Jump to content
House Price Crash Forum
Sign in to follow this  
krosfyah

Crash My Ar*e! Wtf Is Going On?!?!

Recommended Posts

Can someone - in concise, economic terms, explain what is going on here please...

BBC article - Will House Prices Boom Again?

How is this upward spiral being maintained? I just can't fathom it. Is it that in fact there are PLENTY of FTBs, yet we keep getting told the market of FTBs is shrinking/has shrunk?

Without FTBs, how can the property market be sustained for so long, and continue to rise in such value? Without the bottom rung, nothing is propping it up, yet the market continues to defy all expectations.

I just simply do not understand it.

Can someone try and help me understand how this is happening. Please, please don't just post "well it won't last forever" or "it's just a bubble, bubbles defy explanation" - please try and back up your sentiment with cold hard econmic fact.

Thanks

Share this post


Link to post
Share on other sites

Can someone - in concise, economic terms, explain what is going on here please...

BBC article - Will House Prices Boom Again?

How is this upward spiral being maintained? I just can't fathom it. Is it that in fact there are PLENTY of FTBs, yet we keep getting told the market of FTBs is shrinking/has shrunk?

Without FTBs, how can the property market be sustained for so long, and continue to rise in such value? Without the bottom rung, nothing is propping it up, yet the market continues to defy all expectations.

I just simply do not understand it.

Can someone try and help me understand how this is happening. Please, please don't just post "well it won't last forever" or "it's just a bubble, bubbles defy explanation" - please try and back up your sentiment with cold hard econmic fact.

Thanks

I don't know if this is the case just now, but what can happen is that volume of sales can fall dramatically, but the odd house will still sell. These few sales can be at high prices and cause the average price to rise.

Houses are therefore still rising, but in reality, very little is shifting.

Like I said, I'm not saying this is the case, but this is one way it can happen. Is that the sort of thing you are looking for?

NDL

Share this post


Link to post
Share on other sites

Can someone - in concise, economic terms, explain what is going on here please...

BBC article - Will House Prices Boom Again?

How is this upward spiral being maintained?

The upward spiral is NOT being maintained - what you are reading is, it would seem, the personal (property ramping) opinion of a Mr Ian Pollock who has the lovely job of being the BBC's personal finance reporter.

All I want to know is, not what is keeping this bubble going, but what are Mr Pollocks qualifications for writing this pile of cr@p?

He does say however "it is possible that the Halifax survey is simply overestimating what is really going on.

Its figures are based on its own mortgage lending and they show that prices are rising much faster than, for instance, the monthly survey from its main rival the Nationwide"

Does anyone know whether this Halifax survey (which this entire article is based on) based on mortgage lending includes remortgaging and MEWing? If it does that would tear this whole article apart.

He also says "If prices do shoot up further, the Bank of England could become worried again and push up interest rates." So this 'expert' thinks that the BoE sets interest rates to keep the lid on house price rises?

Edited by underpressuretobuy

Share this post


Link to post
Share on other sites

Can someone - in concise, economic terms, explain what is going on here please...

BBC article - Will House Prices Boom Again?

How is this upward spiral being maintained? I just can't fathom it. Is it that in fact there are PLENTY of FTBs, yet we keep getting told the market of FTBs is shrinking/has shrunk?

Without FTBs, how can the property market be sustained for so long, and continue to rise in such value? Without the bottom rung, nothing is propping it up, yet the market continues to defy all expectations.

I just simply do not understand it.

Can someone try and help me understand how this is happening. Please, please don't just post "well it won't last forever" or "it's just a bubble, bubbles defy explanation" - please try and back up your sentiment with cold hard econmic fact.

Thanks

Youngish couple, combined income £46k

Monthly take home pay £2800

House £160k

Deposit £10k

Mortgage £150k

Monthly mortgage payment £875. (Edit: this figure is for a repayment loan at 5% IR)

Percentage of takehome pay = 31%.

Is that clear enough?

Edited by Without_a_Paddle

Share this post


Link to post
Share on other sites

Can someone - in concise, economic terms, explain what is going on here please...

BBC article - Will House Prices Boom Again?

How is this upward spiral being maintained? I just can't fathom it. Is it that in fact there are PLENTY of FTBs, yet we keep getting told the market of FTBs is shrinking/has shrunk?

Without FTBs, how can the property market be sustained for so long, and continue to rise in such value? Without the bottom rung, nothing is propping it up, yet the market continues to defy all expectations.

