its only taken 5 months

W1

Rolf F wrote:

House prices wayyyyyy too high. Only solution is to go back to the old days of 3.5 times your salary mortgage maximums to keep things under control. My house was 65k 10 years ago. And it isn't a starter home. Don't need to much about on any 'ladder' - I bought the house I wanted. Couldn't afford half of it in todays money though.......

Way too high for who though? It's an open market - why should it be regulated and artificially capped? Is owning a house a right?

Anyhow, the government will never let it happen - there are more homeowners than first time buyers (who I presume you refer to) and the income from Stamp Duty and CGT must be enormous.

Back on topic - congrats to the OP! A garage is a proper man space.

the_hundredth_idiot

I'm moving at the moment (relocating to Sussex to be near the wife's family) - "under offer" on our place but not exchanged yet, planning on renting in Sussex while we find the right house to buy.

I do think there is a "Laffer Curve" sort of argument around stamp duty. One of the key reasons I didn't want to move (other than that I love living in London) was the huge amount of stamp duty we have to pay to buy a new place. Our mortgage is well under control and we're not planning on extending that but stamp duty is sucking up all our cash savings - it will take years to replace that. Estate agent's fees, conveyancing, removals, etc are pretty nasty too but stamp duty is by far the largest cost.

So how many people don't move because the stamp duty will be too big a hit? And that reduction in supply (of houses for sale) must translate into upward pressure on house prices. The Government is intending to increase stamp duty further on more expensive properties and I can only see that making the problem worse as owners of those properties put off moving (on the assumption they move to a similarly expensive place) and there is a trickle down effect on cheaper houses.

Well done to the OP. Enjoy having your own place.

lardboy

W1 wrote:

Rolf F wrote:

House prices wayyyyyy too high. Only solution is to go back to the old days of 3.5 times your salary mortgage maximums to keep things under control. My house was 65k 10 years ago. And it isn't a starter home. Don't need to much about on any 'ladder' - I bought the house I wanted. Couldn't afford half of it in todays money though.......

Way too high for who though? It's an open market - why should it be regulated and artificially capped? Is owning a house a right?

Anyhow, the government will never let it happen - there are more homeowners than first time buyers (who I presume you refer to) and the income from Stamp Duty and CGT must be enormous.

Back on topic - congrats to the OP! A garage is a proper man space.

The government have played their only cards, though. Interest rates are at an all-time low, we had a stamp duty holiday that did nothing to promote market activity, and have banks that are almost as bankrupt as the government.

I can't imagine the American or Irish governments wanted a house price collapse, but the markets went south anyway. Government action can only do so much.

Mr Sworld

W1 wrote:

Rolf F wrote:

House prices wayyyyyy too high. Only solution is to go back to the old days of 3.5 times your salary mortgage maximums to keep things under control. My house was 65k 10 years ago. And it isn't a starter home. Don't need to much about on any 'ladder' - I bought the house I wanted. Couldn't afford half of it in todays money though.......

Way too high for who though? It's an open market - why should it be regulated and artificially capped? Is owning a house a right?

Seems to me that most home owners are the Baby Boomer generation. Bought their house when they were cheap, bought a couple more as a 'property portfolio' using the equity on their home when the property prices whent nuts!

Oh, probably also bought a couple of houses when the kids went to University to live in.

These are the people I have to rent from, I'd pay about £600 - 700 for a 1 bed flat in my neck of the woods. Thats way more than the mortgage I'd be paying if I could buy it but the banks think I can't afford that level and so won't lend to me....

Oh, is owning a house a right? Maggie Thatcher certainly though so, hence why this country has no decent council housing stock anymore.

W1

lardboy wrote:

W1 wrote:

Rolf F wrote:

House prices wayyyyyy too high. Only solution is to go back to the old days of 3.5 times your salary mortgage maximums to keep things under control. My house was 65k 10 years ago. And it isn't a starter home. Don't need to much about on any 'ladder' - I bought the house I wanted. Couldn't afford half of it in todays money though.......

Way too high for who though? It's an open market - why should it be regulated and artificially capped? Is owning a house a right?

Anyhow, the government will never let it happen - there are more homeowners than first time buyers (who I presume you refer to) and the income from Stamp Duty and CGT must be enormous.

Back on topic - congrats to the OP! A garage is a proper man space.

The government have played their only cards, though. Interest rates are at an all-time low, we had a stamp duty holiday that did nothing to promote market activity, and have banks that are almost as bankrupt as the government.

I can't imagine the American or Irish governments wanted a house price collapse, but the markets went south anyway. Government action can only do so much.

Oh sure, I agree. What I mean is that the government won't engineer such a crash - they don't want to lose the votes and they don't want to lose the income.

DonDaddyD

[quote="prawny"The amounts you lot talk about for houses scare me seriously, DDD £1200 a month just for a mortgage that is insane. Ours is £630 and it's a real stretch on just my salary. If you're planning on having kids think very carefully before committiong yourself to that much. The wages in the smoke must be mental, funnily enough my company pays f-all for regular grunts like me in Londinium.[/quote]

£1200 is lot but then peoples circumstances are different.

