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So Aberdeen 2008 affordability, following a minor price drop of around 10K in 2007...

No, that's not right.

From the very first words in the report:

"Between 2007 and 2008, the average house price in the Aberdeen Housing Market Area has decreased from £202,479 to £201,115, a decrease of 0.7%."

The change in the affordability ratio therefore appears to be almost entirely due a change in the methodology of deriving the figure.

For instance, if we reverse-engineer the 2008 average price using the affordability index figure, we get a pretty good match of the 2008 Aberdeen and Aberdeenshire mean earnings figure from ASHE 2008. However, if we do the same with the 2007 figure, we get a match with the median figure from ASHE 2007.

I think that there are a few problems with the report, it's quite difficult to pick the bones out of it. For instance, all the house price figures used are from HBOS, except the 2008 Aberdeen figure, which is from ASPC.

A glaring problem with the report is the following:

"

Between 2007 and 2008, the average house price in the Aberdeen Housing Market Area has decreased from £202,479 to £201,115, a decrease of 0.7%.

In 2008, the average property price in Scotland was £138,312. This is a decrease of 2% on the 2007 figure of £141,2229. {typo in report - does no-one proof-read stuff anymore?}

The average property price in the UK during 2008, was £181,032. This is a decrease of 8% on the 2007 figure of £196,478.

All three areas have seen a continued increase in the average house price.

"

WTF????

Edited by The McGlashan
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Hamish - you have avoided my estate agents questions on a few occasions.

You seem to have an intimate knowledge of particular streets in Aberdeen. You seem to know rather quickly the ins and outs of home reports.

Just get it over with and admit you are in the EA (Or related) business. :lol:

His livelihood is definitely affected by house prices. He is on here night and day trying to justify the current inflated prices and how affordable they are! I'm sorry but it is just not worth arguing with someone like him who will swear black is white till the bitter end.

10 minutes spent on ASPC and one of the house price sites like ourproperty is enough for anyone to see how unnaffordable property in Aberdeen & shire has become. Like an earlier poster said - wages have not increased anything like property prices. If you compare what a worker in a given trade/profession could afford to buy now with say 5 or 10 years ago then it is clear that anyone buying now without equity will be forced to live in a smaller property or in a less desirable area or face a longer commute if they can actually afford to buy at all.

McSpamish is just here either to make himself feel better or to wind everyone up. Who exactly comes and posts here if they already own their own property and are perfectly happy with their financial situation and think the economy etc will just carry onwards and upwards?

I bought a 1 bed flat in 2005 for 65k in Aberdeen. Sold it in 2007 for £123.5k. Relaxation of lending and the buoyant oil & gas sector in aberdeen were the main drivers I reckon. Now the credit is restricted back to 2005 levels at least and the jobs market is in a serious nose dive (I work in the industry and I can say that it is the quietest I have seen it since I started in 2004). So why exactly does anyone expect prices to remain at 2007 levels in Aberdeen when lending is at lower levels than 2005 and the jobs front + confidence is worse than at any time since 2004?

Sheesh.

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Hamish - you have avoided my estate agents questions on a few occasions.

No, I've answered it on many occasions, and explained as much of my job as I'm going to, and stated quite clearly I'm not in any way involved with any kind of property business.

I'm now ignoring it, as it's a waste of time to type the same thing over and over again.

I own two properties, and I've frequently admitted I am in exactly the same boat as the other 70% of people who own property, we all want our values to be maintained, but thats it I'm afraid.

You seem to have an intimate knowledge of particular streets in Aberdeen.

Do you KNOW how small Aberdeen is?

You seem to know rather quickly the ins and outs of home reports.

And yet just last week half the posters in the scotland section were ripping the piss out of me for not knowing their called home reports insetad of hips like england..... :rolleyes:

The question about housebuilders being listed has been on several main page threads. :rolleyes:

Just get it over with and admit you are in the EA (Or related) business. :lol:

:lol:

You disagree with my perspective, therefore I must be an EA.....

Muppets.

:lol:

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His livelihood is definitely affected by house prices.

Everyones livelyhood is affected by house prices.

According to several threads on the main page, as much as 8% of consumer spending is from MEW. Remove that and the feelgood wealth factor from the economy and you have a recession, job losses, etc.

Whilst my business is not directly linked to property in any way, like almost all businesses, it is wholly reliant on consumer confidence.

Who exactly comes and posts here if they already own their own property and are perfectly happy with their financial situation and think the economy etc will just carry onwards and upwards?

