Why exactly are houses so expensive?

DpchMd

chewmylegoff wrote: »

personally i always preferred three quarter pounders with cheese to finish the night off.

I'm just glad I bought my double cheeseburgers at the bottom.

daveparker

Back in the days when I was renting I wished for prices to come down, what I learnt though was just because I didn't want to pay x price didn't mean the next person wouldn't. There is still a lot of cash out there and people making good money.

I just can't see a big crash coming, the real crime has been wage stagnation - if wages had been going up 3-4% last 5 years while house prices reduced the same we could have met in the middle by 2017 or so - but with wages remaining flat and house prices going up a bit down a bit we haven't really got anywhere

Eellogofusciouhipoppokunu

DervProf wrote: »

Yes, what we need is for those with savings to invest most of it in bricks and mortar, or at least go on a couple of luxury holidays and buy a 60" TV.

And what have they got to lose ? In the event they are ill, out of work or retire, they get extra state benefits because they have less savings.

There is a joke doing the rounds "If your TV is bigger than your bookshelf then you're working class". I reckon that Working Class should be replaced by Benefit Class for that joke to be accurate.

C_Mababejive

Apart from the market construct fuelled by carp BTL/auction type TV programs and bent estate agents..

You should also read about much of the land which has been stolen from the people and is therefore unavailable for development..

http://en.wikipedia.org/wiki/Crown_Estate

also

http://www.dailymail.co.uk/news/article-1328270/A-Britain-STILL-belongs-aristocracy.html

HM Land Registry connives with the landed gentry to hide
their bent claims to ownership since land only needs to be registered if it is bought or sold,,not passed down the family line.Stolen land inherited by ancestors of thieves.

note_2

Between 1995 and 2007 the UK population increased by 5%, the housing stock increased by 10% and house prices increased by 350%, meanwhile mortgage lending by banks increased by 630%. Which of these figures is more likely to have led to a 350% rise in house prices: a 5% rise in population growth which is matched by an increase in supply of housing; or an unprecedented increase in mortgage lending from the banks?

well thats just kicked my theory that house prices will only continue to rise due to one factor being population increase.....i'll get me coat

wotsthat

Graham_Devon wrote: »

In the same time that houses have increased 8,000% in value, eggs have increased 2,000%, bread 1,983%, milk 1,125%.

According to the figures houses have increased by exactly 8000% and eggs exactly 2000%?

I suspect the blogger decided the conclusion he wanted to make and then found some figures to fit. Whatever, I reckon he's in with a chance of a numberwang award.

ukcarper

Also as wages have increased by round about 7000% that makes your grocery bill less than a third of what it would be if groceries had kept up with salary. So back in the 50s people had to spend a lot more of their wages on basic food items I wonder how people would feel if their £60 weekly shop was £180.

Graham_Devon

I do love how some of you insist on trying to water these things down.

Halifax have done a study.

Average house prices have risen 273% in real terms since 1953. This is an annual rate of 2.7%.

The annual rate of pay increases works out at 2%.

Whichever way you look at it, houses continue to get further out of reach for every year that passed by over this period.

However, 60% of that 273% was over one single decade. This decade also saw the lowest rate of wage increases.

It's very hard to make any sense of house prices vs wages over 60 years. Taxes have changed insumountedly (sp). For instance, council tax wasn't even a factor in 1950.

What these figures do tell us, ignoring any other expenses forgone or existing today over the years, is that house prices have continually outpaced wages by about a 3rd.

Notice most of those who don't want to see house prices fall have concentrated on the eggs and ignored the rest of the uncomfortable truths the article lays bare!

ukcarper

Graham_Devon wrote: »

I do love how some of you insist on trying to water these things down.

Halifax have done a study.

Average house prices have risen 273% in real terms since 1953. This is an annual rate of 2.7%.

The annual rate of pay increases works out at 2%.

Whichever way you look at it, houses continue to get further out of reach for every year that passed by over this period.

However, 60% of that 273% was over one single decade. This decade also saw the lowest rate of wage increases.

It's very hard to make any sense of house prices vs wages over 60 years. Taxes have changed insumountedly (sp). For instance, council tax wasn't even a factor in 1950.

What these figures do tell us, ignoring any other expenses forgone or existing today over the years, is that house prices have continually outpaced wages by about a 3rd.

Notice most of those who don't want to see house prices fall have concentrated on the eggs and ignored the rest of the uncomfortable truths the article lays bare!

Well I suppose that is what the 8000% increase for property compared to the 7000% for earnings tells you. But as you know the housing market is cyclical and if you look at the earnings to average house price graph it is like a roller coaster so those figures are just a snapshot in time.

chewmylegoff

Graham_Devon wrote: »

I do love how some of you insist on trying to water these things down.

Halifax have done a study.

Average house prices have risen 273% in real terms since 1953. This is an annual rate of 2.7%.

The annual rate of pay increases works out at 2%.

Whichever way you look at it, houses continue to get further out of reach for every year that passed by over this period.

However, 60% of that 273% was over one single decade. This decade also saw the lowest rate of wage increases.

It's very hard to make any sense of house prices vs wages over 60 years. Taxes have changed insumountedly (sp). For instance, council tax wasn't even a factor in 1950.

What these figures do tell us, ignoring any other expenses forgone or existing today over the years, is that house prices have continually outpaced wages by about a 3rd.

Notice most of those who don't want to see house prices fall have concentrated on the eggs and ignored the rest of the uncomfortable truths the article lays bare!

wages may have increased by an average of 2% per annum per year, but it might be more sensible to look at household income (which as you rightly point out should be disposible income, i.e. after tax).

the main reason for me saying this is that i should think that in 1953:

(a) the number of women in employment (even part time employment) was probably much lower than it is today; and

(b) the benefits paid by the government were much lower then.

so saying that the average salary was £20 then and is £20,000 now (making the figures up) would be a bit pointless when infact the average household income was £21 then, and is £30,000 now (again just making the figures up to make a point).