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Basing "mmortgage multiples" on joint incomes is all fine and well but what happens when:-

[1] One or more parties to the mortgage get no pay rises and the mortgage interest rates shoot up

[2] One or more parties to the mortgage lose their jobs for whatever reason

[3] A female party to the mortgage gets pregnant and takes maternity leave

[4] The value of the property "nose dives" because of how the economy is being managed by the government

[5] A mixture of one or more of the above

. . . Or any such similar change in circumstance that affects the dynamic of basis of the original mortgage affordability calculation?

Of course, another topic altogether is the "mortgage arrangers who get away with the likes of 6 and 8 times salary multiples" and appear to go "unregulated" regardless of what regulation the government thinks its got in place!

- Fraser, Telford Park, 16/10/2009 11:26
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Carsten, I you don't get the maths you shouldn't comment.

The point is that the average person is paying more than 3.5x their income and people are increasing relying on joint incomes, the banks are/were simply lending more, and still are IMO. They have not significantly reduced their lending criteria on affordability (ability to pay), all they have changed is their equity protection requirement (the deposit) so as prices go down they do not end up with a 'toxic' asset, which is BTW an asset worth less than the loan, not a borrower who is struggling to make payments. Yes they regard your house as their asset, and rightly so it is not proper ownership. Renting is much cheaper and less risky while prices are going down.

The banks have slowed down the crash while they get rid of these toxic assets. They will happily repossess you in 2 years time, even if you are not in neg equity but are struggling with payments due to fuel/food inflation etc.

- Tony, Belfast, 15/10/2009 21:07
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Average House Price in 1987 was £40k.
AHP in 1997 was £55k. {15k Increase over ten years.]

1997-2007 AHP's doubled then trebled then rose some more. 50-60% drop in house prices would return AHP in line with inflationary, historically sustainable levels compared against the average wage earner.

[http://Tokyo property prices have dropped 80% over the last ten years, and they are still out of reach of the average buyer.|http://Tokyo property prices have dropped 80% over the last ten years, and they are still out of reach of the average buyer.]

A house in the UK gets repossessed every 7 minutes.

Large numbers of houses are being kept 'off the books' of taxpayer funded banks, being sent to auctions, not meeting the undisclosed reserve price, then being sent back to auction, with a slightly lower reserve.

In other words the banks are trying to engineer a bottom. They dont have to sell them being taxpayer funded.

So, taxes of FTBers are being used, to prop up this unsustainable bubble.

[http://I have seen a converted barn in Lincolnshire go to auction 4 times, attracting a highest bid of £110k. It sold at peak for 330k in 2007.|http://I have seen a converted barn in Lincolnshire go to auction 4 times, attracting a highest bid of £110k. It sold at peak for 330k in 2007.]
This is not a democratic free market. This is not capitalism.
This is Labour government Cartelism
This is creating a vastly unequal and unfair society

Why should the people who do not own houses, pay for your toxic housing debt?

At 36 years old, I believe a person earning average wage should be able to afford a average house.
I wont buy until they reach 20th Century prices, which they should have done already if not for government meddling.

- Dissavowed, London, 15/10/2009 14:07
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"First-time buyers 'need to earn more than £93,000' "

Soon to be.....

"Houses Fall back to sensible prices."

- Terry, London, UK, 15/10/2009 14:06
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The problem is the tax system and the incentives in the system to invest in property. All taxes on production (income, corporate, capital gains, VAT, fuel duty etc) should be abolished and replaced with a simple Land Value Tax. This would ensure that homes currently witheld from use just because the owner would rather sit on it and wait for the unearned increment in its value would be passed on to someone who needs it/can make economically efficient use of it. There would be no speculation in properties because the 'economic rent' (that portion of its value created by community activity and public spending) would be paid to the public purse.

Consider this - the Jubilee line extension cost £3bn to build but increased the value of surrounding land by £10bn. Those landowners got a huge windfall from public expenditure and yet, as landowners, they contributed nothing to it.

