Are houses unaffordable?

p00hsticks

bigfreddiel wrote: »

Well let's put this in context, my first terraced house cost £7,000. And I had to go for as big a mortgage as I could get, I was a graduate aerospace engineer, salary £200/ month. Mortgage repayments, £80/month, then there was the usual rates, car costs, etf's, not much left after paying all that, then guess what, interest rates of 5 or 6%, peaked st 15% at one point.

A good indication as to the answer to that same question is - could you afford to buy that same property on your current salary now ?

My first buy in my mid-twenties was a 2+1 mid-terrace in the south East (not London). It cost me £33,500 in 1986 - just over three times my salary at the time, and I had a £2000 deposit that I'd saved. I've just checked and a similar property in the same road (4 doors down) sold for £257,000 last October.

So there's no way I could afford to go back and buy my first home on my current salary.

ukcarper

ukcarper wrote: »

Yes it easy to find exceptions to rule but that is far from typical.

I think that is a valid point if I was earning equivelent salary to that I earned in the 70s I would not be able to buy the house I bought then even with the larger mortgage I could now get. I would still be able to buy but it would be a 2 bed instead of 3 bed.

marksoton

I think comparing generations ( and this is what it is ) is fruitless.

Too much has changed. Politically,socially and economically.

To get a true picture you'd have to look at it from a truly macro point of view. And even then i reckon they'd be too many variables.

All i know is the here and now. And the fact is people are struggling to secure reasonable property in a lot of cases.

The reasons for that though are again massively variable...

Nobbie1967

The simple explanation is that we haven't been building enough houses in the southeast for decades. This means any increase in disposable income is just sunk into property as any spare money chases the housing which is available. Add in the current rate of immigration which seems mostly directed at the southeast and the problem is only going to get worse.

Chocolatefund

I've recently started house hunting and in the area I want I can afford to buy a two bed terrace on my reasonable salary of 25k. But there's now way I would be able to afford that down south. I'm fortunate my family and I in the North

I feel for the people in the South

[Deleted User]

You bought a house for 7k and had a salary of £200 per month (£2400 a year), which effectively means your house was only three times your annual salary. With the average house price being around £230k? and average salary being £26k, it is clear that property prices have completely outgrown wage rises.

So yes, I do think its harder nowadays.

chelseablue

I purchased my 2 bed flat fairly recently, in 2010.


I paid £156,000


I'm now selling for £235,000


So I doubt I could afford to buy it on my own now, and that's only 5 years that have passed

ukcarper

Deleted_User wrote: »

You bought a house for 7k and had a salary of £200 per month (£2400 a year), which effectively means your house was only three times your annual salary. With the average house price being around £230k? and average salary being £26k, it is clear that property prices have completely outgrown wage rises.

So yes, I do think its harder nowadays.

I agree house prices have outstripped earnings. But I!m not sure how you can draw that conclusion from his posts because you have no idea whether his house was average price and how his salary compared to average earnings.

Graph at bottom of this http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/2016/Jan_2016.pdf

sofiar

put simply, yes, yes and yes. Way too expensive, I have no idea how or where this is going to end!!

andybenw

If you can put together a deposit today then due to low interest rates mortgages are extremely affordable.

It's clearing the deposit hurdle that is a problem, and high house prices combined with tightening of credit mean that in my experience housing is much more difficult to buy now than when I first did.(2000). I certainly wouldn't be in the position I am now if I had bought in even 5 years later.

I'd imagine the 80's were a much different proposition, probably relatively easy to get the deposit saved, but crippling mortgages if you did buy due to the high interest