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House Prices Are Affordable

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I see so many topics on here like "People cant afford to live on my street".

People can afford to live there because they do. If they couldnt they wouldnt. Am i missing something?

Why do people always complicate things and pick a few dodgy numbers to support their point.

Yes I think house prices are expensive but people can still afford them, maybe not you personally, and I think people have a tendancy to think others are like themselves. If people cant afford them the price would drop. The market price is the market price. Personally I think the whole global house boom is simply cause by low interest rates. All of the 3 countries i have lived in over the past few years have had dramatic house price increases. All are different, some economies are doing much better than other, some have low population density others dont. I think that some issues raised in the UK such as immigration, planning permission, schools etc just divert attention away from the real cause which is INTEREST RATES. The only way i do think the UK is different from elsewhere is because people dont just view a house as a home but also an investment which has cause the boom to be more extreme and longer lasting.

Its only recently that i could afford to buy a decent place. I would buy a place in the UK but since i dont live there it would be BTL and for me there is too much risk for so little return.

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I could "afford" a million pound house if I took out a 200 year mortgage - I could "afford" those monthly repayments. That is not the same as being able to afford to buy the house...as I won't live 200 years to pay off the mortgage..

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I see so many topics on here like "People cant afford to live on my street".

People can afford to live there because they do. If they couldnt they wouldnt. Am i missing something?

Why do people always complicate things and pick a few dodgy numbers to support their point.

Yes I think house prices are expensive but people can still afford them, maybe not you personally, and I think people have a tendancy to think others are like themselves. If people cant afford them the price would drop. The market price is the market price. Personally I think the whole global house boom is simply cause by low interest rates. All of the 3 countries i have lived in over the past few years have had dramatic house price increases. All are different, some economies are doing much better than other, some have low population density others dont. I think that some issues raised in the UK such as immigration, planning permission, schools etc just divert attention away from the real cause which is INTEREST RATES. The only way i do think the UK is different from elsewhere is because people dont just view a house as a home but also an investment which has cause the boom to be more extreme and longer lasting.

Its only recently that i could afford to buy a decent place. I would buy a place in the UK but since i dont live there it would be BTL and for me there is too much risk for so little return.

are you TTRTR's rent boy in Sweden ?

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I could "afford" a million pound house if I took out a 200 year mortgage - I could "afford" those monthly repayments. That is not the same as being able to afford to buy the house...as I won't live 200 years to pay off the mortgage..

Wow you must have a really great job to be able to afford interest repayments on a million pound house... or maybe your lying.

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I am tempted to argue, but fundamentally you are correct. Someone must be able to afford it, or no-one could buy, end of story.

I think the rapid escalation of prices in recent years creates a mirage of affordability. Provided you bought prior to 2 yrs ago in most parts of the country, you are probably well able to move up the ladder, bearing in mind low interest rates.

Sustainability is a different matter, and that is what long term matters if you are an FTB and buy now mortgaging your entire life's earnings away. At some stage, people are going to have to pay the real cost of housing. You might be priced out of some roads, some estates, but it can't happen everywhere, all at once. At least not forever anyway.

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I see so many topics on here like "People cant afford to live on my street".

People can afford to live there because they do. If they couldnt they wouldnt. Am i missing something?

Why do people always complicate things and pick a few dodgy numbers to support their point.

Yes I think house prices are expensive but people can still afford them, maybe not you personally, and I think people have a tendancy to think others are like themselves. If people cant afford them the price would drop. The market price is the market price. Personally I think the whole global house boom is simply cause by low interest rates. All of the 3 countries i have lived in over the past few years have had dramatic house price increases. All are different, some economies are doing much better than other, some have low population density others dont. I think that some issues raised in the UK such as immigration, planning permission, schools etc just divert attention away from the real cause which is INTEREST RATES. The only way i do think the UK is different from elsewhere is because people dont just view a house as a home but also an investment which has cause the boom to be more extreme and longer lasting.

Its only recently that i could afford to buy a decent place. I would buy a place in the UK but since i dont live there it would be BTL and for me there is too much risk for so little return.

Take out I/O Mortgages and I guarantee that people CANNOT afford to buy. I/O is NOT BUYING!!!!

