Bear Food From Sky News

[madasafrog]

Could you be any more patronising?

I apologise if i come across as a bear

[svag]

I apologise if i come across as a bear

very good

[bear call spread]

Crisis in British Housing video

All good points being made there. Some hard truths for the bears here.

Edited October 27, 2007 by ragingbull

[thirdwave]

All good points being made there. Some hard truths for the bears here.

I do hope you bulls, neithers (bulls in neither's clothing really) & the odd bull masquerading as a bear (Levy process) are still around in 3-4 months time when the market would have well & truely turned (It already has, as you'd realise if you get out more). I'd love to see how you try & explain negative figures from the very VIs you love to quote now..Madasa, isn`t it about time you realised you are preaching to the wrong audience? How's the house purchase going,BTW?

[stoffey]

Thats ok, a couple more months and first time buyers will all be able to afford 1 bed "luxury apartments" in Leeds, liverpool and Birmingham! The icing on the cake is that a property speculator down the line has lot their shirt when it halved in value.. if you lick the thresh hold you can probably still taste their sweet tears.

lmao, yes that right. It was on that truth about property program was it not. One place lost 86 large in 18 months oooops in i believe dirty Leeds.. This is the sort of thing the sheeple should be reading in the papers not this shortage of supply and you had better look at share schemes. 9x multiple what will be passing the payment on to our great grand children twice removed divided by tooty three?......I am getting my two fingers ready for the bulls who have posted on this thread today. I will be printing this thread and wiping by jacksy with it, we go are going the same way as America bulls theirs no saving us, sub prime is bigger than all of you and it going to bite you on your small insignificant ****'s.........i thank you and goodnight. I welcome any bull to post as i take enormous joy in laughing at your narrow minded stupidity. If you honestly think after the northern rock fiasco and the fact that half of britain is struggling to pay their mortgage their is'nt going to be a significant correction then more fool you......night night x

[trekking]

If it were bear news it would become doctrine. I posted it to prove a point that any bull news is just dismissed out of hand. Even land reg figs are quickly discarded as inaccurate or relevant when the data doesn't support the bear argument.

I don't think it was dismissed out of hand, it's just that it doesn't pass the test of logic.

Supply and demand can only drive the HPI so far, the big driving force that has taken them to where we are now

is sentiment, driven by fear (if I don't get on the ladder now, I will never have a house) and greed, oh, and lax lending.

Sentiment has changed and that will drive prices down.

I can afford to buy a house now with cash, but I will wait until the house prices have corrected.

[trekking]

If those predictions come true, I will hack off my genitals and auction them on Ebay.

I suppose that's one way of getting some money for a deposit. :-)

[madasafrog]

I don't think it was dismissed out of hand, it's just that it doesn't pass the test of logic.

Supply and demand can only drive the HPI so far, the big driving force that has taken them to where we are now

is sentiment, driven by fear (if I don't get on the ladder now, I will never have a house) and greed, oh, and lax lending.

Sentiment has changed and that will drive prices down.

I can afford to buy a house now with cash, but I will wait until the house prices have corrected.

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[madasafrog]

I don't think it was dismissed out of hand, it's just that it doesn't pass the test of logic.

Supply and demand can only drive the HPI so far, the big driving force that has taken them to where we are now

is sentiment, driven by fear (if I don't get on the ladder now, I will never have a house) and greed, oh, and lax lending.

Sentiment has changed and that will drive prices down.

I can afford to buy a house now with cash, but I will wait until the house prices have corrected.

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[Gurgle]

You are making the schoolboy error of thinking that FTB go straight onto the housing ladder with an average home. When i was a FTB, I started on the bottom of the ladder and worked my way up.

Dont believe all the baloney that you get fed on here.

A fovourite of the uber bears when contested with the undersupply argument is "I look in my paper and there are lots of houses for sale. There are 900,000 houses for sale in the UK". Its as if there are 900,000 houses that will be sold and then the people that selll them, just vanish into thin air. This is movement within the housing market where people sell their home and then buy another home.

The truth is out there, but dont believe everything your told and especially not from an internet forum

And you are making the schoolboy error of thinking that FTB's have average salarys. They don't do they. Making the comparison of average prices and average salaries seems statistically acceptable to me.

There a significant number of empty houses in this country ( I don't have figures). If there is a market downturn, a lot of these will appear on the market increasing supply significantly.

[Jason74]

I do hope you bulls, neithers (bulls in neither's clothing really) & the odd bull masquerading as a bear (Levy process) are still around in 3-4 months time when the market would have well & truely turned (It already has, as you'd realise if you get out more).

