What are reasonable house prices?

ukcarper

Are you talking about joint or single income.

Chris2685

chucky wrote: »

prices in London are not and can't be driven by affordability or a modest wage.

there are a number of other drivers that won't allow London prices to be driven by salary multipliers - foreign investment, cash investors and also rental demand

Very true, all of those drivers lead to make London house prices more unreasonable than is reasonably reasonable to the average family/person

Cannon_Fodder

Have always been a little confused by "treat London seperately" view...

Ok there is more demand, but equally is there not greater supply in a dense area, so shouldn't an equilibirum be possible?

Not saying that it is not different at the moment, but *should* it be different, should people tolerate being ripped off, is it possible for the "bandwagon" (or is it juggernaut?) to be avoided, is there "brainwashing" of the populace to accept the status quo...?

Excepting the foreign cash buyers bit, which obviously influences the mansion end of the market, but I don't see why a studio flat should be above the reach of "modest salary" because of a few oligarchs and princes.

Maybe adopting the Scottish ROS method, of leaving £1m+ properties out of stats would avoid these "anomalies" skewing the bottom end of the market?

ukcarper

£90,000
Nationally is a broad statement a 3 bed semi where I live on the Surrey/Hants border has never been that cheap in relation to earnings

chucky

Nixxx wrote: »

I use london as an example but its really based on general opinion as to what a house is should be worth. Obviously in a prime location in london you can expect to pay a premium but based on heavy generalisation i find it difficult to understand how a 3 bed terrace in an average area could be worth £350k?

because people have the money or have borrowed the money to pay that amount for the property.

median salary in london I believe is £40k maybe slightly higher

joint income of £40k x 2 = £80k
£80k x 3.5 salary = £280k
£280k + 25% deposit = £350k

not that unreasonable really

lostinrates

Cannon_Fodder wrote: »

Maybe adopting the Scottish ROS method, of leaving £1m+ properties out of stats would avoid these "anomalies" skewing the bottom end of the market?

Family member sold a three bedroom flat, in need of renovation...last decorated 1960s, for over a million [strike]last year[/strike] sorry, 2007, in a good but not best location. If ypu cream off everything over 1 million you arr left with an equally disproportionate representation aren't you? I mean, a tatty 3 bed flat should be reasonably attainable for most youngish families.

Cannon_Fodder

I thought joint income was usually a 2.5x multiple.

do we really want our "hard-working families" to be stumping up 3.5x joint income just to prop up the housing market? won't somebody think of the children!!?

http://www.londoncouncils.gov.uk/londonfacts/londonstatistics/Householdincomedistributionin200607.htm
is a year or two old, but £80K joint income being common seems ambitious...

FoxtonsRIP

chucky wrote: »

because people have the money or have borrowed the money to pay that amount for the property.

median salary in london I believe is £40k maybe slightly higher

joint income of £40k x 2 = £80k
£80k x 3.5 salary = £280k
£280k + 25% deposit = £350k

not that unreasonable really

Fantasy arithmetic

Cannon_Fodder

lostinrates wrote: »

Family member sold a three bedroom flat, in need of renovation...last decorated 1960s, for over a million [strike]last year[/strike] sorry, 2007, in a good but not best location. If ypu cream off everything over 1 million you arr left with an equally disproportionate representation aren't you? I mean, a tatty 3 bed flat should be reasonably attainable for most youngish families.

I agree. But that flat only sold for that because some stats told people *it should*, not for any intrinsic value.

So do you "de-value" the stats to bring affordability in reach, or "inflate" salaries so they can pay the inflated prices?

chucky

Cannon_Fodder wrote: »

I thought joint income was usually a 2.5x multiple.

do we really want our "hard-working families" to be stumping up 3.5x joint income just to prop up the housing market? won't somebody think of the children!!?

http://www.londoncouncils.gov.uk/londonfacts/londonstatistics/Householdincomedistributionin200607.htm
is a year or two old, but £80K joint income being common seems ambitious...

yes you're right

£33k is the median and £49k the mean
http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2008/tab7_7a.xls

Halifax are doing up to 4.8x joint income obviously dependant on deposit amount - i've looked at 60% LTV

it's not what i want it's what is being offered