A lot of people can only just afford the I/O payments on a house that they probably DONT LIKE. It's all's they can afford for their £450 p.c.m. When interest rates go up, I can guarantee you that there will be hundreds of thousands of people that will be saying - I cant afford my mortgage.

TB

Edited by teddyboy

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Before you post such rubbish, I suggest you read the rules:

1. No Swedish

2. No Swedish

3. No Bloody Swedish boys who don't know there **** from there elbow..

Yes, your entitled to your opinion, but how can anyone expect to take you serious, when you come out with childish dribble

such as:

Yes I think house prices are expensive but people can still afford them, maybe not you personally.

No People can't afford them, thats why there not selling like they were 2 years ago. Being living under a rock for the last year have you

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I see so many topics on here like "People cant afford to live on my street".

People can afford to live there because they do. If they couldnt they wouldnt. Am i missing something?

Why do people always complicate things and pick a few dodgy numbers to support their point.

Yes I think house prices are expensive but people can still afford them, maybe not you personally, and I think people have a tendancy to think others are like themselves. If people cant afford them the price would drop. The market price is the market price. Personally I think the whole global house boom is simply cause by low interest rates. All of the 3 countries i have lived in over the past few years have had dramatic house price increases. All are different, some economies are doing much better than other, some have low population density others dont. I think that some issues raised in the UK such as immigration, planning permission, schools etc just divert attention away from the real cause which is INTEREST RATES. The only way i do think the UK is different from elsewhere is because people dont just view a house as a home but also an investment which has cause the boom to be more extreme and longer lasting.

Its only recently that i could afford to buy a decent place. I would buy a place in the UK but since i dont live there it would be BTL and for me there is too much risk for so little return.

A small minority can afford to buy houses now, but the reason why people in general can afford to live on their streets is because they bought their house some time ago for pre-bubble prices.

Hypothetically, let' say everyone somehow was made to buy their house all over again today, and I wouldn't think there would be so many people actually affording it.

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Guest Bart of Darkness
A lot of people can only just aford the I/O payments on a house that they probably DONT LIKE but its alls they can afford for their £450 p.c.m. When iterest rates go up I can guarantee you that there will be hundreds of thousands of people that will be saying - I cant afford my mortgage.

Spot on TB.

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Take out I/O Mortgages and I guarantee that people CANNOT afford to buy. I/O is NOT BUYING!!!!

A lot of people can only just aford the I/O payments on a house that they probably DONT LIKE but its alls they can afford for their £450 p.c.m. When iterest rates go up I can guarantee you that there will be hundreds of thousands of people that will be saying - I cant afford my mortgage.

TB

For many people taking out an IO mortgage is effectively buying. When the mortgage ends you can either move to a smaller place or take out another mortgage. As the length of a mortgage rises the difference between repayment and IO reduces. The bloke above could probably afford to pay 1,000,000 capital in 200 years but besides not living that long he wouldnt be able to afford the interest payments in the meantime.

I agree with you and think that interest rates will rise, in the short term its almost certain and is priced into government bonds in several countries. And yes i think house prices will drop because of this and that why i have not bought BTL because for me the risk is to high and the returns are greater elsewhere.

Before you post such rubbish, I suggest you read the rules:

1. No Swedish

2. No Swedish

3. No Bloody Swedish boys who don't know there **** from there elbow..

Yes, your entitled to your opinion, but how can anyone expect to take you serious, when you come out with childish dribble

such as:

No People can't afford them, thats why there not selling like they were 2 years ago. Being living under a rock for the last year have you

I agree far less people can afford them than a few years ago and that is why sales are drying up and the boom stopped, but its not crashed yet so obviously enough people can afford them to sustain prices at their current level. When interest rise less people will be able to afford them, more will be forced to sell or decide to move to a smaller house. Maybe then would be a good time to move back to the UK.

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I could afford a house now easily. BUT I wouldn't be able to go out once a week or buy the odd occasional nice clothes or a CD or DVD once a month or goto the cinema a couple of times a week or afford birthday/christmas presents, or have a holiday once a year.

Life is for living, not for giving your hard earned cash to the banks for an over-inflated priced house.

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Take out I/O Mortgages and I guarantee that people CANNOT afford to buy. I/O is NOT BUYING!!!!

