Jump to content
House Price Crash Forum
Blue Nose Bear

A Property Market Of Haves And Have Nots

Recommended Posts

Apologies if all ready posted, but it's got to be worth it again just for this paragraph:

House prices in England and Wales are now 1.9% lower than they were a year ago and 11.1% below the price peak in February 2008, and Chesterton Humberts calculate that since then, £21,698 has been wiped from the typical house value.

:)

http://www.thisismoney.co.uk/mortgages-and-homes/house-prices/article.html?in_article_id=530955&in_page_id=57

Share this post


Link to post
Share on other sites

Precisely why I am hanging off buying a place for a bit!

That £21,600 takes a bugger of a time to save, and would buy a lovely motorbike,car and a shed load of guitars! :blink:

Share this post


Link to post
Share on other sites

Precisely why I am hanging off buying a place for a bit!

That £21,600 takes a bugger of a time to save, and would buy a lovely motorbike,car and a shed load of guitars! :blink:

Exactly! I pay just £1800 a year (stay at home) in rent... these falls more than cover that. I may also treat myself to a nice guitar:

http://www.evhgear.com/wolfgangspecial/

Share this post


Link to post
Share on other sites

P.S. Only just started reading it, but this is a good article!! Sounds very gloomy looking forward, more akin to the articles you'd see during the last crash.

EDIT: This bit saddens me, though:

'Average deposits have reached eye-watering levels and house price inflation for better homes outpaces the bottom of the market, pushing popular areas further from reach for many.'

:(

Love the divergence of the 'locked out' graph....

One of the titles: 'Mortgage applications up but deposits are sky high'.

If true... there are a lot of idiots who will try to buy your ideal house from under you, the sort that would stretch themselves to ridiculous levels. Thank heavens some stricter checks are in place...

And now the bit about average FTB age being 37+!!! It really is ridiculous. Can these people not extrapolate? If price go up, so will that age. What sort of life is that for your kids?

Edited by guitarman001

Share this post


Link to post
Share on other sites

Eye-wattering 54K ftb deposit :lol:

That is so unstainable in the medium term its not true. If you don't have it and you are not gifted or don't inherit it, you can't save that kind of money in a couple of years (1 or 2). To all house sellers - reduce now to get a sale, the proceedable ftb pool is getting used up as we speak. Reduce now or miss the boat, sell now before it is too late. Sellers are in danger of being priced out of the market.

The next tranche of proceedable FTB are not due to mature until around 2016\2017...

Put like that, it shows what a tightrope we FTB posters walk. I'll have that 54K by next year, I'll probably buy then. Its not "when the last bear turns bull" anymore, its "when the last cash-rich FTB buys" - this sucker will be going down, its too inflated, it's got to go down, it's gravity defying...

Edited by hirop

Share this post


Link to post
Share on other sites

Eye-wattering 54K ftb deposit :lol:

That is so unstainable in the medium term its not true. If you don't have it and you are not gifted or don't inherit it, you can't save that kind of money in a couple of years (1 or 2). To all house sellers - reduce now to get a sale, the proceedable ftb pool is getting used up as we speak. Reduce now or miss the boat, sell now before it is too late. Sellers are in danger of being priced out of the market.

The next tranche of proceedable FTB are not due to mature until around 2016\2017...

Put like that, it shows what a tightrope we FTB posters walk. I'll have that 54K by next year, I'll probably buy then. Its not "when the last bear turns bull" anymore, its "when the last cash-rich FTB buys" - this sucker will be going down, its too inflated, it's got to go down, it's gravity defying...

What a load of nonsense!

Newsflash: the golden age when you could save a deposit in 1-2 years was the very same loose lending bubble that drove up prices. It never happened in a sane world. Except of course for those with help from BoMD or exceptional earnings.

There are a lot of people right here on HPC with deposits of £54k and a whole lot more. I could raise about twice that before having to take a hit on cashing in long-term investments with penalties on early exits (except for the tax hit of cashing in ISAs).

