Fantasy house prices

chucky

stueyhants wrote: »

Ok, think I have an answer.
Average weekly wage 1950 was about £7.08 (http://www.thisismoney.co.uk/pensions/article.html?in_article_id=427290&in_page_id=6)

so yearly was £368.16

Average house price was 1.9k (http://www.wwwk.co.uk/culture/housing/index.htm)

So I make that about 5.16 times, so less than the 6.1 today.

that's only part of the story... the lack of available finance, the lack of properties available to buy and interest rates would have made it much more difficult.

stueyhants

chucky wrote: »

that's only part of the story... the lack of available finance, properties available to buy and interest rates would have made it much more difficult.

Possilbly so.

I don't know why the bulls keep banging on about affordabilty. Yes the cost of housing is more affordable against the long term trends but this is due to multiple incomes and lower IR. Saying that prices aren't over priced against long term trends is not comparing like for like.

chucky

stueyhants wrote: »

Possilbly so.

I don't know why the bulls keep banging on about affordabilty. Yes the cost of housing is more affordable against the long term trends but this is due to multiple incomes and lower IR. Saying that prices aren't over priced against long term trends is not comparing like for like.

probably because most bears don't understand that property is expensive but can still be affordable.

HAMISH_MCTAVISH

stueyhants wrote: »

Ok, think I have an answer.
Average weekly wage 1950 was about £7.08 (http://www.thisismoney.co.uk/pensions/article.html?in_article_id=427290&in_page_id=6)

so yearly was £368.16

Average house price was 1.9k (http://www.wwwk.co.uk/culture/housing/index.htm)

So I make that about 5.16 times, so less than the 6.1 today.

Just as 4 times is slightly less than the 4.3 or 4.4 times they are today.

So it seems the comparison was pretty close after all.;)

Fair enough.

So very roughly, in real income multiple terms, house prices in the 1950's were 85% of the price they are today.

Hardly seems like we have an affordability crisis.....

Now how much of that price increase do you think is due to houses today being far more advanced and comfortable, central heating, double glazing, fitted kitchens, better insulated, etc than they were then?

kataklysm

What a fun thread. Some crucial facts the OP seems to have deliberately ignored though:

a) Banks don't calculate your salary multiple from your income minus tax. So typically, it'd be based on 25k x4 for individuals, or 50k x3.5 for couples.

b) That doesn't take into account a deposit of course.

c) 100k + a decent size deposit will get you a nice 1 bed, even in the south east, if you're buying alone, and 175k will buy you at least a 2 bed in most areas. Outside the South East, you'll get even more bang for your buck.

So where's the problem? Buying a house is not a right, it's an option, and a tough one. But I guess some people will find any excuse to avoid working hard for something. Student debt really doesn't come into it. If losing £75 a month off your income breaks the bank, then owning probably isn't for you right now anyway.

LydiaJ

IveSeenTheLight wrote: »

We both worked and put away one full income into our property.
By the time we were ready to have kids the mortgage on the property was sustainable on one income.

Why do so many people want / expect to have it all on day one?

You make owning a home out to be something that can only be achieved if you don't put a foot wrong:

Form stable relationship young and stay together
Both partners get (and keep) well-paying jobs
Buy house young
Pour all excess income into house for a few years
Have kids only if/when mortgage manageable

OR

Be born before 1975 and buy before 2002

If you missed out on the second option and "fail" on any single part of the first option - eg don't meet partner until older, lose job, have kids too soon, split up from partner, etc - well then, tough, you don't deserve to be able to buy.

I accept that that is how it is at the moment. But just because it's worked out OK for you, doesn't mean that everyone will agree with you that it's OK for society. Some of us would like to see a society where home ownership isn't limited to such a small elite.

leveller2911

Its fair to say that many FTB couples both earn and therefore can afford a larger mortgage.Next they start a family and this is where the problem starts.

Currently when maternity finishes and most women return to work there are plenty of perks to help such as "Child care" vouchers, family tax credits ,Breakfast clubs,after school clubs etc etc etc.Whats going to happen after the election when many of these are cut if not completely removed ,I wonder how many Couples actually factor in the perks when they go for a mortgage?.

Its already well documented that many banks take tax credits inot account when offering a mortgage which IMO is only going to end in heartache for many.

Personally I don't think people should have children if they haven't got the time to bring them up, too many children are purely an accessory......

I can only comment on my area and to me house prices are way,way too high.You can buy a 2 bedroom mid terrace (1908 starter home,2up 2 down) for not less than £160k.....Industry wise its a dead area, majority of jobs are geared to tourism and service industry......

I still maintain prices are going to drop by a fair bit.....;) But then again ,I'm a "glass half empty " chap so its probably best not to take any notice ........

leveller2911

kataklysm wrote: »

What a fun thread. Some crucial facts the OP seems to have deliberately ignored though:


So where's the problem? Buying a house is not a right, it's an option, and a tough one. But I guess some people will find any excuse to avoid working hard for something. Student debt really doesn't come into it. If losing £75 a month off your income breaks the bank, then owning probably isn't for you right now anyway.

The PROBLEM I have with it is many,many people gambled in the last 18-24 months borrowing 125% on interest only which was totally f eckless and because of them my savings rates like many others have fallen through the floor.
As far as I'm concerned people can borrow what they like, just don't make the rest of us pay for their c*ck ups......;):rolleyes:

stueyhants

HAMISH_MCTAVISH wrote: »

Just as 4 times is slightly less than the 4.3 or 4.4 times they are today.

So it seems the comparison was pretty close after all.;)

Fair enough.

So very roughly, in real income multiple terms, house prices in the 1950's were 85% of the price they are today.

Hardly seems like we have an affordability crisis.....

Now how much of that price increase do you think is due to houses today being far more advanced and comfortable, central heating, double glazing, fitted kitchens, better insulated, etc than they were then?

Some good points about the quality of houses 1950 versus 2000+.

I agree we don't on average (although some areas SE, costal areas probably do) have and affordability crisis. However this has been achieved through low interest rates and dual incomes. Whilst this can be maintained going forward, these factors are a one off benefit to affordability and can't be used further, where do prices go now ?

macaque_2

IveSeenTheLight wrote: »

It shows that in the UK the mortgage repayments as a percentage of income is 30.1% while the 27 year average is 37.2%

Mortgage repayments as a percentage of income are 7% different to the 27 year average; even though the 27 year average base rate is more than 1000% higher than today's levels. That is a jaw dropping statistic.