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Bit of a lurker on here - rarely post but there was an interesting article by Kate Allen in the FT and she also featured in the FT podcast. 

"Think you know what your house is worth? Think again"

Low transaction volumes creates considerable uncertainty and wide confidence intervals with regards to actual valuations 

https://www.ft.com/content/86fa173c-01fe-11e8-9650-9c0ad2d7c5b5

Thought it would be of interest to the HPC community. 

(*Disclaimer I'm not crashist in the strictest sense - I believe the market is overpriced (speculative even) in a number of places but affordable in large parts of the country and an uncontrolled nationwide crash a disaster for the wider economy but value debate.)

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14 hours ago, fuzzy_bear said:

affordable in large parts of the country 

Would that be...affordable in large parts of the country with interest rates at 0, magicked up cash being used to lend to people and the houses people can afford on a high salary are 1/4 of the size of the houses people could afford on a low salary 40 years ago ?

 

You'[ve clearly not thought this through.

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I'm not sure what 40 years ago has to do with anything. Interest rates were 14% and Mars bars were cheaper too. Different times. We can live stuck in the 1970s or accept that while some things were better then, many were worse. 

If you are talking about mortgages, then the money has always been "magicked". That's how the financial world (i.e debt/loans work).

Personally we moved out of London/SE a long time ago - we made a choice regarding quality of life, housing & school costs, disposable income etc. 

Where I live now (N.Ireland) average house prices are £125k i.e. 4.7x median single salary (2.3 times joint). Ratio is similar for large parts of Scotland, Wales and NE England. 

With interest rates near zero, a mortgage is considerably cheaper than renting. Money saved can be invested elsewhere or used to overpay the mortgage. It's up to an individual. 

Maybe someone living in 1977 could get a bigger house for the same inflation adjusted figures. If that is what "thinking it through" means I'm not sure that really makes a difference to my life and the lives of my family now so I won't bother doing the math. 

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  • 434 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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