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Original poster

In 2006 average house prices in the UK rose by 9.3%

82 replies

Upwind · 05/01/2007 10:14

From the BBC (clicky) :

"This represents a ?40 increase per day," said Fionnuala Earley, the Nationwide's group economist.

"The top three performers in the final quarter of the year were Northern Ireland, Scotland and London, but even the relatively weaker regions in the Midlands and North have seen a marked pick-up in house price inflation this quarter," she added.

I am fairly sure that average "house price" includes flats. Means that renting has effectively cost us 40 pounds a day, that is 14,600 pounds over the past year - I seriously think that if we cannot get acceptable rental housing or buy as our family grows we will be best off emigrating.

OP posts:
Original poster
Upwind · 16/01/2007 09:48

Thanks for that Kevlarhead - have sent that link on to my inlaws . Hopefully it will help feel guilty enough to desist from making "you know you really have to get on the property ladder...", "when we first bought our house we had to make sacrifices..." type remarks.

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ruty · 16/01/2007 12:58

so is the bubble going to burst?We are one of those crazy people who have just borrowed far too much to buy a flat in a very expensive area [good schools, nice neighbourhood, blah blah] Flats and houses around here are almost all owned by investors so you are bidding against cash only men in suits if you want to own a home. We will be in a very difficult situation if prices drop.

ruty · 16/01/2007 13:00

and we are doing an interest only mortgage. mad i know, but it was the only way we could afford it, and that was about the same as renting the flat we now 'own'.

expatinscotland · 16/01/2007 13:00

You'd better hope the bubble doesn't burst - b/c that'll go hand in hand w/high inflation, high interest rates, and/or high unemployment.

NOT good. And not just for house owners.

Cloudhopper · 16/01/2007 13:22

Too true expat. The bubble isnt going to burst without a lot of pain.

I am really sorry to see so many people who are in the same boat as we are and thinking of emigrating! In reality we will just end up staying I think, in a very small place.

expatinscotland · 16/01/2007 13:24

I really don't see where owning your own place is the have all to end all.

That's a British thing, I guess, that I'll never understand.

I owned a house once, and it was enjoyable b/c the ex and I were earning top whack and it wasn't a major disaster every time something broke.

Plus it was a new build.

But I can see where it'd be a PITA here.

ruty · 16/01/2007 13:37

well we were just fed up of living in rented place with mangy carpets and no say in the decor, etc. In our new flat we have put down a wood floor which helps my asthma and ds's allergies a lot. there is also that idea, maybe it is a british thing, of not 'throwing money away' on rent, when it could, theoretically, be put forward to help you own a place. for many this has taken the place of pensions and other investments but of course is only going to help if there is no crash. i'm hoping the govt and the bank will try to avoid a repeat of last time.

skiwear · 16/01/2007 14:46

Expat we could do with a bit of a shakeup though?! Things have been low interest rate/cheap money for so long this def. seems to benefit the "rich" disproportionately round here. Now many people would be in an improved housing situation if prices drop, why shouldn't they have their day too?
We have relatively high unemployment the gov. just massages the figures (as it does with inflation)
Ruty your 1300 post is what BTL is made of.

expatinscotland · 16/01/2007 14:48

Yes, but you have inflation going up as well. And interest rates.

So when prices drop, you'll be able to afford even less, too.

We're lifelong renters ourselves.

Such is life.

ruty · 16/01/2007 14:57

what is BTL?

expatinscotland · 16/01/2007 15:09

buy-to-let.

people who buy properties w/the intention of letting them out and collecting rental income.

Original poster
Upwind · 16/01/2007 15:19

Ruty - I don't know what is going to happen to house prices but as long as you can keep making the payments it probably won't affect you any more. If it was me I would have gone for the security of a fixed mortgage rate.

Over the past couple of years I have become disillusioned with the whole property ladder concept, I am fed up of the subject coming up at dinner parties I am that our lives could have been so much more comfortable if we had bought right after uni instead of doing postgrads. Feels like all our hard work has done us no favours.

