Without_a_Paddle Posted May 8, 2006 Share Posted May 8, 2006 Anyway how's about a reply fro the disbelief post earlier CS Sorry Cornwall Sceptic, I missed your prev reply. Taken from your link: New figures show the average weekly wage in Cornwall is £100 a week less than the national average. According to the Office for National Statistics the average wage in Cornwall is £329.30 a week while the average for England is £429. People in neighbouring Devon earn about £347 a week. Average wage in Cornwall is £330pw 330x52weeks is £17160 pa. So my guess at £18k was pretty close. Much closer than your figure of £12k. Quote Link to comment Share on other sites More sharing options...
Cornwall Sceptic Posted May 8, 2006 Share Posted May 8, 2006 Sorry Cornwall Sceptic, I missed your prev reply. Taken from your link: Average wage in Cornwall is £330pw 330x52weeks is £17160 pa. So my guess at £18k was pretty close. Much closer than your figure of £12k. I am able to do the maths with a figure of £309 for North Cornwall if you want to be pedantic that's £15,964 Did you not read the other link where the guy said you would be lucky to earn £13k or did you not quote that because it didn't suit your point of view It's not my figure it is a figure repeated in these parts - SW Cornwall is a long way behind the rest of the UK You didn't mention your experience of the County! CS Quote Link to comment Share on other sites More sharing options...
KentishFella Posted May 8, 2006 Share Posted May 8, 2006 Youngish couple, combined income £46kMonthly take home pay £2800 House £160k Deposit £10k Mortgage £150k Monthly mortgage payment £875. (Only if you want to pay 7 percent) Percentage of takehome pay = 31%. Is that clear enough? I’ve made a couple of modifications to the above and so here’s the revised rough: Youngish couple, combined income £46k (Maybe) Monthly take home pay £2800 (Maybe) House £200k Deposit £30k (Provided by the developers on new builds (if you ask very nicely, maybe?) Mortgage £170k (The difference between the “price” and the deposit) Monthly mortgage payment £637.50 or (£7650 per annum, which is £170K at 4.50%) . Percentage of take home pay = 22.8%. I know that we're saying that it’s really only an issue of presentation, but you can see that it looks quite comfortable, doesn’t it? Subnstitute your own figures to see if it fits your local situation? HTH KF Quote Link to comment Share on other sites More sharing options...
Guest Guy_Montag Posted May 8, 2006 Share Posted May 8, 2006 I don't see this as ramping, I see it as analysis of two recent press releases. There is nothing outrageous in the article, all he does is extrapolate from current trends & we can all look at the rather depressing graph at the top right. He points out that both Nationwide & Halifax, along with other pundits are surprised by the sudden growth. He then goes on to discuss the liklihood of a crash. Finally refuting the suggestion of the second poster, he points out that "loans approved for house purchases" (so presumably not MEW) are 27% yoy. I know it's hard when the stats don't support our theories (& hopes), but dismissing articles & authors like this does us no favours. I find it as depressing as the next person when I read that HPI is up again, but we just have to accept these things at face value. Patience my pretties, patience. Quote Link to comment Share on other sites More sharing options...
underpressuretobuy Posted May 8, 2006 Share Posted May 8, 2006 (edited) I’ve made a couple of modifications to the above and so here’s the revised rough: Youngish couple, combined income £46k (Maybe) Monthly take home pay £2800 (Maybe) House £200k Deposit £30k (Provided by the developers on new builds (if you ask very nicely, maybe?) Mortgage £170k (The difference between the “price” and the deposit) Monthly mortgage payment £637.50 or (£7650 per annum, which is £170K at 4.50%) . Percentage of take home pay = 22.8%. I know that we're saying that it’s really only an issue of presentation, but you can see that it looks quite comfortable, doesn’t it? Subnstitute your own figures to see if it fits your local situation? HTH KF You are all missing the point. The original article had nothing to do with affordability! The article was based on the fact that mortgage lending had increased and previous mortgage lending increases have usually included people extending their mortgages by remortgaging or MEWing rather than new mortgages being taken out. Edited May 8, 2006 by underpressuretobuy Quote Link to comment Share on other sites More sharing options...
KentishFella Posted May 8, 2006 Share Posted May 8, 2006 The article was based on the fact that mortgage lending had increased and previous mortgage lending increases have usually included people extending their mortgages by remortgaging or MEWing rather than new mortgages being taken out. OK, so he's saying that there has been an increase in the numbers of transactions or property purchases and I guess that doesn't help the bear case on the face of it, but surely that should emphasize the affordability argument? Maybe, I've missed your point? KF Quote Link to comment Share on other sites More sharing options...
