Historical House Affordability

andykn

jim83 wrote: »

Nationwide provide this data:

Though I find the earnings estimates slightly suspect (apparently it gets earnings data from the ONS, but this indicates that average salary is £31k - the ONS data I can find says it's currently £24k)

I got banned from HPC for explaining that historical data is based on mean male earnings and modern ONS figures usually highlight median male and female earnings. Both full time though.

Buried in the ONS stats you're looking at will be mean male full time earnings somewhere and it will be around 31k.

StevieJ

Graham_Devon wrote: »

Mortgage rates didn't reach 15%, the base rate did.
.

Certainly did in 90.

Research by Halifax, the UK's largest mortgage lender, has revealed that mortgage rates peaked 15 years ago and have never returned to that level.

The Standard Variable Rate (SVR) peaked at 15.4 per cent in February 1990 after a steady upward trend from 9.8 per cent in April 1998.

http://www.fairinvestment.co.uk/news/mortgages-news-Halifax-reveals-15-year-gap-since-mortgage-rate-peak-7756568.html

HAMISH_MCTAVISH

StevieJ wrote: »

Certainly did in 90.

Research by Halifax, the UK's largest mortgage lender, has revealed that mortgage rates peaked 15 years ago and have never returned to that level.

The Standard Variable Rate (SVR) peaked at 15.4 per cent in February 1990 after a steady upward trend from 9.8 per cent in April 1998.

http://www.fairinvestment.co.uk/news/mortgages-news-Halifax-reveals-15-year-gap-since-mortgage-rate-peak-7756568.html

Ouch.

Poor Graham. It's like shooting fish in a barrel sometimes.

Lakelady_2

Quiet_Life wrote: »

Bought first house in 1977, cost £11,000, 10% deposit required, mortgage of 2.5 times husband salary given. Had to be a saver with the mortgage provider; .

Same here - bought in 1979 for £11,000. We had no proven track record in savings but my parents wanted us out of a flat they rented us and they knew the Building Society manager.
I earned £3,000 a year and hubby would be on about £4,000. We can`t have been too badly off as I remember saving for a new car in 18 months.
If you wanted a loan you got dressed up and made an appointment to see the bank manager. Those were the days!

DaddyBear

Generali wrote: »

It's worth remembering that over time in the UK, wages have increased relative to prices so a larger proportion of income is freed for aspirational spending including bidding up house prices and discretionary spending.

Whilst that is true I would argue that the cost of living is currently much higher.
Council tax vs rates
huge increase in energy and water bills
national insurance
petrol prices

morag1202

Graham_Devon wrote: »

Mortgage rates didn't reach 15%, the base rate did.

I did some research on this before and posted up several links to show the mortgage rat was averaging 12% when base rates were 15%.

Same as today. Base rates are 0.5%, but the average mortgage is at what, 5%?

Its disingenuous to use the base rate to make the argument here.

We had to save regularly with the Halifax for 18 months to get our 90% mortgage. We put an offer in for a £16,250 house on 6/08/79 and Halifax approved an interest only Endowment mortgage at 12% We completed on 30/10/79 and that mortgage had rocketed to 15% I have no idea what the base rate was but I'll never forget the amount we were actually paying!

This was around 3.3x husband's gross income.

Cleaver

We first bought a townhouse in 1923 for a conker, a piece of unsual string and some fish bones as a deposit. You could only base your affordability on your grandfather's salary then, and I remember dragging him down to see the bank manager to confirm that he earned 3l 4d.

Of course, in those days you had to have at least four roman coins and a pair of solid silver doves deposited in a safe at the bank for a period of 16 years before getting a mortgage, and obviously all the male staff had a good go on your wife before they would lend you any money. But that was all par for the course in the roaring twenties.

As an aside, when we bought again in 1936 I can remember having to dress up as a schoolgirl and do a strange dance for the bank manager, but to this day I'm still not sure if that was anything to do with the mortgage I was applying for.

ukcarper

Bought my first house in mid 1972 it was £8000 bought with a 90% mortgage I was earning £1500 can’t remember what wife was earning exactly but I think it was about £800. This was a new build terrace they started the year at £5350 and ended at £11000.

As an aside there were cheaper older houses but at the time you could only get 90% mortgages on newer houses you needed a 20% deposit to buy an old house.

Davesnave

Lakelady wrote: »

If you wanted a loan you got dressed up and made an appointment to see the bank manager. Those were the days!

I saved with the Leeds BS for two years, and then, when I decided I needed a mortgage in principle, they told me the quota was used up.

So I popped into a 'new' building society on our High St and asked what they could do for someone with £1k. They offered me a mortgage, provided I moved my stash there immediately. By the end of the day, I was set up to go searching.

That was probably the first time I realised that loyalty in financial matters wouldn't necessarily be rewarded.

MatteH

morag1202 wrote: »

We had to save regularly with the Halifax for 18 months to get our 90% mortgage. We put an offer in for a £16,250 house on 6/08/79 and Halifax approved an interest only Endowment mortgage at 12% We completed on 30/10/79 and that mortgage had rocketed to 15% I have no idea what the base rate was but I'll never forget the amount we were actually paying!

This was around 3.3x husband's gross income.

12% to 15% isn't that big an increase (25%), 4% to 5% is the same.

My friend's mortgage has gone from 4.2% in 2005, to 6.75% now!! (61% increase)