If milk had risen in line with house prices...

michaels

OK - let me try to explain this slowly.

With productivity increases the purchasing power of real incomes has risen and relative prices of other goods have fallen as their production has become more efficient.

This means that people can meet their basic needs for food, heat, transport etc from a smaller share of their income.

Thus they have more spare income to spend on other things. One other thing is housing - the supply of housing has not really increased (any increase has been offset by rising population) so with the same ammount of housing available and more spare income house prices have been bid up so that the ammount of demand for housing (based on affordability) matches the supply.

So with everything else taking a smaller proportion of income (like the milk in the example) by default housing in fixed supply has become more expensive. Unless supply is allowed to expand then any increase in average earnings is likely to translate in to higher house prices - sorry.

Really2

Also how much as the population of cows increased in that time compared to number of houses built?
Also how much has the average milk yeild increased over that time.

Surely that tells us if a house is as needed as much as milk we have enough milk and not enough houses otherwise the inflation would be the same.

phil_b_2

wow... just wow. Comparing a house to a pint of milk as a means of assessing affordability.

It just doesnt get more ridiculous, but obviously folk fall for it so why not.

TighterThanTwoCoatsOfPain

ukcarper wrote: »

What would a gallon of petrol be

I just want to bump this question... Seems it got overlooked. :beer:

ukcarper

Not very scientific but when bought my first house back in the early 70s it were 8k now similar houses are about 180k that 22.5x. If I remember correctly a gallon of 4star (no unleaded back then) was about 30p if it had gone up as much as house prices it would be about £6.75p. So it would seem houses prices have even out stripped petrol.

carolt

michaels wrote: »

OK - let me try to explain this slowly.

With productivity increases the purchasing power of real incomes has risen and relative prices of other goods have fallen as their production has become more efficient.

This means that people can meet their basic needs for food, heat, transport etc from a smaller share of their income.

Thus they have more spare income to spend on other things. One other thing is housing - the supply of housing has not really increased (any increase has been offset by rising population) so with the same ammount of housing available and more spare income house prices have been bid up so that the ammount of demand for housing (based on affordability) matches the supply.

So with everything else taking a smaller proportion of income (like the milk in the example) by default housing in fixed supply has become more expensive. Unless supply is allowed to expand then any increase in average earnings is likely to translate in to higher house prices - sorry.

I agree you need to increase supply - you also need to restrict demand. I don't think that some people should be allowed to own many, many houses for speculative profit whilst others have none - and yes I do realise that is a political point, and non-socialists would have a problem with that. (Which if I recall the authoritarian/libertarian quiz you posted, was most people on this forum apart from me. )

I strongly believe demand should also be restricted by measures such as max 3.5X income multiples, max 90% LTV, etc - again, others will disagree.

But yes, I'm strongly in favour of increasing supply as well.

And am I really the only one to feel that instead of house prices expanding to fill the gap left over after buying essentials, it would be nice if we could all have more disposable income...?

TighterThanTwoCoatsOfPain

ukcarper wrote: »

Not very scientific but when bought my first house back in the early 70s it were 8k now similar houses are about 180k that 22.5x. If I remember correctly a gallon of 4star (no unleaded back then) was about 30p if it had gone up as much as house prices it would be about £6.75p. So it would seem houses prices have even out stripped petrol.

Well at peak prices the other year i was paying £1.38 a litre for diesel which i make around £6.27 ish... seems quite in line using that info :T (although my maths could be a bit shonky!)

StevieJ

lostinrates wrote: »

I agree, its all shocking (and has horrors beyond what it means about farming/and social values) but what would parma ham have been? and smoked salmon and champagne? It seems to me goods that were truly luxury when I was a kid....very, very infrequent special purchases, are now cheaper and are in ''normal'' shops year round.

Interestingly more people can afford a house now than the 50's and before, what is going on . To be fair to Shelter theirs is a noble cause and not just self interest.

ukcarper

TighterThanTwoCoatsOfPain wrote: »

Well at peak prices the other year i was paying £1.38 a litre for diesel which i make around £6.27 ish... seems quite in line using that info :T (although my maths could be a bit shonky!)

I don’t think my figure are particularly accurate and with house prices and petrol going up and down, I suppose depended on what year or even when in that year you compared today’s prices to the figure could vary quite a lot.

silvercar

carolt wrote: »

I don't think that some people should be allowed to own many, many houses for speculative profit whilst others have none - and yes I do realise that is a political point, and non-socialists would have a problem with that.

You are doing a disservice to the people who actually want to rent and want a robust rental sector.

Fine for wannabe buyers to say that others shouldn't be allowed to own, but a lot of renters want to rent and they can only rent from people who own (more than their main home).