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

ukcarper

PasturesNew wrote: »

It is a fact that if you take any house from 10, 20, 30 years ago and see "who could buy this house, on what multiple of their salary" and compared the same house to now, it's less affordable.

In 1995 some flats round the corner from where I am could have been bought by a full-time cashier at any local shop, using 3x their low wages. Now, to buy the same flat you'd need to be a qualified solicitor and borrow 5x your wages.

My dad bought a 3-bed semi in 1970 for 3x his wages. Today, somebody doing that same job might be able to pull £25-30k (with their enhanced skillset and qualifications that he didn't need as he could study at evening classes, which you mostly can't do these days) .... and today that same house would take 10x that person's wage. So now it would need a full-time professional couple 5x their joint wages.

I can give a good example my first house 1972 £8k salary £1.5k = 5.3x

Now £200k same job salary £30k = 6.6x

the_flying_pig

Cleaver wrote: »

Well, you can't argue with a comprehensive and scientific study such as that.

fair point - it's a miniscule sample.

although exactly the same is true of my wife's parents' house, which is of a similar type but a couple of hundred miles away in Devon.

and i don't doubt that there's something similar all over the place.

experiment

1 - choose a street name at random - 'baker street'
2 - search for it on http://www.houseprices.co.uk
3 - copy and paste the postcode for the very first address it gives you [NN9 5PR];
4 - try and find [the data only goes back as far as about 2000] a house that was sold at the very beginning of that period and also at or around the peak of the bubble - say #24.
5 - i've found one - #24. march 2000 price = £32k, sep 2010 price = £117k. so a 264% increase.
6 - predicted increase as per halifax? £167k/£84k = a fraction under 99%.


my sample of course remains far too small to be taken too seriously but i encourage anyone who knows what their house, of any type in any part of teh country, was worth 25 years ago, to try teh same exercise

PasturesNew

ukcarper wrote: »

I can give a good example my first house 1972 £8k salary £1.5k = 5.3x

Now £200k same job salary £30k = 6.6x

My dad's first house in 1970 £4,600, salary £1,200 and £1,000 deposit. 3x salary.

House identical sold at the peak for £295k.

ukcarper

PasturesNew wrote: »

My dad's first house in 1970 £4,600, salary £1,200 and £1,000 deposit. 3x salary.

House identical sold at the peak for £295k.

House prices increased rapidly in the early 70s. The house I was referring to was a new build and increased from £5.3k to £11k from early 72 to early 73 they did fall back a bit after that.

Inflation was also high but if you took the wage multiple at the beginning it would have been between 3 and 4 and at the end it would have been over 6.

PasturesNew

I have a big history of one house, my great aunt lived in it. Here it is:
1867: A piece of land is divided into plots. One man buys one plot for £140. On this he builds 7 houses in a terrace.
He rented the houses out and when he died he left the rental income to his wife for her life, the properties to his daughter.
1912: The one house I have information for was sold for £230.
1928: House sold to the tenants for £235.
1956: My uncle/great aunt bought the house for £1200. 50% down and a mortgage at 5.5% - a 15 year fixed mortgage at £5.43/month.
1988: Both had died and the house was sold for £62,000

At this point, the road started to become desirable/expensive, whereas when it had been purchased in 1956 it was a pretty lawless place, full of chav-types, who were relocated during the 1970s into a big new council estate.

Now, that's where the trail goes cold, because the house was sold to a University's land/estates department, a lot of University money is tied up in owning property... but, as all the houses in the whole road are "the same", especially the 7 originally built on that original plot of land, I can track it through the sales of the other 6:

Mar 2001: £144,500 (same house as sold in Aug 2006)
Aug 2004: £240,000
Jan 2005: £243,000
Aug 2006: £247,000

So, from £230 to £230,000 in 100 years.
Or
£1200 to £240,000 in 54 years.

the_flying_pig

when i was a very small kid in the early 80s my nextdoor neighbour in yorkshire was a postie [salary today around £23k]. his wife didn't work, they had two kids, they owned a semi that today would cost maybe around £180-something [£200k peak], a mere 8 times a postie's salary.

ukcarper

the_flying_pig wrote: »

when i was a very small kid in the early 80s my nextdoor neighbour in yorkshire was a postie [salary today around £23k]. his wife didn't work, they had two kids, they owned a semi that today would cost maybe around £180-something [£200k peak], a mere 8 times a postie's salary.

When did he buy it was it his first house.

Really2

PasturesNew wrote: »

So, from £230 to £230,000 in 100 years.
Or
£1200 to £240,000 in 54 years.

Seems like peace and prosperity are very much linked.

IveSeenTheLight

PasturesNew wrote: »

It is a fact that if you take any house from 10, 20, 30 years ago and see "who could buy this house, on what multiple of their salary" and compared the same house to now, it's less affordable.

In 1995 some flats round the corner from where I am could have been bought by a full-time cashier at any local shop, using 3x their low wages. Now, to buy the same flat you'd need to be a qualified solicitor and borrow 5x your wages.

My dad bought a 3-bed semi in 1970 for 3x his wages. Today, somebody doing that same job might be able to pull £25-30k (with their enhanced skillset and qualifications that he didn't need as he could study at evening classes, which you mostly can't do these days) .... and today that same house would take 10x that person's wage. So now it would need a full-time professional couple 5x their joint wages.

This is a reflection of the population, amount of properties available, household income etc etc etc.

Trying to compare now (2010) with the 1970 (40 years ago) is fruitless

quantic

ukcarper wrote: »

I can give a good example my first house 1972 £8k salary £1.5k = 5.3x

Now £200k same job salary £30k = 6.6x

Surely this example assumes that no value (by doing it up) was added to the house along the way?