Friday, April 5, 2013

Yeah !

A house price warning for first time buyers

House price vastly over priced ! No Sh*t ! Need to subscribe to read article but no money as saving for house!

Posted by happy mondays @ 08:40 PM (5401 views)
Please complete the required fields.



16 thoughts on “Yeah !

  • greenshootsandleaves says:

    Oxlade has got it right apart from the word order. It should read:

    The policy, it seems, is to force up house prices by hook or crook because
    sharp falls in property prices would be disastrous for Britain’s still-fragile banking sector
    And
    it makes Britons feel wealthier and encourages spending.

    Reply
    Please complete the required fields.



  • stillthinking says:

    Ooops. Where the four asterisks are put “tiny” and “url” concatenated together.

    http://*****.com/cd2nf7f

    Reply
    Please complete the required fields.



  • What any ‘first-time’ buyers need to be aware of is that when this government scheme does end – unless it’s planned to run it to infinity – house prices will no longer have this false underpinning and thus a liable to collapse, leaving these first-time buyers with piles of debt around their necks for a house that’s no longer able to command the paid for it.

    Reply
    Please complete the required fields.



  • What any ‘first-time’ buyers need to be aware of is that when this government scheme does end – unless it’s planned to run it to infinity – house prices will no longer have this false underpinning and thus a liable to collapse, leaving these first-time buyers with piles of debt around their necks for a house that’s no longer able to command the paid for it.

    I see successive governments [trying] to do the same thing to keep themselves in power. Housing is a UK obsession.

    Reply
    Please complete the required fields.



  • Any house price crash is an election loser unless it can happen right at the beginning of a government term and then for a ‘recovery’ to happen before the next election. America sort of did this. Most home owners judge a government more on house price increases ( and their asset wealth) than they do on GDP, youth employment, standard of living, etc.

    Osborne and Co can’t afford a housing crash mid term, but May 15th 2015 is just two years off and they will do whatever is required with housing to get re elected. With low interest rates, an influx of foregn money and ponzi house support schemes from the government, prices could well hold this long, unless a major event occurs (financial crisis, Europe implosion or war). Governement policy will be to at least maintain prices for the next 2 years.

    Housing has been so unaffordable for so long now for first time buyers ( over 10 years), that hugely inflated prices are now the norm. A 25 year old on a good salary and some savings that would could have bought a place in normal times would have been in their young teens the last time prices were reasonable. Also, homeoners have stopped talking about prices being overvalued. It is almost as if everyone expects this to be the new norm.

    It seems ynlilkely that the Euro can will be kcked down the road for a nother two years.

    Reply
    Please complete the required fields.



  • After careful deliberation, I am staying out of the market until this scheme is over (or a crash happens).

    When Basel III is fully implemented, the capital controls will make high-LTV (above 85%) loans punitively expensive again. I don’t see how the government guarantee can circumvent international banking rules.

    By the time this scheme is over, half of the FTBs will have almost 50k worth of student debt.

    I can almost afford what I want now, but not quite. I can rent a slightly inferior 2-bed for about as much as the mortgage interest would be upon something decent I could actually live in for 5 years, and that will do me fine.

    I’m not going to worry about the appreciation anymore. I am fully expecting flats worth 400k to hit 600k at some point in this scheme, but I think the whole thing will simply HAVE to blow up at some point and I’d rather be holding cash when it does.

    My only concern is that between Carney, the FLS and HTB, they may succeed in ramping up property so much that it becomes permanently out-of-reach for the younger generation, at least in London. It doesn’t seem much of a stretch. They have already sold out most of zone 1 to a transient international population. The rich will still be able to inherit, of course, and those on stupid money (basically, bankers) will always be able to buy.

    Reply
    Please complete the required fields.



  • Islingtonmike says:

    The attraction of “funding for lending” is that George knows he’s recovering his stake money on the deal from the stamp duties triggered by the deal (s).

