What is an 'Average' Property?

Phirefly

Alan_M wrote:

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.

Finally someone highlights the fundamental reasons behind the rediculous financial situation we are all in.

I work for a uk manufacturer and we are constantly being screwed on price as our competitors source cheaper and cheaper (and poorer quality, unfairly traded) foreign imports. People MUST be educated that while they are prepared to buy a T-shirt or a chicken for £1 without sparing a thought for how that outrageous price came to be, small UK businesses are going to struggle and their salaries will reflect this. As long as salaries are stagnant, housing is going to be unaffordable.

I believe in the fundamental principles of moneysaving, but not at the expense of ethics.

BUY BRITISH BUY LOCAL!

Alan_M_2

mobile-advice wrote:

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.

The problem with a snapshot is it doesn't provide any information on future affordability as and when the eceonomy changes (which is a definiate becasue any economy is an ever changing cycle).

To take an extreme example, using your parameters a person earning £20,000 a year could buy a £200,000 property on a 50 year term with a 9x salary mulitple.

That is technically affordable, luncay but affordable. Where do you draw the line?

Alan_M_2

roswell wrote:

Sorry Alan, I wasnt implying there is a link more that if wages had followed the house inflation there wouldnt be a problem, I personnaly have a large view that the hiding of real inflation is the main factor in the average house price / avergae wages war. But thats another thead.

Sure I actually understood what you were getting at, and my reply wasn't intended as anything than a perspective from a business owner as to why I can't pay people more money.

There truly is no correlation at all between income and houseprices, not whilst we live in a situation where the goal posts are moved everytime property does actually become unaffordable. Which is kind of what I was getting at in the reply above.

Doozergirl

Phirefly wrote:

BUY BRITISH BUY LOCAL!

I'm taking this even more off topic now but I really think that if we have the money to do so, that we have an obligation to do just as Phirefly says.

A family that has very little money should of course have access to cheap chickens and vegetables for example, but it doesn't mean that everyone should buy them.

(Puts on flame-proof suit)

Alan_M_2

Actually I'm in no position to comment on the Buy Britsh thing, I'm an importer which in the Buy British argument is Blasphemy, however I only currently import from Europe (EU) countries and refuse to deal with India/far East, but that's more to do with quality than price.

I also won't do business with Turkey, who would undercut their own mother if they had the cahnce of a sale, it would be an apalling travesty if that country were allowed in the EU.

roswell

Nothing to do with buying british but have to tried sourcing stone from South Africa Alan, there are many platimum mining projects in the north west that have terrible headaches with granite to the extent there exporting it for those english men and woman that love it on the kitchen worktops.

Tricky_Vicky

My son is in his thirties, wife and 2 children. He earns an average salary for the location (West London) - about £25K. Four times that is £100K - there is nothing even remotely within his reach to buy, so he pays to rent privately - £800 per month. It really gets my goat that he pays out all that money and not able to get a house of his own.

sniperpenguin

lynzpower wrote:

saxy1 wrote:

Because they have friends and family? because they need office space?

Simply because 'they want to'? !!!

Personally I think people having houses that aree bigger than thier NEEDS is one of the main reasons why there are too few family houses available on the market and this leads to price increases for those with a growing family who struggle to afford moving up.

Simple answer then - STOP growing your family. :mad:

It amazes me the number of people who have a child THEN wonder how to handle the financial / space requirements...

Alan_M_2

roswell wrote:

Nothing to do with buying british but have to tried sourcing stone from South Africa Alan, there are many platimum mining projects in the north west that have terrible headaches with granite to the extent there exporting it for those english men and woman that love it on the kitchen worktops.

There are some great sources available, after all, stone is stone, it's simply dug out of the ground, the problems only start occuring as soon as humans become involved.

So I could buy similar produts to those that I sell now for half the price, but it would be a lottery each time I opened a container as to whether the product is of saleable quality or not. So I tend to to stick to factories where I know I get good quality control without actually having to pay for it as a seperate expense.

Most of the granite that arrives in this country has arrived via either India or China, it doesn't matter where is originates, it's cheaper to quarry a block, ship it to India/China for processing then ship it back than it is to get it produced in this country, no wonder the economy is screwed!

One particular stone I sell is becoming very popular, Azul Valverde (Blue Valley) which looks like a Portland Blue Limestone, even at retail price I'm half what a British quarry can produce the same product for at wholesale and it happens to be a slightly higher spec product to boot, that's why manufacturing is struggling here.

sm9ai

mobile-advice wrote:

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.

Well said, when properties go down in Price you don't expect a pay cut.