A lot of people can only just aford the I/O payments on a house that they probably DONT LIKE but its alls they can afford for their £450 p.c.m. When iterest rates go up I can guarantee you that there will be hundreds of thousands of people that will be saying - I cant afford my mortgage.

TB

IMO it is not a good time to buy a house.

That's just IMO.

IO is not evil.

To some it is a sensible way to gain a foothold on a property ladder, to be transferred to a repayment mortgage later as finances improve.

To some it is a way to have a place to live which will increase enough in value to cover the capital & leave surplus to downsize later in life.

To some it is a way of 'renting' a place that has secure tenancy while the children are young, providing domestic stability.

To some it is a way of gaining a property they desire now, & worry about the finer details later, if there is a need to.

To some it is a misjudged financial decision bringing hardship if interest rates rise.

To some it is a 'house purchase', they know no better!

There may be more.

Any of these decisions may be right/wrong.

Nobody can say for sure.

There are plenty who state it would have been OK to have an IO in the 70s, because you would have been quids in, but in the 70s would you have recommended it. I doubt it.

Hindsight is wonderful.

Even blaming banks for mis selling doesn't cut it as some folk will hear what they want to hear, discounting all the risks in an attempt to get what they want (till it goes sour of course, if it ever does).

IO is just a tool, how folk use that tool is what will determine the outcomes, good or bad.

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Jätte bra svenska, men jag tror att Star Wars er inte samma. Lord of the Rings ar likadan. Tolkein var högsta lärar i forntida skandinavisk språk.

Jätte bra svenska, men jag tror att superman er inte samma. Lord of the Rings ar likadan. Tolkein var högsta lärar i forntida skandinavisk språk. :D

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i like the sub line of this topic title, but in 2001 i had a salary which wasnt great, but would have bought me a 2 bed terrace for £27 at 1.5x salary, by 2003 it was 85k, while the old job i had now pays LOWER.

??

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For many people taking out an IO mortgage is effectively buying. When the mortgage ends you can either move to a smaller place or take out another mortgage.

Effectively buying???? You either buy or you don't?

You only BUY something when you pay off the capital. As for getting a mortgage at the end of the term? Think average FTB is 34 last time I looked. So 34+25= 59 years old. Would love to see a bank that will lend a 59 year old £200,000 with no security on the loan :blink:

TB

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People can "afford" house because it is very easy about loan. You can take a mortgage without any deposit, for more than 100% of value of your new property. Some banks as well started to look at your monthly spendigs instead wage - if you spend a little, you can take more than your 3 annual incomes.

Even I, despite that my earnings are small and I am just immigrant, received a letter from the bank with proposition of loan....

(fortunetly, I am thinking rather about financing my futher education than home).

But this affordability is just illusion. It is enough to tight again rules of giving mortgages - a number of buyers would decline dramatically.

Second thing are interest rates. People who can affrd home now, will be unable to effrt it in near future. Those who bought it already (with low incomes) will suffer repossesion - more tight rules of giving mortgage will wipe out most of buyers from the market.

Generally, presently people are living beyond their financial abilities, on borrowed money - and time.

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I earn less than the mean average wage. I have several credit cards with no balances on them. I could spend over 25k on them tomorrow if I wanted. Can I afford to? No way!

Massive House Prices are only possible because banks allow loans equally as extreme as my example above.

I have been surprised by the 'buy at all costs' mentality. Some people I know have good jobs that should deliver a liftesyle supirior to the majority, but they're paying over 50% of their pay packet on a mortgage. If they were doing that to live in a great home in a good area at least they could enjoy it but they're living in tiny terraces or flats that Tescos workers could have bought in 1999. So you have extreme financial squeeze every month but can take no pleasure in what you have.

Of course, massively declining quality of life and standard of living only shows up as a statistic when people start defaulting or going bankrupt. I'm sure not everyone I know with vast mortgages will actually go bankrupt but, heck, their standard of living will amount to self-imposed poverty for years and years and years.

i like the sub line of this topic title, but in 2001 i had a salary which wasnt great, but would have bought me a 2 bed terrace for £27 at 1.5x salary, by 2003 it was 85k, while the old job i had now pays LOWER.

