Ah ok. My bad, I didn't read all the posts.
Im calling it.....
- Thread starter Dr House
- Start date
Ah ok. My bad, I didn't read all the posts.
Soldato
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- 29 Jul 2004
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I earn more than my parents combined, yet they could easily afford to purchase a house in the 90s. I can't afford to purchase the same home in the same area today. (44k vs 425k).
Market is great
Market is great
I'm not(have mentioned the limited supply in some areas on this page) but that is slightly different in that that it is part of the reason for competition for homes and why people are prepared to pay more...
I earn more than my parents combined, yet they could easily afford to purchase a house in the 90s. I can't afford to purchase the same home in the same area today. (44k vs 425k).
Market is great
The 90s were not normal though.
Your comparing to a part of history that had very irresponsible lending.
That isn't the historical normal.
My parents and this is the same for most of modern history other than the last ~20 years, not only had to save for years, with sacrifice, they had to buy at the very bottom end of the market and when they moved in had no money to even fit carpets and got by for a while with free furniture scavenged. Now compare that to even now that with a 95% mortgage, can easily save up in a very short time with no real sacrifice, you aren't limited to what historically were fib houses at the very bottom of the market and can easily afford to buy furniture or do it up.
Yes compared to 90s early 2000 it's a lot worse, compared to rest of the last hundred years it is factors easier, despite the higher prices.
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But has essentially nothing, on how easy mortgage are to get, wage multiplier, or amount if despite needed. Compared to most of history, it is extremely easy to get on the ladder, despite the stupid prices.
Doesn't mean it's not an issue though, it absolutely is, but not fir getting on. The ladder, which is why prices will continue to rise,
Associate
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There will definitely be a crash because the population is going down and there's a clear oversupply of housing.
Erm...
Erm...
Did they have to pay exorbitant rents while they saved though? That's the killer for many younger people today.
I'm sure it would for certain people but tell me - who would sell their house with large negative equity caused by a crash unless they needed to (extra bedrooms for kids etc)??
Other costs were higher and wages much lower and no 95% mortgages, as I said they had to save more and sacrafice more to get there deposit together.
For who? A crash would.mean another slump, people losing jobs. Banks not offering mortgages, etc. So the chances are you would be worse off.
Unless your Ritch nd Wth a massive despoit then you could capitalise.
What we need is regulation introduced over many years to stop price rises and let inflation work on it.
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The current housing market is risky for First Time Buyers rather than being unaffordable. (Currently) low interest rates, high capital loans and low amounts of equity. What could go wrong?
I agree that it's not any more difficult to get on the housing market now than it was 30-40 years ago. Difference is, people are now entering the market on vastly inferior terms that contain a vastly greater amount of risk. A crash of the 80s/90s ilk would be utterly devastating today.
The market needs cooling, urgently, before it goes very, very badly wrong. As you say, stagnation and let inflation take care of the rest would be the (unrealistic) ideal.
I hate to put Germany on a pedestal, but there's a number of tricks that they employ that we should look to. Cooling demand through better rights for renters and stricter mortgage controls (no more 95% LTV, maybe not even 90%?). Increasing supply through better management of land; could we leverage CPOs to force house builder to 'use it or lose it'? I'd certainly rather see that than a new Social Housing programme.
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In a way I agree with you, but you only have to look at the stats showing how much the average age of a FTB has risen over the years to demonstrate how much harder it is for young people nowadays to get a foot onto the ladder. People in the 80s bought their first house in their twenties, it's now what 37yrs old? Expected to hit 41yrs old by 2025. By which time we really will be in a pickle because people will be retiring before their 25yr mortgage term is up.*
*Or rather, they won't, because young people nowadays don't have pensions, don't have housing capital to retire on, and the retirement age is going up and up. So we'll be working 'til we drop
Associate
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So why did the house price indexes drop by around 20% from 207-2009, when the population didn't go down and housing supply didn't suddenly increase massively?
I'm not sure that not putting down any money to buy a house is quite how I'd describe "putting my money where my mouth is"
Really need a reduction in house prices and rental prices down in London. Reduction in prices would be great, but it's hard to save all that much when rent takes up so much of take-home.
Devils advocate here, but would they not be moving along a chain that had also lost value? A 20% loss, say, over all housing would benefit someone moving up as the absolute jump in cash/mortgage becomes lower. I'm not sure of the distribution of how an "average" loss or gain in prices manifests as a function of the housing type, though.
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I'd love to know what the actual total cost of building a house actually is though.
Or block of newbuild flats, whatever, just interested to know the sort of profit margins developers are looking at, because there is no way some of the flats cost anywhere near what they are selling for.
Or block of newbuild flats, whatever, just interested to know the sort of profit margins developers are looking at, because there is no way some of the flats cost anywhere near what they are selling for.