I just simply do not understand it.

Can someone try and help me understand how this is happening. Please, please don't just post "well it won't last forever" or "it's just a bubble, bubbles defy explanation" - please try and back up your sentiment with cold hard econmic fact.

Thanks

they lie

http://news.bbc.co.uk/1/shared/spl/hi/in_d...ml/county29.stm

Exeter down 6.9%....

Land Registry.

BBC Website

they might not like it..

Share this post


Link to post
Share on other sites

Youngish couple, combined income £46k

Monthly take home pay £2800

House £160k

Deposit £10k

Mortgage £150k

Monthly mortgage payment £875.

Percentage of takehome pay = 31%.

Is that clear enough?

Exactly. For most couple, repayments are affordable in many areas.

The reason things seem harder is that more people expect to buy on 1 salary these days

Share this post


Link to post
Share on other sites

Youngish couple, combined income £46k

Monthly take home pay £2800

House £160k

Deposit £10k

Mortgage £150k

Monthly mortgage payment £875.

Percentage of takehome pay = 31%.

Is that clear enough?

And add to that some gullability and a little brainwashing from colleagues and relatives and you have your answer.

Share this post


Link to post
Share on other sites

Youngish couple, combined income £46k

Monthly take home pay £2800

House £160k

Deposit £10k

Mortgage £150k

Monthly mortgage payment £875.

Percentage of takehome pay = 31%.

Is that clear enough?

Appears good I concede But.... Insurance....other expenses on top...less than 10% deposit....reliance on capital going up....interest rates historically low. For the time being agree.....looks good on paper, till you see the creases and cracks. Can't and won't last....wing and a prayer....interest rates WILL rise. Stand back and watch.

VP

Share this post


Link to post
Share on other sites

Exactly. For most couple, repayments are affordable in many areas.

The reason things seem harder is that more people expect to buy on 1 salary these days

Excuse me for being stupid but I thought one of the main reasons to buy a house was to start and raise a family. Try having 2 kids. The nursery fees are the same as ONE income in the majority of cases hence you nedd to afford to be able to buy a house on ONE INCOME!

Guess I am being stupid the main reason to buy a house now is to fill it with Ikea designer tat and watch stupid makeover shows on your plasma.

Share this post


Link to post
Share on other sites

Exactly. For most couple, repayments are affordable in many areas.

The reason things seem harder is that more people expect to buy on 1 salary these day

In Cornwall the average salary is 12k

Try the same Calculation on £24k which is why no locals can afford to buy in the County - my calculation is 60% not so affordable which is why there are no FTB's around here

It's not the same allover the country

CS

Share this post


Link to post
Share on other sites

The reason things seem harder is that more people expect to buy on 1 salary these days

What?

Dont you mean that the reason that housing is so expensive is that people expect to buy on 2 salaries these days?

God help us if the mormans ever get a foothold in the UK.

Share this post


Link to post
Share on other sites

Krosfyah,

I wouldn't put too much emphasis on the Halifax 2% rise or the BBC ramper - monthly figures fluctuate quite widely, for a variety of good statistical reasons and this probably exaggerates the situation by a long way.

I also wouldn't pay too much attention to the BBC site given by Apom simply because the mix-adjustment is so bad and the individual areas are too small to give significant samples - the overall Devon figure of a 1.8% quarterly fall is probably the one to look at there (it contains 15% rises and falls in various categories and places if you look, but the overall trend there seems to be a bit down).

The national figures mask a wide variation in local markets. Unfortunately London, (where you are looking at?) is pretty stable and maybe even slightly up this year. But there's no big move in any direction right now. You see the media taking monthly figures and extrapolating huge rises or falls all the time, but right now it's a bit up, a bit down, nothing very decisive. I wouldn't be scared of big rises because they're not really feasible from here. On the other hand big nominal falls may never happen - they don't always happen and we're yet to see what pattern this cycle follows - the current stagnation might continue, or we might get nominal falls eventually. When people here talk about the inevitable falls that follow a boom it's sometimes easy to forget that these falls in the past have often been quite small in nominal terms.

Share this post


Link to post
Share on other sites

In Cornwall the average salary is 12k

Try the same Calculation on £24k which is why no locals can afford to buy in the County - my calculation is 60% not so affordable which is why there are no FTB's around here

It's not the same allover the country

CS

I don't believe you.

