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Affordable Housing for First Time Buyers Watch

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    Britain is breeding a low calibre of student if they cannot be bothered to read a post, on the grounds of it being too long (it isn't THAT long)

    In order to compose essays, you need to read widely.

    How do you achieve this?
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    (Original post by jacketpotato)
    This is all underlain by supply-and-demand. There just aren't enough houses for the demographic changes we are experiencing - people living longer and living in smaller units. And this doesn't happen because of mass middle-class opposition to changes in the planning system. You really can't blame the banks, Labour's changes to the tax system or buy-to-let buyers because they don't change the playing field and they don't fundamentally change the supply/demand, attractiveness or yields of property. Buy-to-let buyers, pension funds and banks will only buy or lend against property with a certain value/yield, but they don't control the demand for property. Basically, you are trying to find scapegoats which make small changes to the outside rather than addressing the actual problem.
    There are demographic changes taking place but when there is an acceleration (a chnage in the rate) of house prices, you have to question what the accelerant is.

    Between 1997 and 2007, prices tripled. Did the population triple? Are people living to be 150? No. There have been NO SUDDEN changes to the demographic.

    So, what has caused the rapid increase in prices?..............EASY CREDIT. This fuels demand. If banks stopped mortgages, demand would crumble overnight and prices would sink like a lead balloon.

    So, you see, banks have it in their power to destroy the market. They DO control demand.

    *Affordability is a function of demand. Simply 'wanting' something does not constitute it. This is basic O Level Economics*
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    (Original post by Quady)
    What annoys me about these threads is that the posters are often (as here) zealous about buying a house, whilst saying they are overpriced. The banks contributed, but people sure as hell want to buy houses, even though they think they are overpriced, which I think destroys their argument that they actually overpriced.
    People want to buy houses for 2 reasons:

    a) FEAR - a potential homeowner has been subject to the propaganda that if they don't buy now, they'll miss the boat. Just imagine that......imagine having to rent forever because prices went out of your reach. It's emotive stuff. They scoot down to the bank and PLEAD for the loan, lie about income, borrow off parents, anything. They MUST get their own place. The price doesn't matter, they want to be 'on the ladder'

    b) INVESTMENT - Investors, BTL, whatever, buy houses because they see the price is rising and thus anticipate profit to be made. A lot of people have made some very easy money out of flipping houses. It doesn't matter if the house is overvalued or not, so long as the price is on an upward trend

    You could sell buckets of manure for £100 a throw and they would sell like crazy, as long as people knew the price was increasing by £x each day (and that there was insane demand)

    An Economist came on the TV the other day and made a very interesting remark. She said "Houses are the only thing that people become MORE anxious to own when the price increases" Not strictly true but she was comparing houses with things like loaves of bread etc
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    (Original post by ElephantInTheRoom)
    b) INVESTMENT - Investors, BTL, whatever, buy houses because they see the price is rising and thus anticipate profit to be made. A lot of people have made some very easy money out of flipping houses. It doesn't matter if the house is overvalued or not, so long as the price is on an upward trend

    You could sell buckets of manure for £100 a throw and they would sell like crazy, as long as people knew the price was increasing by £x each day (and that there was insane demand)

    An Economist came on the TV the other day and made a very interesting remark. She said "Houses are the only thing that people become MORE anxious to own when the price increases" Not strictly true but she was comparing houses with things like loaves of bread etc
    You realise prices are down 10% compared to three and a half years ago right?

    So that can't be driver today really.
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    (Original post by ElephantInTheRoom)
    Britain is breeding a low calibre of student if they cannot be bothered to read a post, on the grounds of it being too long (it isn't THAT long)

    In order to compose essays, you need to read widely.

    How do you achieve this?
    Why would I need to compose and essay or read widely for a chemistry degree?
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    (Original post by ElephantInTheRoom)
    People want to buy houses for 2 reasons:

    a) FEAR - a potential homeowner has been subject to the propaganda that if they don't buy now, they'll miss the boat. Just imagine that......imagine having to rent forever because prices went out of your reach. It's emotive stuff. They scoot down to the bank and PLEAD for the loan, lie about income, borrow off parents, anything. They MUST get their own place. The price doesn't matter, they want to be 'on the ladder'

    b) INVESTMENT - Investors, BTL, whatever, buy houses because they see the price is rising and thus anticipate profit to be made. A lot of people have made some very easy money out of flipping houses. It doesn't matter if the house is overvalued or not, so long as the price is on an upward trend

    You could sell buckets of manure for £100 a throw and they would sell like crazy, as long as people knew the price was increasing by £x each day (and that there was insane demand)

    An Economist came on the TV the other day and made a very interesting remark. She said "Houses are the only thing that people become MORE anxious to own when the price increases" Not strictly true but she was comparing houses with things like loaves of bread etc
    ElephantInTheRoom - I thumbed up both of your posts. Well said and explained with logic.

