Jason Posted July 17, 2006 Share Posted July 17, 2006 (edited) http://money.guardian.co.uk/houseprices/st....html?gusrc=rss The average house price in England will rise by more than 50% to top £300,000 within six years, according to econometric forecasts by the National Housing Federation. It said the further boost to property prices might be reassuring for owners who borrowed heavily to get on to the housing ladder. But the federation, representing 1,400 housing associations, warned that it "spells disaster for tomorrow's first time buyers who will find it increasingly difficult to afford a place of their own". The projections show the average house price will rise from just under £195,000 in the first quarter of 2006 to £303,900 by 2012. With average annual earnings forecast to reach £32,188 by that date, the average house will be nine and a half times salary. Edited July 17, 2006 by Jason Quote Link to comment Share on other sites More sharing options...
simon99 Posted July 17, 2006 Share Posted July 17, 2006 This is yet more diabolical news. The media and housing industry are going ramping mad. Quote Link to comment Share on other sites More sharing options...
marzipan Posted July 17, 2006 Share Posted July 17, 2006 "The OEF concluded that... there would be nothing to stop the average house price climbing above £300,000. It noted that in more than 10% of local authority areas in England, average house prices were already more than 10 times local incomes." how can they have these two statements in the same paragraph??? Quote Link to comment Share on other sites More sharing options...
Realistbear Posted July 17, 2006 Share Posted July 17, 2006 (edited) I agree that this is entirely possible. If, wages double during the same time period! This sounds like the VIs are trying to kickstart a dying market and to panic the FTBs sitting on the fence to get in quick. There oughta be a law..... Edited July 17, 2006 by Realistbear Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 17, 2006 Share Posted July 17, 2006 "The OEF concluded that... there would be nothing to stop the average house price climbing above £300,000. It noted that in more than 10% of local authority areas in England, average house prices were already more than 10 times local incomes." how can they have these two statements in the same paragraph??? There could be new initiatives and products that will make this possible e.g. 40 year mortgages, more IO mortgages, increased sharing etc. etc. In the same way that people would not have believed you if you'd said, 7 years ago, that prices could be what they currently are. We're a long way from a crash. Quote Link to comment Share on other sites More sharing options...
Golden Shower Posted July 17, 2006 Share Posted July 17, 2006 There could be new initiatives and products that will make this possible e.g. 40 year mortgages, more IO mortgages, increased sharing etc. etc. In the same way that people would not have believed you if you'd said, 7 years ago, that prices could be what they currently are. We're a long way from a crash. POssibly. We should also remember that the core problem is money supply, there's plenty of it around. Despite the 0.25% raise by the BoJ we have to remember that the IR is 0.25%! Further the BoJ have stated that they aren't intending a series of hikes like the US. Quote Link to comment Share on other sites More sharing options...
Jason Posted July 17, 2006 Author Share Posted July 17, 2006 (edited) If they are predicting prices to rise far beyond wages, they are really predicting the bubble has a lot further to go. How can prices seriously rise 50% yet wages only rise less than 30%, for that to happen interest rates would need to reduce to around 2% (ish). Here's the full report: http://www.housing.org.uk/library/view.asp...25&type=Doc Direct link: http://www.housing.org.uk/library/viewfile.asp?fid=5592 Edited July 17, 2006 by Jason Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 17, 2006 Share Posted July 17, 2006 If they are predicting prices to rise far beyond wages, they are really predicting the bubble has a lot further to go. How can prices seriously rise 50% yet wages only rise less than 30%, for that to happen interest rates would need to reduce to around 2% (ish). New mortgage products, longer terms etc. etc. There won't be a return to the high IRs of the 70s and 80s, so people will get used to much higher multiples of salary, when getting a mortgage Quote Link to comment Share on other sites More sharing options...
zag2me Posted July 17, 2006 Share Posted July 17, 2006 I can understand why they are saying this, If the government went ahead and built loads of new houses then I might have my doubts about them rising 50% but I only see a tiny number of houses being built, not enough to supply the demand around my area. Quote Link to comment Share on other sites More sharing options...
