What is an 'Average' Property?

mobile-advice

Thanks for the replies. I was thinking along property for that particular circumstance; let's say for clarity:

- The Family: Mr and Mrs X both on average income, with average amount of children.
With average deposit, and average mortgage, can they afford an average home in the area for that salary? (I would consider average to be a 3-bed, not ex-local authority home to be middle of the road here).

- The Single: Mr X is on average income. With average deposit, and average mortgage, can he afford an average home in the area for that salary? (I would consider a two-bed flat middle of the road here).

The question is this: If an average person on an average salary with an average mortgage can afford an average property for their circumstances, is that market overpriced? Is it a case of the property being a bargain 5 years ago, and correct prices being realised now?

mrsS_2

But as prices vary enormously in the same town for identical houses- depending on where you live then the average house could be affordable in one area of th town and completely out of the price range on the other.

In my town because all the good school catchement areas are in the north of the town, the same house in the southern part of our (small) town can be £100000 cheaper (3 bed semi)

silvercar

maybe the average person has to first buy a small home then move upto their average house when their average children arrive.

Do the next generation get a big inheritance from their average parents, to help them fund the average deposit on the average house?

mrsS_2

but if the average first time buyer is 34 the children may already have arrived!

roswell

I think the problem comes from the FTB that belives they need a 3 bed house to meet there future needs as the cost is so high to get a 1 bed flat that in 12 months may not fit your needs and the cost of buying selling buying can easy run into the thousands.

Does anyone think the problem with the average house price`s arent the prices but the wages that have been rather static the last few years ??

I believe that if everyone had 10% + increases at the same rate of house price inflation there wouldnt be anyone priced out the average market.

Alan_M_2

mobile-advice wrote:

Thanks for the replies. I was thinking along property for that particular circumstance; let's say for clarity:

- The Family: Mr and Mrs X both on average income, with average amount of children.
With average deposit, and average mortgage, can they afford an average home in the area for that salary? (I would consider average to be a 3-bed, not ex-local authority home to be middle of the road here).

- The Single: Mr X is on average income. With average deposit, and average mortgage, can he afford an average home in the area for that salary? (I would consider a two-bed flat middle of the road here).

The question is this: If an average person on an average salary with an average mortgage can afford an average property for their circumstances, is that market overpriced? Is it a case of the property being a bargain 5 years ago, and correct prices being realised now?

But affordability is not driven by the value of any given property, it's driven by the ability to borrow the required amount of money and the interest rates at which that money is available at, both of which are not fixed parameters.

It makes the "average" questions a little mute, as the average isn't a constant.

Alan_M_2

roswell wrote:

I think the problem comes from the FTB that belives they need a 3 bed house to meet there future needs as the cost is so high to get a 1 bed flat that in 12 months may not fit your needs and the cost of buying selling buying can easy run into the thousands.

Does anyone think the problem with the average house price`s arent the prices but the wages that have been rather static the last few years ??

I believe that if everyone had 10% + increases at the same rate of house price inflation there wouldnt be anyone priced out the average market.

The problem with that is wages bear no correlation to house prices, in so much as they are driven by different factors.

I own a business, if I employ a person to do a job, their salary is fundamentally based on how much they are earning my business or what value their service is to my business. You may have noticed that retail prices are being driven lower and lower in the UK as people clamour for a bargain, the very nature of this keeps wages down.

For me to pay my staff more, I need to sell my products for more, if people won't pay that money for the product, I can't pay my staff and increased amount and that's the viscious circle.

Now certain sectors have been hit very hard by immigrant labour so not only are those sectors not able to pay more, they're actually having to reduce salaries to keep their businesses competitive or risk going bust.

There we have the Catch 22.

Doozergirl

According to the Land Registry, the average house price in my area is about £179,000. That would just about buy you a small 3 bed semi here.

What's an average deposit? 10%? The couple earn £40-50k between them if average salary is mid £20ks. I can't be bothered to do the maths but the average couple can afford a mortgage at around 4x salary.

As for the singleton? There's quite a shortage of flats so a 1 bed costs about £110,000. Earning £25k a year with a 10% deposit, it's 4x salary.

Depends on whether 4x salary is affordable though?

mobile-advice

Alan_M wrote:

But affordability is not driven by the value of any given property, it's driven by the ability to borrow the required amount of money and the interest rates at which that money is available at, both of which are not fixed parameters.

It makes the "average" questions a little mute, as the average isn't a constant.

Alan - some good points. OK, we should say that a snapshot of the parameters should be taken. At this very moment in time, can an person, average in all respects, afford a property that is average? How would this snapshot differ from other snapshots taken in the past?

I think it's unrealistic for salaries to increase in line with house prices; that's a matter of supply and demand.

lynzpower

mobile-advice wrote:

Thanks for the replies. I was thinking along property for that particular circumstance; let's say for clarity:

- The Family: Mr and Mrs X both on average income, with average amount of children.
With average deposit, and average mortgage, can they afford an average home in the area for that salary? (I would consider average to be a 3-bed, not ex-local authority home to be middle of the road here).

- The Single: Mr X is on average income. With average deposit, and average mortgage, can he afford an average home in the area for that salary? (I would consider a two-bed flat middle of the road here).

The question is this: If an average person on an average salary with an average mortgage can afford an average property for their circumstances, is that market overpriced? Is it a case of the property being a bargain 5 years ago, and correct prices being realised now?

Why would a single man NEED a 2 bed flat?

Why would a childless couple NEED a 3 bed house?