Without_a_Paddle Posted May 8, 2006 Share Posted May 8, 2006 (edited) I am able to do the maths with a figure of £309 for North Cornwall if you want to be pedantic that's £15,964 Did you not read the other link where the guy said you would be lucky to earn £13k or did you not quote that because it didn't suit your point of view It's not my figure it is a figure repeated in these parts - SW Cornwall is a long way behind the rest of the UK CS Your 'other link' was a readers' reply section about tax breaks on second homes. So you expect me change my point of view on Cornwall salaries based on a post made by a reader called 'Michael'? You didn't mention your experience of the County! How many people 'know' the exact average wage in their local area? You obviously don't and it took someone from several counties away to come up with a better guess. I know that we're saying that it’s really only an issue of presentation, but you can see that it looks quite comfortable, doesn’t it? Subnstitute your own figures to see if it fits your local situation?HTH KF You should make it clear that your figures are for an interest only mortgage. My figures were for a repayment mortgage (which most homebuyers opt for) Edited May 8, 2006 by Without_a_Paddle Quote Link to comment Share on other sites More sharing options...
camem' Posted May 8, 2006 Share Posted May 8, 2006 You are all missing the point. The original article had nothing to do with affordability! The article was based on the fact that mortgage lending had increased and previous mortgage lending increases have usually included people extending their mortgages by remortgaging or MEWing rather than new mortgages being taken out. like this my answer for the original question is : It's the parents' money. Which comes from their house. Which was already part of the market. Neat huh ? Has anyone got a graph of "% deposit that comes from FTB's families" ? Quote Link to comment Share on other sites More sharing options...
House Or Home Posted May 8, 2006 Share Posted May 8, 2006 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. I'm not convinced that if you don't have kids, you don't need a house. Is the sole criteria for home ownership the ability to breed? My wife and I earn over £120K between us, but choose not to have any kids. We also choose not to buy a house at these oveerinflated prices. I agree that people should be able to afford to buy a decent house to raise kids in at a reasonable salary, I think that's the real moral issue with the housing market of today, and it's why I'd love to see a sizeable drop in prices Quote Link to comment Share on other sites More sharing options...
Cornwall Sceptic Posted May 8, 2006 Share Posted May 8, 2006 Your 'other link' was a readers' reply section about tax breaks on second homes. So you expect me change my point of view on Cornwall salaries based on a post made by a reader called 'Michael'? How many people 'know' the exact average wage in their local area? You obviously don't and it took someone from several counties away to come up with a better guess. You seem to be putting a lot of effort into proving that you are right - I am only quoting other peoples figures http://www.jrf.org.uk/bookshop/eBooks/185935243X.pdf Look at page 10 of this report, look at Penwith and Kerrier (the two southern most authorities) with total household incomes of £27266 and £25889 respectively (see footnote about Penwith) Penwith is the 3rd least affordability in the UK (out of over 450) behind Kensington & Chelsea and Westminster Irrespective of salary that part of the debate was about affordability - can you argue about that? You were wrong to accuse me of not knowing what's happening on my own doorstep - if you have the guts you should hold you hand up CS Quote Link to comment Share on other sites More sharing options...
SCUMBAG Posted May 9, 2006 Share Posted May 9, 2006 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. No I come from Cornwall and I believe it. There is nothing down there. It is on the brink of poverty. No industry. The only thing keeping it going is tourism. Quote Link to comment Share on other sites More sharing options...
Cornwall Sceptic Posted May 9, 2006 Share Posted May 9, 2006 No I come from Cornwall and I believe it. There is nothing down there. It is on the brink of poverty. No industry. The only thing keeping it going is tourism. Thanks Scumbag I posted some intersting info futher down the thread to say that Penwith is the 3rd highest income multiplyer in the UK of house prices to earnings - it's frightening WOP is talking out of his *rse Regards CS Quote Link to comment Share on other sites More sharing options...