People that are online all day for work anyway, and enjoy a good argument. :lol:

Besides, this place is a compendium of all the useful economic news and house price information there is, and as houses are the bulk of most peoples net worth, it's well worth keeping an eye on.

Once you get past the typically horribly disjointed and biased thinking in the forums, you can actually learn a lot from the raw data.

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No, that's not right.

OK, but you do agree that according to the report, Aberdeen today is slightly more affordable than the total UK was in 2003?

WTF????

I agree that the ASPC reports are often quite fecked when it comes to anything other than their own prices, whenever they have to import data from others they seem to get confused.

Might be easier to start again with mean prices from ROS and mean income from ASHE....... Probably more accurate too as ROS break down the stats by Shire and City.

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I don't believe you Hamish. Some of the things you come out with are just soooooooooooooooooooo Estate Agent like.

Doesn't matter anyway. You are getting a little tetchy recently. I think you are worried. Whether that is from a business point of view or not - who knows.

I do agree you can learn a lot from this forum. I have even learned something from yourself. ;);)

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Doesn't matter anyway. You are getting a little tetchy recently.

I'm getting "tetchy" because this whole argument has descended into farce.

I find a one bed flat for £47k within acceptable commuting range of the city centre.....

HPC answer..... OH NOES!!!!!! Everyone should be able to buy in town.

I find that people making £6 per hour on a 48 hour week can afford to buy within 35 mins of the city centre.....

HPC answer...... OH NOES!!!!!! What about the people on 41.7 hours!!!!!!!

I find that people on only 65% of the local average wage can afford to buy in nice enough streets in the city centre.......

HPC answer..... OH NOES!!!!!!! They should be able to buy in places like Ferryhill for that price.

I find that there are houses for sale within Aberdeen city for all income groups above £20K to be able to buy at 3.5 times income.

HPC answer....... OH NOES!!!!!!! But of course houses are too expensive because they used to be cheaper.

I note that Aberdeen affordability is better today than UK affordability in 2003.

HPC answer..... OH NOES!!!!!!!!! You must be an EA.

Mother Theresa would get tetchy faced with idiocy like that...... :rolleyes:

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Hamish - your ability to take facts and figures and mould themn to your own arguments is quite impressive.

Doesn't change much in reality though.

House prices in the UK, including Aberdeen, are way overpriced. You can try and convince us the opposite is true. That is up to you.

I think you fail to see one important point in this whole debate.

Most of the people you argue with CANNOT WAIT UNTIL THEY AGREE WITH YOU.

Because that will signal the time they think houses are affordable and these people may think about buying a place.

We want to agree with you - and we WILL agree with you.

It will not be for quite a while though IMO. Keep on trying though.

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your examples are never good though haamish

for the sake of argument

if i was one £50K (which I'm not) a year which would be 48% more than Uk average

what can i all buy is this pearl of cheapness of aberdeen ?

point is folk with more than average wages are struggling to purchase what i would consider aberdeen

And no - i'm not interested in some of the "attractive areas" that you sometimes highlight cos i wouldn't consider them average.

I do earn more than average - so tough luck i do expect to be able to buy more than average without getting ripped off by a credit inflated bubble of a housing market.

Theres no point to the argument cos you lost a long time ago and you know this

high proces are only fuelled by the availablity of credit which wont return

Try telling the builders that hooses are selling

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your examples are never good though haamish

for the sake of argument

if i was one £50K (which I'm not) a year which would be 48% more than Uk average

what can i all buy is this pearl of cheapness of aberdeen ?

point is folk with more than average wages are struggling to purchase what i would consider aberdeen

And no - i'm not interested in some of the "attractive areas" that you sometimes highlight cos i wouldn't consider them average.

I do earn more than average - so tough luck i do expect to be able to buy more than average without getting ripped off by a credit inflated bubble of a housing market.

Theres no point to the argument cos you lost a long time ago and you know this

high proces are only fuelled by the availablity of credit which wont return

Try telling the builders that hooses are selling

This is a simple undeniable fact.

Above average earning person = above average house.

Average earning person = average house.

Below average earning person = below average house

Way below average earning person = no house.

Until the above rings true - houses are overpriced. It is as simple as that. And no, a 40 minute commute does not count. 10 years ago peope did nto have to have a 40 minute commute to meet the above criteria. Why should they now ?

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This is a simple undeniable fact.

Above average earning person = above average house.

Average earning person = average house.

Below average earning person = below average house

Way below average earning person = no house.

