Nationwide House Price Index May 2013

[Martin@AS Financial]

http://i.dmtrk.net/CmpDoc/2009/7211/...531C5M,57MPY,1

Key Points:

- Price of a typical home increased by 0.4% in May and was 1.1% higher than May 2012

- The typical UK home is now worth £167,912

[DimPrawn]

(again)

costs

HTH BIDI

PS. Wouldn't it be easier for the govt just to buy everyone in the UK a house for them, and then just get the taxpayer to fund the costs rather than the half hearted "funding for BTL merchants" crap we have now?

[Martin@AS Financial]

[QUOTE=DimPrawn;1752315] (again)

costs

haha - thank you

[CoolCat]

I am going to let you into a secret. House prices are artificially inflated by government action. From quantative easing, to low interest rates, to penalising those who hold their assets in cash rather than houses, to subsidy in various ways, to being a trigger to access better schools and GP's, and so on and so forth.

The average house is worth no more than about 3 or 3.5 times the average salary, any more than that is fantasy. And of course many banks balance sheets depend on this fantasy for solvency, giving the powers that be another incentive to maintain the charade to avoid more bank meltdowns.

We seem to have learnt nothing from the US subprime crisis and the government is planning to further underwrite mortgages, which even the outgoing governor of the bank of england has slagged off as crazy.

We need a correction, a big one, it will be painful, but it will get things over and done with, and things will pick up and recover.

Its very much the wrong time to be entering the housing market unless forced into it to get your kids into a half decent school.

[KentPhilip]

The average house is worth no more than about 3 or 3.5 times the average salary

That was the case when the majority of people buying houses were those on salaries.
Nowadays a major part of the market is overseas investors buying with cash, and domestic buy-to-let investors buying with borrowed cash, both being major new phenomenons of the past 15 years.
Since there is no obvious end to either of the above, is it not reasonable to think that the 3.5-times-salary model for house prices is no longer accurate, short or longer term?

[DimPrawn]

That was the case when the majority of people buying houses were those on salaries.
Nowadays a major part of the market is overseas investors buying with cash, and domestic buy-to-let investors buying with borrowed cash, both being major new phenomenons of the past 15 years.
Since there is no obvious end to either of the above, is it not reasonable to think that the 3.5-times-salary model for house prices is no longer accurate, short or longer term?

I would say the new long term average is nearer 10x earnings.

I know lots of people with £30K incomes with £300k mortgages....

[Ketchup]

In my opinion the government should tax foreing nationals who own british property.

[d000hg]

I know lots of people with £30K incomes with £300k mortgages....

Scary innit... how did they get that mortgage though since lenders typically don't want to go above 5-7X salary even now? Do they now work on household combined salary as standard?

I thought/think our mortgage is scary enough and we're nowhere near that bad (7X wife's salary)

[DimPrawn]

Scary innit... how did they get that mortgage though since lenders typically don't want to go above 5-7X salary even now? Do they now work on household combined salary as standard?

I thought/think our mortgage is scary enough and we're nowhere near that bad (7X wife's salary)

They got the mortgages pre-2008, mostly liar loans/northern crock...

[sirja]

That was the case when the majority of people buying houses were those on salaries.
Nowadays a major part of the market is overseas investors buying with cash, and domestic buy-to-let investors buying with borrowed cash, both being major new phenomenons of the past 15 years.
Since there is no obvious end to either of the above, is it not reasonable to think that the 3.5-times-salary model for house prices is no longer accurate, short or longer term?

Very good points, I agree. Also you know have more self employed people than 20 years ago and that needs to be taken into account