    Reply
    Please complete the required fields.



  • Saw the DT in the pub today… the leader comment concerning house prices says ‘they are vastly overpriced’. Good to see the DT has at last come out and said it. But it will need a few more papers to join to the chorus to put any serious pressure on govt

    Reply
    Please complete the required fields.



  • happy mondays says:

    @stuartking – agreed.. but i think until the last boomer has their 40yr kids still at home reality may not dawn.. But good to see DT & a few others pointing out the fact that hp’s are hugely out of reach without massive debts & a lender backed by the tax payer,,

    Reply
    Please complete the required fields.



  • Yes, but this needs to become widely agreed public knowledge.

    Reply
    Please complete the required fields.



  • @6 – The post General Election crash is precisely what I was expecting following the May 2010 GE – especially as it resulted in a Conservative-dominated government. The Conservatives are supposed to be the party of laissez faire capitalism: “let the market find its level”, etc. For example, John Major’s government did nothing at all (nor did anyone really look to them to) to stop the HPC of the early 1990’s). In the first few months of the Cameron government I fully expected them to recognize that property prices had reached absurd levels (particularly in terms of price versus income ratio) and must be allowed to fall. However, for whatever reason, they’ve decided to prop them up using any and every measure available – regardless of the collateral damage elsewhere in the economy. Given that on this, as on so many other issues, the main parties are all saying much the same thing (for fear of scaring away the voters) I see no reason to think that the next government will not continue to do everything it can to stave off the crash (or even significant falls). Priced out does seem to be the new norm.

    Reply
    Please complete the required fields.



  • Am I the only one to call this out for the bullocks that it is? The house prices to wages ratio is meaningless. It’s completely and utterly pointless. What matters is affordability; and that’s slightly harder to calculate. The greatest impact on affordability is of course interest rates. Rates are now lower than at any point in the past 300 years. That’s why prices aren’t falling. Simples.

    Reply
    Please complete the required fields.



  • @12 Yes, I agree. I think the principle of affordability based on price to income ratio of 3 to 3.5 only worked as a ‘rule of thumb’ because it gave you a figure with some leeway (i.e. if your mortgage was 3 to 3.5 times your income then you would be able to absorb the impact of any foreseeable IR rises – a few %). The problem with the situation we have now is that so many people are so deep in debt that even a modest rise in IRs would send them over the edge. So, all that’s to be done is make it more affordable to service debt – hence low IRs must be maintained at all costs.

    Reply
    Please complete the required fields.



  • In 1997, according to the Office of National Statistics, the UK national average INDIVIDUALS wage was £16,666.
    According to the Nationwide Building Society the Average House price in 1997 was £55k.
    £16,666/£55,000 = 3.3x salary [mortgage]

    * The Average First Timer Buyer mortgage in 1997 was just £41.5k [CouncilMortgageLenders]

    By 2007, at the peak of the boom [according to the Office of National Statistics] the national average wage had risen to £23.5k
    The Average House Price in 2007 was £185k. [nationwide]
    £185,000/£23.5k = 7.8x salary [mortgage]

    Yet according to the halifax data above it was 5.77 in 2007.

    The truth is that over two thirds of taxpayers earn less than average wage, and house prices are still ten times an INDIVIDUALS wage in most areas.

    The Halifax has a huge vested interest in keeping house prices high.

    They have doctored their figures in part to hide the fact that they used to measure house prices to wages ratio against the INDIVIDUALS wage, NOT the median household income.

    Reply
    Please complete the required fields.



  • GB at 13. The Conservatives couldnt afford a crash after the last general election as the banking system was too fragile and they were obsessed with the UK credit rating. I can’t see them believing that they can maintain the housing bubblew for another 6 to 7 years, so better to get it out of the way after the next general election, rather than let it happen naturally mid to end term.

    Reply
    Please complete the required fields.



Add a comment

  • 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

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>