Earning the National Living Wage? Then you can’t afford a starter home in 98% of LAs

audigex

Generali wrote: »

As only a bit more than 10% of employees make the minimum wage I don't think this is a major problem. Minimum wage earners get skills and go on to better paid work.

Whatever you have on your cereal, I'd like some: preferably intravenously.

Wake_up_call wrote: »

The government's new starter home scheme is something of a joke as it allows builders to price properties as much as £250,000 (£450,000 in London) and still call it affordable housing.

For the average first-time buyer, that 250k is almost ten times their income. Hardly affordable is it?

In most of the country, affordable would be 100k or under.

Totally agree. At the very least an "affordable" home should be one that everyone on/above the national median salary can afford.

So that's £24,000 ish in 2013/14.

A typical person can borrow between 3 and 4.5x their salary. So can borrow between £72,000 and £108,000.

Let's assume a 10% deposit (reasonable enough to expect a first time buyer to save, in theory... in practice with rent so high, who knows)

So we're looking at total house prices of £80,000 to £120,000 to be considered an "affordable" home.

Although remember that that only makes it "affordable" for anyone earning at/above the median income, so basically the top half of earners. On the flip side, this assumes everyone is buying a home alone: if we include couples then things are slightly better.

cells

audigex wrote: »

Whatever you have on your cereal, I'd like some: preferably intravenously.



Totally agree. At the very least an "affordable" home should be one that everyone on/above the national median salary can afford.

So that's £24,000 ish in 2013/14.

A typical person can borrow between 3 and 4.5x their salary. So can borrow between £72,000 and £108,000.

Let's assume a 10% deposit (reasonable enough to expect a first time buyer to save, in theory... in practice with rent so high, who knows)

So we're looking at total house prices of £80,000 to £120,000 to be considered an "affordable" home.

Although remember that that only makes it "affordable" for anyone earning at/above the median income, so basically the top half of earners. On the flip side, this assumes everyone is buying a home alone: if we include couples then things are slightly better.

your £24k median wage is not only out of date but includes part time workers and children

what should be used is the adult median full time wage and for men that is currently about £37,500

So by the metric of 4 x wage and a 10% deposit you get £165k as affordable for a single man working full time

And more than half the country terrace housing falls under £165k

For a couple working full time the figure is about double that


so yes, if we look at children and part time workers they can not afford in many places. if we look at a full time employed man things look a lot better

Generali

audigex wrote: »

Whatever you have on your cereal, I'd like some: preferably intravenously.

What does that mean please?

There are about 30 million adults of working age in the UK and 3 million odd make the minimum wage. Which of these numbers do you dispute?

danothy

Generali wrote: »

What does that mean please?

There are about 30 million adults of working age in the UK and 3 million odd make the minimum wage. Which of these numbers do you dispute?

Neither, but we both know that 19% of the remaining 27 million adults are on zero hour contracts, and even though their hourly rate is more than the minimum wage the fact that they work zero hours means they earn nothing. Less than nothing, in fact, because when they take a day off they're technically working minus hours.

Graham_Devon

cells wrote: »

your £24k median wage is not only out of date but includes part time workers and children

what should be used is the adult median full time wage and for men that is currently about £37,500

Because only full time working men need homes...

Things have changed quite drastically in the employment scene (and family scene) over the past 20 years or so. I think it's probably about time some consideration should be taken for those changes.

One way to do that would be to use the average wage of everyone. No good talking about full time male wages in an era of supposed equality. It's also no good talking of full time male wages when many households don't bring a full time male wage in.

Graham_Devon

Generali wrote: »

What does that mean please?

There are about 30 million adults of working age in the UK and 3 million odd make the minimum wage. Which of these numbers do you dispute?

Do you have figures handy?

I've always wondered how many employers pay minimum wage and "10p on top" to escape paying the bog standard minimum wage. I'd guess it's a huge number.

antrobus

danothy wrote: »

Neither, but we both know that 19% of the remaining 27 million adults are on zero hour contracts, ....

Oops, no.

The Office for National Statistics said the number of people reporting that they work on contracts without a minimum number of hours climbed to 744,000 from 624,000 in 2014, a rise of 19% to 2.4% of the total UK workforce of 31 million.

http://www.theguardian.com/uk-news/2015/sep/02/number-of-workers-on-zero-hours-contracts-up-by-19

(You have misremembered what that 19% number meant.:))

I would also like to point out that it is very likely that the overwhelming majority of those 744,000 people on ZHC are most likely to be found amongst those 3 million people who are earning NMW, and therefore the percentage of that other 27 million who are on ZHC is likely to be pretty close to zero.

danothy

antrobus wrote: »

Oops, no.

The Office for National Statistics said the number of people reporting that they work on contracts without a minimum number of hours climbed to 744,000 from 624,000 in 2014, a rise of 19% to 2.4% of the total UK workforce of 31 million.

http://www.theguardian.com/uk-news/2015/sep/02/number-of-workers-on-zero-hours-contracts-up-by-19

(You have misremembered what that 19% number meant.:))

Actually no, I haven't, I was in fact referencing the October 2015 Bulletin (http://www.ons.gov.uk/ons/dcp171778_417237.pdf) and the associated "Good News Ahoy!" thread (https://forums.moneysavingexpert.com/discussion/5341231) in which I asserted that the 19% of new employment that wasn't full time was in fact entirely zero hour contracts, and as a corollary, that such a proportion of zero hour contracts holds for all employment. On that basis, it's alarming that it's jumped from 2.4% overall in 2014 to 19% by October 2015.

antrobus wrote: »

I would also like to point out that it is very likely that the overwhelming majority of those 744,000 people on ZHC are most likely to be found amongst those 3 million people who are earning NMW, and therefore the percentage of that other 27 million who are on ZHC is likely to be pretty close to zero.

I would agree with this if it wasn't for the fact that people on zero hour contracts have zero earnings due to working zero hours. They don't call them zero hour contracts for no reason.

ukcarper

According to ONS ASHE 2014 median full time earnings was £27,195 and median male full time earnings £29,441.

ukcarper

Graham_Devon wrote: »

Because only full time working men need homes...

Things have changed quite drastically in the employment scene (and family scene) over the past 20 years or so. I think it's probably about time some consideration should be taken for those changes.

One way to do that would be to use the average wage of everyone. No good talking about full time male wages in an era of supposed equality. It's also no good talking of full time male wages when many households don't bring a full time male wage in.

Are you now saying that you should be able to buy a house on part time earnings.