in Cambridge.....
That's got to smart a bit if you're just starting out in life....
However, Centre for Cities found house prices in Cambridge were the third-highest in the country, at an average of £362,800 last year, and that property values had risen more quickly in percentage terms than in any other UK city, including London, during 2013.The organisation said Land Registry data indicated that prices had risen by an average of £35,200, or 10.7 per cent, over the last 12 months.
This increase, almost three times as fast as the national average, meant house prices in Cambridge now stood at [b]more than 12 times the city’s average wage.[/b]
And while Cambridge’s average weekly wage of £556 remained the sixth-highest in the UK, the report found earnings had actually dropped in real terms during 2013 – and by more than anywhere else.
How dare you seemingly criticise the foundations on which the UK economy is based? Did you not know high house prices is a [u]good[/u] thing?
The youth of today should be content with their place and [u]rent [/u].
(this may have been written with a somewhat saracastic undertone).
Rejoice! We're rich, rich I tell you!
If I was just starting out I'd be looking abroad, the UK obsession with ever increasing house prices is what has crippled this country (IMO of course).
Would liked to have stayed living in Cambridge, but impossible with the price of houses.
Could have perhaps moved into one of the surrounding villages like Cottenham, but prices there are still high.
We could have bought a house there, but it would have been a really small place, probably with no garage and on-street parking; and would have cost us more money. For us, it was not worth the compromise.
Quick look on RightMove.....reckon it would have cost us >£205k more than we paid for our place to get a similarly sized place in Cambridge. And that would be in a village like Milton or Cottenham; not actually in the centre of Cambridge. It's a nice place to live, but not THAT nice!!
Blimey.
when I lived in Cambridge, our house was worth about 2.5 times our combined salary..
Edit - that was in Histon mind you, so a tad cheaper...
Kimbers you may as well as a picture of the whole political and power elite establishment in that picture - labour, liberals, conservative. The bank of England, all banks aaaand the majority of the local councils refusing planning permissions and whatever law those decisions are based on. Oh and building companies landhoarding. And buy to let.
2 friends of mine are trying to buy just now - 12% over asking and still no where close......
other friends put their house on the market ... not a very nice one in an area with terrible neighbours.....( its close by to bruneep you see) - and it sold within a week at well over asking.
they have just bought a 369k house out of the city with a 5% deposit and a help to buy loan of 20% - they are banking on it appreciating so they can release equity to pay the loan off..... i see fingers getting burnt - we aint out the woods yet(if we ever get there..... - some high interest rates needed - wouldnt be a vote winning policy mind you and probably bankrupt the banks on the number of defaults that would happen. )
Edit - that was in Histon mind you, so a tad cheaper...
Not much now, whole area has gone mad.
As for new buildings, it's even worse, every business in the town is being given planning permission for blocks of flats, so they're all selling up and moving out to make way for 100s of rabbit hutches starting at £250k for a 1 bedroom flat...
footflaps - MemberAs for new buildings, it's even worse, every business in the town is being given planning permission for blocks of flats, so they're all selling up and moving out to make way for 100s of rabbit hutches starting at £250k for a 1 bedroom flat...
An old housemate of mine moved into a new-build flat in a large development between the beehive centre & the court building.
It was costing them quite a lot & was a tiny flat where the 'bedroom' was on a mezzanine level. I went round in the summer once and the 'bedroom' was unbearably warm as all the heat was collecting up there and had no windows at that level to get it out.
I was stupid. When I first moved to Cottenham in 2000, I could have just about afforded a 2 bed terrace house if I had really scrimped and saved - the one that I was renting with a mate was worth about £120k. Dread to think what it's worth now. There was no way at the time though, I wanted to sacrifice having a life, for having a mortgage!!
Renting and saving myself... I earn an OK wage but i can see it taking a while. In my area though a 360k house would be rather nice!
My ears perked up when I heard about the help to buy too but as above I am a bit frightened about the prospect of paying over the odds for the house (I imagine they are all over-valued?) or the market changing yet again leaving me in hot water.