Until the above rings true - houses are overpriced. It is as simple as that. And no, a 40 minute commute does not count. 10 years ago peope did nto have to have a 40 minute commute to meet the above criteria. Why should they now ?

But the above rings true today, for anyone that has done what people have always done, which is to buy a small starter property when you're young, and then buy a bigger one when you're older, have equity, and actually need a bigger place.

If you make 20K today, you can easily buy a small flat in Aberdeen at 3.5 income when you're in your early 20's. 10 years later, you have (in todays money) 70K in equity, and by now you're also making 30K or 35K.

NOW you can buy a place for 175K or 200K, which in Aberdeen WILL buy you a nice semi in a nice area.

Always staying within 3.5 times income, and building equity along the way.

What you lot want to do is completely eliminate all ideas of a property ladder, and jump right in at the top rung as a young FTB on average income for your age, but below average income in total, buying a 3 bed semi. Which is not now, and never has been, the way it is done, and given the housing mix and shortgage of supply of houses compared to flats is completely impossible to achieve.

For you to be able to buy an average semi in the city at 90K, average one bed flats would need to be 35K.

And although I am not particularly inclined towards BTL, I absolutely guarantee you that if this crash does result in average one beds in Aberdeen dropping to 35K, I would immediately buy 3 in cash, and put a fourth on my credit card and pay it off in a few months.....

As would almost everyone I know, because the yields and returns would be fantastic. Of course, this would immediately drive prices back up again, and lock out all the FTB's.... ;)

As for commuting 40 minutes, you're simply wrong.

When we bought our first house 20 years ago as young FTB's, we had two choices, we could buy a wee flat in the city on single income, a bigger and nicer flat in the city on dual income, or for roughly the same money, we could buy a proper house on single income 40 minutes away and commute, or a nicer and bigger house on dual income.

We could not afford to buy an "average" house in Aberdeen, even 20 years ago, even on joint income as young FTB's.

Yet today you seem to expect that a young FTB on below average income (as most young people are), should be able to buy an average house from day one!!!!!!!!!!!!

Edited by HAMISH_MCTAVISH
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But the above rings true today, for anyone that has done what people have always done, which is to buy a small starter property when you're young, and then buy a bigger one when you're older, have equity, and actually need a bigger place.

If you make 20K today, you can easily buy a small flat in Aberdeen at 3.5 income when you're in your early 20's. 10 years later, you have (in todays money) 70K in equity, and by now you're also making 30K or 35K.

NOW you can buy a place for 175K or 200K, which in Aberdeen WILL buy you a nice semi in a nice area.

Always staying within 3.5 times income, and building equity along the way.

What you lot want to do is completely eliminate all ideas of a property ladder, and jump right in at the top rung as a young FTB on average income for your age, but below average income in total, buying a 3 bed semi. Which is not now, and never has been, the way it is done, and given the housing mix and shortgage of supply of houses compared to flats is completely impossible to achieve.

For you to be able to buy an average semi in the city at 90K, average one bed flats would need to be 35K.

And although I am not particularly inclined towards BTL, I absolutely guarantee you that if this crash does result in average one beds in Aberdeen dropping to 35K, I would immediately buy 3 in cash, and put a fourth on my credit card and pay it off in a few months.....

As would almost everyone I know, because the yields and returns would be fantastic. Of course, this would immediately drive prices back up again, and lock out all the FTB's.... ;)

As for commuting 40 minutes, you're simply wrong.

When we bought our first house 20 years ago as young FTB's, we had two choices, we could buy a wee flat in the city on single income, a bigger and nicer flat in the city on dual income, or for roughly the same money, we could buy a proper house on single income 40 minutes away and commute, or a nicer and bigger house on dual income.

We could not afford to buy an "average" house in Aberdeen, even 20 years ago, even on joint income as young FTB's.

Yet today you seem to expect that a young FTB on below average income (as most young people are), should be able to buy an average house from day one!!!!!!!!!!!!

I think he means they should be able to buy SOMETHING in the city they grew up in, without going twenty miles out. The days of "building up equity" in a house are over mate. You just have to let it go, get used to the new reality, everyone will be happier.

Edited by dances with sheeple
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I think he means they should be able to buy SOMETHING in the city they grew up in, without going twenty miles out.

THEY CAN, so long as they are on 20K a year, which in a city with an average wage of 36K is not exactly an unrealistic expectation.

People on as little as 15K can still buy, but they'll need to go further out.

The problem is not affordability, the problem is unrealistic expectations and a few young people on relatively low incomes wanting to get more than they can afford without working for it. Nothing new there then. :rolleyes:

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If you make 20K today, you can easily buy a small flat in Aberdeen at 3.5 income when you're in your early 20's.

This is certainly truer today than it was 4 months ago! :lol:

However, there are only 15 properties today on ASPC which fit, 2 of which require 'upgrading'. Not really ftb fodder. Call it 13 properties. How many potential ftb's do you think are out there on £20k pa? A fair few more than 13, no doubt. It seems that they're not playing along... Why?

10 years later, you have (in todays money) 70K in equity, and by now you're also making 30K or 35K.

No, that's not right. After 10 years of a 25 year repayment mortgage (90% LTV, at long-term conservative 5% annual interest), approx £36k is required for redemption. Your assertion, therefore, assumes approx 50% HPI -from today- over the next 10 years, and all other things being equal - quite a stretch.

NOW you can buy a place for 175K or 200K, which in Aberdeen WILL buy you a nice semi in a nice area. Always staying within 3.5 times income, and building equity along the way.

No, that's not right. As we have seen, your model requires 50% HPI, so that nice semi in a nice area will be £265k - £300k. Deploying his £70k equity, he will need to be on at least £55k p.a. to stay within a 3.5x multiplier. Or if he is on the £35k you reasonably suggest, he would need a 5.6x multiplier.

For £175k - £200k, taking into account your 50% HPI over 10 years, the former FTB will only be able to get a slightly nicer 1 bed flat or a cr@ppy 2 bed. (edit - or an execrable ex-council semi in Northfield/Mastrick)

The rungs of the 'property ladder' are rotten.

Edited by The McGlashan
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This is a simple undeniable fact.

Above average earning person = above average house.

Average earning person = average house.

Below average earning person = below average house

Way below average earning person = no house.

Yet today you seem to expect that a young FTB on below average income (as most young people are), should be able to buy an average house from day one!!!!!!!!!!!!

Hamish do you ever actually listen to what others say ?

I get the impression you are the sort of person who sits and waits for their turn to speak without actually listening to what others say.....

Try it sometime.

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No, that's not right. After 10 years of a 25 year repayment mortgage (90% LTV, at long-term conservative 5% annual interest), approx £36k is required for redemption. Your assertion, therefore, assumes approx 50% HPI over the next 10 years, and all other things being equal - quite a stretch.

No, that's not right. As we have seen, your model requires 50% HPI, so that nice semi in a nice area will be £265k - £300k.

For £175k - £200k, with your 100% HPI over 10 years, the former FTB will only be able to get a slightly nicer 1 bed flat or a cr@ppy 2 bed.

McGlashan, I'm assuming 50% HPI in the next ten years and I'm also using todays money for wages and comparitive prices to avoid confusion.

A person on 20K today should be making 30K or 35K in ten years time in todays money as their career and experience progresses, however, adjusted for wage inflation this would be more like 50K...

Now, I guesstimated the figures in about 2 seconds, but lets take the time and effort to work it out more precisely....

Todays Price: 70K

10 Years Price: 105K (50% HPI)

Equity £69K.

Todays Wage: 20K

10 years wage, allowing for promotion and experience, 35K, and adjusted for annual inflation @3% = approx 50K.

3.5 times salary = 175K, plus equity of 69K = £244K.

Semi price today 175K, semi price in 10 years allowing for 50% HPI = 262K

Shortfall = 18K, which one would assume a person could save over a decade.... But if not, then I admit to being wrong on the 3.5 calculation, it now becomes 3.85 for the second house. Which is hardly a problem.

And all that is based only on single income, not joint, which these days is very much the norm for families needing a house as opposed to a flat. If you take joint incomes into account it becomes stupidly cheap.......

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If you take joint incomes into account it becomes stupidly cheap.......

In fact, let's look at a more typical scenario in this day and age.

Two young single people on very average income for their age, 20K or so, and each buy a cheap flat on a sensible wage multiple.

10 years later they meet, get married, and sell their flats to buy a semi.

Todays Price: 70K (x2)

10 Years Price: 105K (50% HPI) (x2)

Equity £69K. (x2) = 138K

Todays Wage: 20K

10 years wage, allowing for promotion and experience, 35K, and adjusted for annual inflation @3% = approx 50K..... BUT, lets assume one of them is not as successful in the career and only makes 35K now instead of 50K..... And lets assume a much smaller multiple as it's a joint income.

2.5 times joint salary = 212K, plus equity of 138K = £350K budget to buy a property!!!!!!!!

