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Debate House Prices
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More average salary stats to argue over.....
Comments
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HAMISH_MCTAVISH wrote: »Fair enough, but 96 was at close to the bottom of a cycle, and 2007 at the top.
Neither are representative of the value of housing. The true value is at the long term mean. Which is where prices are today. But of course that mean has been rising throughout many cycles...... And will continue to do so until house building stops lagging population growth.
The true value is in affordability. Not a mean, or middle value.
Prices today are not affordable in relation to earnings. Now that lending is a lot stricter (and may be for some time), people can't afford the houses they once could during the property bubble.
It's an old fashioned rule of thumb, but 3.5x the median (not the mean, it's not truly representative, as it's skewed by extreme high salaries) salary is a good judgement. Even if it were 30k, it would mean 105k mortgage, which is some way off current prices.
And it should be partially a single salary, as once children come into the equation, you're often surviving on a single salary.
When will people learn, prices need to drop. Cheaper houses are better for us all. It's only the minority that got caught up from 2004/5 onwards that are largely affected."Boonowa tweepi, ha, ha."0 -
Just in case there is anyone stupid enough to believe this please let me point out it is absolutely wrong. We are 20% off the biggest bubble in house price history. Hardly makes a dent in the nonsense of the last several years.HAMISH_MCTAVISH wrote: »The true value is at the long term mean. Which is where prices are today.
Long, long way to go down yet.0 -
The_White_Horse wrote: »they should get back in the kitchen and stop being so selfish. Look what you have done women, with your stupid aspirations and idiot ideas about careers. You have made house prices double. That is all you have done. If you had done the decent thing and stuck to looking after your man, you would all be living in better houses. talk about stabbing yourself in the face.
women eh?!
women - know your limits!0 -
Just remember that it is a statistic from a sample of a particular part of the population
"The ASHE is a sample of 1% of people who pay tax via PAYE. It doesn't include the self-employed - businessmen, contractors etc - who make up the ranks of the really wealthy."
The very nature of the median average means it would not be much skewed by including the relatively small amount of high earners in the sample.
I agree with a previous poster that "self-employed" isn't a synonym for "wedged". How much do you think a self-employed washing machine repair man brings in a week for example?0 -
OK - So what is the median house price?
Shouldn't we also expect the average house price to be skewed by all those big expensive houses that the big earners buy?
If we want to factor out the big earners, let's also factor out the big houses.0 -
OK - So what is the median house price?
Shouldn't we also expect the average house price to be skewed by all those big expensive houses that the big earners buy?
If we want to factor out the big earners, let's also factor out the big houses.
They do!
Could it be you're talking without checking facts first? Surely not. :rolleyes:0 -
fair enough - I didn't know that.JonnyBravo wrote: »They do!
P.S.
some median values here
http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housingmarket/livetables/
tables 577 and 5860 -
I agree with a previous poster that "self-employed" isn't a synonym for "wedged". How much do you think a self-employed washing machine repair man brings in a week for example?
More than an employed one.(also what they pay tax on and what they bring in are two different things)
How much does a self employed lawyer or barrister bring in, or an accountant etc.
Self employed people do tend to bring in a good wage in general, other wise what is the point of being self employed? (also they tend to be trained professionals offering services for their skills)
The risk has to out way the security of employment so generally a self employed person will almost always earn more than there employed counterpart.
The only exception would be a failing business, but they would not be self employed much longer then.0 -
Graham_Devon wrote: »How is it where it is today on long term mean?
If you are going to use long term, you can't then choose to use recent couples both working.
Long time mean is one salary.
Therefore, 31k x 3.5 = £108,500
It's currently 4.9x the mean wage taking the figures on this very thread. And 6.1x the median.
That's no where near the average long term. It's ONLY near average long term if you change the way the long term average has been calculated to include a second full time earner, which let's face it, is NOT reality.
To be near long term average, even using the mean wage, the average wage would have to be approx 40k.
Explain away....
Your point is invalid.
Long term average, or trend line, or mean, in pricing terms has nothing to do with an afforability metric. And as prices have increased through multiple cycles over multiple decades, so has the mean. This will continue until building does not lag population growth.
As for your affordability metric, the so called "long term average" of 3.5 times income is not long term at all, and nor is it average. As little as 100 years ago 90% of property was owned by 10% of people.
In 1950, the average house cost 4 times the mean average male full time salary. Today, the average house costs 4 times the mean average male full time salary. The average from 1950 to today has also been right around 4 times the mean average male full time salary.
Like it or not, houses today are dead on the long term average, both in terms of the actual price trend line/mean and the affordability measure.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Self employed people do tend to bring in a good wage in general, other wise what is the point of being self employed? (also they tend to be trained professionals offering services for their skills)
A self employed person could be a hairdresser, odd job man, window cleaner, run a B&B or decorator. I'm sure a lot prefer the freedom of being self employed rather than working for someone else.
There's far more to life than just earning money.......0
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