    To the O.P. and other repliers, my response is that yes the increased wages / house prices ratio is unacceptable and unaffordable, but what really can the individual do about it.

    We don't control the levels of borrowing that governments make from the IMF etc, we cant make businesses pay higher wages as this will price the UK out of the labour market, in addition to the UK being a services industry anyway it makes it even harder to do this.
    In addition, we cant control the base rate of interest, nor the availability of credit.

    AND if we do 'protest' or show our discourse, then it does not matter one tosch these days as the government just carries on with its original plans, regardless of the opposing protests ( e.g. student fees protests ).

    I understand that this is no reason to be lathargic and apathetic, but even so I ask you 'all' - what the point - in argueing, or trying to do anything about it, or worrying about it all, actually is.

    Please quote me if you want a reply.

    Cheers
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    (Original post by Quady)
    You realise prices are down 10% compared to three and a half years ago right?

    So that can't be driver today really.
    The driver IS credit

    and we don't have Easy Credit anymore.

    That evaporated during the credit crunch in 2007
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    (Original post by Quady)
    Why would I need to compose and essay or read widely for a chemistry degree?
    You need attention span surely?
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    (Original post by ElephantInTheRoom)
    The driver IS credit

    and we don't have Easy Credit anymore.

    That evaporated during the credit crunch in 2007
    So if credit was now made more esaily avaliable, would prices rise or fall and why? (since part b has gone, and part a is much much less prevalent than '04-07)
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    (Original post by Quady)
    So if credit was now made more esaily avaliable, would prices rise or fall and why? (since part b has gone, and part a is much much less prevalent than '04-07)
    They would rise as the demand would come back. People would see an opportunity ( eg first time buyers ) to buy a house.
    Depending on the ratio ( house prices to wages ) that was available in credit, would dictate how much of an increase and over what period the rise would be.
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    (Original post by donnie-darko)
    They would rise as the demand would come back. People would see an opportunity ( eg first time buyers ) to buy a house.
    Depending on the ratio ( house prices to wages ) that was available in credit, would dictate how much of an increase and over what period the rise would be.
    Are you putting that rise down to 'Fear' or 'Investment' as described by ElephantInTheRoom?
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    (Original post by donnie-darko)
    ElephantInTheRoom - I thumbed up both of your posts. Well said and explained with logic.

    To the O.P. and other repliers, my response is that yes the increased wages / house prices ratio is unacceptable and unaffordable, but what really can the individual do about it.

    We don't control the levels of borrowing that governments make from the IMF etc, we cant make businesses pay higher wages as this will price the UK out of the labour market, in addition to the UK being a services industry anyway it makes it even harder to do this.
    In addition, we cant control the base rate of interest, nor the availability of credit.

    AND if we do 'protest' or show our discourse, then it does not matter one tosch these days as the government just carries on with its original plans, regardless of the opposing protests ( e.g. student fees protests ).

    I understand that this is no reason to be lathargic and apathetic, but even so I ask you 'all' - what the point - in argueing, or trying to do anything about it, or worrying about it all, actually is.

    Please quote me if you want a reply.

    Cheers
    Sadly, there's not a lot you can do. It's a long time since I was a student but I've been caught up in all this mess.

    I would like students to recognise that the Labour party are not their friends at all. This political party has practically ensured that they will never own their own place, unless they kill their parents.

    At the same time they are winding up students to oppose the coalition's student fees reform (which I agree is criminal). Labour don't give a damn about poverty or debt or they wouldn't have presided over the biggest housing boom in history.
    Gordon Brown promised in 1997 to not let the market get out of control, instead he did the exact opposite. He loosened the regulations on the banks.

    Not only that but Labour have thrown everything at the hosuing market to stop it's (inevitable) decline, in it's latter years. They WANT HOUSING TO STAY UNAFFORDABLE.

    The least students can do is stick 2 fingers upto the Labour party. After all, they've done it to you.

    Students are just pawns that Labour are happy to use to attack the Coalition govt.
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    (Original post by donnie-darko)
    To the O.P. and other repliers, my response is that yes the increased wages / house prices ratio is unacceptable and unaffordable, but what really can the individual do about it.

    -------------------------------------------------

    In addition, we cant control the base rate of interest, nor the availability of credit.
    Surely thats simple, individuals could not buy things that they believe are too expensive. Then either prices will go down, or houses are priced correctly.

    -----------------------------------

    Why not?
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    (Original post by Quady)
    So if credit was now made more esaily avaliable, would prices rise or fall and why? (since part b has gone, and part a is much much less prevalent than '04-07)
    If the credit taps were opened again, I'm sure prices would continue up.

