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

ukcarper

Graham_Devon wrote: »

And now, woking average house price is £353,000. Kinda proving the point.

Not only did I find you a similar house I found the exact house
http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=19208640&sale=23418618&country=england

coastline

ukcarper wrote: »

I was just replying to how average house price in the 70s compared to now they look pretty similar.

That house was cheaper in relation to earning back then compared to now. ithink if it had just kept up with earnings it would be worth about £160k

Where my uncle lived...sold it for £25k...again about early 80's.
This one needs an update.

http://www.rightmove.co.uk/property-for-sale/property-17149539.html

coastline

Just to throw in a bit about interest rates...I can remember you got a sheet from the bank showing the Miras calculations which was tax relief at basic 38%....up to £30k.
The net figure was around £7 per thousand per month...now apply that bit to a house now.

ukcarper

Graham_Devon wrote: »

Anyway carper, you are letting too much out of the bag here fella!!

You often tell us how much of a struggle it was to buy then....no different to now. Indeed, that's where this thread started. You tell us that FTB's should not be looking to buy the average house, but a FTB house.

It appears now, you bought over average on both properties you have told us about....but we shouldn't whinge, as it was hard back then....

Just saying.

I'm glad we have had, and you have taken part in this discussion, as I feel were a bit further on, and you have little option but to agree it's quite a lot harder now than made out previously. I'd hope you bare this in mind next time a house price discussion comes up and you talk about 1973 and the average being the same as now!!

That house was 5.3x my income which was above average income I needed a 10% deposit plus legal fees which was almost 2 thirds of my gross income. There were 2 of us and we got a 3.25x combined income mortgage almost unheard of at the time and 6 months later they were selling for £10k so if I had not bought when I did I would have been priced out. Yea very easy.

1972 not 1973 and before peak.

lets look at the first house now £200k equivalent job to when I first bought £35k Wife's earnings equivalent £12.5k combined income £47.5k 10% deposit leaves £180k just under 3.8x joint easier to get than 3.25x in 1972.

　

ukcarper

coastline wrote: »

Just to throw in a bit about interest rates...I can remember you got a sheet from the bank showing the Miras calculations which was tax relief at basic 38%....up to £30k.
The net figure was around £7 per thousand per month...now apply that bit to a house now.

The way Miras worked was the interest was added to your tax code so you did not pay tax on it the saving depended on basic tax rate 30% in 1972. That effectivly reduced your interest rate by 30% but as interest rates were 9% in 1972 the effectiveinterest rate was 6.3% also remember you were paying 30% basic tax not 20% .

Basic rate tax was 30% in the 80s but if you were paying higher rate tax the saving would be more. for most of 80s interest rates were in double figures

nickj_2

shortchanged wrote: »

Who'd vote for lower house prices?

Parents who would like to see their children have a chance of getting on the housing ladder and not be burdened by a massive mortgage debt.

i purchased my house in 1993 for £57k , if i were to sell it now it would probably go for £220k , but to me it's a house to live in , a roof over my head , i've just cleared my mortgage so it has no monetary value to me unless i sell or die so if the value goes up to £1m of goes down to £20k it won';t matter to me
i don't want my kids to have to fork out £1/4 million just for a 2 bed rabbit hutch

J_i_m

In answer to the thread's question:

I have a vested interest, I'm saving for a house to make into my home. So yes I'd welcome lower house process and gladly vote for them.

spenceeyftb

I'm a first time buyer and quite young but I don't see them coming down in the forseeable future.

But first and foremost my first house will be a roof over my head and a house for my wife and me and hopefully children one day.

If you can imagine yourself staying put for a few years 10+ then chances are you'll make money on it anyway.

wotsthat

Graham_Devon wrote: »

Well done. And I think it's quite fair to say, that if the mean average used, is adding £44k to the affordability indicators, whereas it was only adding 10k 15 years ago....it's worth looking at and questioning.

So quit with the muddle-tastic nonsense.

If you like median wages then why not look at Nationwide although I seem to remember this wasn't on your preferred list.



You can measure the distance from the long run average and you'll be able to prove how much a house is over or under the long run average. You won't be able to 'categorically prove' that prices are over or under valued. The long run average is just that - it's not a measure of where prices should be.

It's decent data and maintained by, presumably, competent people on a monthly basis and has been done so for a long time. This thread shows why it's pointless to try and create your own index based on only two time points, making mistakes with the maths along the way, making assumptions about historic variations between means & medians, and then make up for the obvious lack of data by waffling on about celebrities and footballers.

I could tell you that my price earnings ratio based on purchases was 3.7 (1992), 2.7 (1999), 1.9 (2010) - based on your logic I've just proved beyond doubt that prices have been falling against wages for 20 years.

Loughton_Monkey

wotsthat wrote: »

.....This thread shows why it's pointless to try and create your own index based on only two time points, making mistakes with the maths along the way, making assumptions about historic variations between means & medians, and then make up for the obvious lack of data by waffling on about celebrities and footballers....

Agreed.

A bit apples and pears again. The Nationwide HP data is price of houses changing hands/remortgaging. Average Earnings is that of everyone and not the subset of people who buy (or remortgage) their homes.

Also, any sensible comparison would need to factor in other significant variables such as (a) Interest Rates (i.e. perceived affordability), (b) Lending Criteria (i.e. the changing hardness/laxness of banks' income multiples over time), and (c) any chinging trends (if exist) regarding proportion of houses bought/remortgaged by couples as opposed to individuals.