Why exactly are houses so expensive?

ukcarper

wotsthat wrote: »

Hang on a minute. You've posted a blog which you think is lovely. The basis of the article is to compare house prices against the price of the weekly food shop. Now you're saying the weekly food shop is irrelevant.

There are many ways of measuring house prices i.e. pounds & pence, vs wages, vs household income etc. This is a new one - the egg vs house price index - do you think it'll take over from the land reg?

Graham seems to have the impression that things are so much worse than they were in the 50s I was child in the 50s and I can guarantee that if he could rent the house my parents rented and I was bought up in for the equivalent rent he wouldn’t .

Graham_Devon

ukcarper wrote: »

In other words you can’t

I understand the bit about you have some expenses that you wouldn’t have had in 1952 but not what credit has to do with it.

Credit has everything to do with it.

The increasing demand on wages through cars, council tax, other taxes, cost of working, means even though wages have increased, theres more demand on those wages compared to 1952.

Therefore, expanding credit by quite so much in 15 years meant that house prices could forever increase above and beyond what was affordable on the wages alone.

If you add on the expansion of interest only to reduce the monthly outlay, housing could get even more expensive, as you could could buy a higher priced house, for a lower monthly payment. The move away from 3+1x mulitples for dual incomes, to both incomes being counted fully meant suddenly you could afford more debt.

What I am saying is, and have said it a few times now, the weekly shopping bill is an irrelevance compared to the expansion of credit.

Lowering the weekly shopping bill by £20 a week for instance would not make buying a house any easier. it would take years and years for that £20 to mean something in terms of the price of a house.

Expanding credit 630% meant instant gratification and instant reactions to higher prices. Higher prices didn't mean you couldn't afford it, it just meant you took more debt.

It's not that hard to understand, and the article is NOT all about food prices. It covers several angles, but you are insistent on looking at the food bill. I don't know why, as it's so irrelevant compared to the multiples of lending that happened.

This argument is going down the same route again. Soon we'll be at "well in the 50's people worked down mines, and Graham thinks he's got it worse now". You can bet your bottom dollar, as it's the route thats always taken.

This article is clear. It puts reasoning and facts infront of every bull argument. That's why you are pretending not to understand, and not doubt why now the thread will just end up in infantile comments.

ukcarper

Graham_Devon wrote: »

Credit has everything to do with it.

The increasing demand on wages through cars, council tax, other taxes, cost of working, means even though wages have increased, theres more demand on those wages compared to 1952.

Therefore, expanding credit by quite so much in 15 years meant that house prices could forever increase above and beyond what was affordable on the wages alone.

If you add on the expansion of interest only to reduce the monthly outlay, housing could get even more expensive, as you could could buy a higher priced house, for a lower monthly payment. The move away from 3+1x mulitples for dual incomes, to both incomes being counted fully meant suddenly you could afford more debt.

What I am saying is, and have said it a few times now, the weekly shopping bill is an irrelevance compared to the expansion of credit.

Lowering the weekly shopping bill by £20 a week for instance would not make buying a house any easier. it would take years and years for that £20 to mean something in terms of the price of a house.

Expanding credit 630% meant instant gratification and instant reactions to higher prices. Higher prices didn't mean you couldn't afford it, it just meant you took more debt.

It's not that hard to understand, and the article is NOT all about food prices. It covers several angles, but you are insistent on looking at the food bill. I don't know why, as it's so irrelevant compared to the multiples of lending that happened.

This argument is going down the same route again. Soon we'll be at "well in the 50's people worked down mines, and Graham thinks he's got it worse now". You can bet your bottom dollar, as it's the route thats always taken.

This article is clear. It puts reasoning and facts infront of every bull argument. That's why you are pretending not to understand, and not doubt why now the thread will just end up in infantile comments.

It might be now but if instead of £60 a week it was over £200 which was the equivelent of what it would be in the 50s it would be I really don’t think you realise how much cheaper food etc is compared to the 50s.

What are you going on about bull argument I don’t consider myself a bull I am just pointing out that the original blog is pointless I personally think the boom it the 2000s was caused by many things and laxer lending was one of them but I have seen prices jump to 5x average earnings when very tight lending criteria existed.

wotsthat

Graham_Devon wrote: »

This argument is going down the same route again. Soon we'll be at "well in the 50's people worked down mines, and Graham thinks he's got it worse now". You can bet your bottom dollar, as it's the route thats always taken.

