Isn't It Just Weird How None Of The Media Just Ask Sinple Question:

[eric pebble]

Isn't it weird that none of the media just ask the simple question; The "average" house price is around 165k - [and a LOT more in many places including London of course] - and so - how is your average jo public [on an "average" or normal income] going to even remotely afford this? I know this is simple and quite simplistic - but I have never seen any tv commentator just ask this very simple question!!

[homeowner595]

Probably because FTBers have never bought the "average" house - but have tended to buy something closer to the bottom of the housing ladder and work their way up. With sharp regional variations in houseprices and incomes, this "average" is pretty meaningless. The people buying the average house are probably already on the housing ladder and so don't have to find the whole £165K from deposit + mortgage.

But, "can a young couple on typical wages afford a two-bed terrace (for whatever they cost) in your area" isn't too snappy a question.

[right_freds_dead]

because its an intergenerational extortion scam and people running tv tend to be older homeowners.

in fact, it spoild the rest of the country for me, especially gushy news programs about 'herbal medices and isnt the british way of life so good trivial bullscrap' while they are financially beating up the children behind closed doors.

Edited October 6, 2005 by right_freds_dead

[OzzMosiz]

Probably because FTBers have never bought the "average" house - but have tended to buy something closer to the bottom of the housing ladder and work their way up. With sharp regional variations in houseprices and incomes, this "average" is pretty meaningless. The people buying the average house are probably already on the housing ladder and so don't have to find the whole £165K from deposit + mortgage.

But, "can a young couple on typical wages afford a two-bed terrace (for whatever they cost) in your area" isn't too snappy a question.

Yeah but a first time buyer (on average) is likely to have less than an average wage!!! So the less than average priced house will be a similar ratio!!

[Warwick-Watcher]

Yeah but a first time buyer (on average) is likely to have less than an average wage!!! So the less than average priced house will be a similar ratio!!

I agree - if an FTB is on as much as £25k a year then they can borrow 3.5x this - £88K - ask yourselves how far this goes in most of the UK now? Nothing where I live is that cheap, not even bedsits. How much of deposit are they supposed to add to get something half-decent - about 50% probably, but how do they save up another £80-90k ?

[DTMark]

Simple - first time buyers don't actually buy any more.

They get an interest only mortgage and rent the property from the Bank instead. That way they can afford to live in, but not to own, the two bed flat above the fish and chip shop.

[marko]

The inability of the media to ask these awkward questions is the same inability to report house price falls rather than annualised 'growth'. It is pure spin, smoke and mirrors. Halifax report growth...why in God's name would anyone believe this rubbish when faced with countless anecdotal evidence to the contrary from other sources?

House prices are marching south my friends, and have been for months...Halifax and others have such massive interest in maintaining the illusory feelgood factor that they are ABSOLUTELY capable of lying - whether it is just barefaced or through their selective 'methodology' used when compiling their statistics.

I just do not understand this seemingly blind trust that people have in institutions that have clear vested interests - just because they are big and have been around a long time, a lot of people on this forum and in society at large just seem to think they must be telling the truth! I guess it is a comfort issue...people do not like the idea that the major institutions in this country do NOT have their best interests at heart.

For f**ks sake WAKE UP: our society has now become defined by big institutions who are hellbent on deceiving and manipulating you...and if you think Halifax are selling mortgages to you out of the goodness of their collective heart, then God help you. They want to ride on your back. That's it.

Halifax=the biggest mortgage lender in UK=biggest VI in UK

Yet when they 'report' house price rises everyone just nods their head and believes it.

The BBC just again reported 'housing picks up', 3% YoY growth...this is essentially just a lie.

Ridiculous!

[Guest Fiddlesticks]

The BBC just again reported 'housing picks up', 3% YoY growth...this is essentially just a lie.

Ridiculous!

Interesting. Do you mean the Halifax just makes these numbers up? I don't doubt any commercial organisation is capable of doing just that. But the Halifax and the Nationwide indices have been going for a long time. If they habitually massaged the figures to fit their agendas the mismatch between their indices and the Land Registry statistics would be pretty easy to spot looking back over the years (especially back in the early 90s when they last would have had an incentive to lie to us).

[bubble]

Interesting. Do you mean the Halifax just makes these numbers up? I don't doubt any commercial organisation is capable of doing just that. But the Halifax and the Nationwide indices have been going for a long time. If they habitually massaged the figures to fit their agendas the mismatch between their indices and the Land Registry statistics would be pretty easy to spot looking back over the years (especially back in the early 90s when they last would have had an incentive to lie to us).

If you think about it, is it unreasonable to believe that an "average" household has £50k income? If one considers there are two earners, then I think this seams reasomable for the "average" household. Sure, single, young people can't afford to buy their own home, but there is no law saying they should be able to.

[marko]

Interesting. Do you mean the Halifax just makes these numbers up? I don't doubt any commercial organisation is capable of doing just that. But the Halifax and the Nationwide indices have been going for a long time. If they habitually massaged the figures to fit their agendas the mismatch between their indices and the Land Registry statistics would be pretty easy to spot looking back over the years (especially back in the early 90s when they last would have had an incentive to lie to us).

I don't mean that they just make the numbers up, but I do think that there is plenty of room in their methodology for expressing biases or loading the analysis towards a particular desired result.

'There are lies, damned lies and statistics'...

