Here Is A Question For You All.

[hedi]

if there is a shortage of property ,because everybody wants to live on their own, and due to divorces etc.

how come it takes joint income multiples to make the averge ftb property affordable.?

[dog]

if there is a shortage of property ,because everybody wants to live on their own, and due to divorces etc.

how come it takes joint income multiples to make the averge ftb property affordable.?

Good one!

[lulu]

if there is a shortage of property ,because everybody wants to live on their own, and due to divorces etc.

how come it takes joint income multiples to make the averge ftb property affordable.?

Good question and one I have thought about before, my only real answer was the following:

Maybe a part of is it that some of the people who are choosing to live on their own are recently divorced and either have a larger income as they are older or previously owned a property with their partner and so are able to get a deposit from their previous home.

[#scoobydoo#]

Good one!

I agree, just more government and BOE spin to disguise the real reasons why house prices are so hugely over inflated.

[Realistbear]

if there is a shortage of property ,because everybody wants to live on their own, and due to divorces etc.

how come it takes joint income multiples to make the averge ftb property affordable.?

IMO, the housing bubble has reached the point where it is unaffordable for everyone unless they bought in sometime before 2002. People cannot even afford to move up from a semi to a detached. The market has to accept that it has priced everyone out and the supply of cheap credit that was permitting the bubble to inflate is being cut off. It's over.

[Guest wrongmove]

if there is a shortage of property ,because everybody wants to live on their own, and due to divorces etc.

how come it takes joint income multiples to make the averge ftb property affordable.?

There is not so much a shortage of property, but a shortage of desirable, affordable property. A generation ago, many people were working class and, if not proud, certainly not ashamed of it. Now we are all middle-class and competing for what used to be just a sector of the market. Many here (myself included) would not buy in the old working class areas. Also, many more people can afford to own two or more properties. This puts pressure on stock withou needing a rise in population.

As for no-one being able to afford property since 2002, just look at the transaction figures. They tell a very different story.

[Phaedrus]

IMO, the housing bubble has reached the point where it is unaffordable for everyone unless they bought in sometime before 2002.

I disagree with this statement. There are plenty of people who can afford to buy. Whether it is sensible or not at these levels is another question, but to say housing is unaffordable for everyone is patently untrue.

[snowman]

According to C4 teletext last night, the average income multiple for FTBs had crept up to 3.2 from 3.1 in the last month. It made no mention of joint income, so I assume this is 3.2 x single income.

Let's assume that this average FTB earns 30K a year and has saved a 30 K deposit. That gives a house prcie of 126K, which is not enough to buy a flat above a chip shop in the South. I must be missing something. I know that I would need to borrow at least 4x my salary to buy the most basic 2 bed house and I would say that I'm above average (in more ways than one ).

[Realistbear]

I disagree with this statement. There are plenty of people who can afford to buy. Whether it is sensible or not at these levels is another question, but to say housing is unaffordable for everyone is patently untrue.

I use the word "afford" advisedly. As IR surge what was just about affordable may become much less so.

[urban_hymn]

Also, many more people can afford to own two or more properties. This puts pressure on stock withou needing a rise in population.

I can't see how multiple ownership puts pressure on housing stock. It's the occupancy density and population that are more critical.

A mini BTL empire of 10 properties puts no more pressure on housing stock than 10 individual owner occupiers.

However, reckless leveraged borrowing by small time wannabe landlords has jacked up the price big time for those who just want a roof over their heads.

[Phaedrus]

I use the word "afford" advisedly. As IR surge what was just about affordable may become much less so.

In that case don't use it at all. I enjoy your posts but on occasion you make sweeping statements which undermine your credibility. Try to be a little more circumspect when posting.

[Smell the Fear]

According to C4 teletext last night, the average income multiple for FTBs had crept up to 3.2 from 3.1 in the last month. It made no mention of joint income, so I assume this is 3.2 x single income.