??

I'd say just about any bog-standard entry clerical job in the private sector hasn't seen any movement in pay for years - it's still 12-15k. In '99 a couple on these wages could have bought a nice little two bedroom house, more with a decent deposit, now... it's Rachman bedsitville for them or living with parents.

The massive decline in living standards for people on low, modest and average incomes recently is extreme. Something I think the 50k IT-somefink folks on here don't really see sometimes.

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I see so many topics on here like "People cant afford to live on my street".

People can afford to live there because they do. If they couldnt they wouldnt. Am i missing something?

Why do people always complicate things and pick a few dodgy numbers to support their point.

Yes I think house prices are expensive but people can still afford them, maybe not you personally, and I think people have a tendancy to think others are like themselves. If people cant afford them the price would drop. The market price is the market price. Personally I think the whole global house boom is simply cause by low interest rates. All of the 3 countries i have lived in over the past few years have had dramatic house price increases. All are different, some economies are doing much better than other, some have low population density others dont. I think that some issues raised in the UK such as immigration, planning permission, schools etc just divert attention away from the real cause which is INTEREST RATES. The only way i do think the UK is different from elsewhere is because people dont just view a house as a home but also an investment which has cause the boom to be more extreme and longer lasting.

Its only recently that i could afford to buy a decent place. I would buy a place in the UK but since i dont live there it would be BTL and for me there is too much risk for so little return.

So many words, so little said. You sound schizophrenic to me.

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I'd say just about any bog-standard entry clerical job in the private sector hasn't seen any movement in pay for years - it's still 12-15k. In '99 a couple on these wages could have bought a nice little two bedroom house, more with a decent deposit, now... it's Rachman bedsitville for them or living with parents.

That's pretty much minimum wage level though, you can't earn much less if you try - it's illegal. Traditionally those on the lowest few % of salaries never could buy. Why are this couple sticking in entry level clerical jobs for their whole lives, go be a decorator, self-employed, get your book-keeping exams become the office manager. Minimum wage has affected the market - 10 years ago I was on £2.30 an hour in some shops it was £1.80, couldn't buy a house then on that. The problem is such couples could access council housing etc. now they are in bedsit land because priorities mena a couple without kids working in min. wage are not in need of housing.

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I am on 25 quid an hour an I cannot afford to buy another house!!.

lets face facts, if you are earning enough to buy a house, then the taxman will have you down for 40% deductions so you are no better off than someone earning less, who is most likely entitled to tax credits and benefits as well.

In the current economic and political climate it just doesnt pay to work, it doesnt pay to save, and it doesnt pay to be frugal.

Spend your money, have a nice time, and then ask for your rewards come retirement, anyone with assets through hard work will be entitlted to nothing.

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I am tempted to argue, but fundamentally you are correct. Someone must be able to afford it, or no-one could buy, end of story.

I think the rapid escalation of prices in recent years creates a mirage of affordability. Provided you bought prior to 2 yrs ago in most parts of the country, you are probably well able to move up the ladder, bearing in mind low interest rates.

Sustainability is a different matter, and that is what long term matters if you are an FTB and buy now mortgaging your entire life's earnings away. At some stage, people are going to have to pay the real cost of housing. You might be priced out of some roads, some estates, but it can't happen everywhere, all at once. At least not forever anyway.

One thing I am very sure of and that is the ability to borrow a large amount on an IO mortage had little to do with the ability to buy.

You have bought the house at the end of the term

Also if you turn your argument around:

If houses were this affordable this is how much they would have cost a decade ago.

And while we are at it, if you look at affordability against income (inflationary money measure)

And prices could be sustained this high, then the housing market would not have done this.

http://img80.imageshack.us/img80/7379/recessionsgraph4bk.gif

Look, see and understand..

Bubble Economics, Speculative Markets and the Economic Cycle.

What the Bears say would have been right for every market since history began.

What the Bulls say would always been wrong.

See, there are two types of Bull.

1: The market will surge and a great deal of money will be made, if you get the timing right.

2: This market is fabulous and it can go on for ever. It didn't collapse before ever. Ya da ya da ya da..

Bull 2 bought propety from Bull 1.

One is an investor, the other isn't

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  • 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%



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