- Richard Vaughan Jones, Cardiff, Wales, 15/10/2009 13:52
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Isabel, Social housing was never intended to be a safety net for the desperate. It was to stop low and middle earners being ripped off by private landlords in sub-standard housing.

Your plan has several flaws. Firstly, removing social housing from people once they start earning over a certain level acts as a disincentive to work or improve job prospects. If I spend 10% of my £25 K pa salary on housing, why bother trying to get a £50K pa job if I lose my home and end up paying 50% of my salary on housing, leaving me with a similar disposable income. Secondly, it creates ghettoes of deprivation instead of balanced, working communities. Thirdly there are disabled or older people who earn over a certain level but age/disability make them ineligible for mortgages and casts uncertainty on their long term ability to pay private rents.

- Judith, London, 15/10/2009 12:40
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- Ed, Maida Vale

If your a first time buyer maybe you should lower your expectations. I started of by buying a ex-council 1 bed flat in 1998, many of my friends were quite snobbish about it with even a few not coming to visit as they were scared of the area, this was complete nonsense. I lived there for four years had fantastic neighbours and no trouble. I now have a four bed house in SW London

- Dc, London, 15/10/2009 11:56
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J. of Fulham. I think you’ve argued my point. Houses, sorry, homes are for the needy. If you’re no longer needy then you don’t need state help anymore. That’s all I’m saying. I’m not suggesting people get a fixed time to sort themselves out before they’re chucked out! If however, someone has been living in a council home for several years or even decades and then they start earning say, £50,000 p.a. personally I don’t think its right that they get to remain in that home (unless they agree to pay full market rent for it) when there could be another desperate family put into temporary accommodation because there aren't enough homes to go around. In fact, I’m sure a lot of people would move on voluntarily if they could and I’m not suggesting councils chuck out people willy nilly – especially not the mentally ill (of which my brother-in-law is a case in hand), just those who can afford to no longer require state help.

The reality is that there are thousands of people renting privately in this country who won’t EVER earn enough to save and buy a home at current market rates and who aren’t offered council housing because demand is outstripping supply so why don’t you open your eyes and get real, J.

- Isabel, Woking, 15/10/2009 11:29
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P. Staker, how old are you, six? Saying that car ownership proves someone can afford to rent privately is quite possibly the most ludicrous comment I've ever seen posted on these pages, and I've seen some! Good job the sulking resentment of people like you who obviously can't get a council home but would like one does not influence government policy, otherwise hundreds of thousands of families in this country would be living transient lives in rat traps. Good Grief!

- D Woodstock, London, 15/10/2009 09:14
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I would rather live outside London and put up with the daily commute by train. Our friends bought a tiny two-up, two-down with no front garden in Ealing in 2003 for the same price as we bought a 5 bed, 2 bath extended semi with 700 sq mtrs of land out here in Denham.

Our friends have a 20 minute tube ride, where our train & tube journeys take 40 minutes into town. So an extra 40 minutes a day commuting but evenings and weekends are far more pleasant outside away from all the carbon monoxide smog and lack of parking etc in London

- Ted, Denham, England, 15/10/2009 03:40
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I was a council tenant for 16 years. I lived in a back to back terrace house. I bought the property after 16 years of renting it, it needed a new roof, rewiring, new plumbing, DPC course and the chimney relining and the windows were ready to fall out. I spent a small unaffordable fortune making the house warm and dry. I moved jobs and counties and sold the house reluctantly to a landlord developer. I now rent privately, pay more rent than the mortgage I used to pay and have no hope of buying another house as I do not have spare cash to save for a deposit.
You cannot put people into specific boxes - I was a decent council tenant for 16 years and I loved my house - it was home.
There needs to be a radical overhaul of the way we buy houses, we should be able to have a share in a property, passing that share onto the next generation.

Also I do not agree with the wholesale demolishing of terraced streets that are happening in some cities across the country. Nor do I agree with areas becoming official regeneration areas, in Leeds 4 Landlord Developers moved in and accessed all the grants for regenerating houses in that area. There were stories of developers knocking on the doors of houses where elderly people lived trying to persuade these residents to move out. I was in Leeds 6, because I was in work (not on benefits) and not in a regeneration area I was unable to access a grant to help me pay for a new roof.