Share this post


Link to post
Share on other sites

What a load of nonsense!

Newsflash: the golden age when you could save a deposit in 1-2 years was the very same loose lending bubble that drove up prices. It never happened in a sane world. Except of course for those with help from BoMD or exceptional earnings.

There are a lot of people right here on HPC with deposits of £54k and a whole lot more. I could raise about twice that before having to take a hit on cashing in long-term investments with penalties on early exits (except for the tax hit of cashing in ISAs).

I think hirop was referring to the real world, not the world of hpc. Personally, I'd be very surprised if many ftbers have a deposit of 50k+. Anyone got any stats?

Share this post


Link to post
Share on other sites

What a load of nonsense!

Newsflash: the golden age when you could save a deposit in 1-2 years was the very same loose lending bubble that drove up prices. It never happened in a sane world. Except of course for those with help from BoMD or exceptional earnings.

There are a lot of people right here on HPC with deposits of £54k and a whole lot more. I could raise about twice that before having to take a hit on cashing in long-term investments with penalties on early exits (except for the tax hit of cashing in ISAs).

Are you now what would have been considered tradional FTB, age 25-30, quite possibly single, maybe earning a below average salary? It's taken me 4 years to get my wad of cash together and it has been HARD GOING. If I were 25 today, single, earning about 20K if I am lucky enough to have a job with zero savings, then I am not going to be 54K better off any time soon am I.

I'm not talking about me, or you, or any other HPC sitting on a wad of cash. I'm talking about the next generation, the peole who have to buy after us lot do the needful.

Share this post


Link to post
Share on other sites

Are you now what would have been considered tradional FTB, age 25-30, quite possibly single, maybe earning a below average salary?

That's a myth.

One single figure disproves it: that FTB average age of 37. Which implies something in the ballpark of half of all FTBs are over 37.

Let's take a 37-year-old. (S)he was 25 in 1999, when house prices were near a historic low, yet didn't buy, and 30 in 2004 when the bubble was obvious. So on the cusp of the market in your age range.

At 40, just over average age, one was 25-30 when houses were firmly at their historic low.

So how come half of FTBs are over 37? For some reason, lots of people didn't buy at age 25-30 even when houses were cheap.

Share this post


Link to post
Share on other sites

That's a myth.

One single figure disproves it: that FTB average age of 37. Which implies something in the ballpark of half of all FTBs are over 37.

Let's take a 37-year-old. (S)he was 25 in 1999, when house prices were near a historic low, yet didn't buy, and 30 in 2004 when the bubble was obvious. So on the cusp of the market in your age range.

At 40, just over average age, one was 25-30 when houses were firmly at their historic low.

So how come half of FTBs are over 37? For some reason, lots of people didn't buy at age 25-30 even when houses were cheap.

Krusty, Phil, Beenbags and the guy with the bad suits on Homes under the Hammer werent on TV 24/7 telling them to do so?

Share this post


Link to post
Share on other sites

That's a myth.

One single figure disproves it: that FTB average age of 37. Which implies something in the ballpark of half of all FTBs are over 37.

Let's take a 37-year-old. (S)he was 25 in 1999, when house prices were near a historic low, yet didn't buy, and 30 in 2004 when the bubble was obvious. So on the cusp of the market in your age range.

At 40, just over average age, one was 25-30 when houses were firmly at their historic low.

So how come half of FTBs are over 37? For some reason, lots of people didn't buy at age 25-30 even when houses were cheap.

it's not a myth at all, I have friends who bought as soon as they graduated, the difference was it cost 36K for a 1 bed flat back then. I have friends who bought around 30 years old, when 3 bed semi costed about 80K. 37 year old ftb TODAY are the result of stoopidly high house prices and a proped up ponzi market post onset of the financial crisis, resulting in the need to save much much harder and longer to get some skin in the game, so that banks makes sure the ftb eats the first 25% of any loss (or whatever).

