Flamin' 'Eck, English House Prices Are Cheap.....

Graham_Devon

moggylover wrote: »

My goodness! What a thread! I have ended up with a degree of agreement with Generali, and been thanked by Graham Devon:D I think I shall need a little lie down now:rotfl::rotfl::rotfl::rotfl:

I'm quite a lefty now. Even read the guardian

the_flying_pig

quantic wrote: »

I think the point people are trying to make (well at least me) is that the average wage can buy you just as nice of a house now as it ever could. If your prepared to make some choices and not expect everything, which has always been the case. People expect a lot more now and are not prepared to wait for it either.

With respect that's a nonsense. There are reams of ways, including casual observation & published statistics, that show this.

The average house is, by historical standards, unusually high relative to the average wage.

What's more, I personally suspect that the 'average house' that indices measure has declined in quality somewhat... e.g.

(1) according to the Halifax index the average English house price was around £36k in lateish 1985... my parents bought their current house [4 bed detached in a so-so estate on outskirts of a medium sized townin yorkshire] for £36k roundabout that time... meaning that my parents' house was about average in 1985.

(2) today, Halifax says that the average house is worth about £160k... but I know for a fact that houses exactly like that of my parents has risen to around £250k [i think one or two went for £275k at the peak of the bubble]... meaning that my parents' house has gone from being an average one to one that's over 50% more valuable than average...

So my parents' house in 1985 cost about 5 times a working guy's annual income of say £135 a week/£7,100 a year... but now it's worth around 10 times an average working guy's annual income of £250,000. That's the truth. The indices hide a movement towards more weighting on small properties.

moggylover

Graham_Devon wrote: »

I'm quite a lefty now. Even read the guardian

:eek::eek::eek::eek::eek::eek::eek::eek::eek::eek:


Someone fetch the smelling salts: I feel very strange and woozy now;):D

N1AK

Adjusting for inflation you could buy the 'average' house of the 80s for £80k at the beginning of the 2010s it costs £160k. You're saying that with real term house prices twice that of the 80s

quantic wrote: »

"the average wage can buy you just as nice of a house now as it ever could."

That is completely untrue. You're either overstating your case or lying and I like to think it isn't the latter.

I have no issue with the idea that housing exists which is affordable even for lower earners if they are willing to buy smaller and/or in worse areas than poor earners could afford for the last 50 years.

IveSeenTheLight

N1AK wrote: »

I have no issue with the idea that housing exists which is affordable even for lower earners if they are willing to buy smaller and/or in worse areas than poor earners could afford for the last 50 years.

What could a poor earner afford in 1960?
Certainly it appears that owner occupancy was much lower back then.

What was the state of the house back then compared to now?
Is it directly comparable to properties now?

quantic

Good god, I spent the past 2 years looking at homes in the North East, while saving my deposit and there was a massive variety of homes that are easily affordable for me to buy. I earn 25k (similar to the average) and found that I had a lot of choice. Clearly I'm wrong though.

PasturesNew

It certainly used to be harder to find houses to buy... when I used to look it was restricted to the local paper on a Thursday - nothing I could afford. Now, with the full power of the Internet at my disposal I can look at houses all over the place, all of them, with filters. In fact, part of my daily routine now is: All properties of any sort in the whole county that have gone onto the market in the past 24 hours.

You can, now, at least try to find better/cheaper places, rather than being restricted to very narrow and inaccessible channels to obtain information.

IveSeenTheLight

the_flying_pig wrote: »

With respect that's a nonsense. There are reams of ways, including casual observation & published statistics, that show this.

The average house is, by historical standards, unusually high relative to the average wage.

Hmmmmm, relatively high you say.

You seem to mention Halifax and they have a link on affordability

http://www.lloydsbankinggroup.com/media/excel/2010/HPIQ3/221010Affordability.xls

It seems the House Price - Earnings is currently 4.59 while the 27 year average is 4.05 (This doesn't consider the deduction of a deposit)

When you compare the mortgage repayments as a percentage of income is currently 29.7% compared to the 27 year average of 36.9%

So while the price to wages is higher than average, the repayments as a percentage of income is lower than average.

Always handy to have Facts to consider

the_flying_pig

IveSeenTheLight wrote: »

Hmmmmm, relatively high you say.

You seem to mention Halifax and they have a link on affordability

http://www.lloydsbankinggroup.com/media/excel/2010/HPIQ3/221010Affordability.xls

It seems the House Price - Earnings is currently 4.59 while the 27 year average is 4.05 (This doesn't consider the deduction of a deposit)

When you compare the mortgage repayments as a percentage of income is currently 29.7% compared to the 27 year average of 36.9%

So while the price to wages is higher than average, the repayments as a percentage of income is lower than average.

Always handy to have Facts to consider

I think this point might have been covered before. Just once or twice.

In short:

(a) house prices (the point of this thread) are not cheap by any stretch of the imagination. in fact they're very expensive; but

(b) taking a very short-term perspective someone whose current replacements closely reflect the low current IRs quite possibly is, at this point in time, if they have an average 2010 property probably making smaller mortgage repayments than the historical average for an average property [although if, as I reckon, changes in the mix of houses have shifted so far that what was an average house in the mid 80s is now a 50% above average house, the 29.7% of income becomes 44.6% on a like-for-like basis].

IveSeenTheLight

the_flying_pig wrote: »

I think this point might have been covered before. Just once or twice.

In short:

(a) house prices (the point of this thread) are not cheap by any stretch of the imagination. in fact they're very expensive; but

(b) taking a very short-term perspective someone whose current replacements closely reflect the low current IRs quite possibly is, at this point in time, making smaller mortgage repayments than the historical average.

House prices (the point of this thread) have been shown to be relatively cheap in may parts of the UK.
something you seem to wish to overlook.

Even the OP's thread title (the point of this thread) is that they are cheap with some exceptions.