I´ve got to say as a "neither", that this idea that all neithers are just disguised bulls really gets my goat. I registered as a neither because that is what I am (possibly with a bear heart and a slightly veering towards bull head if that makes sense!). I neither believe that HPI is sustainable (or desirable) at anything like recent levels, OR that there will be the kind of dramatic crash that has been predicted by the "ultra bears" around here (at least not in my local market, which is all I can claim to know that much about). A quick look at my posts on this forum (and indeed just on this thread) very much confirms that "neither" stance.

This site is probably the best "one stop shop" for UK property related info on the web, and the forums contain some really interesting threads and viewpoints. However, if it really wants to be taken seriously as a place of serious debate (rather than just a "bear fest"), their needs to be an acknowledgment that neithers may just be exactly what they say they are (although obviously there will be a few who are not), and also that those who seriously (rather than as trolls) put forward the bull argument on here are actually adding a lot of value to the froum, regardless of how much most of us believe or hope that they are wrong

[Woot]

You are making the schoolboy error of thinking that FTB go straight onto the housing ladder with an average home. When i was a FTB, I started on the bottom of the ladder and worked my way up.

You in turn make a different school-boy error: FTBs are no longer single people who can buy a little flat at the bottom of the ladder; people have been priced out for so long that a great many FTBs are now family people who need an 'average' home and indeed for whom a traditional FTB's flat is of no use at all. One of the effects of this boom has been to change the demographics of the housing market entirely: we are not in 1994 any more.

TD

[Woot]

A 3.5 times salary worked when interest only mortgages weren't prevalent.

The monthly outgoings of a home owner are similar now to what they were 20 years ago - its just that now, they aren't paying any capital off.

Ergo 20 years ago mortgage-payers were 'homeowners' whereas today mortgage-payers are simply renting from the bank. And when the prices fall they will still be renting from the bank, and have an additional black hole to fill too.

IO only works when the market is rising. Sadly, many IO mortgagees don't understand what they have bought into, and believe that house prices can only go up (therefore believing that they will be able to pay off capital from equity later on).

TD

[Woot]

So your saying that when you start out on £12k per year that you will jumping into a house on 3.5 multiple of salary so first time buyers houses should be at £42K?

In 1994 I bought a 2 bed apartment in London in a decent zone 2 area. Same year my now partner bought a 3 bed house in Bedfordshire - again in a decent area. You make it sound like a property for this sort of money is madness, but actually it was and should be reality - what's happened over the past 10 years has been mad.

TD

[Tiger Woods?]

You are making the schoolboy error of thinking that FTB go straight onto the housing ladder with an average home. When i was a FTB, I started on the bottom of the ladder and worked my way up.

And you are making the schoolboy error of assuming that a FTB earns the average salary...

[thirdwave]

You are making the schoolboy error of thinking that FTB go straight onto the housing ladder with an average home. When i was a FTB, I started on the bottom of the ladder and worked my way up.

The fact that all that I can afford (comfortably) where I live, despite being on an extremely good wage even by SE standards (top 1% maybe), is a pokey 2 bed flat in a grotty part of town suggests that there is something fundamentally wrong with the housing market in this country. The price increases in recent years have little to do with supply & demand as bulls here often suggest ..well, I see ensuite rooms in town regularly advertised for 30-40 ppw & its likely that most immigrants end up in places like that, rather than in overpriced BTL properties. You don`t need to be a bear brainwashed by hpc.co.uk to realise that the current trend of double digit HPI is purely driven by speculation & lax credit & the longer it continues, the more painful the consequences would be for those caught up in it(and that includes you, soon to be homeowner Madasafrog). Once property starts being viewed as an investment rather than a place to live, its bound to behave in the way other asset classes do, with rapid upturns & equally spectacular downturns..

With regards to FTB salaries, my partner, who has three university degrees including a professional one, is currently looking for a job & the most she is being offered is around 15-17k..go figure

Edited October 28, 2007 by thirdwave

[Capital Keith]

And you are making the schoolboy error of assuming that a FTB earns the average salary...

Just some thoughts...

The average salary quoted much higher is £24,000 pa. This includes full and part time salaries. If you only take full time salaries it is £29,331. http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101. Not unreasonable to assume those taking out mortgages work full-time?

Only 70 per cent of UK properties are owner occupied - http://www.statistics.gov.uk/CCI/nugget.as...=2&Rank=224 - what proportion of the population live in the other 30 per cent - do we need to exclude their salaries from the analysis - SOC 7,8,9 for example - what does that do to the averages?