It's clearly madness that our whole economic world is based on such stupid property values. And the stress of both parents having to work full time to fund it and then pay for childcare on top seems equally barmy and destructive to a lot of people we know.
The question is, would a full on property crash to return things to a sensible level do more harm than good?
Well the reason for the increases is down to lack of supply compared to demand. So we need to build more but we have a problem with where to build, many aren't so keen on losing green spaces. The Gov't is trying to deal with this be allowing Green belt, in the SE anyway, to be changed so lots of those nice villages will find themselves a little bigger with more dense housing. Population is increasing by a noticeable %age, mostly due to immigration. We need the immigration to maximise out GDP growth if that's the main consideration. Also have the problem of an aging population so that big houses are increasingly lived in by 1 or 2 retired people and not young families.
The question is, would a full on property crash to return things to a sensible level do more harm than good?
I imagine it would require a full economic crash for this to happen.
If the banks start lending against 5% of less than deposits again prices will go through the roof again.
A very important point is also that this concerns average wages which are of course total BS - They should give the average wage of a first time buyer.
The question is, would a full on property crash to return things to a sensible level do more harm than good?
Cant see it ever happening. If property didnt fall by 40/50% in the last downturn then it never will.
[i] a sensible level [/i]
I think you'd need to define that?
for anyone with a mortgage a sensible level would have to at least match their current debt. For most they've treated equity on their property as a part of their retirement planning so the impact of a major devaluation could be huge.
Surely the easiest solution is to move to a model where home ownership is not such an economic driver. Most European countries seem to manage this?
Maybe if local authorities had large stocks of housing that they rented out at affordable prices to people who were pleased to live in them and treated the housing stock with respect?
Only one answer - round up all the oldies and...
I imagine it would require a full economic crash for this to happen
I thought we'd just had one....
As for why prices are so high, if supply << demand then prices will rise to the maximum people can afford which is the maximum banks will lend them.
Cambridge has two other problems, one is the rain link to London, you can get to the city faster from Cambridge than you can by tube from Wimbledon, so it's become a London suburb and secondly, there is a lot of investment buying going on with new flats.
Glad it's cheap oop north!
The housing market in this country is completely dysfunctional, and this obsession with ever rising house prices completely skews the real economy.
This government came in saying they wanted to rebalance the economy, never really made any attempt to do that, then said '**** it, lets get a housing boom, fuelled by cheap credit, on the go again instead'
What was the definition of madness? Something about repeating an exercise, and expecting a different result?
What was the definition of madness?
I thought it was voting Conservative.....
I thought it was voting Conservative.....
The snivelling turd that leads Labour does not make me think the alternative party would be a good choice though.
Any place considered as an easy commute to London is pretty much outside of normal house pricing rules though isn't it - London and surrounding areas are becoming almost like a separate country.
What was the definition of madness? Something about repeating an exercise, and expecting a different result?
I thought it was something to do with allowing savoury pastry products to go stale and uneaten.
If you spend a massive proportion of the infrastructure budget in London and the South East instead of spreading it around the regions then you are only exacerbating the "supply vs demand" problem. Spread the load around a bit to where land and property is cheaper and you'd avoid this situation.
home ownership is a modern invention, as a nation we've taken a step back to a time when home ownership was a luxury. simples. now we all moan cos we expect it, it wasnt this way until recent times. get a grip.
Not sure what the struggle is here, we have a high population for the land area - SE particularly bad. France has similar population and a lot more space so lower prices.
We encourage immigration so need more housing - otherwise prices rise right?
conservatives making a mess of the housing market now as values are rising and folks can sell thier home..
just like the poor unemployed.. those no good conservatives finding them jobs..
even the 'sick' are hard done to under the tories, a third of sick people are being told thier okay to work without needing an interview and a further third are been assesed and told thier not sick either.
