£1.2tn given to old from young

Graham_Devon

baby_boomer wrote: »

I'd be very surprised if the average house in 1973 was more than 5x the average salary. In fact, you could knock me down with a feather & I'll give up posting if it was.

It was before the ground breaking 1975 Sex Discrimination Act

Double full income households were unheard of for families who reproduced - which almost all did who were physically capable.

Building societies were still in the mortgage = 3x salary mode, and then only if you'd saved with them for years.

And in those days they could discount any female earnings on the grounds that women would become pregnant & give up work for at least 25 years (even if they were infertile).

It was, but not for very long. Was a blip I believe?

http://www.fool.co.uk/news/foolseyeview/2002/fev020422c.htm

Average looks to be around 3.5.

Note that this only goes up to 2001. Take a look at 2001 and the average house price and average wage.

As the data is based on Halifax data, I'd expect it to be based on the averages of those who bought, rather than the national average wage.

ruggedtoast

Emy1501 wrote: »

The above is the issue. There is nothing wrong with rising houses prices if there is wage inflation to match. The problems is when wage inflation does not match HPI then we get the situation where people borrow way more than they can afford and then are unable to pay it back.

People also forget that there are developing nations who's economies will overtake us in the years to come and these countries plus others will be offering our well educated to chance of a better life.

Given the choice of a 50 year mortgage in a studio as the likes of Hamish would like or the chance to move to a warm up and coming country with a nice package to go with it I know the choice I would make. I know a few young well educated people who are considering the move. There was also a financial company on the news the other day suggesting they may move their business abroad. My old employers one of those who said they would never move call centres etc abroad have just done so.

If we carry on as we are there will come a time when the best youngsters will of had a enough and will disappear and the country will be left mainly with the people that no one else wants. Just look at those multi national companies who have failed due to complancey and living in the past. Something this country seems great at.

If we want our young to look after us in old age then we need to protect them whilst they are young.

I have friends who are teachers and nurses who are emigrating. Countries like Canada and NZ want and need these professionals and are willing to pay the going rate.

Here we want and need teachers and nurses and policemen but as a country we are not willing to pay them enough to live in the places we want them to work.

Many important responsible jobs are now being seen as McJobs done by losers who will never amount to any more than a bedsit in a bad area, or immigrants who will live 5 to a room.

Of course lower house prices would solve all this and stop the need for mass low skilled immigrants. Doesnt seem to be on Brown's to do list though.

ukcarper

mbga9pgf wrote: »

And what happened to real UK prices at the end of the decade?

Here is a clue.

They were overvalued at peak, as they are overvalued now, thats why they are due a fall.

I've not said anything about property being over or under valued I'm just saying that 2x or even 3x average wages is not the norm and rampant hpi is not a new thing.

Let’s take 72 and one particular new build road. Beginning of year £5350 middle of year £8000 beginning of 73 £11000.
Average wages £1500 at beginning inflation about 15% there wage at beginning of 73 £1750.
Multiples about 3.5x at beginning of 72 and 6.25x at end of year. Prices did drop in 73.

Same house now 7.2x average income so I must admit it’s worst but not quite as bad as you try to make out.

Graham_Devon

ukcarper wrote: »

Let’s take 72 and one particular new build road. Beginning of year £5350 middle of year £8000 beginning of 73 £11000.
Average wages £1500 at beginning inflation about 15% there wage at beginning of 73 £1750.
Multiples about 3.5x at beginning of 72 and 6.25x at end of year. Prices did drop in 73.

As I stated, it was a blip. It didn't last long at all, so although it's a case of rampant HPI, it's nothing like we have seen over the past decade.

ukcarper

Graham_Devon wrote: »

It was, but not for very long. Was a blip I believe?

http://www.fool.co.uk/news/foolseyeview/2002/fev020422c.htm

Average looks to be around 3.5.

Note that this only goes up to 2001. Take a look at 2001 and the average house price and average wage.

As the data is based on Halifax data, I'd expect it to be based on the averages of those who bought, rather than the national average wage.

Yes it was a blip but can’t you argue 2006/2007 was and if you are trying to buy when there is a blip does it make any difference when it is.
What I am trying to say is that for a babyboomer trying to buy it the early 70s it was not as easy as some people would have you believe.

mbga9pgf

ukcarper wrote: »

Yes it was a blip but can’t you argue 2006/2007 was and if you are trying to buy when there is a blip does it make any difference when it is.
What I am trying to say is that for a babyboomer trying to buy it the early 70s it was not as easy as some people would have you believe.

The boomers didnt have to put up with the STATE stealing my future tax liabilities to prop up an unfair, overpriced housing market whilst yet again, FTBs get shafted up the !!!!.

If they had let prices fall, we would have been down 30%, the recession would have been worse, yes, but the correction would have been over. We would be able to build off a solid base, unlike the patch of sand Brown and Co have lumped us with. This is where the tories differ from Labour; they understand the market and realise it cant be beat in the long term. We will get the correction, all Labour have done is delay it, in fact will have made it worse for us all. Demand is going to suffer for a very very long time as a result of what labour have got up to over the past 12 years.

Graham_Devon

ukcarper wrote: »

Yes it was a blip but can’t you argue 2006/2007 was and if you are trying to buy when there is a blip does it make any difference when it is.
What I am trying to say is that for a babyboomer trying to buy it the early 70s it was not as easy as some people would have you believe.

So one year and your saying it was therefore harder?

LOL. Think this is simply going round and round in circles. But I don't think those thanking that can say they had it THAT hard compared to today if they see that as hard.

chucky

Graham_Devon wrote: »

So one year and your saying it was therefore harder?

LOL. Think this is simply going round and round in circles. But I don't think those thanking that can say they had it THAT hard compared to today if they see that as hard.

so if it was that easy why didn't more people own property then?

mbga9pgf

chucky wrote: »

so if it was that easy why didn't more people own property then?

Because SENSIBLE lending limits of max 3 times salary meant you couldnt!

Graham_Devon

chucky wrote: »

so if it was that easy why didn't more people own property then?

Credit was far tighter. No matter how smart you dressed to pop in to see the bank manager.