House price rises

ukbondraider

jyonda wrote:

You are living in La-la-land, not London. Averages mean nothing anyway as the top earners absolutely dwarf the earnings of even the people they work with. It doesn't matter if the MD earns millions, the secretary is still paid the going rate for answering a telephone. And that is not anywhere near 70 or even 40 grand.

There are lots of PA/secretaries here on £40K. I know as I have one and so does all the other teams in my firm. Of course there are different levels of secretaries but believe me there are plenty. Also I would not expect the Secretary's wage to be the average. I would expect hers to be way below the average.

Rachman_2

ukbondraider wrote:

There are lots of PA/secretaries here on £40K. I know as I have one and so does all the other teams in my firm. Of course there are different levels of secretaries but believe me there are plenty. Also I would not expect the Secretary's wage to be the average. I would expect hers to be way below the average.

My last secretary made £60K last year with overtime and bonus (but she put in a lot of overtime for it and was good). The lowest secretary wage here is £32K basic.

daveb975

Rachman wrote:

My last secretary made £60K last year with overtime and bonus (but she put in a lot of overtime for it and was good). The lowest secretary wage here is £32K basic.

Surely you are talking about a City financial services firm, though?

This is a long way from the industries that most people in London are employed in. In most companies in London/SE PAs would earn £20-£35k, apart from PAs to directors of very large companies.

A lot of the time, they are suprisingly near to the average wage for the whole company as well.

I do agree with the underlying argument, though. The average 'salary' is meaningless. The rise of contracting for quite junior roles means that when companies struggle to find someone for a £25k per year support role, they go to the contract market and pay £200 per day. With a bit of overtime and weekend work, the contractor earns £65k for the same role.

Rachman_2

daveb975 wrote:

Surely you are talking about a City financial services firm, though?

I am and there are tens of thousands of secretaries at City financial services firms - probably north of 100,000 in London.

Rachman_2

I don't get Arthur Dent's comment - she got on the ladder before prices boomed, so is presumably sat on good equity - I guess from where it is, that an acceptable house can be bought for say £130K-150K - so assuming average wages and £30K of equity - i.e. having ridden the price boom, why is not affordable - even on one wage that's not far off when you factor in child credits etc. At the moment, she's got very little mortgage and shoudl therefore be saving like billyo as any bigger house would cost more, but does not seem to have that cash. Strikes me as a bit of a Marie Antoinette and brioche comment - without more information obviously....

Also, as others have said, why are others able to move and she's not....

Xbigman

I'm not interested in people on 40k+ because that is not average. Supposedly 25k is average but where I work its only the 45 hour night shift that earn that and more typical wages are around 18-20k (Bristol). In Devon typical wages are more like 15-16k.
Lending people on this sort of income 5 times multiples is not sustainable long term for the reasons I outlined earlier.

As to retrospective capping, I agree it cannot be done. We would need to wait for the mythical HPC and lending multiples to fall back before applying any sort of cap, although as I already said an actual cap is not how it could be done. Then again, when multiples drop back no one will care about capping anymore.
Regards


X

Guy_Montag

Right let's deal with this average wage thing once & for all:

From the 2006 ONS ASHE survey:

Gross wages:

All employees (full time*)
Median: 23.6k
Mean: 29.3k

Secretaries (full time)
Median: 17.8k
Mean: 19.1k

London (full time)
Median: 30.6k
Mean: 43.8k

South West (full time)
Median: 22.0k
Mean: 26.5k


*I am using full time salaries as being more realistic of the house buying public

Alan_M_2

£40K salaries are not the norm, not by a large margin and I'm an employer.

My Ex wife had a 1st class honours degree and was studying for Chartership as an accountant, she was on £15K and once chartered might have been lucky to land a job at high £20's low £30's in central London, that's realistic figures.

High salaried city employees will be making up probably 1% of the nations workforce and likely be responsible for the 1% of houses that are worth in excess of £1 million. For the purposes of this thread they are wholly irrelevant.

cronosoft

Perhaps I can shed a bit of light on it... (I'm Arthur Dent's husband btw!)


At the time we bought our house in 1999, we paid £19,500 for it. It was hoped that after a few years we may be able to upgrade to a slightly bigger house - at the time a typical 2 bedroom house was around £30,000 or £40,000 for a 3 bedroom semi.

Unfortunately, due to a number of factors (for example, a massive rise in the demand for low cost housing to cater for the 30% increase in population to the area from migrant workers) house prices rose at a much higher rate in this area (Boston, Lincolnshire) - especially the cheaper houses with several bedrooms, which were bought up to split into multi-occupancy bedsits.

The value of our house rose to around £80,000 - yet the 3 bedroom ones rose to near the £140,000 - which has priced us completely out of the market.

There are also so few houses now for sale, and those at the lower end of the market that do come up for sale are snapped up so quickly.

Nearly everyone we know in our street bought their houses before the property boom, which I guess is how they've managed to survive!

Boston is an apallingly paid area of the country to live in. The average wage (and I don't mean the MEAN wage, but the MODE wage - the amount that most people earn) is very near the minimum wage.

Often the migrant workers are on far less than minimum wage, once gangmaster arranged accomodation, travel, uniforms etc. are taken into account.

Both myself and my wife are not unskilled or uneducated workers - and we've both been to college/university.

Typical wages that we've earned whilst living in the area (over the past 15 years)

My wife: £3.20 per hour - maximum earned £5.05 per hour
Myself: £1.48 per hour, £2.15 per hour , £3.65 per hour (deputy manager), maximum earned £5.15 per hour

I'm currently self employed, and earning around £100 per week, and trying to grow the business.

lypsey

UKBONDRAIDER
You say "My sister earns £40K. Her boyfriend earns £35K. This is approx £2400 and £2100 net per month respectively. If they can get a 4x joint mortgage this will be £300K. A £300K mortgage over 25 yrs at 5.15% fixed for 5 yrs is approx £1750 in mortgage payments"

It is very simple and that is why 3.5x salary or 4 x salary has worked for the last 60 years. Interest rates have been low for the last decade and the norm is closer to 7 or 8%. I would also like to point out that they are not the average person in the UK and I think the average wage is closer to 21 or 22k . But anyway the point on interest rates is this. Say your sister has 20,000 pounds a year that she can use for a mortgage AFTER expenses. . The 20,000 can't change it what she has LEFT

At 4% she can borrow 500k ie 500k x 4% = 20,000
At 5% she can borrow 400k ie 400k x 5% = 20,000
at 6% she can borrow 333k ie 333k x 6% = 20,000
at 7% she can borrow 285k ie 285k x 7% = 20,000
at 9% she can borrow 222k ie 222k x 9% = 20,000
You can clearly see that if interest rates rise even 2 or 3% the borrowing possiblilties can change by 40 or 50%. People tend to forget a small interest change has massive massive effect. Now I have given 20k as their dispossable income after expenses and of course your sister is in avery fortunate position she can clearly afford more than that but as I say there are not many people in her position

As a small aside I paid 15% interest rates 20 years ago and I am not saying this is going to happen again but believe me that nearly broke me and I was only 20 years old . Please don't be so flippant about affordability

I watched a property program 2 years ago and they featured 2 idiots who were paying a mortgage of 1700 a month and they said they had a fixed rate of 4% (it was an introductory thingy) and they said if rates went up they were bu££ered. Any way look at it know they could be paying close on double that. I would suggest they are bankrupt