Salary Reality Check

black_taxi_2

cost of energy is a real worry,from petrol car to heating house,flat

ukcarper

ringo_24601 wrote: »

If we look at this chart:

And compare 1983 with 2010; homes were 3.25x salary in '83 and ended up as 5.25x salary in 2010

Original source: http://blogs.thisismoney.co.uk/2010/04/house-prices-vs-average-earnings.html

Confusingly, i bought my first home in 2006 at the start of the peak, but still sold it for 11% more than i paid in 2011.. ah crazy london prices

ps. anyone else notice how the chart follows the house price chart? Showing the rises in house prices are not linked to rises in salaries

I've I've said in the past - no one has heard of a 'salary bubble'

The graph shows that house prices vary in relation to earnings and I believe the current ratio is about 5.2% so I agree prices are high but only about 25% above long term average. I first bought in 1972 when the ratio was about 4.8x so a blanket statement just using RPI is no where near accurate.

ukcarper

ruggedtoast wrote: »

These stats have hit the House Price Denial Green Zone like a truck bomb. They are shell shocked and disoriented with the incontrovertible proof that housing is actually more expensive now than it was in the 80s.

Fall back to the bunkers!

Arm the secret weapon...

Present tautological arguments!


Of course young people cant afford housing when they all have gold, diamond encrusted i-Phones!

I'm not denying that just that things are not as bad as you try to make out earning have outstripped RPI by 60% over same period.

CLAPTON

ruggedtoast wrote: »

First confabulatory argument away! [stubbornly refuse to acknowledge difference between nominal and real prices, often conflated with a general assertion that wages have risen massively above inflation]

maybe better if you posted less but considered the content more thoroughly:


there are several factors to consider when discussing 'expensive'
-ratio of price to income
-cost of servicing the mortgage debt (percent of salary required to pay the mortgage)
-deposit requirements relative to income

but you know that already

[Deleted User]

ukcarper wrote: »

The graph shows that house prices vary in relation to earnings and I believe the current ratio is about 5.2% so I agree prices are high but only about 25% above long term average. I first bought in 1972 when the ratio was about 4.8x so a blanket statement just using RPI is no where near accurate.

After thinking about it, that graph is probably useless unless you look at it regionally.

I'd love to see a regional version, probably showing how the ratio is sky-high in the south-east, even though there are higher salaries I still feel properties are disproportionally expensive

ruggedtoast

CLAPTON wrote: »

maybe better if you posted less but considered the content more thoroughly:


there are several factors to consider when discussing 'expensive'
-ratio of price to income
-cost of servicing the mortgage debt (percent of salary required to pay the mortgage)
-deposit requirements relative to income

but you know that already

Maybe if you posted less and read more you would realise you already have #1 as it was posted earlier.

Whichever way you try and wriggle and spin #2 and #3 they are percentages of a commodity that is more than twice as expensive in real terms than when you were first in the market.

lostinrates

MrRee wrote: »

They work 4 days a week, no Fridays.

The business calls for the brightest brains in a select area (Nuclear Physics) ..... the best minds in this elite area are as rare as rocking horse crap, hence they can charge what they want and aren't daft enough to be PAYE.

Funnily enough right this second they are talking about a 28 year old nuclear physicist working or a major french employer of nuclear physists in uk not being able to afford house in Bristol on you and yours.

ukcarper

ringo_24601 wrote: »

After thinking about it, that graph is probably useless unless you look at it regionally.

I'd love to see a regional version, probably showing how the ratio is sky-high in the south-east, even though there are higher salaries I still feel properties are disproportionally expensive

Lets use male full time which is what the graphs are based on
average house price £161k compared to £213k South East (Land Reg)

Median male full time earnings is £28.4k compared to £32.6 in south east (ONS ASHE 2011).

Meaning ratio in south east is 6.5x compared to 5.7x for whole, so it looks like in the south east in relation to earnings house prices are higher, I'm pretty sure that has always been the case.

　

black_taxi_2

isn't London a magnet for oversea buyers

noodle_doodle

lostinrates wrote: »

Funnily enough right this second they are talking about a 28 year old nuclear physicist working or a major french employer of nuclear physists in uk not being able to afford house in Bristol on you and yours.

He's quite blatantly making stuff up. 90% of nuclear physicists are at govt research institutions or universities. A senior research fellow at any uni in the uk (with a bit extra for london weighting) gets between 36 and 45K a year. A plain research fellow gets 35k or under.

There may be people at say sellafield making a packet but they are engineers and spanner monkeys rather than physicists. I have such a friend who works in thorp and makes 50K a year, but that still is only 200 quid a working day.