Thursday, Oct 15, 2009

London housing not affordable on single wage

Evening Standard: First-time buyers 'need to earn more than £93,000'

Read this on the way home last night. This is the reason why the market will crash.

Posted by refusetobuy @ 11:11 AM (1689 views)
Add Comment
Report Article

11 Comments

1. refusetobuy said...

Beaten to it by mark. Article did have 37 comments, but they aren't being shown at the moment.

Thursday, October 15, 2009 11:14AM Report Comment
 

2. tyrellcorporation said...

FTBs have been replaced by investors and the BTL crowd - the housing market has fundamentally changed IMO.

Thursday, October 15, 2009 11:24AM Report Comment
 

3. Catmandu said...

One thing to point out - this article is talking about FTBs buying average houses. Of course the average FTB doesn't buy an average house - they buy a starter home for less.

Thursday, October 15, 2009 11:55AM Report Comment
 

4. cynicalsoothsayer said...

The housing market hasn't fundamentally changed IMO, the BTLs will get burnt and the FTBs will get back in. While the HP rises helped the BTLs to expand their empires, the falls will crucify them.

Thursday, October 15, 2009 11:59AM Report Comment
 

5. tyrellcorporation said...

Nice thought @3 but right through this recession I've coughed up £1000 a month to rent my place and the value of the four bedroomed house I live in has probably gone up if anything. Their return has been rock solid. Sure people have lost on city-centre flats but there are plenty of winners. Also, the interest on my savings has dropped by more than 70% over the same period. Much as I despise the BTL crowd, they've been largely bailed out by Labour cronies as they themselves (as we've seen in the expenses scandal) are all at it.

This is what I mean when I reckon large swathes of BTL are being protected from their folly. The upshot being that they are, at present, in a very good podition compared to the hapless FTB who's income is being dessimated and so too are his/her savings.

With plenty of state-supported equity the BTL mob are much better placed to continue buying at the expense of the FTBs who are still drastically priced out.

Thursday, October 15, 2009 12:57PM Report Comment
 

6. smugdog said...

You sum it up very well Tyrell@4. Gordon loves a BTLer.

Thursday, October 15, 2009 01:00PM Report Comment
 

7. cat and canary said...

To get a rough measure of how overvalued London is:

An individual earning £93,000 earns more than 97% of the UK population.

A couple earning £93,000 has a household income more than 98% of the UK households

Data from IFS (http://www.ifs.org.uk/wheredoyoufitin/)

Thursday, October 15, 2009 01:17PM Report Comment
 

8. cynicalsoothsayer said...

I don't think Gordo can protect his BTL chums forever. He may not be in office long. Who knows where QE is heading?

As BTLs have bought the FTBs property they have pushed the FTBs into renting. Income reductions apply to everyone, not just renters. Eventually a turning point is reached where forced sales start to push down prices to the level where FTBs can afford, and the FTBs buy and stop renting, putting the BTLs under rent level pressure. The BTLs sell up or get repossessed selling to more FTBs, reinforcing the downward spiral for BTLs.

Thursday, October 15, 2009 01:19PM Report Comment
 

9. mark said...

there is an another scenario

houseprices hit a price were they no longer go up or down and we have a waiting game for salaries to play catch up...

any views on this?

Thursday, October 15, 2009 01:23PM Report Comment
 

10. mark wadsworth said...

As I said on an earlier thread:

**can anyone actually afford the house they bought?**

I've been saying that for about seven years - I asked people, on your current salary, and assuming you had a ten per cent deposit, would you be able to buy your own home? Most people admitted they wouldn't be able to. OK, prices are back to where they were five years ago (in most areas) but that was still ludicrously expensive. I wouldn't have been able to afford to buy my own house since about 2002 (and I only bought it in 1998, FFS!)

Thursday, October 15, 2009 01:38PM Report Comment
 

11. timmy t said...

Mark@8 - this was talked about a little while ago - house prices stay still, QE continues and 5% inflation is engineered for a few years so everythiing else catches up. So rather than letting the bubble burst we just increase the atmospheric pressure around it so it's no longer a bubble.

Thursday, October 15, 2009 05:16PM Report Comment
 

Add comment

  • If you do not have an admin password leave the password field blank.
  • If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines
Username  
Admin Password
Email Address
Comments

Main Blog | Archive | Add Article | Blog Policies