Just curious -what percentage increase is this?

Bf109

neverdespairgirl wrote: »

In 2006, £12,000.00 from 1978 was worth:

£47,569.82 using the retail price index

£48,319.65 using the GDP deflator

£77,243.86 using the average earnings

£86,200.29 using the per capita GDP

£93,189.48 using the share of GDP

Just goes to show the madness that has taken hold of this country.

When is the government going to learn that you cant base an economy on people moving house.

Premier_2

Prudent wrote: »

http://www-m.aspc.co.uk/cgi-bin/public/LiveProperty/264571?ID=MDFNBFAI#picture

(hope the link works)

I just noticed this house for sale. It is up for offers over £460,000 (in a parcel of two lots). It is in Aberdeenshire and usually 'offers over' means at least 20%. Although this may very well have changed in the current market. I don't live in the area now.

I spent part of my childhood in this house. My parents bought in 1978 for £12,000. Sadly they sold it and have moved many times since.

I am not very good at maths. I am trying to work out the percantage increase in value since 1978. Can anyone help?

The percentage increase in value, assuming it was worth £12k in 1978 and £460k today is

((£460,000-£12,000)/£12,000 ) x 100

= 3733.33%


That's pretty good going compared to the average price increase over the UK in that period according to the nationwide, which suggests the increase would on average be 1104.31%

i.e. a property worth £12,000 in 1978 would be worth on average today £144,517
(£136,667 in 2006)

http://www.nationwide.co.uk/hpi/

I don't know if the property has been improved/extended since 1978 (above and beyond normal improvements), but note it does now benefit from current planning permission.

huntersc

What a wonderful house, it looks lovely. Are you thinking of buying it? I would if it was in my area!!

Prudent

huntersc wrote: »

What a wonderful house, it looks lovely. Are you thinking of buying it? I would if it was in my area!!

Sadly way out of my league now. Just interested because I lived there as a child.

Max_Headroom_3

ffacoffipawb wrote: »

Assuming it goes for £460,000 then that's a 12.9% annual return over 30 years.

If it goes for approx 20% more, i.e. £550,000, then that's a 13.6% annual return.

What would be really interesting would be to know what £12,000 would be worth today with compound interest if it had been put into a high interest account over that period of time and see how it compares.

Prudent

Premier wrote: »

The percentage increase in value, assuming it was worth £12k in 1978 and £460k today is

((£460,000-£12,000)/£12,000 ) x 100

= 3733.33%


That's pretty good going compared to the average price increase over the UK in that period according to the nationwide, which suggests the increase would on average be 1104.31%

i.e. a property worth £12,000 in 1978 would be worth on average today £144,517
(£136,667 in 2006)

http://www.nationwide.co.uk/hpi/

I don't know if the property has been improved/extended since 1978 (above and beyond normal improvements), but note it does now benefit from current planning permission.

I think it has improved in value so much because of the location. It is very close to Aberdeen airport and much of the oil related industrial estates near there. That area was just developing when my parents bought the house. Also old fam houses were very untrendy in the area then. Most of the locals were building new bungalows. This kind of property has risen hugely in this area. The Aberdeen market has seen some of the highest growth in the uk year on year for a long period.

When I spoke to the owners last year they were trying to get planning permission, but couldn't find the orginal natural spring water supply which was a requirement. I was able to tell them where it was - maybe I should get a percentage :rotfl:

Prudent

Max_Headroom wrote: »

What would be really interesting would be to know what £12,000 would be worth today with compound interest if it had been put into a high interest account over that period of time and see how it compares.

That's true, although I have no idea how to do this

morg_monster

well... I was bored, so I found this
http://www.bankofengland.co.uk/statistics/rates/baserate.pdf
On page 3 are retail banks base rate (from barclays, hsbc, natwest, lloyds) since 1970. Pretty crude, but I took an average interest for each year by just averaging the rate on jan 1 and Dec 31 of the year (if there was a range of values for the start or end of the year, I took the lower one), and worked out the interest if you had 12000 in the bank on jan 1 1978...and just left it there for interest to compound over the years, you would have £133,730 by dec 31 2007.

Now I have no idea what a "high interest" savings rate would have looked like back in the 80s, but if I assume they were 0.5% higher than the base rate, you have £152,784 by end of 2007.
If I assume they were 1% higher, then you have £174,446.

Lots of assumptions here, but you would have to have very optimistic savings rates to get even half of the current asking price of the house.

Max_Headroom_3

That's absolutely brilliant MM, well done and thanks.