Ok it looks you concede that your point here isn’t a valid argument against social housing. I agree that putting bad apples among good apples doesn’t make the apple fresh again.
Anyone concerned by interest rates rising re mortgage?
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Ok it looks you concede that your point here isn’t a valid argument against social housing. I agree that putting bad apples among good apples doesn’t make the apple fresh again.
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I posted the data on this earlier in the thread, a mortgage back then was around 12% give or take of people’s income and it now sits anywhere from 35 to 49% of people’s income.
What’s more, that house which cost £7.5k in 1973, by the time 1983 swings round, the average salary in the UK was £8,528. More than the entire value of the property and that’s after only ten years repaying the mortgage.
Will the average salary in 10 years time be £285,000 in the UK?
That's odd when I bought my first house in Southport in the 1980's - having moved from the South East as it was unaffordable. I do remember disusing mortgages with suppliers. They were around 6 % at the time so to test I said work it out at 10% to see if I could afford it. Took out mortgage at 7% and when I moved in they were 15%. That was more than 50% of my take home pay at the time. A lot of porridge eaten and furniture was a deck chair for about a year. It was years before my mortgage dropped below 50% of my wage.
No mobile./ laptop/ sky / coffee meals out / holidays / tattoos unless you were a sailor those days.
No mobile./ laptop/ sky / coffee meals out / holidays / tattoos unless you were a sailor those days.
True, a lot more people are paying a lot more at 5% than they were when it was 0.5% but by the same token, when we took a mortgage out at Say, 7%, we made sure we could still afford the payments if it went to say, 10% or even more. Don't forget either that you could only get a mortgage for 25 years back then. If people max themselves out with no financial cushion on a 35 year mortgage, I'm afraid that it's their own fault if they can't make the payments. Did they think it was going to remain 0.5% for the duration of the loan? Our daughter and her husband nearly bought a £650K house just before lockdown which would have meant upping their mortgage by around £150k which they could comfortably afford but their flat was taking too long to sell so they are staying put until things calm down.
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What 175 years of data tell us about house price affordability in the UK
What we've learned from nearly 200 years of housing data - and is property really a better investment than a pension?
www.schroders.com
Conclusions: how might affordability improve?
Houses are more expensive relative to earnings than they have been for nearly 150 years. Prices are stretched everywhere but London and the south of England stand out. Things look even less affordable for women.The last time there was a sustained decline in the house price-earnings multiple was the second half of the 19th century. Average house prices fell for more than 50 years thanks to substantial building of houses, many of which were smaller than existed before. At the same time earnings rose.
How likely or even desirable would that be today? The UK’s heavily mortgaged consumers would struggle to cope with 50 years of falling house prices. It would also be political suicide for whoever was deemed responsible. A shift towards the building of smaller houses would also seem unlikely– research has found that houses are smaller today than at any point since at least the 1930s.
Which leaves us with earnings. Earnings growth has been weak since the financial crisis but has recently picked up strongly, at least in nominal terms (but falling short of inflation). Average earnings in the three months to November 2022 were 6.4% higher than a year earlier. A period of stronger pay growth may represent the best hope of improving affordability – at least on this metric.
5% must be the norm overall. I fixed my first mortgage @5.5% about 20 years ago. I don’t have a mortgage on our house now. BTL’s are fixed.
7%+ is the tough number for interest only landlords imho. A lot are already feeling the pinch.
7%+ is the tough number for interest only landlords imho. A lot are already feeling the pinch.
What about the 40’s you must still be able to remember.
What I would like is a return to normal. Inflation at say 2.5%, BoE rate at 4%, savings at 3.5%, mortgages at 5%. No more funny money, or juicing the housing market for political gain. If we had something like the 1990s, where house prices fall 20% to get rid of the froth from the last spike, and then they stay level for at least a decade, that stability would be of great benefit.
For a commie you have a morbid interest in money, then again commies like spending other people's money.What 175 years of data tell us about house price affordability in the UK
What we've learned from nearly 200 years of housing data - and is property really a better investment than a pension?
Conclusions: how might affordability improve?
Houses are more expensive relative to earnings than they have been for nearly 150 years. Prices are stretched everywhere but London and the south of England stand out. Things look even less affordable for women.
The last time there was a sustained decline in the house price-earnings multiple was the second half of the 19th century. Average house prices fell for more than 50 years thanks to substantial building of houses, many of which were smaller than existed before. At the same time earnings rose.
How likely or even desirable would that be today? The UK’s heavily mortgaged consumers would struggle to cope with 50 years of falling house prices. It would also be political suicide for whoever was deemed responsible. A shift towards the building of smaller houses would also seem unlikely– research has found that houses are smaller today than at any point since at least the 1930s.
Which leaves us with earnings. Earnings growth has been weak since the financial crisis but has recently picked up strongly, at least in nominal terms (but falling short of inflation). Average earnings in the three months to November 2022 were 6.4% higher than a year earlier. A period of stronger pay growth may represent the best hope of improving affordability – at least on this metric.
It was normal in the sense that the BoE rate was a couple of points higher than inflation, and savings rates were slightly higher than inflation.
Other things were far from normal, like Ninja mortgages and 125% LTV!
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In Wales developers have to build a %age of social housing to get planning permission approved. .. don't know if its the same for England
Yes it is, but only if the development is above a certain number - which varies depending on the local authority. At the lowest end some can be anything above 2 units, at the other end 10 units is common. For major developments it would be a case of handing over a certain percentage of the completed units, for smaller developments it's normal to make a payment in lieu.
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