Food for Though

Robert_Sterling

In 1928 my father went to an auction and bought, as one lot, two Semi detached houses for a total £700.
He lived in one of them for 60 years and let the other for 53p per week.
it was still let for 53p a week until 1950. The rent was classified as "unearned income" and as such was subject to a higher rate of tax than earned income. He also payed the local rate on the let house. This left no income at all from the rent. In 1950 he sold the let house for £1,150.
In 1990 I sold the house he lived in for £67,000.
On the Rightmove website today that house is for sale at £185,000.
Assuming each house cost £350 then the value of the house at £185,000 is well in excess 501 times its original value ( Actually more than 528 times its original value ). So in round figures the value has increase by 50,000%.

MascaraMinx

What would be interesting is to compare those stats with how much he was earning when he bought it, and the average salaries of the people who bought it over the years, and see if the salary: house price ratio correlates?

wibble68_2

As a rough calculation that's just over 8% per year since 1938.

I've been trying to find long term (average wage / average house price) data but can't seem to find anything before 1953.

According to the graph on HPC, the ratio traded between 3 and 5 times from 1953 until 2002 ish. Now were up near 6 times.

Guy_Montag

I did a quick search of the net & scanned a rather dry paper:

Average weekly wage in the 1930s c. £3
3*52 = £156

value to salary ratio in 1930s =
50/156 = 2.24

Slightly less than it was in the late 90s.


(edited to add link)
http://www.pre-war-housing.org.uk/chapter-4the-working-classes-become-owner-occupiers.htm

Robert_Sterling

I have been looking at his mortgage agreement.
He was 28 when he bought the two houses at auction for £700.
He had £400 to put down as part payment and borrowed £300 from the Grays Building Society.
The mortgage document signed by the well known Harold P Jaggard.
The £300 was described as 12 shares of £25. The shares were numbered
34546 to 34557 inclusive.
The repayment of the mortgage was initially by a payment of 12 shillings per week i.e. 60p per week.
He paid off the mortgage within 13 years.