Why were house prices cheaper in the 1970s than they are in the C21st?

michaels

1) How many singleton households of young people or retirees were there in the 70s?

2a) If other basics of living cost 50% of your income up to how much of your remaining income would you be willing to spend to house your family if there was no other option - the other 50%?
2b) Now suppose other basics only cost 25% of income - you are now able to spend 75% of income to secure the essential that is housing.

Generali

Mortgages were rationed so many couldn't buy despite being able to afford the repayments

ukcarper wrote: »

I think that’s what a lot of people fail to understand although houses were cheaper it was just as difficult to buy one, might have been easier to pay for it if you got one though.

Oh absolutely right. If you could get a mortgage* then paying it off wouldn't have been that tough unless you hit hard times as lending criteria were very risk averse.









*AIUI, to get a mortgage in the 1960s and 1970s you had to save every week or month (depending on your pay period) the full repayment amount of the mortgage for a year. On top of that it was expected that you would have been a member of the building society for some time before and that you were the 'right sort', generally a man in a steady job.

michaels

Nothing to do with top earners (who as Hamish keeps banging on are the main house buying group now and would have almost exclusively been in the 70s) paid a much higher proportion of income (up to 98%) in tax in the 1970s

pollypenny

Yes, we had to prove that we could pay our mortgage on a single wage, but it had taken the two of us, saving like hell to get a 10% deposit together.

In 1970 few women had a decent maternity leave entitlement. Only 6 weeks in my case, so there was only one wage available anyway.

New houses were also pretty basic then - a sink unit in the kitchen and that was it. (OH put up work-tops and we bought cupboards.) The garden was rubble; we had to buy top-soil and put down grass-seed.

It seems to me that people expect even small houses to have two bathrooms, front gardens which are at least turfed and fancy kitchens. All these have to be paid for.

Graham_Devon

pollypenny wrote: »

Yes, we had to prove that we could pay our mortgage on a single wage, but it had taken the two of us, saving like hell to get a 10% deposit together.

In 1970 few women had a decent maternity leave entitlement. Only 6 weeks in my case, so there was only one wage available anyway.

New houses were also pretty basic then - a sink unit in the kitchen and that was it. (OH put up work-tops and we bought cupboards.) The garden was rubble; we had to buy top-soil and put down grass-seed.

It seems to me that people expect even small houses to have two bathrooms, front gardens which are at least turfed and fancy kitchens. All these have to be paid for.

LOL, sorry, but wow. Can see you had it immensley hard in your day!

ukcarper

Generali wrote: »

O

*AIUI, to get a mortgage in the 1960s and 1970s you had to save every week or month (depending on your pay period) the full repayment amount of the mortgage for a year. On top of that it was expected that you would have been a member of the building society for some time before and that you were the 'right sort', generally a man in a steady job.

It wasn’t quite as hard as that I managed to get a mortgage with a building society I hadn’t saved with as the one I was saving with wouldn’t lend me enough and their were mortgage brokers then.

The first mortgage I had was for £7200 I can’t remember what my wife was earning but I was on about £1.5k a year she was probably earning about £750.

It was unusaul and most BSs were prepared to lend me £6k

sss555s

A._Badger wrote: »

The lack of understanding of decimalisation (even what it was) suggests opinions on the state of the (infinitely more complicated) wider economic and political conditions during the 1970s be taken with a sack of salt.

Was that a 1 hundredweight or a 50KG sack of salt?

nearlynew

Forget the arguments and inter-generational warfare, let's look at a simple example of two people born just 3 years apart with similar incomes and plan.

Person A born 1977
Person B born 1980

Both start work aged 20 and both plan to buy a house at the age of 30

Fast forward to 2007 person A is 30 has no savings and buys a 150k house with no deposit

Fast forward to 2010 person B is 30 has 30k savings and is unable to buy a 150k house even with 20% deposit

Now HPI cheerleaders would say person A situation is "normal" and if only we could get back to normal person B could do the same and everything would be OK

Whereas I say person B situation is normal and if the same conditions existed 3 years earlier person A would not have been able to "buy" their house


This simple example using 2 people of the same generation illustrates that something has gone wrong.

If the current lending practices had been in place over the past decade we wouldn't be in this mess.

marklv

nearlynew wrote: »

Forget the arguments and inter-generational warfare, let's look at a simple example of two people born just 3 years apart with similar incomes and plan.

Person A born 1977
Person B born 1980

Both start work aged 20 and both plan to buy a house at the age of 30

Fast forward to 2007 person A is 30 has no savings and buys a 150k house with no deposit

Fast forward to 2010 person B is 30 has 30k savings and is unable to buy a 150k house even with 20% deposit

Now HPI cheerleaders would say person A situation is "normal" and if only we could get back to normal person B could do the same and everything would be OK

Whereas I say person B situation is normal and if the same conditions existed 3 years earlier person A would not have been able to "buy" their house


This simple example using 2 people of the same generation illustrates that something has gone wrong.

If the current lending practices had been in place over the past decade we wouldn't be in this mess.

What about person c - no deposit, no savings?

nearlynew

marklv wrote: »

What about person c - no deposit, no savings?

What?

You mean like person A in my example?