I have a friend who brings that home as his entire Salary. I have friend who brings home easily £60k a year. - Both are my age.

With a child I estimated that to live comfortably and pay the mortgage an individual or the household would need to take home between £2,400 - £3,000 each month.

bigmat

They should tax the arse off second homes (i.e. anything that isn't the owner's primary residence). I'm sure the Cornish would agree.

W1

MatHammond wrote:

They should tax the ars* off second homes (i.e. anything that isn't the owner's primary residence). I'm sure the Cornish would agree.

What, like 28% of the profit for example?

rjsterry

DonDaddyD wrote:

The amounts you lot talk about for houses scare me seriously, DDD £1200 a month just for a mortgage that is insane. Ours is £630 and it's a real stretch on just my salary. If you're planning on having kids think very carefully before committiong yourself to that much. The wages in the smoke must be mental, funnily enough my company pays f-all for regular grunts like me in Londinium.

£1200 is lot but then peoples circumstances are different.

I have a friend who brings that home as his entire Salary. I have friend who brings home easily £60k a year. - Both are my age.

With a child I estimated that to live comfortably and pay the mortgage an individual or the household would need to take home between £2,400 - £3,000 each month.

From my experience, that's not a bad budget to work to. It'll help to move a bit further south or east, and you won't be going on any flash holidays or 'accidentally' buying a fancy third or fourth bike, but you'll be comfortable.

rolf_f

W1 wrote:

Rolf F wrote:

House prices wayyyyyy too high. Only solution is to go back to the old days of 3.5 times your salary mortgage maximums to keep things under control. My house was 65k 10 years ago. And it isn't a starter home. Don't need to much about on any 'ladder' - I bought the house I wanted. Couldn't afford half of it in todays money though.......

Way too high for who though? It's an open market - why should it be regulated and artificially capped? Is owning a house a right?

Way too high for almost everyone. Always think it bizarre how people get delighted that their house is worth three times what they paid for it. The only people who gain by house price rises are those selling up or those moving down the chain. For everyone else it is a disaster.

eg My house cost 65k. It is 3 bedroomed, in a nice area, period features, gardens front and rear, and a drive (now with garage) and parking for 4 cars. At the time, I might have been able to get something detached with an extra bedroom for £110,000 - but that extra 55k would have been a bonkers thing to do.

Now, with my house worth £180k, if I was buying now a) I would need to be earning well over 50k and b) the 110k (which now seems strangely affordable) would be worth over 400k.

So, in what way has anyone benefited from the increase in value of my house? I haven't - if I sell, taxes will be higher but if I did want a more expensive house now, the difference I could afford wouldn't be worth it. Also, now people in my position and salary from 10 years ago, are paying more for 2 bed back to backs in dodgy parts of town. They haven't benefited. The fact is, my house is an ordinary middle class property which should be affordable to ordinary middle class people without crippling them financially for 35 years.

If you couldn't borrow more than 3 times your salary, the average house price effectively couldn't rise more than 3 times the average salary. That means no artificially generated, unreal wealth. Of course, the banks lose out (boo hoo) as do the repossession companies and retirees but everyone else gains.

W1

Rolf F wrote:

W1 wrote:

Rolf F wrote:

House prices wayyyyyy too high. Only solution is to go back to the old days of 3.5 times your salary mortgage maximums to keep things under control. My house was 65k 10 years ago. And it isn't a starter home. Don't need to much about on any 'ladder' - I bought the house I wanted. Couldn't afford half of it in todays money though.......

Way too high for who though? It's an open market - why should it be regulated and artificially capped? Is owning a house a right?

Way too high for almost everyone. Always think it bizarre how people get delighted that their house is worth three times what they paid for it. The only people who gain by house price rises are those selling up or those moving down the chain. For everyone else it is a disaster.

eg My house cost 65k. It is 3 bedroomed, in a nice area, period features, gardens front and rear, and a drive (now with garage) and parking for 4 cars. At the time, I might have been able to get something detached with an extra bedroom for £110,000 - but that extra 55k would have been a bonkers thing to do.

Now, with my house worth £180k, if I was buying now a) I would need to be earning well over 50k and b) the 110k (which now seems strangely affordable) would be worth over 400k.

So, in what way has anyone benefited from the increase in value of my house? I haven't - if I sell, taxes will be higher but if I did want a more expensive house now, the difference I could afford wouldn't be worth it. Also, now people in my position and salary from 10 years ago, are paying more for 2 bed back to backs in dodgy parts of town. They haven't benefited. The fact is, my house is an ordinary middle class property which should be affordable to ordinary middle class people without crippling them financially for 35 years.

If you couldn't borrow more than 3 times your salary, the average house price effectively couldn't rise more than 3 times the average salary. That means no artificially generated, unreal wealth. Of course, the banks lose out (boo hoo) as do the repossession companies and retirees but everyone else gains.