It is worth pointing out that comparing house prices in central Cambridge with the average salary in Cambridge isn't very fair. A lot of households in the centre of Cambridge have at least one earner commuting to London. And a lot of the private accommodation in Cambridge are investment properties rented to students at very high prices, because students generally have to live within 3 miles of their college.
From my experience, a lot of the people working in Cambridge but paid less well don't live in Cambridge, they commute in (although the statistics imply the mean salary is around £30k which is quite impressive).
If you spend a massive proportion of the infrastructure budget in London and the South East instead of spreading it around the regions then you are only exacerbating the "supply vs demand" problem. Spread the load around a bit to where land and property is cheaper and you'd avoid this situation
Agreed, this country is becoming more and more London centric. Maybe the magic high speed train line will help?
Suitable land is there to build on but why do that when you can build just enough to keep that huge profit margin on construction? Build enough to meet demand and prices fall = more work for less profit.
Lets not see this situation as anything but what it is - a carefully constructed economic situation presented by the financial elite.
its just the way our economic model is built
high house prices= high mortgages = more money for the banks
which is all that the government cares about
unless theres any other reason for gideon and co's efforts to inflate the market
If you spend a massive proportion of the infrastructure budget in London and the South East instead of spreading it around the regions then you are only exacerbating the "supply vs demand" problem. Spread the load around a bit to where land and property is cheaper and you'd avoid this situation.
But the money to pay for that is made in London, it makes economic sense to help that prosperity (with projects like crossrail) and let the poor areas fight for the scraps of regional development/E.U. Funds.
If your favourite son is doing well working as an investment banker why give the idiot second son a new van for his window cleaning business when he spends the rest of the day in the pub after making a shilling in the morning?
home ownership is a modern invention, as a nation we've taken a step back to a time when home ownership was a luxury. simples. now we all moan cos we expect it, it wasnt this way until recent times. get a grip.
The only problem being that rents are based on a massively overinflated house prices.
Edit: I am agreeing with your sentiment in general though.
From my experience, a lot of the people working in Cambridge but paid less well don't live in Cambridge, they commute in (although the statistics imply the mean salary is around £30k which is quite impressive).
Very true, the road into the Science park from the A14 was enhanced a few years back to two lanes to cope with the mass of commuters coming in each morning.
Our CEO commutes from Paris (stays here 3 nights a week) and most of our management team drive in from the M4 corridor. Very few of us still cycle to work now......
If your favourite son is doing well working as an investment banker why give the idiot second son a new van for his window cleaning business when he spends the rest of the day in the pub after making a shilling in the morning?
Are you actually a character out of a Dickens novel? 😆
Did he do comedies? 🙄
I've just done a quick search for houses in Cambridge thinking this was just media hype.
Errm, as you were then. Cripes. If I were on an average wage, I wouldn't live in Cambridge.
It is a supply and demand issue as mudshark points out, but its not because of immigration.
Read this (if you have the time as its about 10,000+ words)[url= http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live ]piece on housing crisis[/url] but this grpah says it all
[img] 
[/img]
Suitable land is there to build on but why do that when you can build just enough to keep that huge profit margin on construction? Build enough to meet demand and prices fall = more work for less profit.
This was very true, at least in the areas where property prices were falling (south-east excepted!). This is 'old' news (from 2012) but there are still [url= http://www.local.gov.uk/media-releases/-/journal_content/56/10180/3704026/NEWS ]plenty of plots with planning permission available[/url] that the construction industry will hold on to until they can make a profit they are happy with. Which is why they want to build on green field in the south-east rather than build on brown field or build affordable homes.
Edit: What he said ^
Sorry. Great Analogy though Mr Smith . The rest of the country outside London is a drunken window cleaner?
You are the head of a Tory Think-tank and I claim my ATOS assessment for my Stella-fuelled inability to do my window round 😆
Cheers!
[img] 
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Are you actually a character out of a Dickins novel?
wannabe tory'joke' writer-- dont you just love the wild imagination !