- Susan Fryer, Rydal, Cumbria, 14/10/2009 22:40
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Someone please tell me where I can buy a property of more than 1 bedroom (not council or ex council) in London for £362,810????

- Ed, Maida Vale, 14/10/2009 19:21
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I wouldn't bother about buying, rent and save, then buy, as we all had to do in the 70's.

- Dhan Raj, Basildon, 14/10/2009 19:02
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'More Social Housing? Yeah, let's turn our Capital city into one huge bleedin' council estate by voting New Labour next time round.'
This comment really sums up the obnoxious views of many Tories. Cameron and his friends in the press have convinced some that they are no longer the nasty party, but a browse through the comments section of most newspapers reveals their true thoughts. Don't let them convince you that our great country is broken. They think if they say it often enough, we will be stupid enough to believe them.

- Adrian, Dorking, 14/10/2009 18:40
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If you are single, on an average salary you have no chance of buying anything in London. You will be on the bottom of the list for a Housing Co-op flat and be forced to rent; essentially paying for someone else’s 2nd or 3rd mortgage. The governments answer to this is a shared ownership scheme. You have a mortgage on part of the flat and the government owns the other part, to which you pay rent. Problem being the properties are over priced, a 1 bedroom flat being over valued by as much as 70 grand or more. This is a way of the government keeping their affordable housing pledge while guaranteeing developers keep making a mint.

- Paul B, London, 14/10/2009 18:05
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This is soooooooo true whilst the bankers share out 14bn of tax payers bail out money that is why why this goverment will loose the next election as they are always very slow to act on anything ,that money should be put towards lending young people to get on the property ladder thus causing real future tax paying earners making a real contribution to the ecconimy

- Allan Ramsey, london, 14/10/2009 17:54
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Carsten, London - Spot On

- Aidan, London, 14/10/2009 17:51
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Unlike Nolan, I hope whatever Government gets in DOES NOT build any more social housing.

There would be no shortage of affordable housing if they means tested people regularly.

Why should you get a home for life, I see loads of social housing developments near me, with mercs and bwm's regularly parked outside, owned by the occupiers.

They even put secure underground parking in a few of the new social housing flats.

Sorry but if you can afford to run a car you can afford to rent privately.

Another reason flats cost more than they should is that new developers, have to build a percentage of "affordable homes" where there are private flats, the cost of which is subsidised by the buyers of the new flats, which is wrong.

Why should those of us that have worked hard to get on the property ladder, subsidise the so called "needy".

Alot of private home owners are saddled with huge mortgages, because they don't qualify for social housing. So they have to buy and use most of their earnings on a mortgage when others around them get flats for £85 a week etc.

- P Staker, Londonistan., 14/10/2009 16:28
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Where does the average salary of £26,156 come from? Does that include all those highly paid people who don't actually get paid salaries? If you include those who own their own business or are paid in tax effective structures (i.e. most of the wealthy) and those with foreign income (non-doms etc) you'll see where the money comes from.

- Robert, London, 14/10/2009 16:20
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I'm forever seeing bubbles

- Wallytrader, London, 14/10/2009 16:14
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"Clearly more social housing is required".

Ugh. No it isn't. Across the road from me houses and properties are being hoovered up by the council for freebies while people like me and my husband struggle to get on the ladder unless we head miles and miles outside of town. Why should only council house properties get centre spot? Everyone who works in London works equally hard and deserves a shot at living in it rather than outside it or relying on government hand outs and help. Thanks to people like Ken Livingstone and Labour you only qualify for help if you work in public services! Ever consider that all people working in London make it the success that it is and that without that there would be no "key workers"??

Weve been searching for years all over London and cannot buy anything big enough to raise a family in. Something which is key now the recession has hit.