...this is unfortunately true, and although I am certainly not saying statistics is ******, there is plenty of room in statistical analysis to be able to leave out certain undesirable factors and hence skew the results: the government does it all the time by spinning their figures or simply lying by omission (e.g. unemployment figures not including those on incapacity benefit, and people are tacitly encouraged onto incapacity benefit; government omitting to mention that private sector employment has been falling for years and only public sector jobs are making up the shortfall). The fact is that statistics, if the methodology is not fully disclosed, are very easy to manipulate - and of course this is doubly dangerous because they are considered by the wider public as scientific and therefore impartial.

No.

I don't know what is going on with the halifax figures, but I would hazard a guess that they are conveniently just focusing on completions (which are largely at the high quality end of the market only now, since FTBs have disappeared). Or maybe they just take some average of the qouted prices of existing books, despite the fact that none of this stuff is selling because it is too expensive. My point is that I really don't know - I do not have the time or inclination to study the methodology of Halifax (would they let me see it? Is it available?). The fact that I don't know, coupled with the undoubted malleability of statistics, means that I have to rely on the objectivity and honesty of the people compiling the statistics.

Now considering the position of Halifax in the market (UKs largest mortgage provider), I have serious problems with accepting the veracity of their figures. Quite simply, I don't believe them.

Edited October 6, 2005 by marko

[dogbox]

Isn't it weird that none of the media just ask the simple question; The "average" house price is around 165k - [and a LOT more in many places including London of course] - and so - how is your average jo public [on an "average" or normal income] going to even remotely afford this? I know this is simple and quite simplistic - but I have never seen any tv commentator just ask this very simple question!!

Eric, even with only 5% deposit an interest only mortgage at 4.5% costs only £0.80 pence per hour.

Thats affordable to most, especially couples.

Even more affordable if larger deposits used.

Arguments about what will happen to future rates / how to repay capital are irrelevant, people mainly base thier decisions on todays known boundarys and unlike bears dont agonise over the future.

[eric pebble]

The inability of the media to ask these awkward questions is the same inability to report house price falls rather than annualised 'growth'. It is pure spin, smoke and mirrors. Halifax report growth...why in God's name would anyone believe this rubbish when faced with countless anecdotal evidence to the contrary from other sources?

House prices are marching south my friends, and have been for months...Halifax and others have such massive interest in maintaining the illusory feelgood factor that they are ABSOLUTELY capable of lying - whether it is just barefaced or through their selective 'methodology' used when compiling their statistics.

I just do not understand this seemingly blind trust that people have in institutions that have clear vested interests - just because they are big and have been around a long time, a lot of people on this forum and in society at large just seem to think they must be telling the truth! I guess it is a comfort issue...people do not like the idea that the major institutions in this country do NOT have their best interests at heart.

For f**ks sake WAKE UP: our society has now become defined by big institutions who are hellbent on deceiving and manipulating you...and if you think Halifax are selling mortgages to you out of the goodness of their collective heart, then God help you. They want to ride on your back. That's it.

Halifax=the biggest mortgage lender in UK=biggest VI in UK

Yet when they 'report' house price rises everyone just nods their head and believes it.

The BBC just again reported 'housing picks up', 3% YoY growth...this is essentially just a lie.

Ridiculous!

Well said Marko: Is it just you and me and a few others here on HPC who understand something that is SO bleedin' obvious? It is just incredible how the scam machine just goes rolling on.....

A good post would be -- How can we change things [re VI's and media] as of now?.....

[ʎqɐqɹǝʞɐɥs]

If you think about it, is it unreasonable to believe that an "average" household has £50k income? If one considers there are two earners, then I think this seams reasomable for the "average" household. Sure, single, young people can't afford to buy their own home, but there is no law saying they should be able to.

And just what happens when they want children?

... opps no future generation to help pay the pensions...

... all the while our security, pensions, and basic right to a roof over a workers head is plundered _every_ day.

[Mushroom]

Don't kick all us older ones.

We're a couple who have only ever bought houses based on one income.

Mrs. M's income as it happens.

I knew it had all gone stupid when I thought we wouldn't be able to buy our current house on 3.5 her current salary.

Don't give me the low IR, IO, affordability stuff. 3.5 works.

It's a scam to prop up a failing economy.

All imho.

[A Fool & His Borrowed Money]

And remember, the Halifax & Co are your friends!, they wish to "give You money" so as to help you along!

[Mushroom]

And remember, the Halifax & Co are your friends!, they wish to "give You money" so as to help you along!

I've mentioned it on here before but the change from Mutual to PLC was not a good thing.

We voted against in all the Mutuals we were in.

The "Carpetbaggers" won the day and idiots accepted their payout.

All history now.

[Elizabeth]

There are two things going on here. The media tell FTBs to borrow from their parents. Shame if your parents are on the pension!

The other thing is relative and notional value

House prices are relative to the market

The notional house value for those who change houses is relative to the notional value of the house they buyup to.

And that is where the present ridiculous situation come in.

If you bought your house at 90K and sold at ??? 250K 5 years later and bought up to was 300K then all you've really spent on your notionally 300K residence is 120K and your morgage will be even less than that because you would have put a 9K deposit down and have already paid off some of it. Thats a lot more affordable than the 164 average that a FTB needs to find their first home. Roll on the HPC!

Edited October 6, 2005 by Elizabeth