Wage Inflation vrs. HPI

kriss_boy

Lets say the average wage is 25K and the average house 225K. (9 times the average salary)

Over the next 5, 10 and 20 years how do you guys reckon that relationship will change?

surely wage inflation will rise quicker than house prices? What Im getting as is the affordablitliy of homes, do you reckon in 10 years time the average house price could or should be, say, 6 times the average salary.

mitchaa

Average house price is £150k so 6x salary.

As soon as lending restrictions start to ease and the reintroduction of 100% mortgages, then prices will rise again. They will be back to peak 2007 values most probably some time next year.

In my opinion anyway.

Wage inflation at the moment appears to be non existant.

Thrugelmir

Credit availability will determine the actual ratio, of wages to house prices.

Not wages themselves.

House prices may well reflect rental values and yields for the foreseeable future.

dopester

kriss_boy wrote: »

Lets say the average wage is 25K and the average house 225K. (9 times the average salary)

Over the next 5, 10 and 20 years how do you guys reckon that relationship will change?

surely wage inflation will rise quicker than house prices? What Im getting as is the affordablitliy of homes, do you reckon in 10 years time the average house price could or should be, say, 6 times the average salary.

There were 200,000+ applications for a few police officer jobs the other day.

Wage inflation. Some people are going to have their minds melted. It's pay-freezes and pay-cuts from now on.

Don't like it? Start your own company and pay your own staff more than they are worth or a lot more than the business profits support.

The only wage inflation is for people who can seriously produce positive values for themselves or their employers, above and beyond what other people in the market place can do. Not for the big mass of divvies out there, who believe in perpetual inflation and that Gordon ended busts for continual boom and super money from nowhere.

Generali

kriss_boy wrote: »

Lets say the average wage is 25K and the average house 225K. (9 times the average salary)

Over the next 5, 10 and 20 years how do you guys reckon that relationship will change?

surely wage inflation will rise quicker than house prices? What Im getting as is the affordablitliy of homes, do you reckon in 10 years time the average house price could or should be, say, 6 times the average salary.

According to the BBC (no link) over the past 50 years real (inflation adjusted) house prices have risen by 2.79% and wages by 2.70%.

PasturesNew

In a lot of cases, for a lot of people, doing the same job, there's been no rise for 10 years. A lot of jobs are paying less now than 10 years ago ... or even 20 years ago.

1990: I would do temp typing/secretarial at a rate of £6.60/hour.
2010: In most places I'd now be offered £6-6.50

1997: I started a job at £17k
2007: I looked up that company/job and they were recruiting at ... £17k

1985: My dad "took any job" after he was laid off, rate £6/hour
2009: We looked up that same job to see if there were any going, current rate is £6/hour
There are thousands of examples like this.

Cleaver

dopester wrote: »

There were 200,000+ applications for a few police officer jobs the other day.

I heard that the advert said "Do you want to join The Police?", which resulted in 90% of the applicants thinking they were applying to join a band with Sting.

Cleaver

PasturesNew wrote: »

1990: I would do temp typing/secretarial at a rate of £6.60/hour.
2010: In most places I'd now be offered £6-6.50.

According to the BBC the average wage in 1990 was £13,760 (link). Assuming a 40 hour week, working at £6.60 an hour (as you did in 1990) would be £13,765 per year.

Could you really earn above the average wage in 1990 doing a typing job?

treliac

dopester wrote: »

Wage inflation. Some people are going to have their minds melted. It's pay-freezes and pay-cuts from now on.

So surely many non-essential consumer purchases, holidays, etc. will have to come down in price as people won't be able to afford them? Even less so when we are forced to pay more for essential goods such as food and heating.

Cleaver

PasturesNew wrote: »

In a lot of cases, for a lot of people, doing the same job, there's been no rise for 10 years. A lot of jobs are paying less now than 10 years ago ... or even 20 years ago.

1985: My dad "took any job" after he was laid off, rate £6/hour
2009: We looked up that same job to see if there were any going, current rate is £6/hour

Sorry Pastures, but just to question this one too...

The same BBC link states that the average wage in 1985 was £8,890. So your Dad "took any job" paying £6 an hour. Again assuming a 40-hour working week, this would be an annual salary of £12.5k which would have been more than 40% above the average wage at the time. In today's money your Dad would be "taking any job" paying around £35k.

What roles were you looking at that paid 40% over the average wage in 1985 that only pay £6 an hour now?

HAMISH_MCTAVISH

PasturesNew wrote: »

1990: I would do temp typing/secretarial at a rate of £6.60/hour.
2010: In most places I'd now be offered £6-6.50
.

Even secretarial work has wide variances though, depending on type of company, industry, and level of skill/professionalism required.

My wife registered with a few temp agencies when we first got back to the UK from overseas, and regularly got emails for jobs at around £15 an hour for short term secretarial/PA contract work. Covering maternity leave, etc. For that they expect a good working knowledge of Excel, Word, Powerpoint, and sometimes something more specific like SAP.

Of course I've also seen plenty of entry level stuff, receptionist, filing, typing, etc advertised for anywhere between £6 and £9 per hour.

But I know several full time PA's on 30K to 40K a year in Aberdeen...... And presumably those jobs are available elsewhere in the country as well.

It's an interesting field in terms of variety of pay. I'm always shocked to see the money some PA's can make in London, for example.