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Debate House Prices
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The dysfunctional UK housing market.
macaque_2
Posts: 2,439 Forumite
According to the Monster website, (http://career-advice.monster.co.uk/salary-benefits/pay-salary-advice/uk-average-salary-graphs/article.aspx) the average salary of full time employees in the UK is: £24,243
According to this salary calculator (http://www.thesalarycalculator.co.uk/salary.php) someone on average salary will take home: £18,651.32
According to this website (http://www.rentright.co.uk/00_00_00_1_00_rrpi.aspx) the average rent in June2011 was:
2 bed flat: £1102 (£13,224 p.a.)
3 bed house: £1641 (£15,960 p.a.)
For a young person with an average income, rent amounts to over 70% of his take home salary. For a person in a 3 bed house, rent amounts to over 86% of take home salary. This is before other basic housing costs such as council tax, gas, electricity and water and does not include moving costs.
What contribution do BTL's make for taking 70%+ of an average person's take home pay? Very little in fact. They don't build the houses and the properties are purchased with borrowed money. They spend the minimum on maintenance and many of them discharge their management responsibilities to Letting agents. The idea that someone making circuit boards for aircraft should hand over 70% of his/her income to someone who sits around watching daytime TV does not make sense.
How do different groups react to what amounts to this massive and unproductive cost burden?
The government
They can no longer afford large subsidies to the rent industry and are cutting housing benefit.
People on average income
Burdened with large student debts and falling graduate salaries, many of the best graduates are leaving the UK. The remaining group of young people are either waiting for their parents to die or growing increasingly angry at the inequity of this situation.
Industry
Industry are faced with severe shortages of skilled people (see above) and a huge accomodation costs for employees. Their solution is outsourcing (often to other parts of Europe).
Buy to let
Their belief is that high house prices must be protected at any ecost and the solution is more beds per room.
There is no one solution to this problem. If the UK is going to prosper and remain a civilised place to live, change has to take place. We need more houses, better population control, lower house prices and tougher letting laws.
According to this salary calculator (http://www.thesalarycalculator.co.uk/salary.php) someone on average salary will take home: £18,651.32
According to this website (http://www.rentright.co.uk/00_00_00_1_00_rrpi.aspx) the average rent in June2011 was:
2 bed flat: £1102 (£13,224 p.a.)
3 bed house: £1641 (£15,960 p.a.)
For a young person with an average income, rent amounts to over 70% of his take home salary. For a person in a 3 bed house, rent amounts to over 86% of take home salary. This is before other basic housing costs such as council tax, gas, electricity and water and does not include moving costs.
What contribution do BTL's make for taking 70%+ of an average person's take home pay? Very little in fact. They don't build the houses and the properties are purchased with borrowed money. They spend the minimum on maintenance and many of them discharge their management responsibilities to Letting agents. The idea that someone making circuit boards for aircraft should hand over 70% of his/her income to someone who sits around watching daytime TV does not make sense.
How do different groups react to what amounts to this massive and unproductive cost burden?
The government
They can no longer afford large subsidies to the rent industry and are cutting housing benefit.
People on average income
Burdened with large student debts and falling graduate salaries, many of the best graduates are leaving the UK. The remaining group of young people are either waiting for their parents to die or growing increasingly angry at the inequity of this situation.
Industry
Industry are faced with severe shortages of skilled people (see above) and a huge accomodation costs for employees. Their solution is outsourcing (often to other parts of Europe).
Buy to let
Their belief is that high house prices must be protected at any ecost and the solution is more beds per room.
There is no one solution to this problem. If the UK is going to prosper and remain a civilised place to live, change has to take place. We need more houses, better population control, lower house prices and tougher letting laws.
0
Comments
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According to this website (http://www.rentright.co.uk/00_00_00_1_00_rrpi.aspx) the average rent in June2011 was:
2 bed flat: £1102 (£13,224 p.a.)
3 bed house: £1641 (£15,960 p.a.)
If that's supposed to be national average, it seems to be very high and the website has a caveat that casts some doubt on the numbers.Please note that we are continually working to improve the RRPI data, and are currently undertaking an upgrade which may result in some temporary errors or anomalies.What goes around - comes around0 -
Rents have just reached another record high in June.
But the average rental price for all properties is currently just £695 per month.
Around 11.5% of rentals have arrears, although this could just be by a matter of days, and the figure is currently falling.
If property values continue on their current trend, a property investor could expect to make a total annual return of 5.7% over the next year – equivalent to £9,404 per property.
http://www.guardian.co.uk/money/2011/jun/17/rents-hit-record-high
As always, the monkey is spreading misinformation rather than facts.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
What a dysfunctional post, 2 bed flat in Chester in a location to die for (literally), £450 per month.
http://www.primelocation.com/uk-property-to-rent/details/id/RRAR8740400/'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
HAMISH_MCTAVISH wrote: »Rents have just reached another record high in June.
But the average rental price for all properties is currently just £695 per month.
Around 11.5% of rentals have arrears, although this could just be by a matter of days, and the figure is currently falling.
If property values continue on their current trend, a property investor could expect to make a total annual return of 5.7% over the next year – equivalent to £9,404 per property.
http://www.guardian.co.uk/money/2011/jun/17/rents-hit-record-high
As always, the monkey is spreading misinformation rather than facts.
I took the trouble of posting data on 2 and 3 bed flats. Two beds must reflect the minimum reasonable housing requirements for a married couple or young family. You have quoted a figure of £695 which is the average for all properties. Inevitably, this figure will be heavily skewed by 1 bed flats and HMOs.
On the basis of my OP, I don't believe any fair minded person could accuse me of 'spreading missinformation'. The same cannot be said for your response.0 -
Are those rental averages London only or UK Wide? There is absolutely nothing of any size on rightmove being advertised over £900 pcm in my town.0
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You have quoted a figure of £695 which is the average for all properties. Inevitably, this figure will be heavily skewed by 1 bed flats and HMOs.
It does not include HMO's.
It will include one bed flats, but will also include £5,000 a month central London townhouses.
As has been pointed out, 1100 per month is not remotely accurate for a national average of 2 bed flats. I'd be surprised if it was more than 600 per month.
Why doesn't someone check the ONS or DCLG data for the most accurate reflection of total rents paid....
Edit: I just did.
According to DCLG, in 2010 the average rent paid for an assured or assured shorthold tenancy in England was £160 per week. It may have risen by a few tens of quid since then, but it hasn't doubled in a year.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
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Rather spoiled what was going to be, potentially, an interesting post with the daft average rental data.0
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