House prices rises over time

davholla

If you know how much a house cost in year x, is there anyway you can tell how much it should be now assuming that it's value rose/fell at the same rate as average prices. I.e. a website that will calculate this?

TrickyDicky101

The Zoopla website does this. Obviously take it with a pinch of salt but it is pretty addictive...

scottishblondie

There are plenty. Try Googling it. I normally use the Nationwide one but I have no idea which one is best.

davholla

TrickyDicky101 wrote: »

The Zoopla website does this. Obviously take it with a pinch of salt but it is pretty addictive...

It is quite interesting although for my road I think some of the prices are too high/too low.

Benji_Brown

These should certainly not be taken as gospel. They do not take into account any work that has been put into the property and are often way out. Certain properties, areas, developments etc have managed to hold their value better than others and vice versa. I doubt there is any site that can give an actual average percentage of what properties have lost/gained that the other banks/companies etc will agree with.

des_cartes

davholla wrote: »

If you know how much a house cost in year x, is there anyway you can tell how much it should be now assuming that it's value rose/fell at the same rate as average prices. I.e. a website that will calculate this?

If you know what the house was worth in year x, find out what people earned in year x and compare the two. Then apply the same ratio to the house now. For example if the house cost 10k in 1980 and average wages were 3k then if average wages today are 30k then the house is worth 100k. Beware though, some people will try to convince you the house is worth 200k purely because before 2007 you coulkd borrow 6 times your income to buy a house. Those days have now gone so you now have to base the value of the house on what people can now borrow which is around 3 times your income.

davholla

des_cartes wrote: »

If you know what the house was worth in year x, find out what people earned in year x and compare the two. Then apply the same ratio to the house now. For example if the house cost 10k in 1980 and average wages were 3k then if average wages today are 30k then the house is worth 100k. Beware though, some people will try to convince you the house is worth 200k purely because before 2007 you coulkd borrow 6 times your income to buy a house. Those days have now gone so you now have to base the value of the house on what people can now borrow which is around 3 times your income.

Sorry? If that were true the average price of a house in London would be less £100k - which is not the case.

des_cartes

davholla wrote: »

Sorry? If that were true the average price of a house in London would be less £100k - which is not the case.

Is the average wage in London 30k?. Of course house prices in London are very overpriced but not by that much. The average wage in Londeon is probably nearer 50k which makes a London house worth about 170k. This is still less than todays prices but bear in mind that prices will be falling over the next few years to match what people can now borrow.

davholla

des_cartes wrote: »

Is the average wage in London 30k?. Of course house prices in London are very overpriced but not by that much. The average wage in Londeon is probably nearer 50k which makes a London house worth about 170k. This is still less than todays prices but bear in mind that prices will be falling over the next few years to match what people can now borrow.

It is about £33k p.a.

http://www.statistics.gov.uk/cci/nugget.asp?id=285

So therefore the average price according to your calculation should be £99K.

mudshark

des_cartes if that's how you decide that's what a house is worth can I buy yours please?

FTBFun

des_cartes wrote: »

If you know what the house was worth in year x, find out what people earned in year x and compare the two. Then apply the same ratio to the house now. For example if the house cost 10k in 1980 and average wages were 3k then if average wages today are 30k then the house is worth 100k. Beware though, some people will try to convince you the house is worth 200k purely because before 2007 you coulkd borrow 6 times your income to buy a house. Those days have now gone so you now have to base the value of the house on what people can now borrow which is around 3 times your income.

Lenders work to "affordability" rather than a simple x times your income nowadays. There's no way you'd get a house for £100k in London btw.

Have you been to the Debate House Prices board yet? I think you'll be at home there.