How much should the average house price be?

Sibley

Personally, I would like the average house price to settle at £175,000.

No more no less.

That would give everyone a chance and stop all this arguing.
I think we will arrive at that figure within the next 3-5 years.

I don't buy into all this 'real' term stuff. I just want to see the sign on the door. For sale £175,000+

People can get £25,000 deposit together and have £150,000 on a mortgage. Could be worse. With two wage earners in a house that could be paid easily.
Nobody is priced out.

smamst

Average salary in the UK, I'm saying approximately £25,000.

Multiples that mortgage companies sensibly should lend at 3.5x

Therefore 3.5x£25,000 = £87,500.

So a sensible house price average is around the £90k - £100k mark as people will stretch a bit.

At around this figure people will pay a sensible mortgage, will have money for heating, water, food, entertainment and be able to put something aside for savings, their children's University education and still afford a pint or two in the evening.

There will be no need to lie on the mortgage application form either saying you earn twice what you actually earn.

Sensible all round really and what was the norm before the last boom in 2002.

diable

Average house prices never take in to consideration what happens in the big cities especially London.

smamst

diable wrote: »

Average house prices never take in to consideration what happens in the big cities especially London.

London should declare independence, it's a country in it's own right in the UK far more than the rest of England/Scotland/Wales/N.Ireland/Cornwall are.

Sibley

I don't know why everyone thinks a FTB should be able to afford the average house.
They should start with a flat. Average houses should be seond time buys. That way they made a bit on their first purchase and can afford to trade up.

Banks could make mortgages over longer terms to help people wanting to leap frog the waiting game.

JonnyBravo

Sibley wrote: »

That way they made a bit on their first purchase and can afford to trade up.

Oh dear sibbers you really are a dimwit.

I thought you wanted average house prices at £175,000?

Yet you want people to "make a bit" on their first place which you say should be a flat? So you want flats to increase in price but not your "average house"??


And just before you play the "I meant they will pay off their mortgage a bit", what's the difference between that and saving and going straight in at the "average house" level if there is no HPI?

Blacklight

smamst wrote: »

Average salary in the UK, I'm saying approximately £25,000.

Multiples that mortgage companies sensibly should lend at 3.5x

Therefore 3.5x£25,000 = £87,500.

So a sensible house price average is around the £90k - £100k mark as people will stretch a bit.

At around this figure people will pay a sensible mortgage, will have money for heating, water, food, entertainment and be able to put something aside for savings, their children's University education and still afford a pint or two in the evening.

There will be no need to lie on the mortgage application form either saying you earn twice what you actually earn.

Sensible all round really and what was the norm before the last boom in 2002.

You will never see property prices at 3.5x average wage again.

Population has increased, demand has increased. Those things are set to increase further. There just isn't phsically the supply to meet the demand.

Really2

smamst wrote: »

Average salary in the UK, I'm saying approximately £25,000.
Multiples that mortgage companies sensibly should lend at 3.5x

Would it not be sensible to look at average full time wages?
Would you allow a multiple of two wages?

FTBFun

diable wrote: »

Average house prices never take in to consideration what happens in the big cities especially London.

It is also unwise to base them on average wages of the population as a whole as there is a sizable chunk whom will never be in a position to buy, regardless of how much house prices actually are.

ukcarper

smamst wrote: »

Average salary in the UK, I'm saying approximately £25,000.

Multiples that mortgage companies sensibly should lend at 3.5x

Therefore 3.5x£25,000 = £87,500.

So a sensible house price average is around the £90k - £100k mark as people will stretch a bit.

At around this figure people will pay a sensible mortgage, will have money for heating, water, food, entertainment and be able to put something aside for savings, their children's University education and still afford a pint or two in the evening.

The long-term average was last struck in 2002 average house price then was about £110k average wage then £20k so that’s is 5.5x. 5.5x £25k is £137.5k so I would say that was about right.
There will be no need to lie on the mortgage application form either saying you earn twice what you actually earn.

Sensible all round really and what was the norm before the last boom in 2002.

Looking at Halifax graph of wages to earnings lowest point since 1987 was 1997 average wage then was about £16k average house price Land Reg was about £65k which is 4x and that was the bottom of the last crash.

The long-term average was last struck in 2002 average house price then was about £110k average wage then £20k so that’s is 5.5x. 5.5x £25k is £137.5k so I would say that was about right.

crash123

I own my house but if I wanted to buy it today I could not afford it. My take home pay is more now but I would still be about £40,000 short.
So something is wrong. Average house should be about £120,000