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ummabdullah

170,000 6 Times Most Peoples Salary?

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I don't mean to be the voice that all the bears on this website hate..

But........................

It seems to me that most people in the uk do not buy a house as a single person. And all of us women usually have a boyfriend or two to buy us a few bobbles when or if we are paying a mortgage.

Okay lets say a couple makes 25,000k each respectfully. Thats 1,555 each a month. times 2 = £3110 for the couple.

If a person is making 50,000 with a good salary then his montly take home pay would be = 2,910.

Now I hate to say this.. but most people who make 50,000 or more need to pay for alot of xtras just to keep their job. A friend of mine is a doctor and so is her husband. Her husband makes about 60k a year and only takes home £3,150 after his medical expenses. Thats roughly the same as a couple working together making only 50k between them. And does not include his car payment.. he must have for visits.. ectr ectr.

Okay lets say you have a doctor. who takes home 3,150 and your wife takes home a further 1,200. thats 4,350 to help pay a mortgage.

On the lower end of the payscale. a couple who makes 15k and 15k takes home about 997 times 2 = £1,994.

So while I sort of see house prices stagnating.. I am not sure they are going to crash. I mean a mortgage for 150,000 is only about £650 a month for 25 years. Depending on your rate.. ectr.

So it would seem to me.. that well taking into consideration the salaries of people.. that they can afford to pay the prices that are up at the moment. At least in the first time buyers range..

which is why houses in my area less than 120,000 are only considered for landlords and EA are saying that first time buyers tend to go for 120,000 or more.

I mean sure a few people have chosen not to push themselves that far. My next door neighbor is putting her husband through university.. But as soon as he finds a job then she definately plans on moving to a nicer place.

So with that taken into consideration.. why is it that people on this forum think that the market will crash in the lower end of the market?

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So while I sort of see house prices stagnating.. I am not sure they are going to crash. I mean a mortgage for 150,000 is only about £650 a month for 25 years. Depending on your rate.. ectr.

A 150K mortgage at 5% over 25 years is £886.90, which is also a low rate for 25 years. You'll be lucky to get 5-5.25% over a 10 year fixed.

If the rate after a fixed period went to 6.5% which is the standard variable rate, the payments would increase to £1024.76.

Thats a big difference from 650 a month.

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So while I sort of see house prices stagnating.. I am not sure they are going to crash. I mean a mortgage for 150,000 is only about £650 a month for 25 years. Depending on your rate.. ectr.

Once the fast, easy capital gains are gone, the market will crash. There is no such thing as a stagnant property market with low wage inflation. People who bought as in investment will cash in...

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Of course, in previous crashes women didn't work...

What's different this time is the easy availability of credit combined with low interest rates and the belief that property is a no-lose bet. That's how people can afford such big mortgages... for now.

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Your £170,000 is six times the 'national average' salary, but everyone knows that most people are on a lot less than that, the national average being distorted upwards by a small number of extraordinarily high earners.

£170,000 is ten times my salary and 6.8 times mine and my partner's joint salary.

I mean a mortgage for 150,000 is only about £650 a month for 25 years. Depending on your rate.. ectr.

'Only' £650/month? That plus living and transport costs would absorb mine and my partner's take-home pay entirely. Also, the idea that a mortgage that's £650/month now will stay at £650/month for 25 years is grossly naive. Furthermore, you're talking interest only, which is much more sensitive to rate rises, which are inevitable... And we ain't going to 'wage-inflate' our way out of debt like we have in the past because the boom that's going on under Labour that has so lovingly embraced fuels, council tax, water rates, etc. has conveniently overlooked wages, courtesy of cheap imports, outsourcing abroad and mass immigration of low-budget workers.

Finally, many more singles are buying these days because they don't want to commit like people have in the past, while the recently developed gold-digger's charter has ensured that no sensible man with a job will touch cohabiting or marriage with a bargepole.

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Your £170,000 is six times the 'national average' salary, but everyone knows that most people are on a lot less than that, the national average being distorted upwards by a small number of extraordinarily high earners.

£170,000 is ten times my salary and 6.8 times mine and my partner's joint salary.