Let's assume that this average FTB earns 30K a year and has saved a 30 K deposit. That gives a house prcie of 126K, which is not enough to buy a flat above a chip shop in the South. I must be missing something. I know that I would need to borrow at least 4x my salary to buy the most basic 2 bed house and I would say that I'm above average (in more ways than one ).

On R4 yesterday they said this 3.2 stat was based on an average FTB who is apparently 34 years old and earning 34k per year. I.e. not the traditional early 20s FTB earning average wage. They are out of the picture completely.

The reporter also mentioned that 3.2 times salary buys very little (nothing in many places), so many FTBs were stretching to 6 times income mortgages (described as "fairly common" these days).

Good news for a crash, as rising interest rates will ensure that these multiples are simply impossible for buyers to cope with. If the multiple drops to 5, you would expect a significant drop in prices.

Edited August 9, 2006 by Smell the Fear

[Guest wrongmove]

I can't see how multiple ownership puts pressure on housing stock. It's the occupancy density and population that are more critical.

A mini BTL empire of 10 properties puts no more pressure on housing stock than 10 individual owner occupiers.

However, reckless leveraged borrowing by small time wannabe landlords has jacked up the price big time for those who just want a roof over their heads.

I am only saying it is a factor. It is holiday homes and weekend retreats that worry me. These just lay empty for a lot of the time but they are not available for owner occupiers.

[MarkG]

A mini BTL empire of 10 properties puts no more pressure on housing stock than 10 individual owner occupiers.

Of course it does, because if this area is anything to go by, 8 of the 10 BTL properties are empty.

[Son of Taeper]

According to C4 teletext last night, the average income multiple for FTBs had crept up to 3.2 from 3.1 in the last month. It made no mention of joint income, so I assume this is 3.2 x single income.

Let's assume that this average FTB earns 30K a year and has saved a 30 K deposit. That gives a house prcie of 126K, which is not enough to buy a flat above a chip shop in the South. I must be missing something. I know that I would need to borrow at least 4x my salary to buy the most basic 2 bed house and I would say that I'm above average (in more ways than one ).

Rot. There are scores of properties for sale in the South at £126K. Scores at less than £126K even. As for the chip shop bit, if that's what it takes, that's what it takes. There are too many people on this site bleating about affordability and the like and not wanting to give up the luxury items and then saying "I don't want my first place to be a rabbit hutch, I want at least two bedrooms, preferably four and I don't want to work for it. Work for it. :angry:

[snowman]

Rot. There are scores of properties for sale in the South at £126K. Scores at less than £126K even. As for the chip shop bit, if that's what it takes, that's what it takes. There are too many people on this site bleating about affordability and the like and not wanting to give up the luxury items and then saying "I don't want my first place to be a rabbit hutch, I want at least two bedrooms, preferably four and I don't want to work for it. Work for it. :angry:

Are you trying to wind me up? Scores of properties in the South? So that's 20? 40? How many scores? I have an 8 month-old daughter, so you can forget about 1 bedroom flats. My wife looks after her and does not work.

How do you know how hard I work? I have a good job, and I do extra work offshore in the North Sea to earn extra money for the deposit. Still I can't buy a house for my family.

Do you drive a 4x4?

[MarkG]

I don't want my first place to be a rabbit hutch, I want at least two bedrooms, preferably four

Why not? My parents and many of my friends and relatives bought three-bed and four-bed houses in decent areas as FTBs, why should I have to settle for paying vastly more for a one-bed flat over a crack den?

[Son of Taeper]

Are you trying to wind me up? Scores of properties in the South? So that's 20? 40? How many scores? I have an 8 month-old daughter, so you can forget about 1 bedroom flats. My wife looks after her and does not work.

How do you know how hard I work? I have a good job, and I do extra work offshore in the North Sea to earn extra money for the deposit. Still I can't buy a house for my family.

Do you drive a 4x4?

I just rightmoved over 600 2 bed places at 120K and less alone That would be 30 score.

