should erps be banned?

ninky_2

plus i would think that the 30 percent who owned homes in 1930s owned much more significant properties on average than those of today (which include flats in blocks).

Conrad

There are plenty of chaotic states were one cannot raise a mortgage. Dont see too many of thier citizens buying homes for cash mind.

ninky_2

Conrad wrote: »

There are plenty of chaotic states were one cannot raise a mortgage. Dont see too many of thier citizens buying homes for cash mind.

apples and oranges mate. there are lots of things citizens in those chaotic states lack. yet we are a relatively stable state. standard of living (in terms of purchase power) has risen significantly in many areas. yet not in property. and i think we need to look at mortgage lending to find the reasons for that.

Wakey2008

ninky wrote: »

well let's look at the influence of mortgages on housing affordability. mortgages as we know them have really only been around since the 1930s and have been common only much more recently than that.

in 1930 the average UK house cost £590. the price had actually fallen to £545 by 1938. if price rises had kept in line with other basic needs such as clothing or food most people would now be able to save up and buy a house outright. just as the majority are now able to feed and clothe themselves much better now they would similarly be able to house themselves much better now.

it is mortgage lending that has seen prices escalate to a ridiculous degree. so much so that as a double income household with no children in our 30s we can not afford to buy (mortgage) a property that my parents could afford on a fairly low single income with two children when they were in their 20s. instead we live in a one bed flat in a "cheap" area.

is this the 'wealth creation' that mortgage lending would like to take credit for?

You have a small point you are making it very badly. Yes houses are overpriced but you argument about 1930 prices is very stupid.

In 1930 the average house may have been £590 but the average wage was also about £2 per week. This means that a house was 295 times someones income.

If the average wage is now £600 per week the using the 295 multiple that would mean a house should cost around £177,000. Which is quite a realistic average in most areas. :D

ninky_2

Wakey2008 wrote: »

You have a small point you are making it very badly. Yes houses are overpriced but you argument about 1930 prices is very stupid.

In 1930 the average house may have been £590 but the average wage was also about £2 per week. This means that a house was 295 times someones income.

If the average wage is now £600 per week the using the 295 multiple that would mean a house should cost around £177,000. Which is quite a realistic average in most areas. :D

:rotfl:i thought income multiples were based on annual income not weekly?! even assuming you are right about the average income that's £104 a year = 5.7 times income (or there abouts) to buy a property (large house) outright. where do they train mortgage advisers these days?

btw the average wage is not £600 a week.

nervousftb_3

ninky wrote: »

:rotfl:i thought income multiples were based on annual income not weekly?! even assuming you are right about the average income that's £104 a year = 5.7 times income (or there abouts) to buy a property (large house) outright. where do they train mortgage advisers these days?

btw the average wage is not £600 a week.

i'm no expert, but surely wakey2008 is right in principle - it doesn't matter whether you use weekly or annual wage for income mulitples, as long as you compare like with like. or am i missing something?!

so the principle behind the argument remains the same - the income multiple of wage:house price works out the same then as it is now (295x), using the figures wakey2008 gave.

ninky_2

the average uk annual income is just under 25k. the average detached house (which is the type of property we are talking about generally when discussing 1930s ownership) now costs around 350k. 14x income multiples. slight difference.

nervousftb_3

yes i realise that the figures quoted may have been incorrect, but i still argue that the theory was correct - wakey2008 was stating that using the weekly wage as a starting point, the multiples in 1930 and the multiples in 2009 were the same. just a pedantic mathematical point, and probably moot if the figures used were wrong, but i stand by the theory of the argument!

SandC

I wouldn't say average 1930s houses were detached, loads of semi detached from that period. I think £350k is a little on the high side of average if you're saying £25k average salary that's the national average (which i thought was around £28k).

ninky_2

SandC wrote: »

I wouldn't say average 1930s houses were detached, loads of semi detached from that period. I think £350k is a little on the high side of average if you're saying £25k average salary that's the national average (which i thought was around £28k).

we're talking 1930 not 1930s. and even semi's are relatively large when you look at typical properties today.

link to average wages here
http://www.statistics.gov.uk/cci/nugget.asp?id=285

....plus the weekly wage doesn't take into account the fact it might not be a permanent job and therefore won't translate into annual income.