Without_a_Paddle Posted May 9, 2006 Share Posted May 9, 2006 You seem to be putting a lot of effort into proving that you are right - I am only quoting other peoples figures http://www.jrf.org.uk/bookshop/eBooks/185935243X.pdf Look at page 10 of this report, look at Penwith and Kerrier (the two southern most authorities) with total household incomes of £27266 and £25889 respectively (see footnote about Penwith) Penwith is the 3rd least affordability in the UK (out of over 450) behind Kensington & Chelsea and Westminster Irrespective of salary that part of the debate was about affordability - can you argue about that? You were wrong to accuse me of not knowing what's happening on my own doorstep - if you have the guts you should hold you hand up CS Yes, the data from your (very interesting BTW) pdf file has the following footnote about Penwith data Note: based on average household incomes of working households aged 20–39 and average house prices for two- and three-bedroom dwellings. The earnings (and therefore ratio) figures for Penwith should be treated with particular caution. So this data is NOT average wages but houshold income for typical young FTB. So this figure (when halved for a single income) will look lower than the 'average wage' for Cornwall. Look back over my posts and you will see that I am only disagreeing with your claim that average wages are £12k in Cornwall. I never said anything about house prices or affordability in Cornwall. So far you have come up with NOTHING that shows your claim to be true. The best you have come up with is one part of Cornwall has low wages for young people. Other parts of Cornwall showed average household income of over £30k for young couples. Also, your data is two years old. Wage inflation is running at 4% yoy so Penwith data of £27226 will be £29447 in 2006. (for young couples, NOT AVERAGE WAGES) I am quite happy to admit my guess at £18k is (slightly) too high for AVERAGE WAGES in Cornwall. The BBC data you provided indicates just over £17k. Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted May 9, 2006 Share Posted May 9, 2006 i like how everyone assumes that the couple on a combined income of 46k is normal ? where are these normal types then ? what about the rest of the normal population. who packs the foxes biscuits. who pumps the petrol and who collects the bins. ghosts. Quote Link to comment Share on other sites More sharing options...
Bemused Posted May 9, 2006 Share Posted May 9, 2006 (edited) I am quite happy to admit my guess at £18k is (slightly) too high for AVERAGE WAGES in Cornwall. The BBC data you provided indicates just over £17k. Just to add my 2p worth. I spend a fair bit of time in Cornwall and have friends there. The younger of my friends I know struggle with finding any work that is not seasonal and even the more established couples with OK jobs have little chance of buying anything in the towns they grew up in a this is holiday home hell area. If I believed that I could walk into an 18K job I would be seriously tempted to relocate to Cornwall. However this is unlikely to happen. Edited May 9, 2006 by Bemused Quote Link to comment Share on other sites More sharing options...
dnd Posted May 9, 2006 Share Posted May 9, 2006 (edited) 'Affordability' in the examples given is very short term view - what if the couple split up? - what if you get the sack? - what if you get a new job and it pays less (ie > 40 years old) - - you have to maintain your present salary for a 25 year period - unlikely nowadays IIRC mortgages in the past were based on a single main income earner working for the same company for life - for exactly the long term reasons given It's going to get very messy if long term mortgages are being given out on short term basis Personally, I can't see a future for mortgages - other than for BMV buyers to cash in on the misery Edited May 9, 2006 by dnd Quote Link to comment Share on other sites More sharing options...
Cornwall Sceptic Posted May 9, 2006 Share Posted May 9, 2006 Yes, the data from your (very interesting BTW) pdf file has the following footnote about Penwith data So this data is NOT average wages but houshold income for typical young FTB. So this figure (when halved for a single income) will look lower than the 'average wage' for Cornwall. Look back over my posts and you will see that I am only disagreeing with your claim that average wages are £12k in Cornwall. I never said anything about house prices or affordability in Cornwall. So far you have come up with NOTHING that shows your claim to be true. The best you have come up with is one part of Cornwall has low wages for young people. Other parts of Cornwall showed average household income of over £30k for young couples. Also, your data is two years old. Wage inflation is running at 4% yoy so Penwith data of £27226 will be £29447 in 2006. (for young couples, NOT AVERAGE WAGES) I am quite happy to admit my guess at £18k is (slightly) too high for AVERAGE WAGES in Cornwall. The BBC data you provided indicates just over £17k. OK WOP lets call a truce we will never find out the exact figures anyway We moved here 3 years ago (to be near mother) and trying to earn a decent living is hard - much harder than I expected so we have to work up country (as do many down here) to make ends meet Thanks for the debate Regards CS Quote Link to comment Share on other sites More sharing options...
North London Rent Girl Posted May 9, 2006 Share Posted May 9, 2006 The reason things seem harder is that more people expect to buy on 1 salary these days Like most of our parents, you mean? Don't you remember when double income couples started really to be common? All those words like yuppie and nimby and dinky (double income no kids yet) got invented? It was the 80s. Things seem harder? Bonkers. Quote Link to comment Share on other sites More sharing options...
Europa Posted May 9, 2006 Share Posted May 9, 2006 'Affordability' in the examples given is very short term view - what if the couple split up? - what if you get the sack? - what if you get a new job and it pays less (ie > 40 years old) - - you have to maintain your present salary for a 25 year period - unlikely nowadays IIRC mortgages in the past were based on a single main income earner working for the same company for life - for exactly the long term reasons given It's going to get very messy if long term mortgages are being given out on short term basis Personally, I can't see a future for mortgages - other than for BMV buyers to cash in on the misery The points you make always applied. A couple buying in the mid 1990s slump would have faced virtually the same risk. Mortgages are always a long term commitment made on the basis of current circumstances. Do you really think that every home-owner had the benefit of a job-for-life package in the 70s, 80s, and 90s? Quote Link to comment Share on other sites More sharing options...
