So will the UK house prices ever come down ?

[zegna]

That isn't clear and its quite wrong... I can understand what you're trying to get at with regards to equity but as far as actual ownership is concerned its irrelevant.

You don't need 100% equity to 'own' the property... you are the owner when you're on the deed regardless of the size of the loan secured upon it. You get 100% of the rise in value of that asset because you own it... yes there may or may not be a liability linked to the asset but that liability is separate.

Of course you get 100% of the rise in value because the liability is fixed at the amount agreed at the beginning of the term.

Ownership is defined in various ways dependant on the context.

 

[[FnG]magnolia]

Not at all. That's land with building permission. Actual land is cheap around 7k per acre.

Interesting. We're on a 680m2 section and the value of the land, as valued by the Auckland Council, is greater than the value of our house which itself is worth quite a lot. If we were to sub-divide - i.e. sell our back yard for someone to build a house on it - we'd get a hilarious amount of money for it. We're not going to do that but land prices are crazy in Auckland.

 

[Xordium]

That's because again in reality trying to enforce such a measure would be costly and ineffective as the construction companies will simply build the houses but not release them to the market or not build on the land at all.

And isn't that kind of agreeing with what I am saying the wrong people are making the decisions here and have the cards stacked in their favour. But you seem to have no problems with the current situation.

 

[dowie]

edit - nvm

 

[Castiel]

And isn't that kind of agreeing with what I am saying the wrong people are making the decisions here and have the cards stacked in their favour. But you seem to have no problems with the current situation.

Other than the obvious and not unique issues about housing supply in the capital, there doesn't seem to be too much wrong with the housing market..people on modest incomes can still get on the housing ladder and accessibility to the housing market is relatively open to anyone.

As for wrong people making the decisions? decisions on what? Consumers create the demand, Builders supply the stock, Bankers supply the financing. what do you want to change exactly and for what purpose?

The only thing I would encourage is the return to local authority housing stock for the low income market as they are significantly unrepresented in the housing market.

 

[delta0]

Until there is a huge amount of building prices won't fall. There isn't and won't be any significant amount of building.

 

[Raz]

Just saw house prices in Ashford, Kent. Ridiculously cheap compared to London. Bit out of the way and not sure what Ashford is like, but you can pick up a fairly large and decent house for less than 300k.

 

[D.P.]

Interesting. We're on a 680m2 section and the value of the land, as valued by the Auckland Council, is greater than the value of our house which itself is worth quite a lot. If we were to sub-divide - i.e. sell our back yard for someone to build a house on it - we'd get a hilarious amount of money for it. We're not going to do that but land prices are crazy in Auckland.

I live way out in the suburbs of an average American town that has now real land pressure but even here the land is worth around 1/3rd of our property price according to the council.

 

[Jono8]

Just saw house prices in Ashford, Kent. Ridiculously cheap compared to London. Bit out of the way and not sure what Ashford is like, but you can pick up a fairly large and decent house for less than 300k.

Indeed, many parts of Kent are very cheap house price wise.

 

[Ilikeitblackplease]

Lets make something clear:

Owning - 100% equity in property

Debtor - You owe the Bank x% (>0% but <100%) and hold partial equity of the remained

Renter - hold zero equity in property

Being a debtor doesn't make you own property. There are many long term benefits of being a debtor, and a lot of people would prefer to be one. But lets keep things accurate.

For example, mortgaging a £500k house with a deposit of £20k (i know lol) doesn't mean you could have £500k in your account if you sold it.

I know this is elementary for a lot of us- but it's amazing/scary just how stupid the general public are.

Remember you'll be paying back on average 300K ontop of what you borrow, many dont understand if you borrow 500K you'll be paying back 750k -/+ 100k.

 

[Jono8]

Remember you'll be paying back on average 300K ontop of what you borrow, many dont understand if you borrow 500K you'll be paying back 750k -/+ 100k.

I am sure they do. I am sure people gather what an interest rate is and that you do have to pay the interest....

 

[[FnG]magnolia]

Remember you'll be paying back on average 300K ontop of what you borrow, many dont understand if you borrow 500K you'll be paying back 750k -/+ 100k.

I think most adults can understand how a mortgage works.

 

[Ilikeitblackplease]

That isn't clear and its quite wrong... I can understand what you're trying to get at with regards to equity but as far as actual ownership is concerned its irrelevant.

You don't need 100% equity to 'own' the property... you are the owner when you're on the deed regardless of the size of the loan secured upon it. You get 100% of the rise in value of that asset because you own it... yes there may or may not be a liability linked to the asset but that liability is separate.

You dont owe it, the bank does.

 

[Ilikeitblackplease]

I think most adults can understand how a mortgage works.

You'll be surprised at how many don't. now factor in repairs cost of the mortgage admin etc... and you have past the level of affordability with average house prices. 9.6 ratio average wage to average house price, past the affordable 4 ratio and past the ability of paying it back 7 ratio.
If your ratios are 4 or under your safe if your between 4 and 7 your between safe and not safe, if your past 7 your gonna cry.

 

[Jono8]

This is quite interesting and gives a good overview of the changes since 2001 - http://www.rightmove.co.uk/news/house-price-trendometer/

 

[beamer]

There is also too much emphasis on getting on the housing ladder anyway, most of Europe doesn't have such a market which prioritises house ownership in such a way.

And the tenancy laws of most of Europe compare to England how ?

 

[Ilikeitblackplease]

And the tenancy laws of most of Europe compare to England how ?

they are more equal and longer time not like the UK.

 

[dowie]

You dont owe it, the bank does.

You mean own and yes you do as already explained.

 

[Dj_Jestar]

It's not like the state owns those properties in Europe. They too are privately owned.

The UK is heading in the same direction now since pensions were ruined and everyone is putting their money into 2nd/3rd/etc properties. Only we're doing it rather greedily, expecting the rent to pay the mortgage and then some. In Europe it is seen as a longer term investment where the rent won't necessarily pay the mortgage, but knowing that at the end of the term you will still be quids in when you sell up.

Thanks Gordon.

 

[FortuitousFluke]

You dont owe it, the bank does.

No they don't. The bank provide you with money in the form of a loan in order to purchase the property, the loan is secured against the property you purchase. This doesn't mean they own it, they can't just say "it's our house get out". What it does mean is that if you default on your debt, the terms of the contract allow them to take a legal course of action to recover the money lent to you, this could involve repossessing the property against which the loan is secured.

A mortgage is effectively like any other secured loan, it's just specifically secured against property.