Are house prices now affordable

chucky

sjaypink wrote: »

i think, for a general overview, the averages are useful

but you do have to be careful how you use them and what you apply that average to.

an average salary is an average person in the middle of their working career maybe in their 40s.

just because for example you're earning £21k when your 23 it doesn't mean you're below average salary. it has to be taken into consideration.

another example is a single male on a single average salary cannot buy an average priced home.
but a couple on average salaries can buy an average priced home. i know people will say that many women don't work - it's just an example.

IveSeenTheLight

Yes

JonnyBravo wrote: »

Can a simple yes or no cover the whole population and all it's variables? No.


A completely meaningless question. IMO.

Very True,

What may not affordable in London / South East areas, other area can find it affordable.

I would not presume to say that any specific area is affordable or not, what I can show is that on a like for like comparison, mortgage multiples are very near the long term average and people are paying less as a percentage of income than they have previously on average.

Given this factual data, I would say in general, house prices are affordable, but not necessarily affordable everywhere.

Graham_Devon

No

sjaypink wrote: »

but for every factor that makes housing less affordable for 1 person, there are (i believe) relatively equal factors that means it will be more affordable for another?

i think, for a general overview, the averages are useful

Averages have 2 different types two.

Mean and median.

The mean is the average of all wages across the spectrum. So if 100 people earn 20k each, but 10 people earn 100k each, the average salary ends up at 27k. yet 90% of the people in these figures earn 20k.

The median works out what most people earn, so in the same example, the median would be approx 20k, as thats what 90% of the people earn.

Average house price vs average wage tend to use the mean wage.

Which makes no sense to me, but that's how we come to the conclusion that house prices are now 4.5x the average wage, as the average wage is something like 36k on a mean basis. Yet most people earn 26k.

Pobby

No

Not read this fully so sorry if I am repeating another poster. Boe rates are now .5% base. So how affordable would it be if we get a return to the years and years of 7% plus?

sjaypink

No

Graham_Devon wrote: »

Averages have 2 different types two.

Mean and median.

yes, i passed my maths gcse thanks :rolleyes:

...and theres three different averages iirc? mode?

are house price averages mode or median then, generally?

as long as the methods are the same, then i still think av -v- av is useful, albeit inaccurate then...? :cool:

Graham_Devon

No

sjaypink wrote: »

yes, i passed my maths gcse thanks :rolleyes:

...and theres three different averages iirc? mode?

are house price averages mode or median then, generally?

as long as the methods are the same, then i still think av -v- av is useful, albeit inaccurate then...? :cool:

See, trouble!

chucky

sjaypink wrote: »

yes, i passed my maths gcse thanks :rolleyes:

...and theres three different averages iirc? mode?

are house price averages mode or median then, generally?

as long as the methods are the same, then i still think av -v- av is useful, albeit inaccurate then...? :cool:

and here's the thing that many people (i.e. graham) doesn't understand...
buying a house isn't affordable for everyone; minimum wage etc...

those average salaries include all of these in their gross calculations.
so what needs to be done is slice off the lower part of this salary range who would never afford a house to work out the average salary mean or mode... this would make that average salary for buying a house higher than it currently is.

sjaypink

No

chucky wrote: »

and here's the thing that many people (i.e. graham) doesn't understand...
buying a house isn't affordable for everyone; minimum wage etc...

those average salaries include all of these in their gross calculations.
so what needs to be done is slice off the lower part of this salary range who would never afford a house to work out the average salary mean or mode... this would make that average salary higher than it currently is.

well, i disagree actually. i dont think that you can cut nmw out of the equation. an average is supposed to be just that- an overall reflection?

surely it makes no sense to cut out sections that 'dont fit'? otherwise is there not an argument for ignoring (ex rtb) house prices on bad council estates- because no one earning above £6.50ph would want to buy there?

chucky

sjaypink wrote: »

well, i disagree actually. i dont think that you can cut nmw out of the equation. an average is supposed to be just that- an overall reflection?

surely it makes no sense to cut out sections that 'dont fit'? otherwise is there not an argument for ignoring (ex rtb) house prices on bad council estates- because no one earning above £6.50ph would want to buy there?

then the average comparison doesn't work because you're comparing different types of housing - council, apartments, terraced.

you also get into argument that everyone should own a home whatever the salary.

Graham's question isn't clear and is a bit leading.

Batchy

affordable...

ok... you have someone answering this question who has brought and can meet the payments ... therefore affordable... YES

ok imagine ... its now 2011... they can't remortgage or afford the 12% interest rates... affordable now... NO

OK now imagine, cheaper house price but higher interest rate say 8% today affordable... YES

Imagine the same 12% in 2011 affordable... just about YES...

SO to answer the question... are they affordable now... id still say NO. with low interest rates attracting people to take risks without realising where interest rates might be in 2-3 years time,its a VERY VERY risky time to be buying!!!