I sometimes think you carefully guide us down this well trodden route on purpose.

You have a whole group of people who are in 'Graham's Rose Tinted Brigade' but you appear to wear exactly the same spectacles when looking at a past of which you have no experience and a poor comprehension of what the 50's (and particularly the 70's) were like.

Graham_Devon

ukcarper wrote: »

It might be now but if instead of £60 a week it was over £200 which was the equivelent of what it would be in the 50s it would be I really don’t think you realise how much cheaper food etc is compared to the 50s.

ARGH, carper!!!!

So, let's say the equivalent food in 1950 cost £200, and today it costs £60.

Good, so you are saying were £140 a week better off today. The end.

Have you not read my posts about the extra costs of living today? Add on all the costs which wouldn't have been around in 1950, and you are probably OVER the £200 which food would have cost. You may be slightly under it. But yo uare still left with houses being a 3rd more expensive too.

If you just want to say the equivalent food cost today would be £200, the end, that's fine. But it's ignorance of the highest order.

I'd certainly rather live today than in the 50's. But that's not my point, an dit shouldn't be made into such a point. My point is surrounding the simple facts and figures presented in the article. I make no reference to how hard life was back then.

chewmylegoff

Graham_Devon wrote: »

ARGH, carper!!!!

So, let's say the equivalent food in 1950 cost £200, and today it costs £60.

Good, so you are saying were £140 a week better off today. The end.

Have you not read my posts about the extra costs of living today? Add on all the costs which wouldn't have been around in 1950, and you are probably OVER the £200 which food would have cost. You may be slightly under it. But yo uare still left with houses being a 3rd more expensive too.

If you just want to say the equivalent food cost today would be £200, the end, that's fine. But it's ignorance of the highest order.

to be honest neither of you have any statistics to refer to which reliably tell you what the cost of living was in 1950 vs. today. there seems little point in just arguing about what it probably is based on your random guess vs. someone else's random guess (i.e. we are now seeing discussions about a £140 inflation adjusted difference in food bills which appears to come from numbers you have both just pulled out of thin air), and you aren't going to ever resolve anything by just reiterating over and over again what you personally believe to be the case on the basis of general assumptions you have both made which are unsupported by any real evidence.

do feel free to continue though.

ukcarper

chewmylegoff wrote: »

to be honest neither of you have any statistics to refer to which reliably tell you what the cost of living was in 1950 vs. today. there seems little point in just arguing about what it probably is based on your random guess vs. someone else's random guess (i.e. we are now seeing discussions about a £140 inflation adjusted difference in food bills which appears to come from numbers you have both just pulled out of thin air), and you aren't going to ever resolve anything by just reiterating over and over again what you personally believe to be the case on the basis of general assumptions you have both made which are unsupported by any real evidence.

do feel free to continue though.

The only thing I can say in my defence is that using RPI calculator £100 is now £2600 so if you were earning £500 a week (which was the highest figure I could find) and your salary only kept up with RPI it would be £13000.

I’m not sure but doesn’t RPI include housing.

ukcarper

Here is an interesting link it shows average earning for a man as £9 a week.
http://www.parliament.uk/documents/commons/lib/research/rp2002/rp02-028.pdf

Graham_Devon

ukcarper wrote: »

Here is an interesting link it shows average earning for a man as £9 a week.
http://www.parliament.uk/documents/commons/lib/research/rp2002/rp02-028.pdf

And says this too:

Over the last half-century, the size of the British economy has tripled, crime has risen ten-fold, the number of young people staying on to undertake full-time further education has doubled, and average weekly earnings have grown by a factor of 40.

Not quite the 70 you were suggesting earlier.

Wonder why potatoes are up 8,900% according to that article?!

ukcarper

Graham_Devon wrote: »

And says this too:
Not quite the 70 you were suggesting earlier.

Wonder why potatoes are up 8,900% according to that article?!

Try looking at date of report 2002.

We are not sure whether they are using mean or median but ASHE 2011 shows male figures to be £26396 and £33639 56.4x and 71.8x