Semi price today 175K, semi price in 10 years allowing for 50% HPI = 262K

Deposit of 138K leaves a mortgage of 124K, which is 2.25 of the higher single income, or 1.45 joint.

Proving, once again, that the best way to get ahead in life is for every young person to buy a flat as early in life as possible. :lol:

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Hamish, pages and pages of numbers are all and good. However they are not going to change the simple fact. Houses are too expensive.

I honestly think you know this deep down.

You sound more and more like someone desperately trying to convince themselves of what they want to hear.

As I have said already, the day most of us agree with you - will be a very happy day indeed.

I don't think you quite get this. We want to believe you !!

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McGlashan, I'm assuming 50% HPI in the next ten years and I'm also using todays money for wages and comparitive prices to avoid confusion.

A person on 20K today should be making 30K or 35K in ten years time in todays money as their career and experience progresses, however, adjusted for wage inflation this would be more like 50K...

I'm glad you pointed that out, it contains its own negation.

You assume 50% HPI over ten years

You assume 3% YoY wage inflation = 26% over 10 years.

This, of course, raises the question of affordability for the FTB's of the future.

Whereas today:

FTB, £20k pa, purchases £70k flat.

For the 90% mortgage (assuming conservative 5% long term average interest), he needs a £7k deposit (45% of his take-home pay) and a 3.15x multiplier to pay £370 pcm, about 30% of his take-home pay.

In your future, 10 years hence:

By your assumptions, in 10 years, the FTB flat will be £105k and in 10 years a notional equivalent FTB will be making £25k pa.

For the 90% mortgage (assuming conservative 5% long term average interest), he needs a £10.5k (56% of his take-home pay) deposit and a 3.8x multiplier to pay £552 pcm, about 35% of his take-home pay.

In today's money he will have around £950 pa less disposable income than a FTB today.

All of this is based firstly upon all other things being equal, and then upon your own assumptions for future wage and house price inflation. It is also based upon a very conservative 5% long term mortgage interest rate - highly questionable with 3% wage (and corresponding cpi) inflation. Needless to say that lower HPI, lower wage inflation, higher cpi and / or higher long term interest mortgage interest are all mechanisms by which (singly or in concert) your house of marked cards will be further demolished.

It is also questionable how many mortgage providers will be able or permitted to offer 3.8x multipliers to FTB's in the future.

So, given that today's market is characterised in part by a dearth of FTB's (despite your assertions that today's market is favourable for them) the market of ten years time by your own assumptions will be significantly less attractive for the FTB to enter. Where will they come from?

It is also worth noting that demographic change will adversely affect the number of 'fresh fish' FTB's entering the market to prop up the HPI pyramid. Moreover, that same demographic change means that the supply of housing available will become ever greater during the horizon of your predictions. In ten year's time, the baby-boomers will be heading for the eventide home - Aha! There's your future growth market! :)

Edited by The McGlashan
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It is also based upon a very conservative 5% long term mortgage interest rate - highly questionable with 3% wage (and corresponding cpi) inflation.

Is the calculation based on that ? Very strange if it is. By Hamish's own admission the cheapest 20+ year fixed rate you can get today, with interest rates at their LOWEST EVER, is 5.98%.

Given that is the situation why on earth woudl you use 5% as your long term interest rate ?!!

7-8% is far more realistic. 8-10% would leave a lot in contingency for unforseen circumstances and potential rate hikes. If I were getting a loan for 25 years I would want a lot of contingency in place. Common sense.

Planning a 25 year debt on 5% interest rates is beyond mental. IMO.

As I have said numerous times before to Hamish. It is very clear long term low interest rates in a FIAT monetary system is too dangerous. The only time it has been tried .................. the system died.

I have yet to receive a reply to this point. Yet another one of his selective response technique.

Got to give him credit - he is good. ;)

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Is the calculation based on that ? Very strange if it is. By Hamish's own admission the cheapest 20+ year fixed rate you can get today, with interest rates at their LOWEST EVER, is 5.98%.

Given that is the situation why on earth woudl you use 5% as your long term interest rate ?!!

7-8% is far more realistic. 8-10% would leave a lot in contingency for unforseen circumstances and potential rate hikes. If I were getting a loan for 25 years I would want a lot of contingency in place. Common sense.

Planning a 25 year debt on 5% interest rates is beyond mental. IMO.

As I have said numerous times before to Hamish. It is very clear long term low interest rates in a FIAT monetary system is too dangerous. The only time it has been tried .................. the system died.