Interestingly I just had a mortgage call as I'm hoping to move house. They were offering me twice as much money as I'd be comfortable paying. That would be well over 50% of our total take home pay. I thought that they were being sensible now 😯
So long as people can get their hands on silly money like that, prices will keep going up (and then quite possibly crash when the rates go up...)
Here you go..
http://www.bbc.co.uk/news/uk-england-16235349
TRANSPORT SPENDING PER HEADLondon - £2,731
South-east of England - £792
East Midlands - £311
West Midlands - £269
Yorkshire and Humberside - £201
North-west of England - £134
Eastern England - £43
South-west of England - £19
North-east of England - £5
It is a supply and demand issue as mudshark points out, but its not because of immigration.
Well that's increasing the demand and we're not matching with the supply right? But we have the space issue - how much green space are we happy to lose? I live in a Surrey village and riding around the roads feel busy as it is - and commuting on trains/road is a struggle at best.
Maybe if local authorities had large stocks of housing that they rented out at affordable prices to people who were pleased to live in them and treated the housing stock with respect?
they did have back in the 70's --then some dead brain politicos thought it would be good to sell them off at 1/3 of the price--appeal to greed and selfishness--end result 2million taken out of 'circulation'--and most of them now rented out in the private sector at massive cost to all--wonder of da market !!
Oy binners, I wont hear a word against ATOS - they kindly assessed one of my patients who has a moderate to severe learning disability, schizophrenia, scoliosis and rheumatoid arthritis as being fit for work - can obviously heal the sick better than the NHS.
House prices peaked 2Q07 and bottomed 3Q12 and a currently 4.7x average earnings versus average since 80s of 4x.
But versus cost of mortgages, affordability remains well below the average. It's the cost of borrowing that is the issue. It's too low as we have to bail out the over-indebted.
Demand > Supply and IR held artificially below the natural rate => rise in house prices. Which bit is the shock?
Its not rocket science, is it? The banks are chucking silly money about again, as if the last 5 years never happened,*on the back of Gideons absolutely moronic Help to Buy scheme
I predict that whoever wins it, the Bank of England willwait until approximately 10 minutes after the next election, before raising interest rates. At which point its all going to go spectacularly tits up for those presently mortgaging themselves to the hilt to buy insanely-priced property
* Thinking about it … from their point of view, I don't suppose it actually has happened really. Theres been no consequences for them at all.
Less than 15% of the UK population is foreign born, so while immigration is indeed a factor in population growth it is only one factor. People living longer has far more to do with it.
But even that misses the point; government policy of right to buy while at the same time not pushing hard enough on private companies or allowing housing authorities to build more houses is the key problem. It's not really a shortage of space overall that's the problem, its policy.
appeal to greed and selfishness
I thought it was to buy an election....
http://en.wikipedia.org/wiki/Homes_for_votes_scandal
Any figures to show how much is spent on fares/tax portion for transport from local taxes and income tax in those regions? The real figure to look at is the percentage over or under once the costs/profits/tax paid are taken into account.
I wonder if the areas with low population densities and low salaries(income tax) get a higher transport subsidy that those more densely populated with higher income?
Interestingly I just had a mortgage call as I'm hoping to move house. They were offering me twice as much money as I'd be comfortable paying. That would be well over 50% of our total take home pay. I thought that they were being sensible now
Do you mean they were offering 2X your take-home as a mortgage?
If that is the case, it sounds low to me if anything - otherwise a couple with one average and one less (say 35k total after tax) could only get a 70k mortgage, that wont even get a house in the crap hole around here!
Quick online mortgage calculator states a 40k (gross) couple could loan 155k with 450pm other outgoings...
The banks are not chucking silly money about yet.
But you are correct that there is a large segment if the population that is very vulnerable to a rise in interest rates.
A swath of low- to middle-income households are exposed. Nearly a third of mortgage debt is held by households that have borrowed more than four times their income; and a sixth of it is held by those who have less than £200 a month left after spending on essentials.
Not pretty when rates rise.