    I've long since resigned myself to the fact that most people will borrow as much money as you throw at them (regardless of whether they can ever repay it)
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    (Original post by ElephantInTheRoom)
    I've long since resigned myself to the fact that most people will borrow as much money as you throw at them (regardless of whether they can ever repay it)
    Agreed.
    And that's the real difference between people, you can either buy an asset or a liability. Borrowing £800 to buy a 42" TV, regardless of if that credit is buy now pay back in a years time, is not an intelligent move and is the main reason why I feel some people will never progress.
    They have been brought off with toys, gadgets and gizmos. As long as they have a few quid for these things and can pay their rent, it all seems to be good. Close your eyes and ears to the budget and ignore politics because its 'too confusing'.

    Unfortunately at the moment I am in neither camp. I have little money and I spend little on gizmos and liabilities. But as soon as I do have my student loan, I am not going to spunk it up the wall on liabilities.

    Do you feel that house prices will fall in the next 5 / 10 years or rise, and if so by what approximate percentage ?

    Nice chatting wit you btw. Take Care.
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    (Original post by ElephantInTheRoom)
    If the credit taps were opened again, I'm sure prices would continue up.

    I've long since resigned myself to the fact that most people will borrow as much money as you throw at them (regardless of whether they can ever repay it)
    You may be interested to know that Savill's research team made the argument recently (last two months) that we may experience a significant change in the housing market.

    To paraphrase roughly from memory, they postulate that people will no longer go through the traditional one bed flat, two bed flat then small family house steps, instead they will rent for longer and then join the housing chain when their family outgrows the flats that they are renting, probably well into their thirties or even early forties.

    They suggest that financial institutions may slowly replace individuals as the purchasers of flats.

    Accordingly what you may then see is a moribund market for flats, their pricing being based on their investment value, whilst the "house" market continues to a degree as before, albeit with a time lag re demand from new entrants.

    I do not foresee a wholesale collapse in the prices of flats, my earlier post re replacement cost to build similar will prevent prices dropping to the levels some posters on this thread appear to seek (50%-60% i.e below build cost)

    Obviously if banks lose their fear of further price drops (evidenced by the circa 25% deposit levels some now seek) and if availability of funds to lend increases, then the number of first time buyers will start to grow again. However I doubt we will see anything like the levels of demand experienced pre 2007 for some considerable time. (London maybe excepted due to its significance and the amounts of money inherent within)
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    (Original post by Quady)
    My take home pay is around £1,700, over a thousand pounds of disposable income a month is certainly enough for those things. Sod bottles of wine, I've bought a barrel of whisky!

    OK, so I can't secure a huge debt to buy a house, but typing on my 40" (not trying to show off with that, its just the way of the world) TV life seems pretty good.
    Quady - my point was not about how much I earned but how far that income went. A modest income would give a young person a good life style which I personally measure in freedom and independence (not quantity/strength of alcohol available). Most people leaving full time education at present (it is constantly being reported in the press) are forced to live with relatives and have some £20k or more of debt. I think that is a morally wicked situation.

    Please tell me you really understood my point and were being deliberately obtuse
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    (Original post by Soph1990)
    Im just planning on renting at first
    I've been renting for the past three years Soph - it really is not good when you have children. Next week I am moving into my own house I have bought with cash and everyone is congratulating me because they recognise how owning land means owning yourself. I don't have to fear a sudden S21 notice, rent hike or unexpected bills from the agency. My friend rented a place that was freezing and riddled with damp but the landlord kept forcing her to take out a new tenancy or accept eviction. It meant that she could not move until somewhere came up close to her children's school at the precise time the fixed period of her tenancy ended.

    It is not right to get bogged down by party politics - have you heard the saying 'Man is born free and yet everywhere he is in chains' - (JJ Rouseau). To me that is one of the most profound statements about society ever. Those at the top will always seek to enslave those at the bottom - it goes on every day in small and big ways from the pressure to 'pay by direct debit', being constantly brainwashed into 'wanting this' or 'buying that'. It is all part of a great scheme to make you debt slaves. To many in power you are little more than milking cattle.
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    (Original post by Lily Black)
    which I personally measure in freedom and independence (not quantity/strength of alcohol available).

    Most people leaving full time education at present (it is constantly being reported in the press) are forced to live with relatives and have some £20k or more of debt. I think that is a morally wicked situation.
    How do you define freedom and independence (or to take a consultancy-speak approach 'what would that look like for you')?

    But how is that different to 'the good old days'? Far higher a proportion of people are getting a higher education, you need to compare the standard of living by income percentile, not their highest qualification. Since when have the press not reported the growing hardship of graduates? It certainly dates back to the 70s.

    How is it 'morally wicked' that some people are unemployable, and stupid enough to have taken on an increased tax burden without really thinking it through?
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    (Original post by Lily Black)
    I don't have to fear a sudden S21 notice, rent hike
    A rent hike? You just say no, I've been renting the same place for two and bit years, after my first year I negotiated the rent down and froze it after the second year. I intend to freeze it again, or at least keep the rise below well inflation. Or do you think that rent negotiation is a one way street where a landlord sets a price and you either pay it or move out?
 
 
 
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