And the government who want the votes of people who think they deserve their house prices doubling so they can get free money.
House Price Rises Capped at 5%
- Thread starter No1newts
- Start date
And the government who want the votes of people who think they deserve their house prices doubling so they can get free money.
Soldato
- Joined
- 4 Apr 2003
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- 8,081
House prices and pace of sales has picked up dramatically since the beginning of the year. From March / April time when there were loads of ones on the market sub £230k near me, nearly all are sold now in this price bracket (ranging from 1-4 beds) and those coming on are selling to a waiting list unless there is something fundamentally wrong with it.
The reason given by the estate agents round here are that lenders happily lend 4-5 times salary multiplier if you fit their criteria i.e. sensible credit history and minimal debts (I had a chat with their broker and a couple of whole of market independents as I was a tad dubious but it seems to hold true). Other things that seemed to have changed recently are deduction rates for dependents. Deposit values have fallen back to 5% with 10% being normal. Its not the interest rates that are driving it, its the LTV and Salary Multipliers again. The difference is the lenders are supposed to be doing more stringent underwriting checks and having any outstanding personal debt (exc mortgages) seems to be a big barrier.
The way the BoE can control this will simply be to enforce lower salary multipliers and increased deposit requirements.
The reason given by the estate agents round here are that lenders happily lend 4-5 times salary multiplier if you fit their criteria i.e. sensible credit history and minimal debts (I had a chat with their broker and a couple of whole of market independents as I was a tad dubious but it seems to hold true). Other things that seemed to have changed recently are deduction rates for dependents. Deposit values have fallen back to 5% with 10% being normal. Its not the interest rates that are driving it, its the LTV and Salary Multipliers again. The difference is the lenders are supposed to be doing more stringent underwriting checks and having any outstanding personal debt (exc mortgages) seems to be a big barrier.
The way the BoE can control this will simply be to enforce lower salary multipliers and increased deposit requirements.
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Its another political suicide move, like reforming the taxation system and charging 5p for a carrier bag 
I've spent a lot of time in Sweden this year ( i must have made this post 10x but its relevant here again) and where i was in Norrbotte,n had an extremely sensible approach to housing and ownership. A massive, compared to the UK at least, section of the housing market is rented by Housing associations heavily involved with local government. We sold all ours.. My nan's old scabby Council house in SE15 last time i checked was selling for shy of £300k, ridiculous.
The IKEA houses
are not flash by any standards but they are adequate and liveable, but my god they are cheap to rent compared to the cost of living and wages there.
Not everything is municipality owned there is also a healthy private renting market, but that doesn't have the same air about it as the UK one.
The Swedes laughed at me when i told them about our eternal struggle to get on and advance up the housing ladder. It is a very peculiar trait we Brits have bred into us.
I don't have the cure for us..... Its a fundamental shift in our perception of ownership and wealth. We all have to play the game or we don't have anywhere to live...
I've spent a lot of time in Sweden this year ( i must have made this post 10x but its relevant here again) and where i was in Norrbotte,n had an extremely sensible approach to housing and ownership. A massive, compared to the UK at least, section of the housing market is rented by Housing associations heavily involved with local government. We sold all ours.. My nan's old scabby Council house in SE15 last time i checked was selling for shy of £300k, ridiculous.
The IKEA houses
are not flash by any standards but they are adequate and liveable, but my god they are cheap to rent compared to the cost of living and wages there. Not everything is municipality owned there is also a healthy private renting market, but that doesn't have the same air about it as the UK one.
The Swedes laughed at me when i told them about our eternal struggle to get on and advance up the housing ladder. It is a very peculiar trait we Brits have bred into us.
I don't have the cure for us..... Its a fundamental shift in our perception of ownership and wealth. We all have to play the game or we don't have anywhere to live...
You apparently live in the cheaper part of Surrey too - £1300 is nice 1-bed flat / cheap 2-bed flat territory here! Prices are rising very quickly here and we're struggling to get on the ladder as those on get snapped up very quickly. We saw a house that was just on the market last weekend, liked it and found that as we were considering, someone put in an offer (immediately accepted) without even viewing!
They're not necessarily overvalued at the moment... we've got low interest rates and now a govt scheme to help first time buyers - there are more people able to buy, prices reflect that - a rise in rates could easily see a correction to the market, houses (mortgage payments) become less affordable and prices fall.
You live in Surrey - what do you expect.... 22k a year wage is below average and I'm not too bothered about the idea that a single person can't afford a 3 bedroom house. Throw in the average wage for the area and two incomes into the mix and that sort of property will get snapped up at that price... trying to mindlessly blame 'bankers' or 'buy to let landlords' is silly....
In an area that is popular there will obviously be competition for homes, if you want to own your own home and can't compete then yes you will have to look elsewhere. You don't *have* to own your own home.... There is a housing shortage and perhaps we should have a few more Milton Keynes style towns built... this, in itself, isn't going to stop popular areas from being popular and house prices high... Central London will stay expensive as will popular commuter areas in Surrey etc...
Soldato
- Joined
- 29 Jul 2004
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- 7,159
Christ, 2 bed flats start at 900 here! The worst thing about the whole situation is that the government are actually paying for a large amount of peoples second or third mortgages via housing benefit for the astronomical rents being charged.
Soldato
- Joined
- 29 Jul 2004
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- 7,159
Way to miss the point, for starters 22k is just to cover rent and council tax, what about other living expenses? That pushes it far and behond the average wage. Its not going to be a single person either. Two kids and a stay at hone partner is not unreasonable in this situation. All tjats happening now is the goverment picks up the tab via housing benefit, which is a dire situation for the country to be in.
I'm sorry to say, but you did not buy at the bottom of the market 4 years ago. That was the top of the market actually. The bubble that started in the early 00's did not burst, but now they want another bubble on top of the one we already have. The UK is in a really bad state now and I really feel sorry for people who have been caught up in this mess which will come to fruition to the masses by around 2015/16.
You're right, no party wants to address it. Fortunately they won't have to as the financial markets will have it's say and it will be out of their control. Same as it's always been.
Better to take the pain now than later. What's coming is coming anyway. The longer interest rates stay at these artifically low levels, the more damage is occurring and the bigger the bust at the end.
Of course, politicians know all this, as do the majority of people so there's no need for me to give a lecture.