House prices need to drop 40% to be affordable discussion

nembot

ukcarper wrote: »

According to Nationwide the long-term average is 4x average full time male salary and it is now just over 5 so a drop of 20% would get it back to long terms average. A drop of 40% would take property down to 3x, which only occurred, at the bottom of the 90s crash.

How about instead of according to Halifax, you use your own brain?

So the average wage is what 29k and the average house price is around 160k, is your math really that bad... it's much closer to 6x, than 5?

nembot

JonnyBravo wrote: »

Some people have the temerity to disagree with your point of view?

tut.

Yes, doesn't mean I'm any less right though does it?

ukcarper

nembot wrote: »

How about instead of according to Halifax, you use your own brain?

So the average wage is what 29k and the average house price is around 160k, is your math really that bad... it's much closer to 6x, than 5?

Where did you get that figure

RenovationMan

nembot wrote: »

How about instead of according to Halifax, you use your own brain?

So the average wage is what 29k and the average house price is around 160k, is your math really that bad... it's much closer to 6x, than 5?

£160,000 / £29,000 = 5.52 x Salary.

However, we don't have 100% mortgages available anymore so that calculation isn't valid. It's unlikely that a FTB would be buying the average house unless he has a very substantial deposit.

More likely is that the average home is bought as a second or even 3rd purchase with built up equity softening the blow and reducing the salary multiple.

nembot

I used an average regional price, rather than 228k which is the country average. Shall we use those numbers, with the national average wage of 30k to skew your figures further???

Well here you go 7.8x

Best of luck spinning that as affordable carper, no really - good luck!

Jeez, give me strength.

IveSeenTheLight

nembot wrote: »

I used an average regional price, rather than 228k which is the country average. Shall we use those numbers, with the national average wage of 30k to skew your figures further???

Well here you go 7.8x

Best of luck spinning that as affordable carper, no really - good luck!

Jeez, give me strength.

Where do you get your £228k figure from?

According to LR, the average house price is currently £162,347
http://www.landregistry.gov.uk/

nembot

RenovationMan wrote: »

£160,000 / £29,000 = 5.52 x Salary.

However, we don't have 100% mortgages available anymore so that calculation isn't valid. It's unlikely that a FTB would be buying the average house unless he has a very substantial deposit.

More likely is that the average home is bought as a second or even 3rd purchase with built up equity softening the blow and reducing the salary multiple.

It's unlikely a FTB would be buying an average priced house, because they're so expensive? 10 years ago, there would be no obstacle for someone on average wage, buying an average property.

wotsthat

nembot wrote: »

I used an average regional price, rather than 228k which is the country average. Shall we use those numbers, with the national average wage of 30k to skew your figures further???

Well here you go 7.8x

Best of luck spinning that as affordable carper, no really - good luck!

Jeez, give me strength.

OK. 7.8 is the Nembot affordability index. Using your methodology what's the long term average? What was it this time last year? What was it 10 years ago?

Are you starting to see why affordability indices maintained by someone else, even if you don't agree with the numbers, are handy for spotting trends?

nembot

IveSeenTheLight wrote: »

Where do you get your £228k figure from?

According to LR, the average house price is currently £162,347
http://www.landregistry.gov.uk/

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm

^^^

Where did the the figures come from?

Sources:

England and Wales

Land Registry of England and Wales, Crown copyright. The information above is based on figures provided by the Land Registry of England and Wales.
Figures for England and Wales are for the period April to June 2011.

IveSeenTheLight

nembot wrote: »

It's unlikely a FTB would be buying an average priced house, because they're so expensive? 10 years ago, there would be no obstacle for someone on average wage, buying an average property.

I'm in agreement with you that the last 10 - 20 years was probably the easiest opportunity to become an owner.
This is reflected in the rise in owner occupancy levels.

However this is not the historical norm and could be viewed as a historical abnormality.

I've made comment before that the last 30-40 years have changed expectations and possibly we are returning to a mosre historically normal era of increased renters and reduced owners.