wage inflation. When was the last time many working in the private sector got a wage rise?? Even at -2% per annum with property prices currently overpriced by c40% it would take about 20 years to get back to sensible multiples.

In my opinion, property prices were allowed to bubble due to a) too much credit and too easy to MEW to give the impression of a booming economy under the previous government, b ) the BTL brigade and their tax breaks "my portfolio of properties is my pension" (here's an idea, GET A PENSION!), c) 'liar loans' (better known as self certification) which basically meant that the lender did not bother to check you could afford to repay, d) 125% mortgages, I mean really??!, e) endless property porn in the mass media and f) terrible tenants rights for renters such as the AST. There are others but these are the ones I can think of straight away, and I have other things to do today!!

Anyway, my advice to you all is that you should let Mr Shapps know what you think - http://www.shapps.com/2011/01/welcome-to-the-new-shapps-com/#comment-152 - if enough of us say it enough times it may start getting through.

Regards.

*** END OF SNIP

Edited by danlee74

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Grant Shapps's cunning plan is that house prices rise, but by less than the increase in average wages. So no negative equity for home owners but housing becomes more affordable nonetheless.

If it's inflated away the banks will ultimately lose out (it's just a roundabout means of defaulting), and I can't see them letting that happen.

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Grant Shapps's cunning plan is that house prices rise, but by less than the increase in average wages. So no negative equity for home owners but housing becomes more affordable nonetheless.

Wage increases being destroyed by much higher inflation. Net less expenditure eroded even futher by increased taxation. - House orice falls.

Rest of the economy - artificially propped costs causing all sorts of problems - more offshoring, more jobs losses, less new businesses, loads of empty (extortionate) rent-less propoerties. Less wages . More hosue price falls.

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Wage increases being destroyed by much higher inflation. Net less expenditure eroded even futher by increased taxation. - House orice falls.

Rest of the economy - artificially propped costs causing all sorts of problems - more offshoring, more jobs losses, less new businesses, loads of empty (extortionate) rent-less propoerties. Less wages . More hosue price falls.

It's like one of those crumbling chalk cliffs down on the south coast of England.... Bits drop off slowly, then a chunck falls off, ..... then the whole bleedin' cliff collapses! There is a strange DELAYED sense of inevitability about it all.......

IT SHOULD HAVE BEEN STOPPED IN 2005 at the latest.... But instead Moron Brown took away house prices from the RPI/CPI[?who cares] AND instructed the BOE to put interest rates DOWN instead of up..... THAT WAS THE POINT OF NO RETURN -- to CERTAIN DISASTER - AND - GORDON MORON BROWN DID NOTHING TO STOP LIAR LOANS *- AND SO THEY JUST MUSHROOMED IN NUMBER - TURBO-CHARGING THE "MARKET" FRAUDULENTLY -

AND SO...... here we are today.... :rolleyes:

* In fact, Gordon Brown knighted Head of HBOS James Crosby - Even though HBOS and its subsiduaries were peddling LIAR LOANS like confetti all over the shop... :rolleyes: SEE BELOW FOR ALL INFO.

Edited by eric pebble

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I don't think that it will take much more before prices fall.

The Banks do not have enough money for current prices.

FTB's are wiser and sitting on their hands.

Sentiment has changed, because everyone knows that interest rates will rise this year, jobs will disappear.

There are not enough cash buyers to keep the whole thing going.

I think that this year, when the 'Spring bounce' is yet again a dull twang, the tide will begin to flow out. Executors will be some of the first to sell because of the pressure from heirs to get some money, then divorcees. These people have to sell. Those who have been hanging on will watch as the market sinks.

This time, they know that it can sink, they know that house prices do not 'always go up'

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Fine but for 40% overpriced property this will take 20 years if you assume 2% HPI but 4% inflation ie 2% correction (OK not 20 years due to compounding but as good as)

It's impossible.

He's confusing price inflation with wage inflation

Outside of banking, the outlook for wages is extremely deflationary.

Even worse, wage deflation + price inflation for necessities = reduced disposable income. Banks will not want to lend unless there are state guarantees

This is my worry - the summit is part of a process whereby we end up with our own Phoney and Fraudie

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Fine but for 40% overpriced property this will take 20 years if you assume 2% HPI but 4% inflation ie 2% correction (OK not 20 years due to compounding but as good as)

Or 2.5 years of 10% HPI & 25% CPI. I'm sure people are factoring this into their decisions in some cases, right or wrong.

Piece on radio 4 yesterday about a Chinese city with 12% annual economic growth where apartments cost 29 times average salary, ouch

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If it's inflated away the banks will ultimately lose out (it's just a roundabout means of defaulting), and I can't see them letting that happen.

:lol: The bankers never lend their own money

It's the depositors' money that's inflated away, bankers absolutely love inflation: it makes it easier to get their bonus.

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It's impossible.

He's confusing price inflation with wage inflation

Outside of banking, the outlook for wages is extremely deflationary.

Even worse, wage deflation + price inflation for necessities = reduced disposable income.

2% nominal wage inflation sounds about right though they will keep falling in real terms obviously.

You're absolutely right about disposable income, I'm not sure whether they are factoring in that one properly.

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Or 2.5 years of 10% HPI & 25% CPI. I'm sure people are factoring this into their decisions in some cases, right or wrong.

Piece on radio 4 yesterday about a Chinese city with 12% annual economic growth where apartments cost 29 times average salary, ouch

29x salary but no one lives in them due to the fact that it would spoil their value, thats what I call a ponzi/pyramid/bubble just waiting for a hyper crash. Unlike the rest of the world where even a 5% gross yeild covers half the mortgage, in China it is a purely speculative play. If perhaps the panic sets in and prices collapse then they will rent them out but I would suspect not a price to pay the 29x salary mortgage. This has the potential to collapse to maybe 2x salary, ha ha :D

Edited by steve99

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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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