Nationwide Building Society House Price Index July 25

[agentzero]

Inheritance and funny money.

Covid19 is still a relatively new disease. If you're catching it once or twice a year and are over 65 years old, trouble is accumulating. Evidence is emerging that it's badly impacting the immune system after 3+ infections.

It is impacting the life expectancy figures and also results in inheritance being passed on sooner than would otherwise have been the case. It's likely the lucky few inheriting a lot of money, often young people, don't understand that house prices in the current economy are unsustainable medium to long term and the multiple will have to come down. This has already started to show in London.

Otherwise it's funny money, crypto and crazy investments paying off in the short term. People are offering much more on houses than they otherwise would if in a sensible headspace.

[financial analyst]

P/E ratio is 5.75, but banks will lend max 4x. It makes no sense.

The Index covers the whole market, not just FTB.

Some properties will be below the 5.75 average.

Also, many people selling one property to buy another will be using equity.

[Martin@AS Financial]

Interestingly some banks now have enhanced income multiples for first time buyers and will consider 5.5x.

[willendure]

The price to earnings ratio is bonkers. No wonder people can't afford to buy.

P/E ratio is 5.75, but banks will lend max 4x. It makes no sense.

[Protagoras]

The price to earnings ratio is bonkers. No wonder people can't afford to buy.

Should be called the 'unaffordability index'

[ladymuck]

The price to earnings ratio is bonkers. No wonder people can't afford to buy.

[Martin@AS Financial]

Key points:

• Annual rate of house price growth increased modestly in July to 2.4%, from 2.1% in June
• House prices were up 0.6% month on month
• UK house price to earnings ratio at lowest level in over a decade at c.5.75

Full report here:

https://www.nationwidehousepriceinde...07-w9ty8-0zamn