House prices

ukcarper

buglawton wrote: »

If this thread were for the purpose of us quoting stats at each other and see who's the winner, then yes my contribution is not of much functional use. But I just remembered, this is a discussion thread.

I can well believe that there's more floorspace today though. When I last visited my childhood street, practically every semi had an extension over or instead of the garage space. There's your extra living space.

On a Sold House Prices site I see that not one semi of that design in the street has changed hands since 2006. In 2006 the price was 150 times higher than 1959.

On average house prices are 100 times higher than 1959 but they are only 10x higher than 1979.

lisyloo

GreatApe wrote: »

Also the size/quality of homes issue you have wrong too, homes were not materially bigger or better in the 1950s and most importantly we now have about 30% more residential floorspace per capita than we did in the 1950s

Is there any data about the inequality e.g. more people having holiday homes nowadays?
That would be interesting.

GreatApe

lisyloo wrote: »

Is there any data about the inequality e.g. more people having holiday homes nowadays?

That would be interesting.

I dont know about that but the average person is much better house today than in the 1950s not only do they have a lot more floor space but they have central heating proper hot water systems better insulated homes much better appliances and mostly much better fit out homes too

Wealth for the public has also boomed and this is evident very clearly with housing.
In 1951 home ownership was less than 30% and it was 65% in 2011 and that 65% is closer to 70% if you look at just the locals and exclude the migrants. And even of the houses owned today by landlords most own just 1 rental property and some half a million rental units are let rent free to relatives/friends.

So I do not buy the idea that wealth inequality is so much worse today.
One of the problems is how we measure wealth.
For instance if I have £1 million pounds I would be classed as very wealthy.
If I spend that £1 million on buying an annuity I no longer have a lot of wealth I would have a pension £35,000 which most people would agree is not very wealthy. In financial terms however the two are roughly equivalent yet there is a massive distinction when calculating or talking about 'inequality'
So there is something wrong there with the way things are calculated.
Either the 'poor' or rather non rich should have their income calculated as a NPV or the rich should have their wealth calculated as an income

Its compounded further by the fact that lots of people have small businesses. A small business owner with a self running business leaving him say £50k a year in a low risk sector. Well he is not considered rich but if that was a share in a FTSE 100 company those £50k dividends would have a face value of over £1 million.

GreatApe

buglawton wrote: »

If this thread were for the purpose of us quoting stats at each other and see who's the winner, then yes my contribution is not of much functional use. But I just remembered, this is a discussion thread.

I can well believe that there's more floorspace today though. When I last visited my childhood street, practically every semi had an extension over or instead of the garage space. There's your extra living space.

On a Sold House Prices site I see that not one semi of that design in the street has changed hands since 2006. In 2006 the price was 150 times higher than 1959.

By all metrics life is better than in the 1950s anyone who thinks otherwise has a very biased and wrong view of things.

westernpromise

buglawton wrote: »

I've not talked about things being better. This is a house price thread not a things one. And what I'll repeat is my own anecdote - that while I was growing up, neighbours and family friends from a very moderate class background were buying decent and by todays standards spacious houses. Not just a few but in large estates. My experience is based on when and where I grew up and I've not made any further claims or defensive rebuttals.

Stats are one thing. To be able, as a youngish ordinary couple to buy a decent house on the outer London suburbs is another thing altogether. I'm putting the cause down as lack of planned living space.

Housebuying was perhaps easier than now for some because of sexist taxation. Until 1988 a married woman had no personal allowance (her husband had hers added to his) and her earnings were taxed at his marginal rate. So a woman whose husband was on Labour's 83% rate would lose £5 in tax for every £6 she earned. This meant that after getting married she didn't bother to work at all (unless she was a total mug), which was the whole idea. By taxing women out of the workforce, men's wages - trade unionised men's wages, typically - were kept high and unemployment figures were gerrymandered down. Labournomics: nothing changes.

A side effect was that when you got to the front of the queue for a rationed mortgage, lenders would only loan you 3.5x the main salary or 3x plus 1x hers. Why? Because in terms of its ability to service a mortgage a wife's salary was worth shirt buttons by the time the taxman had finished with it. It was worth so much less that it was largely discounted.

So house prices were set at the margins on the basis of 3x the average male salary tops, and given the interest rates we had back then it was dodgy to bid even as much as that for your Wimpey semi. Post 1988 this started to correct so that 3x joint salary is now plausible, with concomitant effects on house prices.

Of course, the average house is still only worth about £200k and the average owner has 45% equity, so the mortgage is about £110k on such a house. £110k, funnily enough, is 3x one average salary plus 1x another, so we are pretty much back where we've always been.

buglawton

Funny that, when I last obtained a mortgage about 18 years ago I compared adding my wifes income and getting a joint mortgage with just using my own income. With the joint mortgage both our multiples were lower and in the end the larger mortgage was to be had based on main earner, me.

When did that policy change? And is current lending policy sexist or a matter of convenience because lenders like simple situations, whoever the main breadwinner is?

buglawton

The higher number of owner occupiers today vs the 60s has been oft quoted here.

Now, it's the flow rate - the number of new people becoming owner occupiers per year that indicates the ease of buying. That's the rate of change and not the level. And I believe that the current rate of new owner-occupancy is at a historical low.

GreatApe

buglawton wrote: »

The higher number of owner occupiers today vs the 60s has been oft quoted here.

Now, it's the flow rate - the number of new people becoming owner occupiers per year that indicates the ease of buying. That's the rate of change and not the level. And I believe that the current rate of new owner-occupancy is at a historical low.

Well of course it is because home ownership is at near historical highs.

But clearly you do not understand what that means so let me help you by rephrasing it. Renting is at near historical lows (especially for the natives) so you cant have a big shift from renters to owners because we have far fewer renters than in the 1950s

Windofchange

GreatApe wrote: »

Well of course it is because home ownership is at near historical highs.

:rotfl:

https://tradingeconomics.com/united-kingdom/home-ownership-rate

https://www.theguardian.com/money/2017/mar/02/home-ownership-in-england-at-a-30-year-low-official-figures-show

http://www.telegraph.co.uk/finance/property/house-prices/10663923/Rise-of-Generation-Rent-as-home-ownership-hits-25-year-low.html

https://visual.ons.gov.uk/uk-perspectives-housing-and-home-ownership-in-the-uk/

GreatApe wrote: »

But clearly you do not understand what that means so let me help you by rephrasing it. Renting is at near historical lows (especially for the natives) so you cant have a big shift from renters to owners because we have far fewer renters than in the 1950s

:rotfl:

Look at the bottom graph here:

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7706

Renting would actually appear to be at an all time high, especially for UK natives? Why has the percentage of UK nationals renting increased since 1996?

Oh, and as for the young...

http://www.telegraph.co.uk/finance/economics/11754122/Most-20-to-39-year-olds-will-be-in-private-rented-homes-by-2025-warns-PwC.html

Buglawton I've tried for a while to have sensible conversations with GreatApe, but all you'll get is anecdotes and made up 'facts'. Let's see how he explains the above.

buglawton

Actually I'm quite happy to see anecdotes based on real life here to add the the many stats being quoted. But just like anecdotes, stats can be quoted selectively

We do see endless quoting if 'you've never had it so good' housing stats while the evidence before our eyes, and from our own personal experience and memories, hints at a different reality! A bit like Stalinist Russia where official stats are telling the downtrodden peasants they've never had it so good.

Ah well, to the youth of today we say, 'let them live in castles'.