yes really good for the banks , just think how many times those mortgages can be re-hypothecated :-) , on the other side , that's what got us in the pickle we are in , the way to get out of debt is to pay it , not to take on more debt . so how is there a recovery ? UK more in debt now than before the crisis and same in the US and Europe . plastering over the cracks doesn't stop a house from falling , it just looks better till it falls.
Indeed, where ever I travel, and I admit I haven't visited ghost towns its always bustling with people shopping and dining out. Went to Cambridge last week for the first time, such a beautiful city, was absolutely thriving with people, punting, dining, shopping. If we all believed in the media we would think it's all doom and gloom. Many people have lost jobs which is hard but it really isn't as dire as the media would have us believe.
You do have a point but also these average figures are quite misleading. As we have said before, London and South East have very different averages from rest of the uk. Where I am in Reading, you can buy a decent 2 bed for around 150k to 180k, quite a difference to 250k and that's still in South East. Understandably will correlate to local average wages but certainly it is viable for a couple to buy. Heres an example,,,
Just a point interest... This being a true fact...
I worked it out last night that my house that was bought from new in 1974 ..has risen 20 times its purchase price in 40 years.. 8k then ..160k now
On breaking the 40 year increase down into yearly equal rises .....that equals to an average increase of 4k per year...every years of the past 40 years..
Now I would question that the average wage has gone up 4k every year over the past 40 years ....to keep up with house prices... ..we all that is not the case ..or the average wage would be nearer 160k....I bought my house on around 4k a year income in 1974... 20 times increase would indicate that I should be on 80k ..to match the same ability to buy my current house price now.... Sadly I am earning well below 30k
That indicates my point of house prices were more affordable 40 years ago for first time buyers like me then.. ..on only my 3 times earnings .. More like 5 to 6 times my earnings now...equals not affordable now..to me...In today's terms
Nobody on the average wage can afford to by my house on 3 times earnings like I did.. 2 people earning a gross 50k now would just manage a 3 times earnings mortgage like me.. But it now... takes 2 people to do what I did on my own in 1974.....another big change .takes 2 instead of one person.. In most cases..to buy a house... Now
I cannot explain my point of house prices now being far harder to afford any clearer.. Having lived thought it alll... 4k a year increase on my house every year for 40 years ... Just crazy...
What if bread and milk ..and .. Travel costs and utility bills and cars went up over 40 years by the same percentage... Chose... So why has house prices been allowed to rise that much... ?..and has in been a benefit for all..?... Now..?
The rise in house prices now mention on tv... Are from investors and buy to let perchases with many new people getting on the buy to let bandwagon....first time buyers are getting hit even harder ... And are needed to help boost the market...mentioned on tv..
Rail fares going up above average wage percent increases ... The same for utility bills .. Also set to rise again in the next few months.. If past years are a guide .. Before every winter...
Interesting point about my breakdown of year increse in my house in my area... Double that increase in other locations.. Making the house prices situation totally out of line with incomes...and the increasing amount of peoples yearly income that is needed to buy a house now...
yes they have access to money , it's called the lend to buy scheme , you now only need 5% deposit and get 20% interest free for 5 years from the tax payer and the bank mortgage of 70% , if it wasn't for this scheme and the fact the tax payer is liable , how many would get a mortgage without the scheme ? , then it is on new builds only at the moment , so it's helping sell the new builds that have been sat empty for awhile , seen as there isn't that many being built since the crisis . it's helping the property developers get there money back and leave the buyer holding the baby , again a scheme to help the governments friends and not the buyer or tax payer . it' looks good short term but actually only causes more problems , as will the buy to let scheme , all it's doing is putting up rents .
I do like your periodic jousting about house prices. However, I am interested in how you are accounting for 'demand' being up? What is the measure you are using for increased demand? Is it prices? Take up of loans?
and in the wide view it is all about the numbers. eg: my last post to mailman. If people don't have the money and cannot borrow it then they can't buy the houses, or dine out, or whatever. It seems to me that money is still being spent right across the Country.
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