How do I get my Dad off my back?

LittleMissAspie

Yakubu22 wrote: »

Has it? Only my parents and many others of the generation who have owned property for many decades. All tell me, that the 3-3.5x ratio was what they were restricted too throughout the years.

And that was the husband's earnings only. My parents bought their first house based on my dad's earnings only, even though my mum was working at the time. House next to that sold for over £220k in 2006, impossible to buy for anyone in a manual job like my dad's.

JayScottGreenspan

Yakubu22 wrote: »

Has it? Only my parents and many others of the generation who have owned property for many decades. All tell me, that the 3-3.5x ratio was what they were restricted too throughout the years.

Yeah, it was the way of things for many years. Your bank manager would just refuse to lend you more than 3.5x salary, or something similar.

The fact that the average house price has historically tended to be about 3-4x the average UK salary is a completely separate matter.

The key point is that poor people tend not to buy houses, so the average wage of housebuyers is higher than the average wage of everyone.

For example, suppose there are only two people in the UK. Bob earns £20k and doesn't buy a house. Jim earns £36k and buys a house for £100k with a 2.5x mortgage and a £10k deposit.
The average wage is £28k (average of 20k and 36k)
The average house price is £100k
Av house / av wage =~3.57

chucky

JayScottGreenspan wrote: »

Yeah, it was the way of things for many years. Your bank manager would just refuse to lend you more than 3.5x salary, or something similar.

The fact that the average house price has historically tended to be about 3-4x the average UK salary is a completely separate matter.

The key point is that poor people tend not to buy houses, so the average wage of housebuyers is higher than the average wage of everyone.

For example, suppose there are only two people in the UK. Bob earns £20k and doesn't buy a house. Jim earns £36k and buys a house for £100k with a 2.5x mortgage and a £10k deposit.
The average wage is £28k (average of 20k and 36k)
The average house price is £100k
Av house / av wage =~3.57

i believe that £42k is the average salary for a homebuyer - this could have been single or joint or even one part time.

JayScottGreenspan

chucky wrote: »

i believe that £42k is the average salary for a homebuyer - this could have been single or joint or even one part time.

Cheers. And the UK average wage is ~£28k, I believe.

the_ash_and_the_oak

Dan: wrote: »

We can't all be home owners either.

agree w this fwiw. Over the last 100 years home ownership stats have risen and risen. Kinda feeling we're at a point where it can't really go any higher without consequences and that we passed that point at some point in the last couple decades. Feel like we have a significant proportion of homeowners who can't really afford it - supply and desire I guess (not overly comfortable with using the word demand here tbh)

Feel like ever increasing rises over the last 5 decades kinda linked to ever increasing ownership stats. Not sure what happens when latter percentage gets to a point where its difficult to increase without govt schemes etc - and also wonder if home ownership levels may (should?) start to decline again

chucky

JayScottGreenspan wrote: »

Cheers. And the UK average wage is ~£28k, I believe.

but that is the point - we can't take a UK average on neither salary or house prices because London prices will be different to Wigan prices and so will salaries

have a look at this which will give a better indication instead of using national averages that don't prove anything.
http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2008/tab7_7a.xls

it just proves that not everyone will be able to afford to buy unfortunately

ruggedtoast

Yakubu22 wrote: »

Agreed, but a hard working person on an average salary should comfortably be able to afford something more than a hole in the ground.

They shouldnt need to borrow 4-5x their salary. Historically this was never the case (until the 2003-2007 boom). And IMO the market will slowly return to something like the more 'normal' 3-3.5x salary to house price ratio.

I'm tired of all this bias towards the hard working. I feel it excludes me and 98% of everyone in every place I've ever worked to be fair.

This country badly needs housing for moderately demotivated people who do enough at work to get by.

What is there for us?

Yakubu22

ruggedtoast wrote: »

I'm tired of all this bias towards the hard working. I feel it excludes me and 98% of everyone in every place I've ever worked to be fair.

This country badly needs housing for moderately demotivated people who do enough at work to get by.

What is there for us?

good luck!

izzybusy23

Dan: wrote: »

You feel it has some way to go because you have deceided you WON'T buy at the current prices. In reality, you don't want to commit financial suicide and live and long and lonely life paying off an expensive mortgage on an overpriced piece of tat.

Damn, thanked you in error!!!

Please see adjusted remarks and note the word WON'T

izzybusy23

Dan: wrote: »

There is no such thing as 'normal' 3-3.5x salary to house price ratio. This is a myth dreamed up over at hpc.co.uk

Sorry Dan, but what CR&P!!!! I have had two mortages in the past, one on a flat the other on a house and both were done at 2 x my partners wage and 1.5 my wage.. (edited for Mr Monkfish) which goes to prove that you didn't need stupid multiples to get mortgages.. 3.5 wage was always the norm.. how old are you... your remarks suggest in your twenties if you cannot remember the 3.5 wage rule. :rolleyes: