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House Price Crash Forum
Mr_Sminty

The Present And Future

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Okay house prices are up or not declining or whatever, pretty much can argue either way if going to crash(economy imbalance) or all okay(latest prices evidence).

Some guesses/observations from me

Stubborn asking prices - If I have overpaid for something or have re-mortgaged to add some fancy kitchen, then I cannot afford to budge as it will mean major financial ruin. But who sets the price, is it the buyer, or what someone is willing to pay (afford to pay!) or is there some compromise? When will this break down!?

Housing multiples - Who can afford anything on an avg salary anywhere in the UK without lengthy saving and then high % mortgage payments. All of which will effect the amount of money going through the economy as people save rather than spend, though financial services are a big winner! Do we all rent forever!? Smells like some easy money to be made say the BTL brigade continue to invest and hold out in a war of attrition. How long will the war go on for!?

Property boom big business FOR THE GOVERNMENT - Massive intake of Stamp duty, CGT from all transaction, MEW spending on big ticket items cars, crappy goods VAT increases. Massive profits from UK financial services (25%+ maybe more of all UK CORPORATION TAX INTAKE in FT the other day, Brown expects shortfall in GDP expectations slack to be made up by FIN services, maybe crack downs on tax avoidance). Large employement in construction industry, low wages, but lots of NI and PAYE still going through yum yum in my tum says Brown. Already missing budget targets, where is the TAX shortfall going to come from.

BTL - Likely disillusion with pensions and stock markets, herd mentality (too bothersome to do own research into the dark arts of working out interest calcs and best places for investment) slowly increases exposure to property, market meets demand churning out 2 bed flats and appartments that meet INVESTOR needs but not RENTERS or normal house hunters. Big increase in supply with limited demand means one thing in economic theory.

Wage inflation expectations- out of synch with globalisation, there is someone who will one day be able to do anything you can do cheaper at some point! I work in insurance, LLOYDS is one of the worlds insurance centres, it is the first to gain License in CHINA, the things the UK does best are all up for competition. But this long term trend will only start to kick in slowly over the years, by which point you might only realise when your 35 still havent paid off your mortgage but your "safe complicated analyst" role has been sourced cheaper. Long decline needed in property to match this, enforced demand of lower prices as financially impossible to meet supply price taking current mentality

UK productivity - Still lags behind nearly all major competitors, infrastructure is a pile of pants. Gordon Browns surplus to deficit turnaround has not been matched by any increase in producitvity output. Competitiveness in the global arena is increasingly poor, only attraction is going to be the masses willing to work for peanuts for 70 hours a week to pay off those pesky past indulgences and debts.

House price crash? - Financial meltdown, people are forced out of homes, goverment buys up the glut of former BTL at knock down prices (TTRTS have bought cheap from those silly amateur speculators and now makes a profit off the tax payer, fair play in my opinion!) everyone forced into renting box accomodation, rise of slums, massive debt write offs, financial services in the UK wiped out and ripe for the picking by international companies.

Okay get progressively extreme in my possibilities. How about something more optimisitc!

Labour nationalises lottery everyone given a ticket at tax payers expense, 1 number of a possible 47(all drawn) increases likelyhood of a win to 1 in 1.1. Sun headline WE ARE ALL MILLIONAIRES, picture of lovable DEL BOY. Governments prints off 1,000,000,000,000,000,000,000,000,000,000,000 pounds weekly and we all live happily every after

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Housing multiples - Who can afford anything on an avg salary anywhere in the UK without lengthy saving and then high % mortgage payments.

Couples. I am not aware of anywhere in the UK where a working couple both earning the local average (mean) salary and taking out a (perfectly affordable) 4x joint salary mortgage can't buy a reasonable place for a couple to live within commuting distance of their work. In London, for example, their budget would be £320,000.

Edited by zorn

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its very simple in political terms.

gordon brown is using YOU to fund the political applause he receives from every home owner who he has gifted on average £80k on top of the houses real worth.

you - the minority dont count. your vote is not as big as the home owners.

as a renter. ive never been so clearly used by a government financially as now.

it all seems very obvious to me.

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Zorn, coffee, wake up, smell.