The minimum wage gets you around £10k pa! (40hr week)

I would guess £18k average for the far SW would be more like it.

Edited by Without_a_Paddle

Share this post


Link to post
Share on other sites

Excuse me for being stupid but I thought one of the main reasons to buy a house was to start and raise a family. Try having 2 kids. The nursery fees are the same as ONE income in the majority of cases hence you nedd to afford to be able to buy a house on ONE INCOME!

Guess I am being stupid the main reason to buy a house now is to fill it with Ikea designer tat and watch stupid makeover shows on your plasma.

Exactly! It is meaningless when bulls post calculations showing affordability is reasonable but do not factor in childcare costs etc. If you haven't got kids, you don't really need a house and currently, if you have kids it is nigh impossible to buy a house. My husband and I earn over 60k between us but because of childcare costs, we are skint, relatively speaking. That is why we are FTB's.

Edited by Buffer Bear

Share this post


Link to post
Share on other sites

I don't believe you.

The minimum wage gets you around £10k pa! (40hr week)

I would guess £18k average for the far SW would be more like it.

£18k would put your calc nearer 40% would it not?

NDL

Share this post


Link to post
Share on other sites

Youngish couple, combined income £46k

Monthly take home pay £2800

House £160k

Deposit £10k

Mortgage £150k

Monthly mortgage payment £875.

Percentage of takehome pay = 31%.

Is that clear enough?

Devon

Youngish couple

£35,000 would be good.

£170,000 for a house..

It's easy to add a few thousands one end, take a few from the other..

less vat last year then the year before.

Bankrupsies rising much faster then 1989 crash.

Land registry showing massive drops.

9% drop in new cars sales.

crash massive acceleration speed here

Share this post


Link to post
Share on other sites

Exactly. For most couple, repayments are affordable in many areas.

There is a reason why historically income multiples (linked to wages), rather than monthly outgoings (linked to interest rates), were used to determine affordability. It's because over the term of a typical mortgage, things change. You'll get some times at low rates and some times at high rates.

To say that house prices are affordable (but only at a time of historically low interest rates) somewhat misses the point, IMHO. We are storing up a world of trouble. If rates do rise significantly over the next 5 years or so, the economic and social pain will be considerable.

Share this post


Link to post
Share on other sites

There is a reason why historically income multiples (linked to wages), rather than monthly outgoings (linked to interest rates), were used to determine affordability. It's because over the term of a typical mortgage, things change. You'll get some times at low rates and some times at high rates.

To say that house prices are affordable (but only at a time of historically low interest rates) somewhat misses the point, IMHO. We are storing up a world of trouble. If rates do rise significantly over the next 5 years or so, the economic and social pain will be considerable.

Great nick and avatar ollie!

Good point well made also.

NDL

Share this post


Link to post
Share on other sites

I don't believe you.

The minimum wage gets you around £10k pa!

I would guess £18k average for the far SW would be more like it.

Believe it or not that's what the local press have quoted in the last 12 months

and the BBC who have got it nearly right for once

http://news.bbc.co.uk/1/hi/england/cornwall/4406976.stm

- main story

http://news.bbc.co.uk/1/hi/talking_point/4183374.stm

- 3rd post

Anyway WOP what part of Cornwall are you from to enable you to make such an agressive statement? where are you drawing your information from?

BTW if you take into consideration all of the Poles, Lithuanians nad Estonians that are working picking tulips for "6d every 4 years" then the average will be much lower

CS

Share this post


Link to post
Share on other sites

Can someone - in concise, economic terms, explain what is going on here please...

BBC article - Will House Prices Boom Again?

How is this upward spiral being maintained? I just can't fathom it. Is it that in fact there are PLENTY of FTBs, yet we keep getting told the market of FTBs is shrinking/has shrunk?

Without FTBs, how can the property market be sustained for so long, and continue to rise in such value? Without the bottom rung, nothing is propping it up, yet the market continues to defy all expectations.

I just simply do not understand it.

Can someone try and help me understand how this is happening. Please, please don't just post "well it won't last forever" or "it's just a bubble, bubbles defy explanation" - please try and back up your sentiment with cold hard econmic fact.

