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Economist: Overpriced Property

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You got an avatar out of it though :)

They say on the chart at the moment mortgage repayments are around 40% of disposable income. I can believe that given following figures: If average mortgage of a first time buyer is, say, £130,000 then repayment per month at 5.5% (typically available fixed rate price) would be £800 (repayment on 25yr). If average take home pay is £2000 per month (assuming average wage and lots of buyers will be couples) that is around 40% ratio.

To get to 60% of last crash would need interest rates of 10% assuming house prices remained constant.

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You got an avatar out of it though :)

They say on the chart at the moment mortgage repayments are around 40% of disposable income. I can believe that given following figures: If average mortgage of a first time buyer is, say, £130,000 then repayment per month at 5.5% (typically available fixed rate price) would be £800 (repayment on 25yr). If average take home pay is £2000 per month (assuming average wage and lots of buyers will be couples) that is around 40% ratio.

To get to 60% of last crash would need interest rates of 10% assuming house prices remained constant.

Thing is with inflation so low the total cost of the mortgage is that much greater. It also takes longer to erode the capital of the debt. So that 40% will last for a long time whereas the 60% in a high interest/high inflation environment would be eroded if you could see yourself through that initial pain. This time we have the worst of both worlds. What happened last time isn't really directly comparable. I think this has the potential to be more of a long drawn out thing but ultimately more devastating for individuals in the long run. Especially when you factor pensions into the equation.

Edited by SCUMBAG

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The price of houses won't matter any more if Labour stay in power for much longer!! What will matter is the state of the country in the long term and what sort of hell hole our children will have to live in!!

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The price of houses won't matter any more if Labour stay in power for much longer!! What will matter is the state of the country in the long term and what sort of hell hole our children will have to live in!!

Who is in power won't matter, it is who is living in the UK. Another 1 million immigrants from Bulgaria are expected next year which will flood the labour market pushing up unemployment and pushing down wages. House prices might soar as a result of too few properties and councils handing out social housing to homeless immigrants.

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The price of houses won't matter any more if Labour stay in power for much longer!! What will matter is the state of the country in the long term and what sort of hell hole our children will have to live in!!

Quite......

1st labour term '97-'01 was probably quite good for democracy and a pretty benigh influence on the economy.

2nd labour term '01-'05 needed some reality checks on what they took us into foreign policy-wise and economically in terms of competitiveness and efficiency.

3rd labour term '05-'09 will take another government 10 years+ to rectify and may permanently damage our standing in a global economy.

4th labour term - leave the country

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The price of houses won't matter any more if Labour stay in power for much longer!! What will matter is the state of the country in the long term and what sort of hell hole our children will have to live in!!

100% right..

I don't think people quite realise how massivly overstretched the FTB's have been over the last few years..

It's massive.

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To get to 60% of last crash would need interest rates of 10% assuming house prices remained constant.

Unsecured debt is far higher today than it was during the last crash. Where does that fit into your maths? Or rising petrol prices, energy prices, council tax . . .

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Quite......

1st labour term '97-'01 was probably quite good for democracy and a pretty benigh influence on the economy. a centre right lowest common denominator policy government

2nd labour term '01-'05 needed some reality checks on what they took us into foreign policy-wise and economically in terms of competitiveness and efficiency. was a centre-right lowest common denominator policy government

3rd labour/tory term '05-'09 will take another government 10 years+ to rectify and may permanently damage our standing in a global economy. will be another centre right lowest common denominator policy government

4th labour term - or conservative term....who cares other than the politicians whose careers are directly affected. The policy range of all 3 main parties used to be poles apart, back in the quaint old days when politics involved differences of opinion rather than emphasis - now the policy range could be covered by a small ladies hankerchief. Big deal.

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  • 302 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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