Make what you will

cells

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.

the question people should look at is not house prices but house costs

why have costs risen so much over the last 60 years. The implied thinking seems to suggest people think builders margins have grown and grown and grown but that is not the case. The actual cost of building a house has ballooned and that is one of the problems of the UK housing market

land is one of the factors but in some parts of the UK building land is very affordable there are many other factors which inflate home prices. a house builder needs to pay for a lot of crap that has nothing to do with homes. They also need to pay for social homes, in London the builders need to give half their homes away at a price where social rents work. That means if they build 100 homes, 50 homes go to social, the other 50 homes sale price need to cover that.

So the UK can never get truly affordable unless the cost of building homes goes down and a lot of that cost has nothing to do with the actual building or 'build-ing' of the house

Generali

cells wrote: »

the question people should look at is not house prices but house costs

why have costs risen so much over the last 60 years. The implied thinking seems to suggest people think builders margins have grown and grown and grown but that is not the case. The actual cost of building a house has ballooned and that is one of the problems of the UK housing market

land is one of the factors but in some parts of the UK building land is very affordable there are many other factors which inflate home prices. a house builder needs to pay for a lot of crap that has nothing to do with homes. They also need to pay for social homes, in London the builders need to give half their homes away at a price where social rents work. That means if they build 100 homes, 50 homes go to social, the other 50 homes sale price need to cover that.

So the UK can never get truly affordable unless the cost of building homes goes down and a lot of that cost has nothing to do with the actual building or 'build-ing' of the house

AIUI, the biggest part of the cost is getting planning permission.

In Aus we have a system which reduces the cost of housing IMHO (other policies push it up). The Government takes a greenfield site (e.g. a farm/Crown land) and then subdivides it into individual plots. The land is then sold, subdivided, to a developer who sells off the individual plots and in return puts in agreed services such as utilities, roads, a shopping centre and perhaps a school or a nursery or a sports ground or playgrounds.

You then buy a plot and can build what you like on their subject to it being up to an agreed code, the code being appropriate to the area (e.g. whether you are in a bushfire zone or not).

purch

Quite a few things have changed over the past 56 years.

I'm not sure why Property affordability should be any different.

Thrugelmir

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.

That's because banks didn't leverage their balance sheets at the time. Required multiple savers to fund a borrowers mortgage. The restriction was lifted in 1971. For 47 years lenders were therefore able to leverage to higher and higher levels. Since 2008 and currently until 2019. There'll be a contraction of banks balance sheets as they are cleaned up and capital requirement levels are ratcheted up. Without Central Bank intervention be interesting to see the how the next phase evolves.