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

wotsthat

Loughton_Monkey wrote: »

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.

It's what I'm (badly) trying to explain to our man from the South-West.

The indices are just proxies for affordability. Not understood by everyone as indicated by references to the graph 'hiding' money. I think he's now trying to compare the wages of George Best and Rooney so that the index can be adjusted for 'celebrity culture'.

IveSeenTheLight

Graham_Devon wrote: »

No, but ISTL kindly provided enough to base anything on.

The biggest crux in your argument, and one that's now plain for all to see, is the mean is moving away from the median, meaning the graph shown above means less and less for the typical person. Hence no matter how many people say it's affordable, less and less can afford to buy, as the graph doesn't represent the typical person.

Not something that can really be argued, as the data is the data.

We have been saying for some time now that unfortunately the percentages of home ownership are likely to decline and that only the wealthier will be able to afford.

Your desire for properties to be affordable to the mass would only be achievable is there was a massive over supply of property.

If we were to look at this from a different perspective, you might find that household income in 2012 has vastly changed from household income 30 years ago.

this change in household income is probably more relevant to the affordability of (potential) home owners

IveSeenTheLight

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.

I don't buy this thought process.
It's a bit like announcing record breaking box office hits at teh cinema.
As the price of the tickets increased, the likelyhood of new records being achieved increases.

It has nothing to do with how popular the film was.

Personally, my wage has more than tripled since 1997. With a 4 x salary multiplier, that would mean I could afford more than 12 times what I could in 1997, even though my salary [edit] only [/edit] tripled.

Thrugelmir

IveSeenTheLight wrote: »

We have been saying for some time now that unfortunately the percentages of home ownership are likely to decline and that only the wealthier will be able to afford.

With average wage in decline (buying power). Surely the wealthier will also become poorer.

chewmylegoff

IveSeenTheLight wrote: »

Personally, my wage has more than tripled since 1997. With a 4 x salary multiplier, that would mean I could afford more than 12 times what I could in 1997, even though my salary tripled.

last time i looked:

£1 x 4 = £4

£3 x 4 = £12


£12 / 4 = 3 (not 12)

IveSeenTheLight

chewmylegoff wrote: »

last time i looked:

£1 x 4 = £4

£3 x 4 = £12


£12 / 4 = 3 (not 12)

Of course, slip of the [STRIKE]tongue[/STRIKE] type as I hastily posted.

I meant I could afford 12 times my 1997 salary as opposed to 4 times.

IveSeenTheLight

Thrugelmir wrote: »

With average wage in decline (buying power). Surely the wealthier will also become poorer.

Surely that depends on whether the wealthier salaries have increased lower than inflation, otherwise if their salary outpaced inflation, they would be more wealthier.

The average salary has been attributed in part to more people working part time.

The ONS provide some great figures for comparing local markets and demographs to determine what the outcomes are.

When you compare the ASHE 2010 to the ASHE 2011 results, we can see that the 90th percentile on average attained an average 1.89%, which being below inflation, they are demonstrably poorer, however, they are less poorer than the lowere percentiles.

So yes, their buying power is reduced, just not as much as lower earners

chewmylegoff

IveSeenTheLight wrote: »

Of course, slip of the [STRIKE]tongue[/STRIKE] type as I hastily posted.

I meant I could afford 12 times my 1997 salary as opposed to 4 times.

why is that really relevant to anything. i started working in 2000. i could now borrow approximately 31.25x my 2000 salary.

what has that got to do with the price of fish though? it doesn't mean that average earnings have increased by 31.25x during the intervening period. it just means i wasn't paid very much in 2000 and that now i am paid quite a lot more.

IveSeenTheLight

chewmylegoff wrote: »

why is that really relevant to anything. i started working in 2000. i could now borrow approximately 31.25x my 2000 salary.

what has that got to do with the price of fish though? it doesn't mean that average earnings have increased by 31.25x during the intervening period. it just means i wasn't paid very much in 2000 and that now i am paid quite a lot more.

I agree, in my mind it was highlighting that very point to the argument that previously proposed regarding median average multiplier needing £10k, but now needs £44k.

The difference is irrelevant as it does not take into account wage inflation at the same time.

I also used the box office example to show measurement on value does not replicate whether the film was more popular.

Graham_Devon

IveSeenTheLight wrote: »

I agree, in my mind it was highlighting that very point to the argument that previously proposed regarding median average multiplier needing £10k, but now needs £44k.

The difference is irrelevant as it does not take into account wage inflation at the same time.

Yup, it does.

To look into that a little further, the "allowance" (can't think of the right word there) was 10% greater than the median wage in 1997.

In 2011, the allowance was 64% greater than the median wage.

Wage inflaion is already factored in, as the average wage from each year is used.