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canbuywontbuy

Crisis, What Crisis? Majority Of Houses More Affordable Than In 1997

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Although, relative to actual money, that are about as unaffordable as at any time in the past.

I said sopmewhere else today, if you took the asking prices I am seeing round here as gospel, then the nationwide unaffordability graph would be at an all time high ( or is it low :lol; ).

This is just a desperation.

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There are occasions when I think even Anna White must be embarrassed at the codswallop she churns out. Not many, but some. This is one of them.

Ask yourself....who's asked her to write it ?

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In 1997 in Leicester a 3-4 bedroom house in the Clarendon Park area of town (nice Victorian terraced houses) cost between £60k-£100k. A graduate starting salary was around £15k-£18k and an average wage roughly £20k.

In 2015 the same houses cost £200k-£350k and a graduate starting salary is £17k-22k and an average wage roughly £25k.

How is that more affordable?

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What's interesting is how off message the telegraph has gone. They normally toe the line with this government, however It seems since the budget they have thrown a hissy fit of BTL ramping. I wonder whether a few hacks with BTL were a bit wrong footed by the budget announcements. Could be a pump and dump.

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Ask yourself....who's asked her to write it ?

Probably her old pal Mark Alexander. Although I haven't seen her having much input on their latest circle jerk - have I missed it, or has even Anna seen them for the dead ducks that they are?

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What's interesting is how off message the telegraph has gone. They normally toe the line with this government, however It seems since the budget they have thrown a hissy fit of BTL ramping. I wonder whether a few hacks with BTL were a bit wrong footed by the budget announcements. Could be a pump and dump.

Most of the journalists are arrogant fools getting high on their own supply. They can't imagine that there could be a massive unsustainable property bubble staring them in the face, pumped by a politically and economically unsustainable buy-to-let sector, and that whilst the journos had missed it, clever civil servants and politicians seeking to hold onto power would eventually find commons purpose in taking it down.

The sad fact is that someone like Anna White is really in PR. There is no journalism in her work.

(It is a reprise of the way that personal finance journalists cheered retail money into Icesave accounts long after the money markets had closed to its parent bank. Richard Dyson (the group personal finance editor) knows exactly what is going on, but I guess his role is to supervise the production click fodder by twerps like White and he has to keep his opinions to himself until everybody knows the worm has turned.)

Edited by bland unsight

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In 1997 in Leicester a 3-4 bedroom house in the Clarendon Park area of town (nice Victorian terraced houses) cost between £60k-£100k. A graduate starting salary was around £15k-£18k and an average wage roughly £20k.

In 2015 the same houses cost £200k-£350k and a graduate starting salary is £17k-22k and an average wage roughly £25k.

How is that more affordable?

If you take into account the interest ( at 2% rather than 6% ) it probably is.

However, if someone had 60K then and a 100K now then then in 1997 they could buy for cash, now they have to bend over and take out a mortgage, handing over a percentage of your income/life to the bankers.

I have a phrase for this, "systematic fraud".

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Anna's busy these days. Only yesterday we had

Where the smart money bought: The 5 best cities for rental growth

New study from CBRE shows where savvy landlords piled in.

Debate over the purported house price bubble that many believed was developing in London last year has been replaced by fears of a buy-to-let boom.

In fact, the Conservatives have sought to address this. In the emergency budget in July George Osborne announced that he will scale back the tax relief that those landlords with a mortgage, in the higher income tax bracket, have so enjoyed.

But there are some savvy property investors who moved into the buy-to-let space 12 months ago and have reaped the rewards from buying in areas that combined sensible house prices with subsequently soaring rents. That pretty much counts London out, where high house price growth has dampened yields.

Sometimes I think I might actually puke.

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Not read the article. Neal Hudson's chart is always worth looking at when discussing "affordability" imo.

Neal Hudson ‏@resi_analyst May 19

Complex affordability chart shows impact of regulation post Q2 last yr More info on chart http://sav.li/3r0 PDF

CFWx4BVWIAARsFv.png

Looks more like modern art.

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In 1997 in Leicester a 3-4 bedroom house in the Clarendon Park area of town (nice Victorian terraced houses) cost between £60k-£100k. A graduate starting salary was around £15k-£18k and an average wage roughly £20k.

In 2015 the same houses cost £200k-£350k and a graduate starting salary is £17k-22k and an average wage roughly £25k.

How is that more affordable?

even if you factor in the differance in interest rates

£100K at 5% - is 5K per annum

£100K to pay off over 25 years is 4K per annum

£250K at 2% is 5K per annum

BUT

£250K to pay off over 25 years if £10K per annum

of course if there was massive inflation that debt would be eroded but we are not in high inflation territory.

no wonder interest only was such a popular product (forget the £10k per annum to be repaid)

Edited by olliegog

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In 1997 in Leicester a 3-4 bedroom house in the Clarendon Park area of town (nice Victorian terraced houses) cost between £60k-£100k. A graduate starting salary was around £15k-£18k and an average wage roughly £20k.

In 2015 the same houses cost £200k-£350k and a graduate starting salary is £17k-22k and an average wage roughly £25k.

How is that more affordable?

Pretty much sums up Northampton, and I'm sure most of the UK.

Wages have barely moved 20% up since the late 90s - house prices have trebled/quadrupled depending on the property. Credit might be cheaper, but the numbers are unforgiving and don't represent "cheaper than1997" at all - in fact, quite the opposite. Furthermore, because the absolute values are so daft now, most FTBs require huge mortgages which also come with higher interest charges. Forget 2% teaser rates when you're borrowing 80 to 90% of the mortgage - more like 4 or 5%.

The purpose of the article isn't even hiding behind so much as a fig-leaf - Anna White already has her points decided upon long before an article is "researched" or written.

Edited by canbuywontbuy

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Pretty much sums up Northampton, and I'm sure most of the UK.

Wages have barely moved 20% up since the late 90s - house prices have trebled/quadrupled depending on the property. Credit might be cheaper, but the numbers are unforgiving and don't represent "cheaper than1997" at all - in fact, quite the opposite. Furthermore, because the absolute values are so daft now, most FTBs require huge mortgages which also come with higher interest charges. Forget 2% teaser rates when you're borrowing 80 to 90% of the mortgage - more like 4 or 5%.

The purpose of the article isn't even hiding behind so much as a fig-leaf - Anna White already has her points decided upon long before an article is "researched" or written copied and pasted.

Corrected for you...hope you don't mind.

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Falling inflation is a bad thing for mortgage holders. It's the real rate that counts.

??

Having to spend less money on food and fuel makes it harder to pay the mortgage?

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Falling inflation is a bad thing for mortgage holders. It's the real rate that counts.

Thats a fair point, but with 2% rates ( for anyone stupid enough to give the banks 40% of a 2007+30% price !!!! :blink: ) that's still crazy bubble madness cheap

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??

Having to spend less money on food and fuel makes it harder to pay the mortgage?

Stop with your making sense !!!

No, it just means they actually have to pay the money back they borrowed and not get it paid off for them by the destruction of peoples savings/wages/pensions.

The Inflation lie was a great idea to entice people into the top of the pyramid scam 30 years ago...how do you argue against someone sat with £1M on untaxes unearned free pyramid scam equity in their house ?

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??

Having to spend less money on food and fuel makes it harder to pay the mortgage?

Rising wages reduce the burden of your mortgage. It's the real interest rate that matters.

Of course, if there's inflation without wage inflation that that doesn't work, but that's just a roundabout way of saying wages are falling. All else equal debtors benefit from inflation.

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