More rationing

silverwhistle

Oooh, that's an interesting graph: I bought my house in Q1 1983 with a repayment mortgage! Thank goodness for lodgers and pay increases is all I can say!

nick74

IveSeenTheLight wrote: »

Interesting perception.
How would you qualify your statement?

Looking at the data available here
http://www.lloydsbankinggroup.com/media/excel/2013/250413Affordability.xls

It shows the House Price compared to Average Earnings as being slightly higher than the long term average

The long term average has itself been distorted by the unusually high prices in the period 2002 -2008 ! Before that 6 year period the long term average over the previous decades was considerably lower.

armour

Very interesting ISTL, particularly the affordability data.
We've had very low intrest rates for 3 yrs now.
Who seriously thinks they are gonna go up significantly anytime soon?
If I wasn't already heavily (as a proportion of my total wealth) invested in property, I'd be in like Flynn at these low borrowing rates.
The gamble is interest rates staying low and inflation remaining significantly higher for the next few years. I reckon this is something that the government (Labour or Tory or coalition) will try to engineer.

IveSeenTheLight

nick74 wrote: »

The long term average has itself been distorted by the unusually high prices in the period 2002 -2008 ! Before that 6 year period the long term average over the previous decades was considerably lower.

Why do you consider an average distorted by the higher period, but ignore the lower than average periods? i.e. 83 - 88 and 92-02

It's a 30 year average, considering the peaks and troughs over that 30 year period.

To your point, prices are still showing higher than the 30 year earnings ratio average

michaels

IveSeenTheLight wrote: »

Why do you consider an average distorted by the higher period, but ignore the lower than average periods? i.e. 83 - 88 and 92-02

It's a 30 year average, considering the peaks and troughs over that 30 year period.

To your point, prices are still showing higher than the 30 year earnings ratio average

Ah but what if you also add 'average people per house' in to the mix, the population has grown faster than the housing stock as far as I know. thus average numebr of people and thus amoutn of income per household must also have increased even if the ratio of average single earner income to house prices has not.

Anyone got the data to see if this is significant?

ukcarper

nick74 wrote: »

The long term average has itself been distorted by the unusually high prices in the period 2002 -2008 ! Before that 6 year period the long term average over the previous decades was considerably lower.

The average in 1991 would have been just under 4x compared to just over 4x now

Conrad

Graham_Devon wrote: »

But hey, who cares! People just cope...

:beer:

Indisputably the overwhelming majority do, yes.

Dual incomes, work an additional job in the pub, let out a room, do overtime, get promotions, build equity and remortgage to a lower rate.

Yu'p most of us cope.

IveSeenTheLight

michaels wrote: »

Ah but what if you also add 'average people per house' in to the mix, the population has grown faster than the housing stock as far as I know. thus average numebr of people and thus amoutn of income per household must also have increased even if the ratio of average single earner income to house prices has not.

Anyone got the data to see if this is significant?

I understand, household income may well have increased, strengthening the ability to support house prices.

Not too sure of the significance as most would prefer to move out and get a place of their own / to share.

IveSeenTheLight

ukcarper wrote: »

The average in 1991 would have been just under 4x compared to just over 4x now

Again, why should you discount 6 years of 2002 - 2008?
You'd be as well discounting 88 - 92 as well.
Then you'd find you'd want to expand the next peaks.
In fact, why not just say the trough was 3x and that what it should be.........

ukcarper

IveSeenTheLight wrote: »

Again, why should you discount 6 years of 2002 - 2008?
You'd be as well discounting 88 - 92 as well.
Then you'd find you'd want to expand the next peaks.
In fact, why not just say the trough was 3x and that what it should be.........

I done to show that if you disregard the last boom and the previous bust the figure is almost the same.

People seem happy to disregard the last boom when trying to talk down average but never mention the 90s when prices were lower than any time since the 50s.

It's funny that people keep quoting 3x as long term average when it was only below 3x for a few years in 90s