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Affordable Housing for First Time Buyers Watch

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    (Original post by donnie-darko)
    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.
    And yet I doubt you'd suggest the population should move to not taking out a mortgage for a house (I mean as a matter of principle, not because they'd be over-stretching themselves).

    Borrowing is not always a bad move, I used it to get my TV via a credit card which gave 1% cashback and obviously the interest free period - why is that less sensible than paying by cash? (they didn't offer discount for cash)
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    (Original post by donnie-darko)
    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.


    Hi Donno,

    I think prices will at best, stagnate in nominal terms (which is a real terms fall).

    I did think that there would be a fall of upto 40% but I'm not so sure now. The amount of intervention by wretched govts (robbing my savings to bail out overstretched mortgagees) is astounding.

    I'm extremely confident that they'll not rise for a long time. The banks won't lend and are strapped, FTB's fresh out of Uni will have to find so much money, both to pay off their loans and scrape together a deposit, that they'll have to steal it from somewhere. 'Graduate' jobs are a joke. ie there are about 500 grads for every position, the rest is just stuff that any schoolleaver could do......and they'll pay schoolleaver wages

    There just aren't enough buyers at the bottom of the chain with any money and there aren't enough BTL to fill the gap. What we're seeing at the moment is a standoff, as the govt make it all so easy for homeowners (not letting the banks reposses, keeping IR at ridiculous low levels etc). This 'help' cannot go on indefinitely as it's damaging the economy.

    If historic low interest rates are the answer to all the economy's ills, then all govts would have pinned them this low since time began
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    (Original post by Quady)
    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?
    Depends on where you live and what your circumstances are - as a single bloke (as I assume you are) - yes it's easy. Not easy when you are a responsible parent and live in a place where the landlords have the whip hand because of pressure of demand.
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    (Original post by Quady)
    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?
    freedom and independence - I have real choice; you are privileged to live in an area of the country where the power relationship between you and landlords is balanced or even in your favour but this is not true of alot of the country.

    Far higher proportion getting a higher education - if it was free this would be a good thing, although based on my personal experience and those of my generation (80's) many of my peers felt (looking back) that their degree was a waste of time with respect to their career development. I now study because of personal interest but I know that my work history would be far more important to a potential employer and as a business manager I judge others chiefly by their industriousness. Vocational degrees (such as Chemistry) are different IMO.

    It is morally wicked to railroad young people into spending three years of their life and accumulating a debt of £30k or unless it is part of an assured and well thought out process. For example, anyone studying/working to become a barrister or a doctor know exactly what path they are on and what will be there for them at the end of it. I do feel that young people are coralled by a doctrinaire attitude in educational institutions who keep feeding them the lie that a degree in itself is going to be useful. I have challenged this attitude on a number of occasions with my children's teachers. I don't think that young people who succumb to this indoctrination are 'stupid' they are just vulnerable and being exploited (in my view).
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    Where did a house only cost £55K in 1997? Zimbabwe? :lolwut:

    I live in the south-east and even then the average house in my area must have been more like £400k.
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    (Original post by Aspiringlawstudent)
    Where did a house only cost £55K in 1997? Zimbabwe? :lolwut:

    I live in the south-east and even then the average house in my area must have been more like £400k.
    BS.

    Since the average house price in the south east is less than £300k today, its pretty unlikely they were a third more expensive 13 years ago wouldn't you say?

    http://news.bbc.co.uk/1/shared/spl/h...ml/region9.stm

    Or do you have a source?
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    My god you need a girlfriend...
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    I heard squattings quite easy nowadays.
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    (Original post by Quady)
    BS.

    Since the average house price in the south east is less than £300k today, its pretty unlikely they were a third more expensive 13 years ago wouldn't you say?

    http://news.bbc.co.uk/1/shared/spl/h...ml/region9.stm

    Or do you have a source?
    Well I don't have a source but my parents house was valued in 1early 1999 at 95k. It was a 3 bed detached. In 2007 it was valued at £240k.

    I always like to keep this in mind when people tell me houses "aren't ridiculously overpriced"

    Edit: see nethouseprices.com
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    (Original post by Aspiringlawstudent)
    Where did a house only cost £55K in 1997? Zimbabwe? :lolwut:

    I live in the south-east and even then the average house in my area must have been more like £400k.
    Not at all. Lots of places in my home town could be bought for 55k.

    Put a street/postcode of your choice into this, then scroll down to 1999/2000

    http://www.nethouseprices.com/index....d-House-Prices
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    (Original post by Quady)
    And yet I doubt you'd suggest the population should move to not taking out a mortgage for a house (I mean as a matter of principle, not because they'd be over-stretching themselves).