- Alison, London, 14/10/2009 15:26
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The government should offer an incentive to first time buyers who work in London such as raising the stamp duty threshold to £300,000 on a once only basis. Or for a first time buyer defer the stamp duty untill they sell it, or better still change it round and make the seller pay the stamp duty, so that in fact the stamp duty becomes a sales tax, whereas at the moment stamp duty is a purchase tax which disadvantages people who are the mainstay of this country, people who are in work, from getting on the housing ladder.We give plenty to newly arrived immegrants, its about time we looked at "benifiting" the working population

- Jim Allan, Lake District, 14/10/2009 15:02
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I thought Tony Blair had bought up all the houses and the others were second,third/fourth and fifth homes of our beloved MPs.

- Dave, london, 14/10/2009 14:56
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I'd bet that MPs don't need to earn that much to get a second or third property in the Capital!

- Fraser, Telford Park, 14/10/2009 14:39
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Everyone is waiting for house prices to fall, but they never will. London is totally overcrowded and there aren't anything like enough homes to go around. Every time prices fall back a bit, people enter the market, pushing them up again. If you want to get on the property ladder and you're not rich, you have to leave London.

- Mick, Manchester, 14/10/2009 14:28
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Mike you're very lucky: for a family it's pretty hard to find a place to rent which is not paying off the mortgage for the landlord and then some extra for the git to live off as well. Buy never having the money to raise the deposit on a house I have, since I was 18, paid out the more than £200,000 in rent.

- Roz, France, 14/10/2009 14:24
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This is easy sorted, become an MP. Get a second allowance or just rip us off with the normal expenses.

- Lee, middlesex, 14/10/2009 14:02
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"Council housing should be a stopgap service for the financially hard up, not a free or subsidised house for life."

So says you, Isabel from Woking, and you speak the words of the extremely ignorant. Council HOMES are given to people in housing NEED. The clue that it's not a stopgap is in the word HOMES, meaning it's supposed to be a decent and permanent home, not some hostel for people passing through. Have you ever stopped to think about the strain it would put on someone who'd been homeless or mentally ill to be told they were only going to be housed on a temporary basis? And if you think that some council estates are in a state now, imagine how bad they'd be if the residents had no long term affiliation to them. If people have the right to buy and can afford to do so great. I doubt that many people who can afford to buy their council homes prefer to go on paying rent. Once they've bought their homes and then sold them back to the council and moved on, the homes can be used for new tenants. Social housing is also needed for people in job sectors where they would NEVER be able to afford to buy privately, so why don't you open your eyes and get real, Isabel?

- J., Fulham, 14/10/2009 13:56
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Why should a first time buyer expect to buy an "average" property?

My first purchase was a small one bedroom flat. How I'd have loved a two or 3 bedroom place, with a garden, but I wasn't stupid or arrogant enough to think I 'deserved' such a property.

- Anthony, Esher, Surrey, 14/10/2009 13:03
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I agree with Carsten. This article implies that the only places worth living in cost around £360,000, whereas it is possible to buy a pretty decent 2 bed starter flat in zone 2 outwards for £175,000 or thereabouts. A "property ladder" implies you start at the bottom rung or two and many first time buyers are able to do this as long as they don't expect to go straight to the end game.

- Anon, London, 14/10/2009 12:30
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Oliver in Exmouth

I suggest you come to London and see exactly what you will get for your money - see how much a small house (if you can find one not converted to what are laughingly called flats) will get you.

1 bedroom flat in Ealing average price £225,000

As for Couples there is a huge number of single people in London

- Paul, Ealing, 14/10/2009 11:36
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It makes much more sense to rent for lots of people, but so many people are overly consumed with the thought that you must buy and rent is dead money. I enjoy my buy to let landlord subsidising the flat I live in! I could never afford to buy the flat I rent.

- Mike, London, 14/10/2009 11:25
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You should buy what you can afford - a joint professsional couple will have an average income of £80-£100k - lenders are offering 4 x joint salary so they can afford a loan of £350-400k - its often the deposits required for a good rate that is the obstacle. In this case, they would need around 70-80K total costs including fees etc.