Those buying houses will be mainly drawn from SOCs 1,2 and 3. Average full time salaries being: £48,000, £37,000 and £29,000 respectively. (wtih 25 per cent of full time salaries being below: £22,000, £27,000 or £21,000 respectively).

If the average first time buyer is now 34(!) - no link to hand, but an oft-used figure - then why assume they do not have well-established careers?

So, although a schoolboy error, it may in fact a more useful assumption than you have given it credit for.

It may be more sensible to use medians rather than means. A few big salaries and a few expensive houses have a big effect and may not be equal.

[Guest grumpy-old-man]

The fact that all that I can afford (comfortably) where I live, despite being on an extremely good wage even by SE standards (top 1% maybe), is a pokey 2 bed flat in a grotty part of town suggests that there is something fundamentally wrong with the housing market in this country. The price increases in recent years have little to do with supply & demand as bulls here often suggest ..well, I see ensuite rooms in town regularly advertised for 30-40 ppw & its likely that most immigrants end up in places like that, rather than in overpriced BTL properties. You don`t need to be a bear brainwashed by hpc.co.uk to realise that the current trend of double digit HPI is purely driven by speculation & lax credit & the longer it continues, the more painful the consequences would be for those caught up in it(and that includes you, soon to be homeowner Madasafrog). Once property starts being viewed as an investment rather than a place to live, its bound to behave in the way other asset classes do, with rapid upturns & equally spectacular downturns..

With regards to FTB salaries, my partner, who has three university degrees including a professional one, is currently looking for a job & the most she is being offered is around 15-17k..go figure

if you don't mind me asking why has she got 3 degrees & what are they in ?

[Capital Keith]

The fact that all that I can afford (comfortably) where I live, despite being on an extremely good wage even by SE standards (top 1% maybe), is a pokey 2 bed flat in a grotty part of town suggests that there is something fundamentally wrong with the housing market in this country. The price increases in recent years have little to do with supply & demand as bulls here often suggest ..well, I see ensuite rooms in town regularly advertised for 30-40 ppw & its likely that most immigrants end up in places like that, rather than in overpriced BTL properties. You don`t need to be a bear brainwashed by hpc.co.uk to realise that the current trend of double digit HPI is purely driven by speculation & lax credit & the longer it continues, the more painful the consequences would be for those caught up in it(and that includes you, soon to be homeowner Madasafrog). Once property starts being viewed as an investment rather than a place to live, its bound to behave in the way other asset classes do, with rapid upturns & equally spectacular downturns..

With regards to FTB salaries, my partner, who has three university degrees including a professional one, is currently looking for a job & the most she is being offered is around 15-17k..go figure

Again using ASHE - If you are in the top 1 per cent of earners in the South East, you must be earning well over £57,000 - 10 per cent of males working full-time in the South East earn over £57,000. Either you are earning less than you thought, or you need to get better at searching for property.

If you borrowed 3.5 x salary at £57,000 (and you claim to earn more) - you could raise £200,000. Even at 8% (£1542 per month repayment) that would leave you £2000 per month to spend - how comfortable do you need to be?

EDITED for grammar

Edited October 28, 2007 by Capital Keith

[thirdwave]

if you don't mind me asking why has she got 3 degrees & what are they in ?

Degree in Business, Masters in Management, Degree in Law & she has completed the Legal Practice Course (1 year-£ 10000). She hasn`t got a training contract yet & all she is being offered at present are secretarial jobs (even that's hard to come by). One firm even told her that they had someone with LPC stuffing envelopes in their office!

[thirdwave]

Again using ASHE - If you are in the top 1 per cent of earners in the South East, you must be earning well over £57,000 - 10 per cent of males working full-time in the South East earn over £57,000. Either you are earning less than you thought, or you need to get better at searching for property.

If you borrowed 3.5 x salary at £57,000 (and you claim to earn more) - you could raise £200,000. Even at 8% (£1542 per month repayment) that would leave you £2000 per month to spend - how comfortable do you need to be?

EDITED for grammar

Maybe I am overestimating my earnings but I suppose 70k should be right up there...BTW, Where did you get the 57k figure from? I don`t know many people around here who earn 35k, let alone 57k. I hope you haven`t included London in your calculations as City wages are bound to massively skew average earnings upwards.

