Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
That on its own is going to kill most of the market, when average earnings are around £21kpa.

Anyone with a £100k deposit and earning enough to afford a £200k mortgage isn't going to want to live in an area where they can afford a £300k family home.

Really what's happening is that buy-to-let is keeping prices artificially inflated. People with no choice keep renting, the owners keep cashing in.

But if rates rise the numbers won't add up, and it's unlikely rents can rise much further.

If there's a mass exodus from b2l, or mass repossessions, prices will fall by up to 30% best case.

Worst case will be Ireland 2.0.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 1st, 2011 at 10:05:05 AM EST
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I'm surprised Buy to Let hasn't blown up yet.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Wed Jun 1st, 2011 at 10:08:29 AM EST
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BBC News:

The number of mortgages approved for house purchases hit a new low in April, Bank of England figures show.

At just 45,166, the number of new approvals was the lowest April figure since the Bank's records began in 1992.

Analysts said the data may have been affected by the number of public holidays in April.

However, the figures suggest that the UK property market will remain subdued in the coming months, with a low level of sales and falling prices.

The number of approvals was 4% lower than in March and 9% down on April last year.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 1st, 2011 at 10:17:59 AM EST
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9% down on last year when sales were terrible, that can't be good.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Wed Jun 1st, 2011 at 11:21:40 AM EST
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Depends on your definition of "good."

A housing market where an entry-level mortgage is 5+ times median income is not my definition of "good." There are only two ways in which that can change: Higher incomes or lower prices. And higher incomes would take time, even if the British government had the inclination or the economic expertise to make them happen.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jun 1st, 2011 at 11:54:47 AM EST
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