Soldato
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houses are not affordable. look how much for a 1 bedroom flat anywhere in London is. blood sweat and tears and u still cant swing a cat. 
Market Volatility at Highest Level since 9/11
- Thread starter DAVEM
- Start date
AcidHell2 said:
You cant avoid the inevitable, it is not so easy to tighten up on lending, when big buisnesses have massive loans, the populace is loaded with debt and are having their disposable income eaten up with debt servicing.
Businesses start to lose their customers as cumstomers cant afford to buy their goods as wages are not increasing in line with real inflation. Businesses however still have to put up their costs in line with inflation which makes it even worse. - Either that or outsource their products/materials from out of the way countries, but again all this does is move the problem into the future, it does not negate it.
the shadow said:houses are not affordable. look how much for a 1 bedroom flat anywhere in London is. blood sweat and tears and u still cant swing a cat.
Houses are affordable relative to their availability. In a market economy where something is in limited supply, the price will rise. You cannot force the price of a limited commodity down without either increasing supply or reducing demand. It's one of the reasons why we won't have a housing crash while demand remains high. The only time prices will crash is when people cannot afford to buy, they are a symptom of wider problems.
Just because you cannot afford a house, or feel unwilling to pay the asking price, does not make house prices unaffordable. If they really were unaffordable, the prices would drop until equilibrium is achieved again.
Of course they are, building get sold. Just because you and I can't afford houses, doesn't mean there not affordable. It's still demand outstrips supply, that on it's own says it's affordable.the shadow said:
I'm sure they will be a recession at some point, how big Will remain to be seen. People like you have been saying this for over a decade know. Yes it's possible, likely? not really.Tenzen said:
noob said:
Partly, I'd agree with you, but I'd also add that too many people think they have a right to things and won't change their lifestyles as needed to ensure they can survive. The number of people I know who claim to be struggling financially who smoke, drink, go on foriegn holidays etc instead of trying to sort out their problems is frankly shocking, and that applies to both homeowners and non-homeowners. It's also a common thing from those who say they can't afford a house, what they mean is they aren't willing to make sacrifices to get their first home, which has never been realistic apart from possibly in the depths of the last price crash. If most people ask their parents or grandparents what they had to do to get their first home, there would be a lot of shocked people in their 20's I think.
Dolph said:
Uhm...no.
In the 1930's the average mortgage was for 8 years and was two times average salary.
In the 1960's the average mortgage was for 3 times the average salary.
Yes they must have had it harder back then!
Anotehr historical fact: mortgages were NEVER meant for buying houses. the literal meanign of the word mortgage is death pledge - it was used as a last resort to raise money on a property you already owned.
But I guess its by the by.
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Dolph said:
Agree 100%. The good old consumer society, everyone wants 42 inch plasmas, brand new cars and three holidays a year. It has to stop, the debt they are getting themselves into is incredible. My father couldn't afford a TV for years when he bought his first house.
I could go out and buy a new Lotus Elise but I drive an 800 quid Ford Mondeo, it baffles me people on low incomes getting these fancy cars. I would and could buy a house tomorrow but to be honest with you, I really don't like this country and that's not because of house prices. After I finish my PGCE I'll be looking to emigrate to Canada, OZ or NZ.
Tenzen said:
What's the average mortgage size now compared to the average household income (to make it relevant to your earlier examples, as the advent of the two earner household has shifted the affordability scale quite dramatically)?
(here's a hint, the average mortgage is still 3 times the average household income, just like in the 1960's. The fact that the total value has increased doesn't change that. source)
But most people would have you believe "its different this time"..." surely the banks wont let it happen"..."they stand to lose more than the average joe".
BOOM ---> BUST Always ard forever. unless they developed a new system of economics without anyone noticing,
BOOM ---> BUST Always ard forever. unless they developed a new system of economics without anyone noticing,
Dolph said:The economic cycle does move in waves, however the economy also continually expands over the long termAs long as you can weather the dips, you'll always end up better off.
Sounds sensible, as long as you can weather the dips is the thing.
If interest rates continue to go up, then those people who got 3.5% mortgages fixed in 2003 are gonna get crippled next year.