To what extent is buy-to-let an issue? I mean, clearly it takes housing out of the buy-to-live market, and the entire concept is based on renting out for more than the cost of the mortgage so that also pushes up the rental costs... Apparently fully 13% of new mortgages are for buy-to-let, obviously it makes good financial sense for the banks and the letter but it seems like bad news for everyone else... Just not sure to what extent.
Makes me wonder, why are we penalising people who have 1 more bedroom than they need, but not people who own several more houses than they need...
I was in that there London at the weekend, was chatting with my friends about housing there. Its completely mad, both of them have good jobs so have managed to scrape onto the property ladder but the money they have paid for a small two bedroom house would get me a 4/5 bedroom detached house in Glasgow.
The thing is basic supply and demand means that prices in the SE are only going to go in one direction. Housing is a limited resource and its not being increased rapidly enough to take into account rising populations. So upward pressure on prices isn't going to go away
Makes me wonder, why are we penalising people who have 1 more bedroom than they need, but not people who own several more houses than they need...
I think you'll find it's about making the poor suffer, for the sin of being poor, rather than actually serving any purpose...
[b]ti_pin_man - Member [/b]
home ownership is a modern invention, as a nation we've taken a step back to a time when home ownership was a luxury. simples. now we all moan cos we expect it, it wasnt this way until recent times. get a grip.
Yes let's go back to feudalism and people not having any land to live on and renting from the [u]man[/u]. Yeah that was really great.
Do you mean they were offering 2X your take-home as a mortgage?
No 🙂
They were offering me a mortgage that would have cost me more than 50% of combined income per month of me plus Mrs Clubber which is considerably more than I would consider sensible. By my quick maths thats over 4x combined salary borrowing.
"Do you mean they were offering 2X your take-home as a mortgage?"
no
he means what he wrote
he means the banks are offering him twice what he would be happy borrowing - which would mean that 50% of his total monthly intake would be going on a mortgage.
2grand a month is nearly a 400k mortgage with 5%down ..... and the banks are lending that......
dont know about you but right now - i could service that debt . on twin incomes. if we had a kid and went to single income or twin income+childcare - we couldnt even come close to servicing that.
Paying 50% of income on mortgage repayments is normally in the "perilous" zone. Recommendations to do so, should be ignored IMO.
% of income on monthly repayments is a bit of a useless figure unless we know the income involved.
Someone earning £150k net will still be comfortable spending 50% of income on their mortgage, however the same can't be said for someone on £15k net.
Unless you're simply talking from a rate hike perspective?
£350,000 to £400,000 buys you a detached farm house with 4/5 beds in Calderdale and the mountain biking here is great.
Think I know where I'll be staying.
peter - the key for me is . 50% of one income when there are 2 incomes - no issue ....
50% of combined/single income - dodgy ground.
Aye, I agree with that TR.
All of our bills are based on a comfortable level against my income alone. Not only does it add some protection, but it ensures a bit of perspective too!
peterfile - Member
% of income on monthly repayments is a bit of a useless figure unless we know the income involved.Someone earning £150k net will still be comfortable spending 50% of income on their mortgage, however the same can't be said for someone on £15k net.
Unless you're simply talking from a rate hike perspective?
Valid point but I'm not earning £150k and neither are most people. It's a very large percentage and much more than I think sensible or prudent, especially when you consider that's on a fixed for 2,3 or 5 years, which are likely to end with rates being considerably higher than at the moment while salaries are unlikely to rise to match.
If you're not paying silly money to the banks for your mortgage, you're paying silly money to your landlord for your rent.
Property inflation effects everyone, not just those who can "afford" to buy a home.
The "help to buy" scheme may well be helping some people buy half a million pound houses, but it will also be pushing up the rent of others who can only dream of such things.
To what extent is buy-to-let an issue?
Buy to let versus bedroom tax is an interesting discussion.
Private rents are pushed up by the availability of housing benefits and soft touch regulation of the rental market combined with the increasing cost of homes meaning traditional first time buyers are forced to rent for longer.