£320 k in most of london will get you a flat - in significant parts a 1 bed flat. You'd have to be right out in the boonies to get a decent house. Jeez, my little sister has a house worth more than that (3 bed 1930s semi) in Oakwood, 1 stop from the end of the tube line. Top of her road is fields fer chrissake. Kinda defeats the point of living 'in' London, dontcha think?

also, 4x joint = 8 x single, when the sensible max historically is about 3.5 x single.

Wanna have kids? Wife has to quit job? Don't looky so 'zorn rosy' now, does it?

Face it, the whole country is f*cked, and even if YOU personally have done very well out of it, your hopes and wishes count for nothing. It's on the slide, for YEARS.

PS, sister's hubby works for the govt. As does his son. Man, this country is *doomed*...

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Couples. I am not aware of anywhere in the UK where a working couple both earning the local average (mean) salary and taking out a (perfectly affordable) 4x joint salary mortgage can't buy a reasonable place for a couple to live within commuting distance of their work. In London, for example, their budget would be £320,000.

I'm sorry, you seem to be on planet Janet.

Average gross wages are around £25k. Credt action actually quotes £22k, but lets take the higher figure.

2 x £25k is £50. 4 x £50k is £200k.

By your numbers average wage would be £40k!!!

Go back to school.

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I'm sorry, you seem to be on planet Janet.

Average gross wages are around £25k. Credt action actually quotes £22k, but lets take the higher figure.

2 x £25k is £50. 4 x £50k is £200k.

By your numbers average wage would be £40k!!!

Go back to school.

The average full-time wage in London is over £40K. The 2005 ASHE figures are just out -- go take a look at them. £41,879 is the exact figure.

National average is £28,528. England average is £29,010.

Credit Action are probably quoting the median rather than the mean (£22,941 for the whole UK). But if you want to use median salaries, you also have to use median house prices, which aren't available, so let's stick to means.

The average full-time wage in London is over £40K. The 2005 ASHE figures are just out -- go take a look at them. £41,879 is the exact figure.

And average male full-time earnings for people working in Tower Hamlets, one of London's more deprived boroughs, are £88,411, up 15.5%. Puts those expensive new-build flats in Docklands into a different perspective.

Edited by zorn

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Face it, the whole country is f*cked, and even if YOU personally have done very well out of it, your hopes and wishes count for nothing. It's on the slide, for YEARS.

PS, sister's hubby works for the govt. As does his son. Man, this country is *doomed*...

HPC cliche watch #5: 'the whole country is f*cked', 'this country is *doomed*'

Edited by BoredTrainBuilder

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Face it, the whole country is f*cked, It's on the slide, for YEARS.

this country is *doomed*...

Crash

Do you realise you are a perma - bear and will be until your last breath?

Throughout history perma - bears have voiced your take on the state of the nation.

Up - wake, Coffee Smell?

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And average male full-time earnings for people working in Tower Hamlets, one of London's more deprived boroughs, are £88,411, up 15.5%. Puts those expensive new-build flats in Docklands into a different perspective.

Tower Hamlets is a bit of an exception, though. The average in my borough (Kingston) is £25k. 4x joint income (£200k) will buy a very good one-bed flat, or a grotty 2 bedder in the worst parts of the borough.

There would be nowhere to go for these average earners to go within commuting distance, either, because it gets generally more expensive as you go further into London, and not much cheaper as you go out into Surrey.

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Average full time wage is a foolish & unrepresentative measure, particularly in London.

So is basing the ability to buy a house on a dual income - in London 28% of the population live on their own - this figure does not include lone parents with children, which is up to 15% of households in some parts of london. So the joint salary multiple doesnt apply to them (source statistics.gov.uk).

In inner London 38% of people rent from a social landlord (council or housing association & double the UK average) - I reckon inner city includes Tower Hamlets. Can't see many of them being on $88k a year.

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why is everyone assuming that a dual income multiple is the beat measure?

...what happens when part of that dual income takes time off to have kids?

.....come on,it ain't rocket science......if the govt want DECENT people to occupy this country then prices for houses HAVE to come down so that they can raise families.

....all the immigration in the world can't help if the brains of the country F*** off elsewhere and all that's left is a few McJobs at £4.50ph to support the elderly.

...it won't work....you'll sooner have a re-hash of LOGAN's RUN to exterminate pensioners if it becomes that much of a burden.

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  • 301 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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