Make what you will

Pobby

Laying in the bath today, what it being a leap year and all,my mind drifted back to 1960. My aunt sold her home for £600 pounds. 3 bed terrace south east . Looking on rightmove the going price is a bit over a quarter of a million.

Been trying to find accurate data on income at that time but it appears that a not too good wage was at £7 a week, about £350 a year. So thinking about wages in Reading, for that is what we are looking at, £31,000 appears to be a decent wage.

Going back to the sixties the house cost approx. 1.7 multiplied by the annual wage. At todays rate it would be around 8.2. Clearly tax and interests rates have not been applied but it still gave me something of a surprise.

Generali

Pobby wrote: »

Laying in the bath today, what it being a leap year and all,my mind drifted back to 1960. My aunt sold her home for £600 pounds. 3 bed terrace south east . Looking on rightmove the going price is a bit over a quarter of a million.

Been trying to find accurate data on income at that time but it appears that a not too good wage was at £7 a week, about £350 a year. So thinking about wages in Reading, for that is what we are looking at, £31,000 appears to be a decent wage.

Going back to the sixties the house cost approx. 1.7 multiplied by the annual wage. At todays rate it would be around 8.2. Clearly tax and interests rates have not been applied but it still gave me something of a surprise.

I think that the key difference is mortgage availability: most people couldn't buy a home as they couldn't get a mortgage. It wasn't just a case of being able to afford it or even having a deposit, you had to be the 'right sort'. White, male, probably married. Mortgage funds were very limited and so were rationed.

You can only bid a house up as much as the funds available to you will allow.

padington

Generali wrote: »

I think that the key difference is mortgage availability: most people couldn't buy a home as they couldn't get a mortgage. It wasn't just a case of being able to afford it or even having a deposit, you had to be the 'right sort'. White, male, probably married. Mortgage funds were very limited and so were rationed.

You can only bid a house up as much as the funds available to you will allow.

My friends dad was an amateur boxer and eventually licensesed porter for the railways. In his life time he managed to buy five properties in Chiswick outright just by saving and not drinking after the Second World War. He also managed to support a wife and two children ....

I have no doubt social mobility was better then, if you were white, male, straight and prepared to conform.

Generali

padington wrote: »

My friends dad was an amateur boxer and eventually licensesed porter for the railways. In his life time he managed to buy five properties in Chiswick outright just by saving and not drinking after the Second World War. He also managed to support a wife and two children ....

I have no doubt social mobility was better then, if you were white, male, straight and prepared to conform.

Ol' Gramps Generali bought a house by saving most of the money. He got a promotion at work to Foreman which enabled him to get a small mortgage to buy the house sooner. Working on the factory floor meant that nobody would lend him the money to buy.

Houses were cheaper but most people couldn't buy them. It doesn't make much difference if you can't buy a house because it's too expensive or for another reason, you still don't end up owning a house.

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/a-century-of-home-ownership-and-renting-in-england-and-wales/short-story-on-housing.html

In 1961, roughly when Pobby's aunt sold her house, 42% of people owned the house they lived in. 50 years later, despite house prices being far higher by almost any measure and Pobby's measure of income multiple is as good as any IMV, 64% of people owned their own home.

Pobby

Yes and of course inflationary times which wiped away a lot of the debt. Surely right that it was more difficult to get a mortgage. Building societies had to wait until the funds were available from savers/ Oh, how very quaint.

The real elephant in the room is interest rates. Reading this week there may be sub 1% mortgages in sight. That is going to make the pain even worse when irs do go up. Over the 60 plus years I have been alive is you learn that nothing stays the same. Could be a dangerous move.

ukcarper

According to nationwide the average house price in 1960 was £2.3k compared to £197k now. Nationwide regional figs only go back to 73, UK average house price has increased 20x since then while in the South East they have increased 23x.

I first bough in 1972 3 bed terrace £8000 similar properties now selling for £275k.

In 1966 £1k was a good wage similar jobs now paying about £35k

ukcarper

Pobby wrote: »

Yes and of course inflationary times which wiped away a lot of the debt. Surely right that it was more difficult to get a mortgage. Building societies had to wait until the funds were available from savers/ Oh, how very quaint.

The real elephant in the room is interest rates. Reading this week there may be sub 1% mortgages in sight. That is going to make the pain even worse when irs do go up. Over the 60 plus years I have been alive is you learn that nothing stays the same. Could be a dangerous move.

the house I first bought in 1972 is now worth about £275k in that time the earning for someone in a similar job have increased by about 23x. If the house had increased with earnings it would now be worth about £185k.
By 1974 The bank rate had increased from 6% to 13%.
If you had a 90% mortgage on the £275k price at 3% over25 years the payments would be £1184 a month.
A 90% mortgage on the £185k house at 7% would be £1190 rising to £2018 at 14%.

ess0two

Pobby wrote: »

Yes and of course inflationary times which wiped away a lot of the debt. Surely right that it was more difficult to get a mortgage. Building societies had to wait until the funds were available from savers/ Oh, how very quaint.

The real elephant in the room is interest rates. Reading this week there may be sub 1% mortgages in sight. That is going to make the pain even worse when irs do go up. Over the 60 plus years I have been alive is you learn that nothing stays the same. Could be a dangerous move.

IR's aint going anywhere.

cells

Generali wrote: »

I think that the key difference is mortgage availability: most people couldn't buy a home as they couldn't get a mortgage. It wasn't just a case of being able to afford it or even having a deposit, you had to be the 'right sort'. White, male, probably married. Mortgage funds were very limited and so were rationed.

You can only bid a house up as much as the funds available to you will allow.

that assumes homes are a fixed stock and people battle each other and set prices whereas new builds are quite important

a big difference was that the cost of building a new home was much lower

Its a good deal easier to build a solid brick house with single glazed windows and no central heating no gas and very basic fittings with shallow and thin foundations and often using some child labor and poor safety standards.

fast forward to today and you are looking at in some cases £50k before you lay a brick (planning costs and council bribes in the form of s106s CILs contributions to arts and school places and new roads five miles away and other BS)

Therefore we are not really comparing like with like.


houses cost a lot less 50-60 years ago but you got a lot less too and they had a lot less regulations to meet.

Generali

cells wrote: »

houses cost a lot less 50-60 years ago but you got a lot less too and they had a lot less regulations to meet.

That's a very good point. The houses of 50 years ago were pretty poor from an amenity POV. Single glazing is horrible in the UK climate for example. From memory it was only in the 1980s that houses in the UK started being built to a standard that is remotely what we'd expect today.

HBOS include hedonic adjustment when they gather their HPI so they might have some figures relating to it, at least from 1974(?) when their HPI series started.

ukcarper

Generali wrote: »

That's a very good point. The houses of 50 years ago were pretty poor from an amenity POV. Single glazing is horrible in the UK climate for example. From memory it was only in the 1980s that houses in the UK started being built to a standard that is remotely what we'd expect today.

HBOS include hedonic adjustment when they gather their HPI so they might have some figures relating to it, at least from 1974(?) when their HPI series started.

I bought a new house in 1972, single glazed, no real central heating just an oil fire in lounge in fact did not have gas, no insulation to speak of.