I have yet to receive a reply to this point. Yet another one of his selective response technique.

Got to give him credit - he is good. ;)

Hiya ccc,

I'm being as fair to Hamish as I can - I'm using his own assumptions, which, if we work them through logically, can be demonstrated to undermine themselves. The 5% long term interest rate was something we agreed to base hypotheticals upon in the 'Clan War' thread.

I totally agree with you that it's a very conservative estimate. If I use 7-8%, the calculations, of course, drift farther and farther away from Hamish's sweet-spot, which is, itself, undermined even by 5%.

Edited by The McGlashan
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Every post that McSpamish puts up means he loses another chunk of equity in his home. Every sleep that McSpamish has mean he loses another chunk of equity in his home. So on and so forth...

We can all derive some pleasure from this fact. :P

It's karma for him being a ramping greedy tw@t in denial... or penance for his sins of greed and vanity. Your choice.

McSpamish, you are the Joseph Goebbels of HPI.

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I'm glad you pointed that out, it contains its own negation.

You assume 50% HPI over ten years

You assume 3% YoY wage inflation = 26% over 10 years.

This, of course, raises the question of affordability for the FTB's of the future.

Wrong.

A 3% annual wage inflation rate over 10 years compunds to 34.3%.

Your following calculations are therefore also incorrect.

I agree that eventually, over a multi decadal time frame, corrections must and do occur to slow the growth, however the underlying trend is always up.

I also agree that eventually, HPI and economic growth will end, but this will not occur until the planet reaches carrying capacity and population growth ends, which will not occur in my lifetime, barring a meteor strike, global plague, or nuclear war....

It is also worth noting that demographic change will adversely affect the number of 'fresh fish' FTB's entering the market to prop up the HPI pyramid. Moreover, that same demographic change means that the supply of housing available will become ever greater during the horizon of your predictions.

The United Nations projects that the UK population will increase to 72 million by 2050.

Thats an increase of 12 million in a little over 40 years, which equates to around 300,000 additional people per year.

If we assume 3 people per house, we would require 100,000 NEW houses be built every year for the next 40 years, just for house prices to remain constant. The odds of 4 MILLION houses being built over the next 40 years are slim to none, thanks to our ridiculously cumbersome planning restrictions.

HPI is not just probable, it is absolutely guaranteed, and tinkering with income multiples only means that home ownership progressively becomes the reserve of the richer members of society, instead of being available to all. Those already on the property ladder will win big time, and those who are not are doomed to a lifetime of increasing rents and the destruction of all hope of lifetime financial security.

By all means bring in income multiple restrictions. It would make people like myself seriously consider buying into BTL in a big way, secure in the knowledge that my ever increasing number of prospective tenants would never be able to buy their own place, no matter how much I raise the rent.....

It would be a one way ticket to wealth for me, not so good for the next generation though... :rolleyes:

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By all means bring in income multiple restrictions. It would make people like myself seriously consider buying into BTL in a big way, secure in the knowledge that my ever increasing number of prospective tenants would never be able to buy their own place, no matter how much I raise the rent.....

It would be a one way ticket to wealth for me, not so good for the next generation though... :rolleyes:

I thought I'd find you in here arguing the case for the hinted lending regulations working in your favour.

I came along to marvel at the virtuoso skills of a true a Maestro of the Denial Phase!

I do agree - There will be great scope for those with the cash to build a BTL portfolio.

Just make sure to wait untill after the absolute price implosion that will immediately follow the regulations coming into force - then make your purchases.

Both rents and mortgage payments will be buttons by then - Which is all good.

I do observe your motivations swivelling round somewhat.

* Once you were arguing the case that a HOLD play in the property market beats a SELL at any time.

* Now you expound the potential benefit (to you) of swooping on the availability of more affordable property in order to enslave renters in your BTL clutches - where they are denied the opportunity to purchase affordable property themselves.

Common to both is your hope that those without property (sold it, or never had it) should not benefit by property becoming more affordable.

The coming of more affordable houses would make a nonsense of your HOLD play, let alone being LONG houses.

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Wrong.

A 3% annual wage inflation rate over 10 years compunds to 34.3%.

Haha! But you're not right either. We've both made related year zero errors.

The compound rate of 34.3% is after 10 increases - that is the pay rate in the eleventh year.

The compound rate in the 10th year is 30.5%.

It makes little difference to the calculation which proves that, following your assumptions, the FTB has a harder time in 10 years than he has now.

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  • 415 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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