Stewy Posted April 22 Share Posted April 22 (edited) "First-time buyers are facing the toughest conditions in 70 years to buy a home, according to a report by the Building Societies Association (BSA). Those buying a first home were increasingly reliant on having two high incomes or receiving parental support, it said." https://www.bbc.co.uk/news/articles/c87zgx42m5go The chart on that page implies HPIs go up over twice as fast as earnings - so we should be looking at 10-15% growth, based on how quickly earnings are ramping. I don't think the Plateau can hold much longer. Edited April 22 by Stewy Quote Link to comment Share on other sites More sharing options...
PrincessNutNut Posted April 22 Share Posted April 22 It's the affordability of debt that drives house prices. Earnings factor into that, but are not the whole equation. Quote Link to comment Share on other sites More sharing options...
fellow Posted April 22 Share Posted April 22 7 hours ago, Stewy said: "First-time buyers are facing the toughest conditions in 70 years to buy a home, according to a report by the Building Societies Association (BSA). Those buying a first home were increasingly reliant on having two high incomes or receiving parental support, it said." https://www.bbc.co.uk/news/articles/c87zgx42m5go The chart on that page implies HPIs go up over twice as fast as earnings - so we should be looking at 10-15% growth, based on how quickly earnings are ramping. I don't think the Plateau can hold much longer. The chart suggests an unsustainable bubble and the article suggests prices have reached their limit and can only go down from here ( im real terms at least). Thanks for posting some bearish news for a change. Quote Link to comment Share on other sites More sharing options...
regprentice Posted April 22 Share Posted April 22 (edited) You can draw a much more impressive (i.e. bad) graph going back to 1970 which is where wages and house prices begin to "decouple". Back in 1970 the average wage was £1,080 and the average house £4,163. House prices have risen at 3 times the rate of wages since 1966. link Edited April 22 by regprentice Quote Link to comment Share on other sites More sharing options...
Sackboii Posted April 22 Share Posted April 22 They should all just buy with cash then wages won’t matter.. ✔️ Quote Link to comment Share on other sites More sharing options...
TenYearToGetMyMoneyBack Posted April 23 Share Posted April 23 8 hours ago, regprentice said: You can draw a much more impressive (i.e. bad) graph going back to 1970 which is where wages and house prices begin to "decouple". Back in 1970 the average wage was £1,080 and the average house £4,163. House prices have risen at 3 times the rate of wages since 1966. link A couple of annotations (which you might have heard before). In 1974 a 21" colour TV was £250 compared to £9000 for the average house. The TV was most likely to be made by a well paid British worker. The inevitable repairs would then need an even better paid repairman like one I konw. In about 1988 a colleague suggested that HPI was caused by everything most people wanted in a house like TVs and Washing Machines becoming cheaper. Fast forward to 1999 and the BTL mortgage was so new I had never heard of them. Like everyone else I had heard of Bridging Loans. "You want two mortgages?" Sharp intake of breath in astonishment. Looking at the graph and reiterating what others have said, it's not what you earn but how much you can borrow. Quote Link to comment Share on other sites More sharing options...
Stewy Posted April 23 Author Share Posted April 23 25 minutes ago, TenYearToGetMyMoneyBack said: Looking at the graph and reiterating what others have said, it's not what you earn but how much you can borrow. And how much you get given by the Bank of Boomer. Let's not forget the importance of recycled equity - and smaller families & wealthier pensioners mean inheritance is no longer just a pittance. The vast majority of renters in this country, if given a lump sum, would buy a house (or put down a deposit). We're not going to change that cultural mindset by pointing to two divergent lines on a chart. It's ingrained (baked-in). Quote Link to comment Share on other sites More sharing options...
TenYearToGetMyMoneyBack Posted April 23 Share Posted April 23 11 minutes ago, Stewy said: And how much you get given by the Bank of Boomer. Let's not forget the importance of recycled equity - and smaller families & wealthier pensioners mean inheritance is no longer just a pittance. The vast majority of renters in this country, if given a lump sum, would buy a house (or put down a deposit). We're not going to change that cultural mindset by pointing to two divergent lines on a chart. It's ingrained (baked-in). I missed that one. Actually I suspect that if the Boomers could have got a decent return in the bank (or a pension fund) they would have been happy to leave their money there. How many times have we read "My houses are my pension" on other forums? Quote Link to comment Share on other sites More sharing options...
70PC Posted April 23 Share Posted April 23 The property market has a solution. Free lenders up to load more debt onto borrowers. Heaven forbid that more affordable house prices might be a better solution. "Building societies calls for looser mortgage regulation to fix ‘broken housing market’" https://thenegotiator.co.uk/news/uk-housing-market-news/building-societies-calls-for-looser-mortgage-regulation-to-fix-broken-housing-market/ Quote Link to comment Share on other sites More sharing options...
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