I not sure what you are actually arguing about. I'll try again to see if I can make it clearer. 37 years old FTB with 54K deposits are either going to become the norm or house prices will have to reduce. I believe house prices will reduce as there will be more houses for sale for than people able to buy them. Supply will outstripping demand. Demand = proceedable buyers.

I have to go out cycling now, but feel free to continue arguing that FTB at 37 years old and 54K are plentiful and that state of affairs will continue well into the future and prices will not dop or something (I think?)

Edited by hirop

Share this post


Link to post
Share on other sites

If you do look at all the house price commentary, the one clear train is that there is a divergence. Working class, lower to middle class areas in the UK are seeing house prices fall or struggle. But at the upper middle class to rich class, house prices have never done better.

This is due to the fact that there is a divergence in incomes/fortunes between the classes. The rich are getting richer, and the poor are getting poorer. And then there's all the rich foreign buyers, who are never going to buy a home in like Rochdale or Slough, but go for prime areas and properties like in Chelsea or Mayfair.

House prices will always be linked to affordability, and affordability is a combination of savings and mortgage finance availability. At the lower end of the market, unfortunately, both are squeezed, so house prices will continue to fall until they are cheap enough so that people can afford the deposit and also get a mortgage for that amount. The saying "houses are only worth what someone else can pay for it" is true.

The same saying applies to the upper end of the market, only that its now distorted. If you're a couple, childless (DINK), living in London, both in good middle-management jobs by your 30's, earning combined £100-£120k a year, life has never been better. You can squirrel away like £40k in savings combined if you're frugal - 4 years of that and you have a £160k deposit. Chances are, your parents were probably middle class either - and they have so much equity and cash from the boom times that they could chip in another £50-£100k. Suddenly, a £500k two bedroom flat doesn't seem that unaffordable.

And I haven't even started on the cash rich overseas buyers - every one of the 150+ countries in the world have countless millionaires, and a good majority aspire to have a "pad" in London to show off. What's £800k for a one bedroom bedsit in South Kensington when your personal fortune is estimated at £100m? For every property going to a foreign buyer, the pool of properties for Londoners gets smaller - so prices go up as supply is limited.

So yes - definitely a market of haves and have nots.

Share this post


Link to post
Share on other sites

That's a myth.

One single figure disproves it: that FTB average age of 37. Which implies something in the ballpark of half of all FTBs are over 37.

Which shows just how messed up the market is.

For the property ladder to work you need FTBs to be aged 25; moving up the ladder once kids start to arrive (say early 30s) and again once this kids get a bit older (late 30s/early 40s).

If FTB's are buying their first home aged 37 then where are they going to go from there? By the time they're ready to move their income isn't likely to have gone up much and they'll be mid 40s so a 25 year mortgage will take them up to age 70.

So in all likelyhood your 37 year old FTB is in fact an ONE time buyer.

Share this post


Link to post
Share on other sites

So how come half of FTBs are over 37? For some reason, lots of people didn't buy at age 25-30 even when houses were cheap.

I think you have to think very carefully how FTB are defined for generating these numbers. If I recall correctly it is anyone who buys a house without having had a mortgage in the past 6 months or so. Hence it would include those who have owned before but have temporarily moved into renting. This would explain both the high average age + the huge deposits that they can put forward.

edit to back up the above)

See for example the following statement from http://www.mortgagestrategy.co.uk/ftb-home-truths/102399.article:

The problem with using CML statistics on FTBs is that they are grossly misleading because the CML's definition of an FTB is different from what most people would see as an FTB. It views it as anyone who is buying and not selling at the same time.
Edited by moesasji

Share this post


Link to post
Share on other sites

If you do look at all the house price commentary, the one clear train is that there is a divergence. Working class, lower to middle class areas in the UK are seeing house prices fall or struggle. But at the upper middle class to rich class, house prices have never done better.

