Why is property unaffordable for even the relatively well-off among the population?

Losing_the_way

Sorry my knowledge doesn't go back that far but wasn’t there changes to tenancy legislation and as already pointed out wage inflation was rampant.

I’d be very interested to hear a description of the market in those days from someone with knowledge of the market back then.

chucky

Losing_the_way wrote: »

Sorry my knowledge doesn't go back that far but wasn’t there changes to tenancy legislation and as already pointed out wage inflation was rampant.

I’d be very interested to hear a description of the market in those days from someone with knowledge of the market back then.

a good start would be to get a knowledge of the market now

and then look at the price rises in the 1970s and understand the difference between real and notional price rises...

princeofpounds

Inflation was very high in the 1970s. What matters is real house prices, adjusted for inflation, not nominal house prices. Wage inflation was also very high in the 1970s, so appreciating nominal house prices did not necessarily mean a degradation of affordability - money was just devaluing.

princeofpounds

The measure above is CPI ex food and energy by the way, which were the most severe inflation points. You can see how drastic the oil price rise was (in real terms!) at the time.

oldandhappy

Losing_the_way wrote: »

Sorry my knowledge doesn't go back that far but wasn’t there changes to tenancy legislation and as already pointed out wage inflation was rampant.

I’d be very interested to hear a description of the market in those days from someone with knowledge of the market back then.

We had little idea of what the cause was then but the feelings where nethertheless 'really horrid'. Family life was very hectic for us and we where also sooooooo sooooooo young then!
We would like to know the reasons why the interest rates hit the roof back then.. there is always a good reason of course! But we honestly did just get on with it and it did not put us off buying a 2nd property abroad a few years later, for an investment intially. Dianne

chucky

Losing_the_way wrote: »

Sorry my knowledge doesn't go back that far but wasn’t there changes to tenancy legislation and as already pointed out wage inflation was rampant.

I’d be very interested to hear a description of the market in those days from someone with knowledge of the market back then.

a fair description would have been that people got on with it and made the best of the opportunities they had.

Losing_the_way

Nowadays, is the having it all now attitude more responsible for the feeling of un-affordability?

ukcarper

Losing_the_way wrote: »

[FONT=&quot]Nowadays, is the having it all now attitude more responsible for the feeling of un-affordability?[/FONT]

You do wonder how today’s generation would cope if instead of flashing the credit card to buy a ipod, they had to pay deposit fill out the forms leave them with the shop and then come back in a week to pick up if loan was approved.

princeofpounds

We would like to know the reasons why the interest rates hit the roof back then..

Interest rates went high in response to high inflation. If inflation is high, your money is devaluing, so if you want to lend it to someone else you will demand a higher rate of return in order to preserve the value of the money in inflation-adjusted terms (otherwise it would be more rational just to buy and hold consumer goods and commodities).

As to why inflation was high, lots of reasons. Previously excessively loose monetary policy, oil cartel, trade union militarism all contributed, there are probably other reasons I don't have on the tip of my tongue.

Really2

princeofpounds wrote: »

The measure above is CPI ex food and energy by the way, which were the most severe inflation points. You can see how drastic the oil price rise was (in real terms!) at the time.

Why not use the 2008 peak of $147

2008 costs were the highest cost in real terms in history.
http://inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp