House prices have risen 6.9% a year since 1980 according to the ONS

tkane

Buy to let still not making sense to HPC'ers?

If you are buying for the long term, which most BTLers are, property makes every bit of sense :beer:

Only seven out of the last 33 years have seen house prices go down, and the highest ever increase was in 1988 - not in the last 15 years as most would assume.

http://www.thisismoney.co.uk/money/mortgageshome/article-2921526/House-prices-risen-6-9-year-1980-according-ONS.html

HAMISH_MCTAVISH

And the ONS rightly points out that the big drop in homeownership amongst the young is primarily not down to rising house prices, but rather that the average deposit percentage demanded of young people is around double what it was in the 1980's.

The ONS says a huge factor in the decline is the rise in deposits required to secure a mortgage. For first-time buyers, the average deposit as a percentage of the purchase price increased by almost 10 percentage points between 1988 and 2013, from 12 per cent to 22 per cent.

http://www.thisismoney.co.uk/money/mortgageshome/article-2921526/House-prices-risen-6-9-year-1980-according-ONS.html

Mortgage Rationing remains endemic in this country, and home ownership will not increase until that changes.

PasturesNew

My friend bought a flat in 1980, a 2-bed flat, in a "reasonable/good area". Not posh, not rough, sought after village, edge of a town. Paid £20k. Three identical small blocks on the one road. One sells every year.

If that flat had risen by 6.9% per year it'd be £207k now. Last three to sell were at £156k, £116k, £135k = average of £136k.

Averages are meaningless really. These flats in what is considered now a "boom area/town" have made 5.6% per year. During some of that time interest rates were well over 10%, even as high as 15%.

Having said that, 1980 to now, 35 years - mortgage will have been paid off over a decade ago, so it's a "free flat".

It didn't have any central heating, just a 1930s electric bar fire on the living room wall - and no double glazing. So it's probably had a makeover or two since then.

tkane

PasturesNew wrote: »

My friend bought a flat in 1980, a 2-bed flat, in a "reasonable/good area". Not posh, not rough, sought after village, edge of a town. Paid £20k. Three identical small blocks on the one road. One sells every year.

If that flat had risen by 6.9% per year it'd be £207k now. Last three to sell were at £156k, £116k, £135k = average of £136k.

Averages are meaningless really. These flats in what is considered now a "boom area/town" have made 5.6% per year. During some of that time interest rates were well over 10%, even as high as 15%.

Having said that, 1980 to now, 35 years - mortgage will have been paid off over a decade ago, so it's a "free flat".

It didn't have any central heating, just a 1930s electric bar fire on the living room wall - and no double glazing. So it's probably had a makeover or two since then.

Well obviously these are average figures so the London figures will probably be double digits.

TickersPlaysPop

HAMISH_MCTAVISH wrote: »

And the ONS rightly points out that the big drop in homeownership amongst the young is primarily not down to rising house prices, but rather that the average deposit percentage demanded of young people is around double what it was in the 1980's.

http://www.thisismoney.co.uk/money/mortgageshome/article-2921526/House-prices-risen-6-9-year-1980-according-ONS.html

Mortgage Rationing remains endemic in this country, and home ownership will not increase until that changes.

If we listen and believe many on this forum, it was due to iPhone purchases, alcohol binge drinking and expensive Nike trainers.

I think they won't humbly apologise to those they have insulted and berated over the mths.... they can't say the ONS stats are wrong, they so often say they are gospel.

hpifever

Hamish won't be happy until the young can't afford to buy anything because prices have risen so high.

padington

hpifever wrote: »

Hamish won't be happy until the young can't afford to buy anything because prices have risen so high.

To be fair, Hamish was advising the young and old to buy when property was almost half the price it is now. Its only the bear camp and their 'advice' that have royally stuffed the young around here.

Libber

For comparative purposes, nominal wages rose by an average of 5.3% per year over the same period, so there's a gap of 1.6% per annum between house price growth and income growth. I think it's pretty obvious that sustained real terms inflation in the price of a fundamental necessity has the potential to create a major social problem.

padington

Libber wrote: »

For comparative purposes, nominal wages rose by an average of 5.3% per year over the same period, so there's a gap of 1.6% per annum between house price growth and income growth. I think it's pretty obvious that sustained real terms inflation in the price of a fundamental necessity has the potential to create a major social problem.

That's the reality when you have an ever growing population chasing the same limited supply. Hence the call to build more houses.

tkane

Libber wrote: »

For comparative purposes, nominal wages rose by an average of 5.3% per year over the same period, so there's a gap of 1.6% per annum between house price growth and income growth. I think it's pretty obvious that sustained real terms inflation in the price of a fundamental necessity has the potential to create a major social problem.

Hmm so wage inflation not too dissimilar to house price inflation over that period, which should mean that home ownership shouldn't be such a big issue even at current prices.

Either that, or it means home ownership has been out of reach for the past 33 years.

ukcarper

tkane wrote: »

Hmm so wage inflation not too dissimilar to house price inflation over that period, which should mean that home ownership shouldn't be such a big issue even at current prices.

Either that, or it means home ownership has been out of reach for the past 33 years.

If you look at nationwide earnings to house price graph you will see that in 1985 the ratio was 3.6 compared to 5.5 now which is roughly in line with that 1.6% difference.