No disrespect to hard working types like yourself, I did 84 hours a week for a year to get my first place. The comment is pointed at people that want it all on a plate.

Do I drive a 4x4? No. I save every penny I can (like you) to look after my family.

[MarkG]

I did 84 hours a week for a year to get my first place.

I'm sure most people would be quite happy if they could pay off their mortgage by working 84 hours a week for a year.

But we can't, and we don't have massive wage inflation to look forward to either, in order to wipe out the huge debt we'd have to take on to buy a decent house today.

[Son of Taeper]

Why not? My parents and many of my friends and relatives bought three-bed and four-bed houses in decent areas as FTBs, why should I have to settle for paying vastly more for a one-bed flat over a crack den?

You I'm afraid, are destined to be in rented forever. You are the type I'm talking about. I reckon you are the i-pod type that takes 4 holidays a year and then complains about a lack of cash. Did your ancestors live in 3 & 4 bed places too or did they start in a twig hut and work for a better life? I think they started in a twig hut and worked for a better life. You should try it, I did.

[MarkG]

You I'm afraid, are destined to be in rented forever.

Hardly. I've been looking at ads for 4/5-bed houses in Canada with a few acres of land...

...which I could buy for cash.

The same amount of money wouldn't buy me the cheapest shit-hole flat around here: which is precisely why I'm just sitting around waiting for the embassy to finish processing my visa application.

Edited August 9, 2006 by MarkG

[Son of Taeper]

I'm sure most people would be quite happy if they could pay off their mortgage by working 84 hours a week for a year.

But we can't, and we don't have massive wage inflation to look forward to either, in order to wipe out the huge debt we'd have to take on to buy a decent house today.

That was not to pay the mortgage off, it was to get a deposit and help meet the first few repayments.

I did not enjoy massive wage inflation either. I did enjoy interest rates of 12% though. Remind us all what they are today please.

decent house

Sums you up.

[MarkG]

I did not enjoy massive wage inflation either.

If you bought when interest rates were 12%, you've seen at least one of: a) massive wage inflation and massive cuts in interest rates. Today's buyers are unlikely to see either of those, only higher rates and low wages.

I did enjoy interest rates of 12% though.

Which made you far better off than today's buyers, because houses were massively cheaper. If you buy at 12% interest rates then rates are almost certain to go down... if you buy at 4% interest rates, rates are almost certain to go up.

Frankly, given you don't even understand something that simple, I don't know why I'm even bothering to reply to your 'get on the ladder at any cost, you're all just lazy slackers, we had to sell our babies to pay our deposit' garbage.

Edited August 9, 2006 by MarkG

[Son of Taeper]

Hardly. I've been looking at ads for 4/5-bed houses in Canada with a few acres of land...

...which I could buy for cash.

The same amount of money wouldn't buy me the cheapest shit-hole flat around here: which is precisely why I'm just sitting around waiting for the embassy to finish processing my visa application.

Believe me, once you have lived in a 5 bedroomed house for any time you will wish you hadn't. I speak from experience. As for the Canada bit, that’s the only sensible idea you have had and I wish you well.

(processing visa application takes about a year I think, do try to save up a bit in that time)

[snowman]

I just rightmoved over 600 2 bed places at 120K and less alone That would be 30 score.

No disrespect to hard working types like yourself, I did 84 hours a week for a year to get my first place. The comment is pointed at people that want it all on a plate.

Do I drive a 4x4? No. I save every penny I can (like you) to look after my family.

I just rightmoved 2 bed houses in Hampshire and found 74 properties. Most of these were on the Isle of Wight (not Hampshire) or Gosport. At least 1 was in Spain. None of these are commutable for me. I then did the same thing for Southampton and found 10 properties. 1 of these was a mobile home and 1 was a boat. So that's 8 house left for me to choose from. And yes, the remaining 8 were undesirable properties in undesirable locations. Check for yourself - I am confident you would not buy one for your family to live in. Why should I?