Housing benefit essentially becomes a subsidy for private landlords, in some areas there is even evidence that housing benefit tenants are charged more than tenants that cover their own costs. But rather than look at this through rent control or taxation on second homes the government goes after council tenants in houses which are "too big" despite having no alternative accommodation available.
Meanwhile people already on the property ladder can use the equity they have built up to buy a second property and rent it out to the council tenants who having been forced to move out of the 3 bed council house they have lived in for 20 years and are now looking for a 1 bed flat.
This costs more to rent than the 3 bed council house but is covered by housing benefit anyway and not subject to the "bedroom tax"
Meanwhile a young couple looking to buy their first home are priced out of the market by the spike in demand from buy-to-let purchasers who know that a guaranteed rental market exists for 1 and 2 bedroom houses. The young couple rents instead and watches as house prices continue to rise well above earnings
And just when you thought housing policy couldn't possibly be [url= http://www.theguardian.com/society/2013/nov/10/bedrooom-tax-affordable-homes-face-demolition ]more bonkers![/url]
Makes me wonder, why are we penalising people who have 1 more bedroom than they need, but not people who own several more houses than they need...
Well we're only penalising people in council houses - given the lack of smaller places for them to move into this seems a terrible thing. We should encourage private owners to sell large houses when older and not needing the space, perhaps reducing stamp duty here would help? Actually stamp duty causes all sorts of problems, messes up the market.
As for owners of 2nd homes, well full council tax for them would be a good thing - not sure if it is now as it wasn't the case. Not sure how much impact foreign owners investing here has but if we responded to all these little issues the result could be significant.
I remember looking at houses in 2000, when we bought our first home, and thinking it was madness that the 3-bed new builds were £90k 🙂
I am very glad that we bought then. Though, with hindsight, we should have bought two houses and then sold one of them after 5 years or so. Instead, we were sensible and bought based on just one of us working, which gave me the flexibility to go back to uni for a year and for my wife to take time off when the kids were smaller.
I have a colleague who wanted a bigger house, but their previous home was in negative equity so they switched it to buy-to-let mortgage and bought a new house. Given how the market locally has changed, I suspect that they're now in negative equity on two houses.
Cambridge is a special case, anyone with property in the area is doing well on it these days. Personally went for a village about 6 miles out, connected by the guided busway. House was not above national averages for a 2 bed semi, was ex MOD so once inside you actually have space to move, have a garage, off road parking and lovely neighbours. Admit I can't walk to a pub in the city from my front door - but I can live with that.
We were also offered far more than I'd have been happy borrowing (£100k more) with the sage words from the lender to my wife: "It's alright love you can talk him up when you get home ..." Lucky, she's far from stupid and we can comfortably afford our re-payments.
I've lived in Ely for a year and I can't believe how much prices have gone up in that time. Mainly because people can no longer afford Cambridge.
It's an extra 15 minutes on the train to London which isn't bad but getting anywhere further afield to the South or West is tortuous due to the poor road network.
It takes my wife 60-90 minutes to commute the 15 miles by car into Cambridge. She's a social worker so must use her car.
The house price thing is such a big issue in this country and I can't see how it can be sorted easily. I have little sympathy for the buy to let landlords but then again many have only done so due to not trusting pensions.
its not bad for everyone though
http://www.mirror.co.uk/news/uk-news/george-osborne-rbc-mortgage-chancellor-3062406#.UuZ6WxDFKUl
Millionaire in 'doing better than the rest of us' shocker......
GO isn't exactly getting a "deal for the super rich" on his interest rate - at 2% he's paying twice as much as we're paying on our Santander mortgage.
Well you wouldn't get that if looking now - wonder what he was getting before though. Doubt I'll touch my base rate + 0.49% offset tracker for a while.
Osborne's most welcome to take advantage of the opportunities available to the rich- he's not abusing his position after all. It's only really relevant because it proves once again what a total **** he was for saying "we're all in this together"