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

IveSeenTheLight

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

In 1972, did you buy a a single mortgage application?
Does the fact that hoint applications are more prominant now reflect the increase in purchasing power?

ukcarper

IveSeenTheLight wrote: »

In 1972, did you buy a a single mortgage application?
Does the fact that hoint applications are more prominant now reflect the increase in purchasing power?

I’m not trying to say anything about house prices just showing an example. The £200k price would not show much improvement possibly better central heating. I bough it 1972 with a joint mortgage application and some people on here might find it hard to believe but my mortgage was over 3x our joint income.


But as you say comparing 1972 to now is meaningless. I left school at 16 and by the time I got married at 22 and bought the house I was earning almost as much as I was when I was 35. Now people are just starting work at 22.

If I was buying now using same criteria as 1972 I could just about buy a 2 bed flat the house was 3-bed terrace to buy house now would require 4.8x joint equivalent wages with 10% deposit.

Saying all that if I had waited another 6 month I would have been lucky if I could have bought a flat.

ash28

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.

Interesting - we looked at South Yorkshire for somewhere to live in the very early 1980s - OH was being relocated and we thought we couldn't afford to buy in the south east - so we looked for somewhere that was in reasonable travelling distance. He was a shift worker and would have stayed at work during his time at work and travel home for his days off.

In the areas around Barnsley at the time you could buy a 2 up 2 down terrace for less than £3k and a nice semi for about £15k - we looked at a lot houses and estate agents leaflets. The prices doubled in a very short time. His mother also lived in the area which made it a reasonable choice for us. Parts of Yorkshire and North East were very cheap then.

We did in the end bite the bullet and move south, we bought the cheapest house we could in a nice area. We just had to move away from the 3x salary multiplier and go to a lender who lend us a higher multiple - happened to be the Halifax.

PasturesNew

In about 1980/82, I knew somebody that was a PA/Secretary (back in the days when those were proper skills/jobs), earning £6k and they bought a flat 3-4 miles out of town for £18k, 3x salary. It was a bit of a wreck, but just livable. No DG, no CH of course (nobody much had that then). It was clean, tidy, respectable.

There were 6 in the block, identical, I just looked up the prices:
2000: £70k
2003: £90k
2004: £110k
2010: £120k

This was in a smallish town.... but no PA/secretary would be earning £40k/year these days to be able to buy it at 3x salary. Most likely, if that person had waited all these years and climbed to the top of their salary scale in the same job in the intervening years, the most they could hope to ever get would be probably £18-20k in today's money, taking the flat from 3x the salary for that job to 6x.

Loughton_Monkey

Something I've never done before.

I've owned 7 'main residence' properties in UK, starting in 1973. For each one, I have checked my actual house price value rise, compared with the Nationwide Quarterly Index for UK [But the majority of my houses, until current one, have been Midlands/North West]. Here are the figures:


In each case, my result followed by Nationwide index

1st House - 21% 22%
2nd House - 34% 16%
3rd House - 81% 52%
4th House - 25% 24%
5th House - 29% 59% [House 'blighted' by by-pass!]
6th House - 2% 13%
Current House - 202% 151% [But based on current estimate of value]

So a couple of good winners. A couple of 'losers'. Overall, I have outperformed. Luckily, most of the earlier moves were fully at company expense, so I was able (at no cost to myself) to 'upsize' to the point have maintaining maximum mortgage (house value) at any one time.

ukcarper

Loughton_Monkey wrote: »

Something I've never done before.

I've owned 7 'main residence' properties in UK, starting in 1973. For each one, I have checked my actual house price value rise, compared with the Nationwide Quarterly Index for UK [But the majority of my houses, until current one, have been Midlands/North West]. Here are the figures:


In each case, my result followed by Nationwide index

1st House - 21% 22%
2nd House - 34% 16%
3rd House - 81% 52%
4th House - 25% 24%
5th House - 29% 59% [House 'blighted' by by-pass!]
6th House - 2% 13%
Current House - 202% 151% [But based on current estimate of value]

So a couple of good winners. A couple of 'losers'. Overall, I have outperformed. Luckily, most of the earlier moves were fully at company expense, so I was able (at no cost to myself) to 'upsize' to the point have maintaining maximum mortgage (house value) at any one time.

The Nationwide index increase and actual increase for my present property bought in 1985 are very similar if anything my house hasn’t kept up with index.

Old_Slaphead

PasturesNew wrote: »

In about 1980/82, I knew somebody that was a PA/Secretary (back in the days when those were proper skills/jobs), earning £6k and they bought a flat 3-4 miles out of town for £18k, 3x salary. It was a bit of a wreck, but just livable. No DG, no CH of course (nobody much had that then). It was clean, tidy, respectable.

There were 6 in the block, identical, I just looked up the prices:
2000: £70k
2003: £90k
2004: £110k
2010: £120k

This was in a smallish town.... but no PA/secretary would be earning £40k/year these days to be able to buy it at 3x salary. Most likely, if that person had waited all these years and climbed to the top of their salary scale in the same job in the intervening years, the most they could hope to ever get would be probably £18-20k in today's money, taking the flat from 3x the salary for that job to 6x.

How did interest rates compare 1980 to now ?

ash28

Old_Slaphead wrote: »

How did interest rates compare 1980 to now ?

There is no comparison - property may have been cheap to buy but it wasn't cheap to pay for.

We bought in 1982 the rate was 13% our £25k mortgage cost us nearly £300 a month. We used to listen to the news for base rate rises as building societies followed the base rates +1% and a rise in the base rate meant a rise in mortgage interest usually announced the same day - by all of them.

In 1980 the base rate reached 17% - so the mortgage rate would have been around 18% for part of that.

I guess there was a good reason why most lenders limited lending to 3.5 times income as it was realistically all you could afford to pay and even then we struggled for quite a while.

http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp

moggylover

IveSeenTheLight wrote: »

In 1972, did you buy a a single mortgage application?
Does the fact that hoint applications are more prominant now reflect the increase in purchasing power?

It probably just means that there are far fewer people who can actually afford to do it on their own now;):D

ukcarper

moggylover wrote: »

It probably just means that there are far fewer people who can actually afford to do it on their own now;):D

I bought my first house in 1972, mortgage interest rates average 13% for the next 10 years so I’m not sure it was more affordable then.