In any case, a decent 2 bed flat where I live is 300k plus & although I may be able to afford it WITH A STRETCH, I prefer to rent as its far cheaper (and the fact that I aspire to something better than a tiny flat next to a crack den). I only gave my example to highlight the difficulties other FTBs on lower earnings are facing in getting on to the wretched 'ladder'

PS: You do not take home £ 3542 pm on 57k. Its more like £ 3200 (& that's before pension contributions). Repayments on a 300k property with a 10% deposit would be around £ 1900 pm.

http://netsalary.blogspot.com/

Edited October 28, 2007 by thirdwave

[Guest grumpy-old-man]

Degree in Business, Masters in Management, Degree in Law & she has completed the Legal Practice Course (1 year-£ 10000). She hasn`t got a training contract yet & all she is being offered at present are secretarial jobs (even that's hard to come by). One firm even told her that they had someone with LPC stuffing envelopes in their office!

ah, ok thanks for that.

so she is finding it difficult to find a good job as they are looking for experience as well ? she is stuck between over qualified for a lot of jobs but competeing against people with degrees & experience who are struggling to find work ?

I have noticed for instance that the jobs market looks to have 'died a death' in the last 6 months imo, in the North anyway.

good luck anyway & keep renting, you will be so glad you did as I'm sure your already aware.

Hopefully she will be working in a decent position in a couple of years ? then it's a buyers market & you hopefully will both have good jobs. (you already have by the sounds of it).

How would your position be affected during a recession btw ?

[Guest mSparks]

They actually said that unless something bad happens to the economy, house prices are set to rise.

I may have lost the plot, but I thought the price of any asset was set by the price somebody was prepared to pay for it.

Brits are so brainwashed that housing has to be owned by them, that they have an irrational desire to put asmuch as they can ito their housing costs.

Greedy and irresponsible banks have fed this desire and lent more and more to feed this desire, both here and in the US.

This lending is now crashing down as risk is having to be priced in, and investors are losing money and therefore the supply of funds is also drying up.

WIthout huge support of mortgage loans, then the price people CAN pay for housing will reduce, probably to the level where a loan will only be cosidered for 3.5- 4 times earnings.

The average home is now around £200,000.

The average income is around £25,000

Lets consider a FTB wants a 3 bed semi to start out.

3.5 times salary =87,000

lets add a deposit of 10% say 9000.

this makes your average house (3 bed semi) £96,000.

Thats a drop of over 50%.

Here here, Yes please Mr government sir, I want to risk losing 10's of thousands of pounds so you can give me a piece of paper that says I 'own' the place I live in, and can pay all the maintenance costs with living there.

maybe when I have 10's of thousands to throw away I might think about it.

[Capital Keith]

Maybe I am overestimating my earnings but I suppose 70k should be right up there.. In any case, a decent 2 bed flat where I live is 300k plus & although I may be able to afford it WITH A STRETCH, I prefer to rent as its far cheaper (and the fact that I aspire to something better than a tiny flat next to a crack den). I only gave my example to highlight the difficulties other FTBs on lower earnings are facing in getting on to the wretched 'ladder'

PS: You do not take home £ 3542 pm on 57k. Its more like £ 3200 (& that's before pension contributions). Repayments on a 300k property with a 10% deposit would be around £ 1900 pm.

http://netsalary.blogspot.com/

Agree that take home pay is a bit less - I make it £3275, before pension as you say - but that hardly weakens the argument, you are left with £1733 per month. So again, if that isn't affording it comfortably, I don't know what is. (You could save that and live off the girlfriend's earning without hardship).

Even with the figures you provide - leaves you with £1300 per month. You could overpay by £500 per month and be mortgage free on place witha £300,000 mortgage at 6 per cent 107 months early.

You must have high standards if you think the only decent places are £300,000 - even if you live in Windsor - one of only a very few boroughs in the SE where average flat prices are over £300,000. I think I was right saying you need to get better at searching for property!

But, I think we are agreed in saying places to live cost too much!

All the best

Keith.

[Capital Keith]

Where did you get the 57k figure from? I don`t know many people around here who earn 35k, let alone 57k. I hope you haven`t included London in your calculations as City wages are bound to massively skew average earnings upwards.

Sorry, forgot about this bit. The link was in a post from a few minutes before.

This is the source: http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

You'll need to go to ASHE 2006 - then table 7 for place of work by local authority or one of the others for Government Office region (table 5?, occupations at table 2 is interesting too). The South East does not include London, which is a seperate region.

If you live in the commuter belt you will have to consider City salaries though - they have to live somewhere and that has an effect on the housing market as you have found with your £300,000 2 bedders.