    Borrowing is not always a bad move, I used it to get my TV via a credit card which gave 1% cashback and obviously the interest free period - why is that less sensible than paying by cash? (they didn't offer discount for cash)
    Unfortunately most people don't think 'oh I wont have that mortgage I could get as a matter of principle, my principle being that the house prices are now 7x my annual salary compared with 3x a decade ago'. In addition, that principal is relative as for fresh grads they never experienced 3x or 4x wages to house prices, so the only ratio they have worked with is what we are experiencing now.

    Clearly your 1% cash-back credit card is a good move, but on the other side it desensitises you to using it and it has psychologically linked the cashback ( gain ), with you using it for purchases.
    I take it that offer is only for a set period, so depending on your susceptibility levels, your brain may still associate that gain with using your credit card, even if that offer has passed.
    Also, you may still use it after this initial deal for the same reasons and the habitual connotations.
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    (Original post by donnie-darko)
    Unfortunately most people don't think 'oh I wont have that mortgage I could get as a matter of principle, my principle being that the house prices are now 7x my annual salary compared with 3x a decade ago'. In addition, that principal is relative as for fresh grads they never experienced 3x or 4x wages to house prices, so the only ratio they have worked with is what we are experiencing now.

    Clearly your 1% cash-back credit card is a good move, but on the other side it desensitises you to using it and it has psychologically linked the cashback ( gain ), with you using it for purchases.
    I take it that offer is only for a set period, so depending on your susceptibility levels, your brain may still associate that gain with using your credit card, even if that offer has passed.
    Also, you may still use it after this initial deal for the same reasons and the habitual connotations.
    Surely your principle earlier was 'don't borrow' - so why for houses is it 'borrow only upto three times salary'. The existence of mortgage lending would have had something to do with houses being 3.5-4x salary (not three, people used to have deposits you know), so why is it ok to borrow for a house but not for anything else? If you can justify that, then why should the level by three times income? (not 'because it used to be', but why three and not two or four ect).

    Possibly, (although it would have been the interest free period that set such a mindset, not the cashback) but by that logic then you think people shouldn't use Quidco.
    Cashback on Amex is a permanent feature.
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    (Original post by ElephantInTheRoom)
    Well I don't have a source but my parents house was valued in 1early 1999 at 95k. It was a 3 bed detached. In 2007 it was valued at £240k.

    I always like to keep this in mind when people tell me houses "aren't ridiculously overpriced"

    Edit: see nethouseprices.com
    So what price should your parents house now be worth in your view?
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    (Original post by Quady)
    Surely your principle earlier was 'don't borrow' - so why for houses is it 'borrow only upto three times salary'. The existence of mortgage lending would have had something to do with houses being 3.5-4x salary (not three, people used to have deposits you know), so why is it ok to borrow for a house but not for anything else? If you can justify that, then why should the level by three times income? (not 'because it used to be', but why three and not two or four ect).

    Possibly, (although it would have been the interest free period that set such a mindset, not the cashback) but by that logic then you think people shouldn't use Quidco.
    Cashback on Amex is a permanent feature.
    My principle previously was not to borrow for frivolous items and liabilities. On mortgages I am of a different opinion, but the same in some regards. If there is to be borrowing, then in my utopia all it would be was for land or property and this should be ideally 3x annual wages. As ElephantInTheRoom stated earlier, prices have been kept artificially high since the massive house inflation, by having a low interest rate in a time where the market should catch up with itself and become affordable again.

    So to answer your question, only borrowing for a house because it is such a high cost that if borrowing for this was not aloud, then hardly any would ever own their own home.
    Three times income is just a personal thing, one I feel that I could comfortably afford. I feel no more than 50% of disposable income should be spent on mortgage repayments and this should take no more than 25 years total.
    That way the persons wages could be inline with house prices and you would not have ( even deprived areas ) still with that 6 or 7x wages ratio.

    I'm not familiar with Quidco, but essentially if it is involving interest or a loan on items that are not a house, then I am not in favour of borrowing for this purpose.

    I am sure you will come back at me with some 'what if' example, but the above pretty much sums up my mentality and opinion on borrowing. In addition if all of these things were not instead and the housing market was left alone with no special measures being taken, then housing prices would be at an affordable level. Unless of course you feel 7x wages is acceptable and not getting onto the property ladder until whatever age it is now, is acceptable ?

    They left the economy alone in the 90s bust in Japan and housing prices fell to a decent level which was then affordable to most.

    Cheers
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    (Original post by Quady)
    BS.