Jason Posted July 17, 2006 Author Share Posted July 17, 2006 New mortgage products, longer terms etc. etc. There won't be a return to the high IRs of the 70s and 80s, so people will get used to much higher multiples of salary, when getting a mortgage The products you mention are keeping the market buoyant at present. There isn't much more that can be done to increase affordability. Also, no one is suggesting interest rates will return to the high level of the 70s and 80s, yet I do think it is possible for rates between 5-6% which would do seriously damage to yields and those overstretched. This report sums it all up, price to rise on average by 8% - so it's worth investing for the capital gain anyway. That's the message. Quote Link to comment Share on other sites More sharing options...
Without_a_Paddle Posted July 17, 2006 Share Posted July 17, 2006 (edited) The products you mention are keeping the market buoyant at present. There isn't much more that can be done to increase affordability. Also, no one is suggesting interest rates will return to the high level of the 70s and 80s, yet I do think it is possible for rates between 5-6% which would do seriously damage to yields and those overstretched. This report sums it all up, price to rise on average by 8% - so it's worth investing for the capital gain anyway. That's the message. That's going to make a few STRs choke on their cornflakes! "Dear Dilemma....." Edited July 17, 2006 by Without_a_Paddle Quote Link to comment Share on other sites More sharing options...
Jason Posted July 17, 2006 Author Share Posted July 17, 2006 That's going to make a few STRs choke on their cornflakes.... It's also going to make wannabe FTBs a little more angry and bitter. Quote Link to comment Share on other sites More sharing options...
rockdoctor Posted July 17, 2006 Share Posted July 17, 2006 50% in 6 years is only 7% per year. If we strip out wage inflation of approx 4% that's a real HPI of only 3% per year. Not so scary. Don't believe it either. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted July 17, 2006 Share Posted July 17, 2006 It said the further boost to property prices might be reassuring for owners who borrowed heavily to get on to the housing ladder. But the federation, representing 1,400 housing associations, warned that it "spells disaster for tomorrow's first time buyers who will find it increasingly difficult to afford a place of their own" . reassuring for owners who borrowed heavily to get on to the housing ladder. nuff said. Quote Link to comment Share on other sites More sharing options...
sikejsudjek Posted July 17, 2006 Share Posted July 17, 2006 What are they smoking ? Same old rubbish to prop up a market at its top, just like all the spin before the dot com crash... Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 17, 2006 Share Posted July 17, 2006 50% in 6 years is only 7% per year. If we strip out wage inflation of approx 4% that's a real HPI of only 3% per year. Not so scary. Don't believe it either. You're right, it's not scary at all when you calculate the annual increase. Compounded increases always look scary! However, I do think that increases around wage inflation , plus or minus 2%, is the most likely scenario. Quote Link to comment Share on other sites More sharing options...
Te Mata Posted July 17, 2006 Share Posted July 17, 2006 It is always interesting when "hope" is transmutated into "forecast". I can only L.O.L. You bulls! hahaha! Any bullish hopefulness is grasped onto and treat as though gospel. Quote Link to comment Share on other sites More sharing options...
faloos Posted July 17, 2006 Share Posted July 17, 2006 It is always interesting when "hope" is transmutated into "forecast". I can only L.O.L. You bulls! hahaha! Any bullish hopefulness is grasped onto and treat as though gospel. I am sure over the next couple of months that the we will read articles that have been seeked out by agencies that are feeling a bit desparate for good news. Yes there are going to be lots of forecasts to try and kick start the market . The property market has had good times but now in decline. You cannot buck the market . The Parrot is dead and there is nothing that Gordon and his band of creative accountants can do. I sold 3 years ago because I thought that what is happening now should have happened a couple of years ago. I am not bothered as now I am waiting on the big sale and it is going to be interesting. Cash is King !!! Quote Link to comment Share on other sites More sharing options...