OP posts:
OrmIrian · 16/01/2007 15:44

I agree upwind. We got it wrong all the way along the line. Bought high in 1988 just before major crash. Sold in 1997 with a loss of 1/3 the value. Got sold endowment mortgage and lost out even with compensation. Such is life I know but it rankles a bit that we are still in a terrace house that is really too small when we have mates who bought 5/6 yrs before that who have paid off mortgage by now or are in their dream homes where they are happy to stay for the rest of their lives.

skiwear · 16/01/2007 15:58

Expat but I will owe less money overall so will benefit that way.

skiwear · 16/01/2007 16:00

Sorry ruty it is buy to let, the idea is that you get an interest only mortgage kind old Gordy allows you to pay your IO mortgage with the rent pre tax and you rely on the value increasing to make a good portion of your money. That's why many landlords are subsidising their tenants living costs here.

ruty · 16/01/2007 17:04

thanks expat and skiwear i get it now. A scary, scary market, i have to look at it as Upwind says - we just have to make the monthly payments which would be the same as renting round here - as long as interest rates don't go really high in the next two years. Oh god.

skiwear · 17/01/2007 09:33

If I had to guess now I don't think interest rates will go really high (and I'm not an economist just watching like frantic) 6.5/7 % tops. For house prices to drop it will also take a change in sentiment and like expat says other economic variables to change as well. One thing is though if people get a sniff of them going down (and I mean really going down) then that will help because they will hold off waiting for them to go lower. Don't mean to upset those homeowners on here remember you've only lost money if you've had to sell just as you've only made money if it's sitting in the bank!

expatinscotland · 17/01/2007 09:41

All I want in life is an assured tenancy of a place w/a garden in a decent area.

No longer care about owning.

Just a decent rental w/a place to grow some food is enough for me.

skiwear · 17/01/2007 10:02

yeah but then I start to worry about growing food for the lo in toxic London gardens!!!

TwoIfBySea · 17/01/2007 13:07

I am in your shoes too expatis as I think you know. I have always wanted my own house as twice before when privately renting the flats were sold and we had to move. Fine when you are just a couple but not ideal when you have children.

So I still harbour the dream of my own place. But even if I could afford it I would baulk at paying the prices they ask as the houses simply aren't worth it. I suppose we need to wait for the bust to happen as well but then won't that just mean more "investors" buying up the cheaper property to rent out and we as ordinary families just wanting a home to live in will once again lose out.

We currently live in a housing association property, if we could get a swap to where we want to live, next to the boy's school, then I would be happy with that. But so many social properties are privately owned now it is another situation you can get stuck in.

mumfor1standfinaltime · 17/01/2007 13:18

At the moment we can not afford to buy.
We live in a 2 up 2 down housing association house and have no way of moving. I feel trapped most days. Can't buy anything to move, and can't exchange with another tenant as it is a tiny weeny new build house with no garden (open plan seems more important) - who wants that?!

The plus side is rent is cheap, and we don't have any repair bills.
Just a shame our Council Tax is in the same band as a 3 bed house with garden, garage and drive way - just because it ia a new build.

I think house prices are pathetic and even if I came into the deposit I don't think I would want to buy a terrace house (all I could afford if I had the deposit) for £170k with no parking and a back yard!!

ratclare · 17/01/2007 14:21

we cant afford to buy ,it would be lovely to own a house of our own .However until you have fully paid off a morgage do you truly own any house ? We sit here waiting for a crash ,but at the same time i dont want there to be one because of all the heartache it will cause so many people if it happens

expatinscotland · 17/01/2007 14:30

We stand a good chance of swap in that our location is very attractive.

BUT, our rent and council tax is WAY higher than many other social landlord tenants b/c of the location, a trendy area of Edinburgh w/lots of amenities, several choices of schools and off-street parking.

The big problem w/swapping is finding a job to pay the rent.

But my 'ideal' no longer includes owning our own place.

It just isn't going to happen.

We're over it.

Hopefully an assured tenancy in a decent area w/garden space is a more attainable goal.

TwoIfBySea · 17/01/2007 15:01

Expatis know what you mean, we live in an awful town, as you read on the other thread about places to live in Scotland. It ended up being a thread on where not to live!

Yet our HA is more expensive by £20 per week than the others for not a better service and are about to raise the rents again which they think is fine because the majority of tenants are on benefits, to hell with those of us who have to pay. We are stuck and frustrated with it.

This country is too expensive for the average family. But the government twiddle the figures so it looks like the the average earnings are better than they truly are.

expatinscotland · 17/01/2007 15:04

Ours is in a really good part of town, TIBS, it's just that this is reflected in the rents, which are still lower than average b/c htis is HA and unfurnished.

We want to move FAR out of Edinburgh, so anyone coming in here would have to be able to afford Edinburgh rents, which is saying much.