Thanks

right,my 2p worth.

what we are seeing at the moment is the lag factor before SIPPS got pulled.I know it's may now and that happened in december.....however many people STILL weren't aware of the chancellors U turn by april and thus carried on regardless.

ones that did get completed before december are working their way through "seasonal adjustment" at the moment.......autumn and winter months are usually quite poor for housing transactions but this last one was unusually strong(due to sipps)....don't expect it to last.

the last pennies are being wrung from the foolish,once the IR hike comes(possibly as early as july),there are going to be some VERY scared punters out there....they were told IR's were coming down and will run for the exit.

tenants are feeling the squeeze from higher utility bills at the moment,that merely prevents rents from rising too fast....IR hikes will directly affect the geared landlord as the cost-base goes up and the revenue can't keep pace.

Share this post


Link to post
Share on other sites

Youngish couple, combined income £46k

Monthly take home pay £2800

House £160k

Deposit £10k

Mortgage £150k

Monthly mortgage payment £875.

Percentage of takehome pay = 31%.

Is that clear enough?

Nice piece of spin, if you read it fast, the figures look like they stack up, but

Youngish couple - increasinlgy rare if demographics are to be bielieved.

Combined income 48K - maybe in London, outside, I think they might struggle

to average 30k

House 160k -like WHERE? -the Outer Hebrides maybe.

Round my way that will struggle to get you

a ex LA maisonette.

Depsit 10k -possible

Mortgage 150K - see above...

More common:

Single youngish person, income 24K, monthly take home around 1400 pcm

Depost 10K (just fo rcompariosn), so Mortgage 875pcm

62.5% of take home...

What's good about that?

ABB

Edited by AgeingBabyBoomer

Share this post


Link to post
Share on other sites

Exactly! It is meaningless when bulls post calculations showing affordability is reasonable but do not factor in childcare costs etc. If you haven't got kids, you don't really need a house and currently, if you have kids it is nigh impossible to buy a house. My husband and I earn over 60k between us but because of childcare costs, we are skint, relatively speaking. That is why we are FTB's.

Unfortunately, you are up against couples/BTL who will buy at these prices.

I'll have to tread carefully here, because last time I got slated for offering possible solutions for couples starting a family.

http://www.handbag.com/family/workingmums/mumpreneurs/

http://www.mumpreneurs.co.uk/

Also, with many mortgages you can take payment holidays for up to a year at a time (try asking TTRTR for a 12 month holiday from paying the rent!)

That could mean a £10k saving spread over a year (OK, you still have to pay it back at some point in the future)

Nice piece of spin, if you read it fast, the figures look like they stack up, but

Youngish couple - increasinlgy rare if demographics are to be bielieved.

Combined income 48K - maybe in London, outside, I think they might struggle

to average 30k

House 160k -like WHERE? -the Outer Hebrides maybe.

Round my way that will struggle to get you

a ex LA maisonette.

Depsit 10k -possible

Mortgage 150K - see above...

ABB

Well, I quoted the average for the UK. What did you expect? A postcode linked spreadsheet linked to local houseprices and wages?

More common:

Single youngish person, income 24K, monthly take home around 1400 pcm

Depost 10K (just fo rcompariosn), so Mortgage 875pcm

62.5% of take home...

What's good about that?

So if your single person meets another single person (boy/girl meets girl/boy)

...and they want to buy a house together then they can.

I gave the OP what he/she asked for.

If you disagree with my figures then please explain to me (and the OP) who is buying all these houses in 2006 then?

Edited by Without_a_Paddle

Share this post


Link to post
Share on other sites

Unfortunately, you are up against couples/BTL who will buy at these prices.

I'll have to tread carefully here, because last time I got slated for offering possible solutions for couples starting a family.

Possible solutions?

http://www.handbag.com/family/workingmums/mumpreneurs/

I loved the link - it really is that easy to start a business - I don't think so

Most people would not have the tenacity to succeed which is why most businesses fail in the first 12 months with an extra 10k of debt because of the business loan - sorry holiday repayment

Good luck to those who did/do

Anyway how's about a reply fro the disbelief post earlier

CS

Share this post


Link to post
Share on other sites

If you disagree with my figures then please explain to me (and the OP) who is buying all these houses in 2006 then?

The Nationwide said back in Summer / Autumn 2004 that houses were being traded between those people who had been on the ladder since the start of the boom as theywere the only ones who had adequate equity to buy. I suggest that's still the case.

Share this post


Link to post
Share on other sites

If you disagree with my figures then please explain to me (and the OP) who is buying all these houses in 2006 then?

It's Willem Dafoe in 'To Live and Die in LA'. He was printing money. It's him. I tell you.

No, hang on, it's the BOE. And it's 'benefactors'.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.