Guest mattsta1964 Posted July 17, 2006 Share Posted July 17, 2006 http://money.guardian.co.uk/houseprices/st....html?gusrc=rss The average house price in England will rise by more than 50% to top £300,000 within six years, according to econometric forecasts by the National Housing Federation. It said the further boost to property prices might be reassuring for owners who borrowed heavily to get on to the housing ladder. But the federation, representing 1,400 housing associations, warned that it "spells disaster for tomorrow's first time buyers who will find it increasingly difficult to afford a place of their own". The projections show the average house price will rise from just under £195,000 in the first quarter of 2006 to £303,900 by 2012. With average annual earnings forecast to reach £32,188 by that date, the average house will be nine and a half times salary. They can spin this bull as much as they like but there is no way the market can take that kind of hike in the forthcoming economic conditions House prices might be kept stable for a while by high demand and shortage of availability but in the new economic cycle, higher interest rates, inflationary pressures and the migration of billions of dollars to China and the far east, the idea that this is possible is absolute fantasy. I reckon we will see the US economy is serious trouble this time next year and as sure as eggs are eggs, the UK wont be far behind. This shouldn't stop wannabe FTB's being ever more vocal in their opposition to even higher prices though. Quote Link to comment Share on other sites More sharing options...
Come On Down Posted July 17, 2006 Share Posted July 17, 2006 They can spin this bull as much as they like but there is no way the market can take that kind of hike in the forthcoming economic conditions House prices might be kept stable for a while by high demand and shortage of availability but in the new economic cycle, higher interest rates, inflationary pressures and the migration of billions of dollars to China and the far east, the idea that this is possible is absolute fantasy. I reckon we will see the US economy is serious trouble this time next year and as sure as eggs are eggs, the UK wont be far behind. This shouldn't stop wannabe FTB's being ever more vocal in their opposition to even higher prices though. Exactly, higher interest rates, an extra £600 million personal debt, 6% unemployment. Quote Link to comment Share on other sites More sharing options...
warwickbloke Posted July 17, 2006 Share Posted July 17, 2006 http://money.guardian.co.uk/houseprices/st....html?gusrc=rss The average house price in England will rise by more than 50% to top £300,000 within six years, according to econometric forecasts by the National Housing Federation. It said the further boost to property prices might be reassuring for owners who borrowed heavily to get on to the housing ladder. But the federation, representing 1,400 housing associations, warned that it "spells disaster for tomorrow's first time buyers who will find it increasingly difficult to afford a place of their own". The projections show the average house price will rise from just under £195,000 in the first quarter of 2006 to £303,900 by 2012. With average annual earnings forecast to reach £32,188 by that date, the average house will be nine and a half times salary. Maybe it's just the mood I'm in but I read this & thought it not even worth commenting on & wondered what kind of fool could ever take this seriously....then I read this paragraph: The findings were based on an analysis by Oxford Economic Forecasting, an independent group whose housing market model is being used by the government to work out the policy implications of Kate Barker's review of housing supply. Oh dear! Quote Link to comment Share on other sites More sharing options...
karen1000 Posted July 17, 2006 Share Posted July 17, 2006 It's hardly worth reading most of the responses to this article; it'll be some or all of the following words:- VI Spin Gordon Brown Soon Desperate Bastards I would say though that if house prices did rise 50% over the next few years, what kind of Britain would we have? Houses are just affordable to some first time buyers - an average price of 300K would put them out of reach. My house is worth over 300K now, and there's NO WAY I could afford it as a new buyer. Quote Link to comment Share on other sites More sharing options...
Guest mattsta1964 Posted July 17, 2006 Share Posted July 17, 2006 It's hardly worth reading most of the responses to this article; it'll be some or all of the following words:- VI Spin Gordon Brown Soon Desperate Bastards I would say though that if house prices did rise 50% over the next few years, what kind of Britain would we have? Houses are just affordable to some first time buyers - an average price of 300K would put them out of reach. My house is worth over 300K now, and there's NO WAY I could afford it as a new buyer. Houses are just affordable to some first time buyers???????? Only if you are INSANE Quote Link to comment Share on other sites More sharing options...
zag2me Posted July 17, 2006 Share Posted July 17, 2006 Wages go up every year too, dont forget that! Quote Link to comment Share on other sites More sharing options...
Te Mata Posted July 17, 2006 Share Posted July 17, 2006 Wages go up every year too, dont forget that! That maxim may prove to be incorrect Quote Link to comment Share on other sites More sharing options...
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