'Only' £650/month? That plus living and transport costs would absorb mine and my partner's take-home pay entirely. Also, the idea that a mortgage that's £650/month now will stay at £650/month for 25 years is grossly naive. Furthermore, you're talking interest only, which is much more sensitive to rate rises, which are inevitable... And we ain't going to 'wage-inflate' our way out of debt like we have in the past because the boom that's going on under Labour that has so lovingly embraced fuels, council tax, water rates, etc. has conveniently overlooked wages, courtesy of cheap imports, outsourcing abroad and mass immigration of low-budget workers.

Finally, many more singles are buying these days because they don't want to commit like people have in the past, while the recently developed gold-digger's charter has ensured that no sensible man with a job will touch cohabiting or marriage with a bargepole.

Here here!

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so it's another 'i don't think prices will crash because everyone i know can afford to pay the current price' post then..? :rolleyes:

please, if you must be the voice that all bears hate to hear, say something we haven't heard...

and check your calculations before hitting 'add reply'. ;)

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The National average salary as mentioned above is distorted by high earners and the medium wage is two-thirds the mean.a further distortion arises from using male average earnings of full time workers.(these are the figures used by Halifax in its price/earnings ratio)Only 55%of the workforce are men and only two-thirds of them work full-time.The Halifax figures are therefore based on less than 40% of the workforce in the highest paid grouping.

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Once the fast, easy capital gains are gone, the market will crash. There is no such thing as a stagnant property market with low wage inflation. People who bought as in investment will cash in...

Just the sort of flawed logic that was trotted out repeatedly throughout 2005. Why on earth would an investor sell for a loss for no obvious reason? The most likely scenario is that an investor would keep the property until the market started to show capital appreciation again.

It is interesting how many people have mocked the original poster; yet her logic is sound. And yet I hear again and again on here that the market is imploding.

Eppur si muove <_<

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No offense, dullhaasadishawarta, but this is just sloppy thinking, as you no doubt have already realised.

sloppy thinking => punishment.

Just like the current crop of johnny-come-too-lates will be punished for not thinking through the possible ramifications of rushing to BTL after the biggest boom in history just ended and population declines begin.

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£170,000 is ten times my salary and 6.8 times mine and my partner's joint salary.

'Only' £650/month? That plus living and transport costs would absorb mine and my partner's take-home pay entirely. Also, the idea that a mortgage that's £650/month now will stay at £650/month for 25 years is grossly naive. Furthermore, you're talking interest only, which is much more sensitive to rate rises, which are inevitable... And we ain't going to 'wage-inflate' our way out of debt like we have in the past because the boom that's going on under Labour that has so lovingly embraced fuels, council tax, water rates, etc. has conveniently overlooked wages, courtesy of cheap imports, outsourcing abroad and mass immigration of low-budget workers.

Finally, many more singles are buying these days because they don't want to commit like people have in the past, while the recently developed gold-digger's charter has ensured that no sensible man with a job will touch cohabiting or marriage with a bargepole.

Where do I start? :blink:

So, you expect interest rates to increase significantly. Yet inflation will remain largely static. How do you see such a scenario panning out?

You add that more singles are buying, yet in the same breath suggest that this is impossible because of the economic situation?

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Where do I start? :blink:

So, you expect interest rates to increase significantly. Yet inflation will remain largely static. How do you see such a scenario panning out?

You add that more singles are buying, yet in the same breath suggest that this is impossible because of the economic situation?

I think 'static' is the one word no-one will be using for a good couple of years in respect of inflation

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So, you expect interest rates to increase significantly. Yet inflation will remain largely static. How do you see such a scenario panning out?

I can't speak for anyone else, but I'm expecting high price inflation, high interest rates and minimal wage inflation. Pretty much the worst possible thing that can happen to a debt-inflated housing bubble.

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Guest donall

I liked the original post.

I am one of the people who earn above the national average and i have a modest flat (costing just less than 3 times my salary) so i am not worried if my flat loses half it's value - i pay less for the mortgage (325£ io) compared with renting (valued at ~500/550£ pcm) and my flat mate contributed £250/month.

Also - if you buy a car, you expect it to lose value over time.

Would anyone (except me) consider not buying a car because they will lose money on it???

Even in a falling market - owning can be a cheaper option than renting - and while you are tied into a property or 25 year term, you are able to benefit (or suffer) from any savings (or losses) yo make from buying instead of renting.

