House Prices 10 x Earnings Now.

Sibley

Interesting read.

http://www.mirror.co.uk/news/uk-news/house-prices-rocket-10-times-6769726

Thing is. Not actually true. People should cut their cloth like we did. Nothing wrong with one bedroom flat to start off with.

the_flying_pig

Sibley wrote: »

Interesting read.
...Thing is. Not actually true. People should cut their cloth like we did. Nothing wrong with one bedroom flat to start off with.

wotchoo on about?

do us a favour, tell us, honestly, how much you paid for your [first] right to buy property, and in what year, and i'll look up what the average wage was then.

PasturesNew

My house would cost about 12x what my salary would be.

The average house where I live costs £350,457 (RM figure I just got). Mine's not worth that much.

The average terraced here is allegedly £309,949. Mine's not worth that much.

I'm on the "edge of posh" .... so I'm in the cheap seats.

Generali

Is 'edge of posh' a nice way of saying 'hell hole'? A heck hole perhaps.

ukcarper

the_flying_pig wrote: »

wotchoo on about?

do us a favour, tell us, honestly, how much you paid for your [first] right to buy property, and in what year, and i'll look up what the average wage was then.

Looking up average earnings is not that easy have you got an accurate link.

ukcarper

These articles always pick highest of the house price indices Nationwide, Land registry and Halifax are similar and much lower than ONS. My first house was 5.3x my earnings and now a similar house is now about 8x an equivelent wage.

Generali

ukcarper wrote: »

These articles always pick highest of the house price indices Nationwide, Land registry and Halifax are similar and much lower than ONS. My first house was 5.3x my earnings and now a similar house is now about 8x an equivelent wage.

IIRC, the difference is that the ONS doesn't use hedonic regression. That is to say that it doesn't take account of the fact that houses have gotten nicer over the years (indoor toilet, fitted bathroom and kitchen, central heating, double glazing, access to broadband, knitted doll to put over the spare bog roll).

As a result, indices like Haliwide will capture changes in price better as they compare like with like. The ONS will capture the average house price better.

What the use of the average house is to the average person is a completely different question of course.

PasturesNew

Generali wrote: »

Is 'edge of posh' a nice way of saying 'hell hole'? A heck hole perhaps.

No ... it means that if I walk 300 yards, the house prices double .... and everybody thinks they're "terribly nice".

I've always been one for believing you should buy a smaller place in a nicer area. I could've found/bought a 3-5 bed, probably detached, house ... in a hell hole. But I bought a little house in a "nice area".

Even so ... neighbour's house still hasn't sold and it's been on for nearly four months. So I'm in a house where people say they want to live, until they see what they can get for the money .... and they buy something bigger/elsewhere.

The fact it's not been snapped up though indicates it's not even attractive to BTLers, who were buying everything round here when I bought.

PasturesNew

ukcarper wrote: »

Looking up average earnings is not that easy have you got an accurate link.

It's also different depending on the area and if you're a girl or a boy.

Two gay boys will have higher earnings than one hetero couple; two gay girls will have lower earnings than either of those two groups ....and the single/unloved don't stand a chance really because whatever they do it's still only one wage.

cells

Generali wrote: »

IIRC, the difference is that the ONS doesn't use hedonic regression. That is to say that it doesn't take account of the fact that houses have gotten nicer over the years (indoor toilet, fitted bathroom and kitchen, central heating, double glazing, access to broadband, knitted doll to put over the spare bog roll).

As a result, indices like Haliwide will capture changes in price better as they compare like with like. The ONS will capture the average house price better.

What the use of the average house is to the average person is a completely different question of course.

in inner London especially in the ultra prime areas this is indeed a distorting factor

flat 1 kensington Gardens might have sold for £2m four years ago and just sold for £4m now but the figures don't capture the £1m spent on a basement extension and a total refit....

cells

Sibley wrote: »

People should cut their cloth like we did. Nothing wrong with one bedroom flat to start off with.

people are cutting their cloth to fit what they can afford,

a couple on £50k wage each will get you a £500k home which is maybe an ok 2 bed flat in z2

a couple on £31k wage each in 2000 (equivalent to £50k now) would get an ok 4 bed terrace in z2

this is how prices are staying 'affordable' people are effectively moving down a step for each 5 years of HPI. Problem is once the couple earning £50k each who can buy a 2 bed flat can only get a 1 bed flat what is the next step down to allow 'affordability' to continue?