    Since the average house price in the south east is less than £300k today, its pretty unlikely they were a third more expensive 13 years ago wouldn't you say?

    http://news.bbc.co.uk/1/shared/spl/h...ml/region9.stm

    Or do you have a source?
    I know what my own house cost to buy.

    £372,000 in 1998.
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    (Original post by Quady)
    BS.

    Since the average house price in the south east is less than £300k today, its pretty unlikely they were a third more expensive 13 years ago wouldn't you say?

    http://news.bbc.co.uk/1/shared/spl/h...ml/region9.stm

    Or do you have a source?
    Detached £467,019
    Semi-detached £258,030
    Terrace £210,624
    Flat £168,858

    My house is detached, lol.
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    (Original post by Aspiringlawstudent)
    Detached £467,019
    Semi-detached £258,030
    Terrace £210,624
    Flat £168,858

    My house is detached, lol.
    Those numbers are for today, not 13 years ago.

    Or has the price of the average detached house in your area only risen by 15% over the last 13 years?
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    (Original post by donnie-darko)
    My principle previously was not to borrow for frivolous items and liabilities. On mortgages I am of a different opinion, but the same in some regards. If there is to be borrowing, then in my utopia all it would be was for land or property and this should be ideally 3x annual wages. As ElephantInTheRoom stated earlier, prices have been kept artificially high since the massive house inflation, by having a low interest rate in a time where the market should catch up with itself and become affordable again.

    So to answer your question, only borrowing for a house because it is such a high cost that if borrowing for this was not aloud, then hardly any would ever own their own home.
    Three times income is just a personal thing, one I feel that I could comfortably afford. I feel no more than 50% of disposable income should be spent on mortgage repayments and this should take no more than 25 years total.
    That way the persons wages could be inline with house prices and you would not have ( even deprived areas ) still with that 6 or 7x wages ratio.

    I'm not familiar with Quidco, but essentially if it is involving interest or a loan on items that are not a house, then I am not in favour of borrowing for this purpose.

    I am sure you will come back at me with some 'what if' example, but the above pretty much sums up my mentality and opinion on borrowing. In addition if all of these things were not instead and the housing market was left alone with no special measures being taken, then housing prices would be at an affordable level. Unless of course you feel 7x wages is acceptable and not getting onto the property ladder until whatever age it is now, is acceptable ?

    They left the economy alone in the 90s bust in Japan and housing prices fell to a decent level which was then affordable to most.

    Cheers
    Your 50% of disposable income on mortgage payments is a bit on the high side, fine if you are a high earner, but otherwise I would pitch more like 1/3 of take home pay on mortgage payments. If more than this then with council tax/ house insurance etc , and given you need to eat, you will likely be somewhat stretched.

    The other thing to watch out for is using average earnings to average house prices as your multiple. First time buyers don't buy average houses, they buy lower cost houses.

    Unfortunately not everyone will be able to afford to own their own house, therefore average wages as an affordability indicator can also be flawed by including a large swathe of very low earners and a few very high earners within the average. Using Median earning bands and ignoring the top 10% and probably the bottom 30% gives a better picture of housing affordability.

    Also it is not impossible to find flats within the 3 times multiple in large parts of the UK, for a couple in Edinburgh each earning £20,000 per annum on a 2.5 times multiple of joint, that gives £100,000 borrowing. With deposit that brings quite a few one bed flats into their price range.
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    (Original post by Quady)

    CDOs didn't start taking off until 2004, how how can you blame them? Sure they helped rocket prices in the last few years of the major house price rises, but they weren't 'the cause'.
    .
    Again. Just Plain Wrong.

    Just backtracking through this thread.

    It was 1999 onwards when mortgage-backed securities, started to be repackaged into CDOs, creating a tranched, packaged product each component of which was itself a tranche of a packaged product!

    I dont know where youve got 2004 from?


    Of course putting mortgage-backed securities inside CDOs for the first time, without having rated the AAA mortgages was fraud. [And if we cannot trust the government to regulate, who can we trust?]
    In 1999 Bayerische Landesbank, packaged a staggering $14 billion of bundles of mortgages, via JP Morgan. This was the beginning of CDO's/

    I cannot be bothered to respond to every single one of your posts on this thread, but you have some strange ideas.....

    According to you, everythings fine in the housing market....And Labour can do no wrong?

    That just about sums up every one of your posts.

    Millions upon millions of people would vehemently disagree with you.
    And they would be correct.
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    (Original post by Dan1el)
    Its having the time to do so.

    You said you only skimmed my original post.

    I shall not do you the same discourtesy. I'll be happy to answer them.
    Sooooo..... are you going to reply?

    Has your MP?
 
 
 
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