Those who can't afford to buy now will probably always be priced out of the market - for any number of a variety of reasons - i can't see that changing. It will take a miracle for someone on the minimum wage to afford to buy anything these days.

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I am one of the people who earn above the national average and i have a modest flat

No you don't. You have an interest-only mortgage, so you're merely renting the flat from your bank... except you get to pay all the maintenance costs and take the hit if and when prices drop.

Would anyone (except me) consider not buying a car because they will lose money on it???

There aren't many cars that lose 200,000 pounds in value within a few years of purchase. There are plenty of 'executive flats' around here that are going to.

In any case, who buys new cars?

Edited by MarkG

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Guest Bart of Darkness
Okay lets say a couple makes 25,000k each respectfully.

There probably are couples like this.

I don't know any though.

I mean a mortgage for 150,000 is only about £650 a month for 25 years. Depending on your rate.. ectr.

Let's not forget the magic words "interest only". That's the only way you could boorow that amount for those monthly repayments.

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No you don't. You have an interest-only mortgage, so you're merely renting the flat from your bank... except you get to pay all the maintenance costs and take the hit if and when prices drop.

Or the capital gains if prices increase

There aren't many cars that lose 200,000 pounds in value within a few years of purchase. There are plenty of 'executive flats' around here that are going to.

A rather bold claim <_< Are you sure?

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Yes they could probably stretch themselves and buy a poxy single bed flat for now.

But thats where they would stay, stuck on the first rung.

Low wage inflation, will make it virtually impossible for them to move up the ladder for a very very long time.

Think about the sums of money we are talking about, £150,000. £200,000 ? Paying that back will take a lifetime for the average person. No housing ladder there!

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Your £170,000 is six times the 'national average' salary, but everyone knows that most people are on a lot less than that, the national average being distorted upwards by a small number of extraordinarily high earners.

The NOS stats say that the median wage is 25k. That is defined by 50% of the population earning less than that. Mens median is a little more, womens a little less.

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A rather bold claim <_< Are you sure?

Check out this tidy little investment. The 'king' of executive flats - purchased for £550K in June 2004, up for auction now @ £350K.

What's that noise you say..? That's the sound of someone losing £200,000 in 2 years - in the middle of a 'boom'. BTL... more like Buy To Bankrupt :lol:

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A rather bold claim. Are you sure?

There is an absolutely massive glut of 'executive flats' in this area: as I mentioned a while back, the council thought they'd already met all their housing targets up to 2012 from new developments up to 2005. There's no use for them and no real demand for them... a few more rate rises and they're history.

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I liked the original post.

I am one of the people who earn above the national average and i have a modest flat (costing just less than 3 times my salary) so i am not worried if my flat loses half it's value - i pay less for the mortgage (325£ io) compared with renting (valued at ~500/550£ pcm) and my flat mate contributed £250/month.

Also - if you buy a car, you expect it to lose value over time.

Would anyone (except me) consider not buying a car because they will lose money on it???

Even in a falling market - owning can be a cheaper option than renting - and while you are tied into a property or 25 year term, you are able to benefit (or suffer) from any savings (or losses) yo make from buying instead of renting.

Those who can't afford to buy now will probably always be priced out of the market - for any number of a variety of reasons - i can't see that changing. It will take a miracle for someone on the minimum wage to afford to buy anything these days.

Exactly - and why should everyone be entitled to buy a property, its not a right!

Most average couples earn £50k or more and can easily afford entry level 2 bed flats in most parts of the UK.

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Guest Bart of Darkness

Check out this tidy little investment. The 'king' of executive flats - purchased for £550K in June 2004, up for auction now @ £350K.

What's that noise you say..? That's the sound of someone losing £200,000 in 2 years - in the middle of a 'boom'. BTL... more like Buy To Bankrupt :lol:

Superb! :lol:

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Of course, in previous crashes women didn't work...

What's different this time is the easy availability of credit combined with low interest rates and the belief that property is a no-lose bet. That's how people can afford such big mortgages... for now.

... which is interesting, because, after one has read the red, one's mind seems to finish the blue, but wrongly. This is how my subconscious finished it before I actually read it: "such big properties."

All of which leads one to the rather disappointing conclusion that women are working just so families can have bigger debts, rather than bigger houses. :(

Edited by Sledgehead

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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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