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Troubleatmill

How Much Is A Fair Price ?

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We are all sat on the sidelines waiting for some point in the HM where we feel safe to buy. What roughly is that point ? Is it :

a) When HP's return to 3.5 salary (my case £80K for an average house/flat)

B) When house prices stop falling

c) Other (please state)

When are you going to jump back in ?

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Guest KingCharles1st
We are all sat on the sidelines waiting for some point in the HM where we feel safe to buy. What roughly is that point ? Is it :

a) When HP's return to 3.5 salary (my case £80K for an average house/flat)

B) When house prices stop falling

c) Other (please state)

When are you going to jump back in ?

Interesting point by my solicitor, who was firmly of the conviction that 2.5 X should be the realistic target for borrowers, having seen so many problems being caused by people overstretching themselves financially.

Mind you, I can't see him wanting to live in a OBFOCH at any price..

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a) !!! ;)

If we don't get to that level I will buy when it is cheaper than renting well.

My other option is to wait a couple of years until the French market cools off and buy something around the Boulogne/ Calais area - easily commutable for me to my current job.

Vive la France! :lol:

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50% falls in advertised prices as of 6 months ago. Even then, in my part of the world that will only bring properties back to their 2001 prices IMPO. In fact, a significant number will not be back to their 2001 prices with a 50% fall.

Otherwise, it does not make economic sense for me to buy. In fact, it would be economic suicide as I would be paying a huge mortgage, even at today's historically low IRs, and I would have the knowledge that, effectively, I had paid off someone else's mortgage.

I am taking great delight in seeing such a vast number of empty, traditionally family, houses up for sale and/or to let in the West of Swansea. A great many of them are empty and many of the newly built ones have clearly never had anyone live in them.

If the 50% fall does not come in the next 2 - 3 years, which I think it will, then I will simply make a lifestyle decision to go and live somewhere else on the planet.

Interesting point by my solicitor, who was firmly of the conviction that 2.5 X should be the realistic target for borrowers, having seen so many problems being caused by people overstretching themselves financially.

Mind you, I can't see him wanting to live in a OBFOCH at any price..

Your solicitor sounds a wise man.

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When it looks so wrong but it feels so right :)

following advice like that has got me into more scrapes than I care to mention right now! :unsure:

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We are all sat on the sidelines waiting for some point in the HM where we feel safe to buy. What roughly is that point ? Is it :

a) When HP's return to 3.5 salary (my case £80K for an average house/flat)

B) When house prices stop falling

c) Other (please state)

When are you going to jump back in ?

c). There's no such thing as a "fair" price, only a market price, which fluctuates quite a lot. Current selling prices are exactly the same as market prices, as is always the case.

If you're asking where the low point in market prices may be, I give it roughly equal chances that the low point is where we are now (give or take a couple of percent), or a Halifax figure somewhere between 4 and 4.5 x mean gross male full-time earnings (which at present would be between £125,000 and £140,000, 15% to 25% below where we are now) as mean gross male full-time earnings in 2004 were £29,998 and you have to add 4% for 2005), or something catastrophically lower than that.

Remember that the Halifax figure is understated by around 15%, so a Halifax figure of £125,000 to £140,000 represents a real average house price of around £145,000 to £160,000.

Edited by zorn

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We are all sat on the sidelines waiting for some point in the HM where we feel safe to buy. What roughly is that point ? Is it :

a) When HP's return to 3.5 salary (my case £80K for an average house/flat)

B) When house prices stop falling

c) Other (please state)

When are you going to jump back in ?

long term average... thats the fair point..

it will swing below that.. it always does.

always has.

no matter how much we kid ourselves.. The economy sets the price of houses..

all we can do is buck the trend.. and be astute enough.. to see this for what it is..

an aberation.

No matter what people think.. in a few years the house price crash will seem the most obvious thing in history..

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c) Other (please state)

When are you going to jump back in ?

Repeat post form the thread: now is the time to buy 10~20% haggle time.

What is difficult to nail, is what exactly is market value today?

There as been a lot of posts suggesting that vendors are raising their

prices for a psychological affect, when the buyer knocks the price down.

(O.. good, I got 20% off a house over-valued by 40%!)

I think the best yard-stick is the year:

If the house you are going for can be bought at 2002/2001 prices

by checking houses sold that year on land registry. Then I’d go for it!

I say 2002/2001 because if I wanted I could buy now at 2003 prices

those prices are around now!

Which is strange! because a lot of 2-bed flats near rail stations aren’t selling

in my area, now you would think BTL would be jumping at them as they

did in 2003, but no they’re not, not even at 2003 prices????????

Ahh...Jeeze..! another thread kill!

Edited by burnt before

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I will use the x3.5 average house/average salary as a guide. In the meantime I will just keep pumping money into a high interest earning account. Where I live the average house / salary ratio is about the 5.5 - 6.

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Zorn,

gross male full-time earnings in 2004 were £29,998...

Really? I am surprised; I thought the mean was more like £22,000... and the mean figure is never the full story.

In Kent, for example, wage statistics often omit to mention that the majority of the newcomers to the town are London city workers earning London wages, which exceeds any equivalent local salary.

I think a more reasonable calculation of affordability is, what was doable with a given set of circumstances 10 years ago, compared to today.

Buying a 3 bedroom family home in Ashford, Kent in the mid-90s was definitely doable with a £15,000 a year total household income and a 6.25% deposit of £2.5k (I saw plenty of houses like that for sale at £47,500 or less back then). So, it was within reach of a working couple grossing £300 a week between them.

I was earning £150 a week packing boxes on a factory floor in the summer hols. So if I had quit uni, and me and a partner had both been packing boxes, then the pair of us could have bought. Sod buying a flat, we could've gone the whole hog and bought a HOUSE.

Fixer-uppers, and houses in dodgy areas, were substantially cheaper - some houses were available at £30k, if you were prepared to live in a poarticularly rough area.

The cheapest ex-council 3 bedroom house on the market in the same area today, is in excess of £125,000. Rounding that down to £120k for convenience, for the same wage-earner to get the this bottom-of-the-range property on the same terms they'd be looking at a £7000 deposit and an income in the high £30k ballpark.

It's clearly still doable for a couple, but I doubt if a pair of factory workers on average salaries could afford it.

And you have to remember that £120k is, at present, the MINIMUM needed to buy a 3 bedroom property, irrespective of its condition, or how good or bad the area is.

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  • 337 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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