- Ancient Wisdom, London, England, 14/10/2009 11:16
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winning x factOR or playing for CHELSEA IS THE ONLY ANSWER UNLESS THE MPS CAN PASS OVER THEIR EXPENSES

- J Windsor, LONDON ENGLAND, 14/10/2009 10:56
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Escalating house prices also pull up rent rates, as rental becomes in demand as less first timers can afford to buy.
This, of course, also pushes up demand on councils who fork out vast sums subsidising rental property for those deemed in need - on benefits.
Thus the injustice to the saver and non-owner taxpayer is ratcheted up.
One (albeit painful in the short term) way of dealing with crazy house prices (that is, average equal to 3x single average salary) would be to re-evaluate mortgage repayments based on the current "value" of the house, less the amount when bought, less the deposit.
This would certainly re-balance the market, unearned income from the escalation in price would be clawed back and prices would eventually fall to what average earners can actually afford - a desirable and fair outcome.
Of course there may be some initial hardship, but compared to the house-owning apartheid the young have to endure now, a bit of pain for those who have grown fat on the back of the crazy property casino (and want to leave it to their children whilst the house-less pay for their old age!)
Perhaps this would seem, to many, a reasonable price for a less unjust society - made so, don’t forget, by the same greed in the financial system that everyone is now complaining about and suffering from.

- Darius Midwinter, London UK, 14/10/2009 10:55
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Once the banks are happy that prices are not falling they will lend one higher percentages, nearing 10%, probably not as recklessly as before, but let's face it they are profit driven.

- Reg, London, 14/10/2009 10:34
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Nolan, let's face it, we have no real idea whether any government (Labour or Tory) would provide more social housing but I would hope that they introduce legislation that allows councils to kick out council house dwellers that have got back on their feet and can afford to pay private rents again. Council housing should be a stopgap service for the financially hard up, not a free or subsidised house for life.

- Isabel, Woking, 14/10/2009 10:33
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Yes, to more Housing Association properties. But this shows that prices in the London property market are still inflated and at a false level. It is supply and demand. The big changes in my life have been double earners, bank bonus and foreign investors. For normal Londoners it is difficult to keep up with these changes.

- Andrew, London, 14/10/2009 10:27
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More Social Housing? Yeah, let's turn our Capital city into one huge bleedin' council estate by voting New Labour next time round.

- Ted, London, 14/10/2009 10:19
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Clearly more social housing is required. Anyone expecting that is going to be provided by a Tory Government?

- Nolan, Londonist, 14/10/2009 09:57
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And yesterday you reported that house prices in London are set to rise 40% over the next few years.

But that's all right. We're all right Jack.

- Dave Markham, London, UK, 14/10/2009 09:43
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This is nonsense. First time buyers do not buy "average" houses they buy smaller one for a lower price. Also, in most cases first time buyers are young couples with two incomes. The National Housing Federation is using statistically invalid data to grab a headline and draw attention to itself.

- Oliver, Exmouth UK, 14/10/2009 09:32
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Well, as only 10% of the population are now able to buy in London, I assume the other 90% are going to need the few remaining Housing Association homes.pay huge private rentals. Shame Thatcher sold off most of the council housing stock in London, eh?
What madness- in 1984, earning a princely £8 grand p.a., I was given a 100% mortgage to buy a lovely studio flat in Islington- lots of young graduate professionals were buying similarly at that time....

- Ex-Islington-Owner, Essex, 14/10/2009 09:21
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the writing is on the wall ( yes im aware of the irony )
maybe a tag is the closest way of getting near a property, im 29 years old, im still renting trying to save hard and pay rent at the same time as my bills seem to never decrease, might as well get the wax out for the cardboard box, im not even in the city, far to many people in the same position.....

- James, surrey, 14/10/2009 09:01
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What is 'average': The 'average' person has a little less than two legs. Does this make a point?
There are plenty of properties available for less than half of what is quoted as 'average' here. Why does a first time buyer need a terraced house in London to start out on the property ladder?

- Carsten, London, 14/10/2009 08:58
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