Rachman Posted May 9, 2006 Share Posted May 9, 2006 Like most of our parents, you mean? Don't you remember when double income couples started really to be common? All those words like yuppie and nimby and dinky (double income no kids yet) got invented? It was the 80s. Things seem harder? Bonkers. Who's going to tell all those career women and graduates that they should stay at home to keep house prices down then ? Face it, it's not just house prices that are forcing women to work, most women homebuyers want a career and to earn their own money and be independent, not a baby factory - so they are out there as adding to HPI - the problems now start in their 30's when they change their minds (mostly) and want to be at home a lot more and want a career 3 days a week (which for most high paying jobs is nonsense BTW - whatever the unions and government waffle on about) and be at home the rest - they then get a double whammy, high mortgage payments if they don't earn big and big childcare costs if they do. The simple way is to stop those women working, I should love to see you make that work (TIC).... Quote Link to comment Share on other sites More sharing options...
dnd Posted May 9, 2006 Share Posted May 9, 2006 (edited) Do you really think that every home-owner had the benefit of a job-for-life package in the 70s, 80s, and 90s? Yes, It was more likely and the changes have been gradual - but the basis of mortgage repayment hasn't - if you don't keep up repayments you lose your house It's unrealistic nowadays Edited May 9, 2006 by dnd Quote Link to comment Share on other sites More sharing options...
sm9ai Posted May 9, 2006 Share Posted May 9, 2006 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? Well I actually fit into this quite well. Me and my Fiance are youngish, 26 and have a combined income of £46k ish. However without sounding snobish or anything like that, I could buy a house but earning this sort of money would put us struggling at the very bottom rung of the ladder. Earning this money we should be a rung or two further up. So basically there is no way I will buy to only go onto the bottom rung. Quote Link to comment Share on other sites More sharing options...
AFineMess Posted May 9, 2006 Share Posted May 9, 2006 The points you make always applied. A couple buying in the mid 1990s slump would have faced virtually the same risk. Mortgages are always a long term commitment made on the basis of current circumstances. Do you really think that every home-owner had the benefit of a job-for-life package in the 70s, 80s, and 90s? I think you make some good points there. The problem is that the whole notion of affordability is lacking in discipline now. The relaxing of lending criteria has pushed up prices beyond any sane level for many people. Lie-to-buy for FTBs is now extremely common - a vicious circle that keeps prices high. Many people I know have mortgages beyond anything they could have borrowed in the past - and some of them are hurting right now. I'm not saying that income multiples are necessarily the right way to determine how much to lend, but the curent lax lending criteria are contributing massively to this bubble market. We are riding the ceiling of affordability, rather than occupying a sensible middle ground. Quote Link to comment Share on other sites More sharing options...
laurejon Posted May 9, 2006 Share Posted May 9, 2006 The income multiples are for sure high, but you have to take it into the context of the "New Economy" invented by Blair and Brown, and the fact that affordability is based on earnings. We do indeed have very very low interest rates, and that has been the case for 7years, however you have to ask yourself is the concept of a miracle economy working, is it sustainable, and is it real. When you have pondered those questions, then you have the simple answer and can continue to rent safe in the knowledge some time very soon the rates will rise, Blair will be history, New Labour will be yet another blip in the failed history of socialism, and we will return to normal income multiples. I think you should all remember, Conservatives were and always will be the party of householders. Core to their beliefs is that everyone who works should own a home. Unlike the Labour Party, who consider the working classes to be of little importance, its the big bosses who line their pockets that count. Quote Link to comment Share on other sites More sharing options...
LivingTheDream-JustLikeLeedsUtd Posted May 9, 2006 Share Posted May 9, 2006 I think you should all remember, Conservatives were and always will be the party of householders. Core to their beliefs is that everyone who works should own a home. Unlike the Labour Party, who consider the working classes to be of little importance, its the big bosses who line their pockets that count. Quality. I would really love to know what Maggie "Anyone who finds themselves travelling on a bus at the age of 27 should consider themselves a failure" Thatcher would think about this website. She'd be telling priced out FTBs to "get on their bike" (And yes I know that was actually Tebbit about the unemployed, but the sentiment holds). And while you're claiming that the Conservatives weren't intrested in lining their pockets, you might like to ponder why Jonathan "Sword of Truth" Aitken spent seven months in the late 90's being very careful not to drop the soap. Cameron's idea of helping FTBs is shared ownership. There is no salvation from the Conservatives (Guess what, they own property too!!!!!) Quote Link to comment Share on other sites More sharing options...
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