I suspect a lot of this is VI spin - there might be a house price crash but this area is special (so you should buy now)

Share this post


Link to post
Share on other sites

Which shows just how messed up the market is.

For the property ladder to work you need FTBs to be aged 25; moving up the ladder once kids start to arrive (say early 30s) and again once this kids get a bit older (late 30s/early 40s).

If FTB's are buying their first home aged 37 then where are they going to go from there? By the time they're ready to move their income isn't likely to have gone up much and they'll be mid 40s so a 25 year mortgage will take them up to age 70.

So in all likelyhood your 37 year old FTB is in fact an ONE time buyer.

Correct

And for the 25 year old FTBs to move up once in their 30s and again in the late 30s early 40s you need both wage and house price inflation. That was how it always worked and those two are now gone.

Share this post


Link to post
Share on other sites

Correct

And for the 25 year old FTBs to move up once in their 30s and again in the late 30s early 40s you need both wage and house price inflation. That was how it always worked and those two are now gone.

You don't need wage and house price inflation to move up the ladder over time. Over time, you should be promoted, get salary raises (not due to inflation, but due to more responsibility and experience), and you should save money dutifully every year so that you have a bigger deposit and can get a bigger mortgage to get that bigger house that your growing family will need.

Share this post


Link to post
Share on other sites

You don't need wage and house price inflation to move up the ladder over time. Over time, you should be promoted, get salary raises (not due to inflation, but due to more responsibility and experience), and you should save money dutifully every year so that you have a bigger deposit and can get a bigger mortgage to get that bigger house that your growing family will need.

Correct, but you do need to start from the right place, i.e. mid 20s with most of your career progression ahead of you and not late 30s with most of it behind you.

Share this post


Link to post
Share on other sites

Correct, but you do need to start from the right place, i.e. mid 20s with most of your career progression ahead of you and not late 30s with most of it behind you.

Don't forget jobs.... one needs a job to progress.... :unsure:

Share this post


Link to post
Share on other sites

Correct, but you do need to start from the right place, i.e. mid 20s with most of your career progression ahead of you and not late 30s with most of it behind you.

Crikey... I'd best get on with my career!!

Share this post


Link to post
Share on other sites

You don't need wage and house price inflation to move up the ladder over time. Over time, you should be promoted, get salary raises (not due to inflation, but due to more responsibility and experience), and you should save money dutifully every year so that you have a bigger deposit and can get a bigger mortgage to get that bigger house that your growing family will need.

But it was the quickest route and helped buyers from the pitt falls of home ownership. Taking on the massive debt to buy a house is fraught with risk , however the quicker the wages rise the more that risk falls. In my own case FTBer at 23 the mortgage was about 50% of my take home pay. Interest rates were 12%, 3 good pay rises later and interest rates were 15% , but the pay rises stopped me from being another repossession satistic .

Not everyone get's promoted that is a work place lie . How can everyone reach the top when there a far fewer jobs at the top than the bottom ?

As for dutifully saveing money every year , I found that in my working life after paying the bills , mortgage and paying into a company pension scheme there was very little or none left to carry out my duty to save.

Share this post


Link to post
Share on other sites

Crikey... I'd best get on with my career!!

Glad it wasn't just me that read that with alarm bells. Don't worry though, looks like we'll still have another three decades to try and get a promotion :(

Share this post


Link to post
Share on other sites

You don't need wage and house price inflation to move up the ladder over time. Over time, you should be promoted, get salary raises (not due to inflation, but due to more responsibility and experience), and you should save money dutifully every year so that you have a bigger deposit and can get a bigger mortgage to get that bigger house that your growing family will need.

VI BS.

In the UK, the Joe-Average's maximum wage earnings peaks at 32.

Work it out - the average person is not that skilled. A major proportion of the UK rely on flexibility (ability to move/travel) or grunt (think shovelling).

After 30 Joe Average faces declining wages. Talk to a 49 year old builder.

Share this post


Link to post
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...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • 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.