Well people are still buying houses - it's not like the market is completely dead. They've been buying them for the last 10 years whilst prices were heading mental too.

If you cap the price of houses almost everyone goes into negative equity overnight. The reposession companies would have a field day!

rjsterry

A lot of the buying has been fueled by the rising prices, with people taking out the equity in one property, and using it to buy another, on the basis that the rise in value of the first property will 'replace' the equity taken out. This is partly what led to the buy-to-let boom, which came so badly unstuck in some northern cities.

DonDaddyD

rjsterry wrote:

DonDaddyD wrote:

The amounts you lot talk about for houses scare me seriously, DDD £1200 a month just for a mortgage that is insane. Ours is £630 and it's a real stretch on just my salary. If you're planning on having kids think very carefully before committiong yourself to that much. The wages in the smoke must be mental, funnily enough my company pays f-all for regular grunts like me in Londinium.

£1200 is lot but then peoples circumstances are different.

I have a friend who brings that home as his entire Salary. I have friend who brings home easily £60k a year. - Both are my age.

With a child I estimated that to live comfortably and pay the mortgage an individual or the household would need to take home between £2,400 - £3,000 each month.

From my experience, that's not a bad budget to work to. It'll help to move a bit further south or east, and you won't be going on any flash holidays or 'accidentally' buying a fancy third or fourth bike, but you'll be comfortable.

That's the idea-aspiration.

rjsterry wrote:

A lot of the buying has been fueled by the rising prices, with people taking out the equity in one property, and using it to buy another, on the basis that the rise in value of the first property will 'replace' the equity taken out. This is partly what led to the buy-to-let boom, which came so badly unstuck in some northern cities.

Ageing population is a factor as well.

rolf_f

W1 wrote:

Well people are still buying houses - it's not like the market is completely dead. They've been buying them for the last 10 years whilst prices were heading mental too.

If you cap the price of houses almost everyone goes into negative equity overnight. The reposession companies would have a field day!

People are still buying houses albeit ones that they probably shouldn't be. What's worse - to buy a house for twice what it is rationally worth or to not buy one for twice its value and then find in a years time it is now 3 times what it is really worth?

I don't blame people for paying silly money but I don't see how things are sustainable as they are. Negative equity should be no more a real problem than positive equity isn't a real benefit (at least to people not planning to exit house ownership). You buy a house, arrange a mortgage and pay it off. As long as you do the latter, it is neither here nor there whether the value of the house at the time you pay off is 50p or 5 million. Sensibly, it should be what you paid for it plus inflation.

It would help if the media stopped talking about 'fears of house price falls'. That's our only hope.

W1

Rolf F wrote:

W1 wrote:

Well people are still buying houses - it's not like the market is completely dead. They've been buying them for the last 10 years whilst prices were heading mental too.

If you cap the price of houses almost everyone goes into negative equity overnight. The reposession companies would have a field day!

People are still buying houses albeit ones that they probably shouldn't be. What's worse - to buy a house for twice what it is rationally worth or to not buy one for twice its value and then find in a years time it is now 3 times what it is really worth?

I don't blame people for paying silly money but I don't see how things are sustainable as they are. Negative equity should be no more a real problem than positive equity isn't a real benefit (at least to people not planning to exit house ownership). You buy a house, arrange a mortgage and pay it off. As long as you do the latter, it is neither here nor there whether the value of the house at the time you pay off is 50p or 5 million. Sensibly, it should be what you paid for it plus inflation.

It would help if the media stopped talking about 'fears of house price falls'. That's our only hope.

I also don't see how things can be sustained as they are. But I also said that five and ten years ago!

There is a sizable number of people waiting "with cash" for the the market to fall. A number of these have been waiting for some years. The most recent correction (2007/2008) wasn't as bad as people assumed simply because people snapped up relative bargains and restored the market. Where things will go from here who knows.

I see your point regarding negative equity - but some people are forced to sell/move and can't make up the excess. It's also not a nice place to be mentally.

rolf_f

W1 wrote:

I also don't see how things can be sustained as they are. But I also said that five and ten years ago!

Yeah, I know!

W1 wrote:

There is a sizable number of people waiting "with cash" for the the market to fall. A number of these have been waiting for some years. The most recent correction (2007/2008) wasn't as bad as people assumed simply because people snapped up relative bargains and restored the market. Where things will go from here who knows.

I see your point regarding negative equity - but some people are forced to sell/move and can't make up the excess. It's also not a nice place to be mentally.

This is the trouble - if people who can't (really) afford it can snap up bargains, things will never correct. All that has been achieved with the housing market is we need far more money for our houses so need to pay the banks far more interest.

I know the negative equity thing is not nice and the business probably needs to address that. At least before interest rates go up and solve the problem naturally by bankrupting all those who paid too much. Which isn't nice either.

Ideally, what the market needs is more confidence - more confidence that prices will crash back to a sensible level and that therefore a 3 bed semi outside London for 150k isn't seen as a bargain.