Who'd vote for lower house prices? Not many...

coastline

Graham_Devon wrote: »

Explains all the arguments over "well howcome one wage could buy a house in the 70's and it can't now if the average earnings vs house price ratio is close" arguments.

And I'm done.

About 20 years ago a family member bought a 3 bed bungalow which needed an upgrade...I could have bought that for 3x my wage..today even with a fall it would be nearer 7..

Graham_Devon

coastline wrote: »

About 20 years ago a family member bought a 3 bed bungalow which needed an upgrade...I could have bought that for 3x my wage..today even with a fall it would be nearer 7..

Yep, and normally the response would be to show you the graph provided earlier, telling you that's not the case, and secondly, provide you with a graph showing that house prices are much cheaper now due to much lower mortgage payments.

The graphs been sorted.

The lower mortgage payments were sorted ages ago..(interest rates, but that's ignored!).

Conclusion? It's harder to buy today. Much harder.

ukcarper

Graham_Devon wrote: »

And one final point. The figures calculated earlier, probably show why some stand back with disbelief when people say it was just as hard in the 70's, and were approaching the same level of earnings.

If the mean is much higher than it was in the 70's comapred to median (which is extremely likely based on the data provided so far and the type of earnings) it stands to reason that someone earning real average earnings in the 70's WAS paying 4x their earnings for a house, and the Halifax graph would be correct. They would have been far closer to the mean and therefore te graph provided would have been more accurate.

But that's not the case now. The real average person is paying 6(+)x their earnings, even though the graph says something else, as the mean is so far away from the median.

Explains all the arguments over "well howcome one wage could buy a house in the 70's and it can't now if the average earnings vs house price ratio is close" arguments.

And I'm done.

You have no idea that the mean and median were closer in the 70s and as I have said Nationwide use median and thier figures go back to thr 50s.

ukcarper

coastline wrote: »

About 20 years ago a family member bought a 3 bed bungalow which needed an upgrade...I could have bought that for 3x my wage..today even with a fall it would be nearer 7..

Same old thing again 20 years ago when prices were the cheapest they have been in relation to earning since the war .

ukcarper

coastline wrote: »

The mortgage and financial industry tend to use average earnings as a guide to affordability...
The posts on here are showing average isn't that accurate and median is a better...
The link I've posted shows that the majority of people don't even earn that and its around 60% of the total.

That has always been the case so what does it show in regard to long term affordablity.

the_flying_pig

just chucking in a fact - i looked at the RPI baskets for 1987 and 2012 [see first link on this search]. these are the changes in the weights of different item's in a household's spending.


Food: down 53
Clothing & footwear: down 29
Booze: down 20

Fuel/light: down 15
Leisure goods: down 14

Household goods: down 11

Tobacco: down 9
Catering: up 1

Personal goods & services: up 1
Fares/travel: up 1

Motoring: up 4
Household services: up 23

Leisure services :up 41
Housing: up 80

the_flying_pig

another thing - it'd be difficult to prove this but i am dubious that the Haliwide 'average house' definition has stayed constant over time.

e.g. Haliwide reckons that the average house price was £36k when my parents bought theirs for £36k in 1985.

but now my parents' house is right below the stamp duty threshold of £250k, so it's now worth 60% more than the 'average house'.

my wife's parents' house, 200 miles away, is exactly the same - not the same numbers but the same result - it's gone from being supposedly about average to loads better than average.

i cannot help but wonder if the indices drastically understate how much less affordable a house of a given type [say 3-bed semi, 4-bed detached, whatever] has become over time, by moving the average away from bigger places and towards smaller.

coastline

ukcarper wrote: »

Same old thing again 20 years ago when prices were the cheapest they have been in relation to earning since the war .

In the 1980's my aunt...who'd moved south when she was young....showed me her estate agents advert for her house...
She lived in Raynes Park..Wimbledon area...£13,800..

Graham_Devon

the_flying_pig wrote: »

another thing - it'd be difficult to prove this but i am dubious that the Haliwide 'average house' definition has stayed constant over time.

e.g. Haliwide reckons that the average house price was £36k when my parents bought theirs for £36k in 1985.

but now my parents' house is right below the stamp duty threshold of £250k, so it's now worth 60% more than the 'average house'.

my wife's parents' house, 200 miles away, is exactly the same - not the same numbers but the same result - it's gone from being supposedly about average to loads better than average.

i cannot help but wonder if the indices drastically understate how much less affordable a house of a given type [say 3-bed semi, 4-bed detached, whatever] has become over time, by moving the average away from bigger places and towards smaller.

My first reaction to this would be to suggest it's a north thing. But then having said that, my parents bought their house in 1979 for £9,000.

When we last looked, out of interest, it was sold in 2005 for £102,000. So probably worth £85-90k now? Increase of 900%

That....was up North, and it went from below average, to average (for the area).

the_flying_pig

Graham_Devon wrote: »

My first reaction to this would be to suggest it's a north thing. But then having said that, my parents bought their house in 1979 for £9,000.

When we last looked, out of interest, it was sold in 2005 for £102,000. So probably worth £85-90k now? Increase of 900%

That....was up North.

as i said mine & her parents were 200 miles apart. mine in north yorkshire, hers in west devon.

but two houses is clearly a miniscule sample.

it'd be interesting to do it for a bigger one. not that i particularly have the time or inclination. i guess to make any sense at all you'd need to look at a chosen sample of say 6 towns, covering NE, NW, WM, EM, SW, SE, maybe choosing the first few streets alphabetically [e.g. 'Albany Terrace' or whatever] for each, & seeing which houses have been sold twice since the 70s [sadly online figures start only about 10-15 yrs ago, definitely not back to the 70s], compare those with what Halifax would predict.

a fun job for someone.