At what figure do YOU think the average house price will hit rock bottom ?

Thrugelmir

mitchaa wrote: »

Great, it should be 3.5 x £18k then

So £63k all round then? I'll have 5, maybe 6, if i stretch, can i buy 7

Lot of houses in the Midlands for under a 100k. So with a joint income and 25% deposit very feasible.


Exclude London and the South East from wages and house prices. Then you'll see a much different picture.

ad9898_3

Pee wrote: »

I hope I'm wrong, but I don't see house prices falling any further. Shame as I would like to buy.

Cheer up, spring bounces happen, er every spring, this one was particularly crap due to the state the country is in, but I bet you the shirt on my back prices will be lower at Christmas than now.

chucky

ad9898 wrote: »

So how come the average wage shouldn't afford the average house ?

because not everyone can afford to buy on their salary (i'm being realistic here).

these can then be taken out of the average house price vs average house price comparison and the gap is then narrowed considerably.

if you believe in house owning for all then add everyone on minimum wage that skews the average salatu and you get the typcial graphs that appear every so often.

mitchaa

Median wage in the UK = £20k

However these are for both FT/PT workers, if we switch that to FT workers, the figure changes to £24k

These are median figures so 50% below, 50% above.

mitchaa

ad9898 wrote: »

Absolutely disagree, and for what its worth, so does history.

So you believe Mr average on his £26k income and Mrs average on her £26k income should be able to afford 2 average priced homes? They sell their 2 average homes and buy what, a 6 bed countryside mini mansion?

This is an average couple, not a high earning couple. Average couples in UK all living in 6bed mini mansions seems a bit far fetched to me

Expand the scenario to 2 £40k middle income earners, then onto 2 x 75k high earners. Every middle incomed family would be living in mansions, every high incomed family living in castles and god knows what footballers would be buying? Islands perhaps?

If a single income of £26k is enough to buy a typical 3bed SD home, then the BTL world would expand 100 fold as every family with a decent income would be buying multiple properties.

Complete lunacy i think you'll agree;)

ad9898_3

Ok, well I'm not up on the figures enough to argue, but the evidence in my family and others close to me is that only since 2001 onwards have 2 average wages been needed to buy the average house. Seeing as that was the start of the bubble, make of it what you will.

mitchaa

Thrugelmir wrote: »

Exclude London and the South East from wages and house prices. Then you'll see a much different picture.

http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2008/tab7_7a.xls

Aberdeen - £29,813
Edinburgh - £28,827
Manchester - £28,282
Birmingham - £25,458
Leeds - £25,107

They all support the average salary of £26k without interference from London and account for many millions of people as major cities in the UK

ad9898_3

mitchaa wrote: »

So you believe Mr average on his £26k income and Mrs average on her £26k income should be able to afford 2 average priced homes? They sell their 2 average homes and buy what, a 6 bed countryside mini mansion?

Doesn't work like that though in the real world, perhaps Mrs 26k wants a family and stay at home, perhaps Mr and Mrs 26k, want to carry on working but perhaps buy a fancy car or go on holidays. I know associates who are on 60k +, yet have very, very average houses, but also have nice cars, motorbikes, caravans, go on holidays around the world, spoil their children... etc.

Just because you have a household income of 60k a year doesn't mean you want a mansion with 20 year old mini metro outside and like holidaying in Bognor once every 5 years.

ad9898_3

mitchaa wrote: »

If a single income of £26k is enough to buy a typical 3bed SD home, then the BTL world would expand 100 fold as every family with a decent income would be buying multiple properties.

Why, if I had a £2 million in the bank, I would still only have one house, and live the life of riley. Why the hell would I want tenants ringing in the middle of the night when I had that much cash, not everyone measures their wealth by how big their house is, or by how many they've got.

Most people have no interest in multiple properties.

IveSeenTheLight

mitchaa wrote: »

Median wage in the UK = £20k

However these are for both FT/PT workers, if we switch that to FT workers, the figure changes to £24k

These are median figures so 50% below, 50% above.

Why use the median wage, when the LR reports Mean average house prices?
To compare adequately, Mean Average wages need to be compared

from http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2008/tab1_7a.xls

Full Time Male Mean Average = £35,122
Full Time Female Mean Average = £25,304
Part Time Male Mean Average = £12,586
Part Time Female Mean Average = £9,911

Roughly on average, I make this an average household income of £45,033 (Not sexist but 1 full time male and 1 part time female)
Use your 3.5 multiplier and thats £157,615.50
Don't forget to add on the minimum 10% deposit = £173,377.05

Not everyone can afford to buy, you have to live to suit your means, not that everything has to adjust to suit your means