Houses are affordable!

ukcarper

lincroft1710 wrote: »

As I said in an earlier post, the house in 1976 was worth 3 times my salary, in the 2010s it would be 6 times my expected salary. My expected salary would be above average.

As things have change so much since the 70s I think these comparisons are pointless, what is important is if property is affordable now.

According to Land Registry the cheapest part of country is the North East with an average price of £130k median full time earnings for North East is about £25k so I would say property is affordable. In the South East most expensive outside London average price is £325k median full to time earnings is about £30k so I would say property is clearly unaffordable. The other regions are in between.

lincroft1710

ukcarper wrote: »

As things have change so much since the 70s I think these comparisons are pointless, what is important is if property is affordable now.

According to Land Registry the cheapest part of country is the North East with an average price of £130k median full time earnings for North East is about £25k so I would say property is affordable. In the South East most expensive outside London average price is £325k median full to time earnings is about £30k so I would say property is clearly unaffordable. The other regions are in between.

So some property is affordable and some isn't.

Balabalabala_and_Volare

Without wishing to sound like a spokesperson for the good old days, it used to be that young, first time buyers, would buy in the cheapest, most run down areas of a city. Then they would invest their youthful enthusiasm and labours into "doing up" their modest homes and creating a community. As a result, the area would flourish and become the next "property hot spot" and values would rise accordingly. Sadly, todays first time buyers seem to feel that the "average" priced house should be the starting point. The housing ladder is described as such because one starts on the bottom rung, not the middle rung!

I appreciate that there are areas, particularly in the SE, where even the bottom rung is not an affordable option. The answer is, I'm afraid, quite simple. Don't live in those areas because you simply can't afford to.

Shoving more money into an already over inflated market, as the recent stamp duty cut will, simply isn't the answer.

GreatApe

lincroft1710 wrote: »

As I said in an earlier post, the house in 1976 was worth 3 times my salary, in the 2010s it would be 6 times my expected salary. My expected salary would be above average.

You make the mistake a lot of people do which is to think just because something has gone up in price it must now be unaffordable. That is not how it works something could go from cheap to affordable.

Arguably in Zone 2 london prices went from ridiculously cheap in 1995 to cheap in 2000 to affordable in 2005 to still affordable in 2010 (recession) to now in 2017 where prices are expensive but still affordable

In most the country a starter home is very affordable it is in fact cheap.
For instance in Birmingham our #2 city you can buy a 3 bedroom terrace for £120,000
A couple on the minimum wage can afford that and the repayment mortgage is not much more than social rents. That is not just affordable it is cheap

Red-Squirrel_2

GreatApe wrote: »

Well the way it tends to work is that if you have 2 kids they get half a house worth of wealth each. But most people partner up in life and their partner also gets half a house worth of wealth from their side. So overall the young couple get half a house each makes one whole house

And the data shows gifts and inheritance figures are still increasing and the savings rate is still positive so they will increase future. Maybe a long way down the road they might turn slightly negative but we are not close to that (if it ever comes). And it will be offset by the fact that the average uk born woman has fewer than 2 children




I am not saying it is a solution I am however pointing out that some 75% of people will inherit housing and I am pointing out the fact that roughly 1 million homes worth of wealth each and ever year are given from the old to the younger. Most youngesters dont need to worry about wealth they will get huge amounts of it from the boomers who cant take it to the grave.

Also you do not know what your future yet holds, you will at some stage partner up and perhaps get married so there are two sides you can possibly inherit from.

I do not have children yet but if I did and they were 25+ years old I would pass any inherited wealth straight to them. Assuming they were reasonable with money obviously not if they were gambling or alcohol addicts etc

Single person households are the biggest growing demographic I believe, and people who are pairing up are doing so later in life, long after they first need to house themselves as independent adults!

If you are not suggesting that inheritance is a solution, you are doing a very good impression of it. What is your point if I've read it wrong?

ukcarper

Balabalabala_and_Volare wrote: »

Without wishing to sound like a spokesperson for the good old days, it used to be that young, first time buyers, would buy in the cheapest, most run down areas of a city. Then they would invest their youthful enthusiasm and labours into "doing up" their modest homes and creating a community. As a result, the area would flourish and become the next "property hot spot" and values would rise accordingly. Sadly, todays first time buyers seem to feel that the "average" priced house should be the starting point. The housing ladder is described as such because one starts on the bottom rung, not the middle rung!

I appreciate that there are areas, particularly in the SE, where even the bottom rung is not an affordable option. The answer is, I'm afraid, quite simple. Don't live in those areas because you simply can't afford to.

Shoving more money into an already over inflated market, as the recent stamp duty cut will, simply isn't the answer.

It’s not quite as don’t live there if that’s where your job is there is no point in moving to an area where jobs are harder to come by. The other being to function the south east needs these lower paid jobs so it’s not just a problem for the individual, the problem is that not only are prices high rents are to.

GreatApe

lincroft1710 wrote: »

So some property is affordable and some isn't.

All property is affordable in the UK the only thing that varies is who is doing the affording...

In most the country, about two thirds of the country, property is not just affordable but cheap. In those areas a couple can buy a starter home on just the minimum wage

I would argue even London is affordable. In outer London the cheaper homes are circa 450k for a 3 bedroom house and in inner London about £450k for a lower end but 3 bedroom flat. £450k sounds like a lot of money but it is affordable for a couple on £40k each. In London working a full time job £40k is not a huge figure. Of course there are even cheaper options like 2 bedroom flats or 1 bedroom flats too.

The problem is when people look at buying a house with just one income and complain its too hard well yes it would be its not many countries that can afford 1 house per person its the norm that a couple buys pooling their resources

Red-Squirrel_2

ukcarper wrote: »

It’s not quite as don’t live there if that’s where your job is there is no point in moving to an area where jobs are harder to come by. The other being to function the south east needs these lower paid jobs so it’s not just a problem for the individual, the problem is that not only are prices high rents are to.

Exactly, if all the low earners in London and the SE just moved to Newcastle what do people think would happen?

ukcarper

Red-Squirrel wrote: »

Single person households are the biggest growing demographic I believe, and people who are pairing up are doing so later in life, long after they first need to house themselves as independent adults!

If you are not suggesting that inheritance is a solution, you are doing a very good impression of it. What is your point if I've read it wrong?

But it’s always been difficult to buy alone and the rise in single person households puts pressure on house prices.

I don’t think you will convince GreatApe he is convinced inheritance is an answer although I agree with you it might help some people but no the majority at the time they need it.

economic

GreatApe wrote: »

All property is affordable in the UK the only thing that varies is who is doing the affording...

In most the country, about two thirds of the country, property is not just affordable but cheap. In those areas a couple can buy a starter home on just the minimum wage

I would argue even London is affordable. In outer London the cheaper homes are circa 450k for a 3 bedroom house and in inner London about £450k for a lower end but 3 bedroom flat. £450k sounds like a lot of money but it is affordable for a couple on £40k each. In London working a full time job £40k is not a huge figure. Of course there are even cheaper options like 2 bedroom flats or 1 bedroom flats too.

The problem is when people look at buying a house with just one income and complain its too hard well yes it would be its not many countries that can afford 1 house per person its the norm that a couple buys pooling their resources

i bought my 2 bed flat worth 600k on just my income alone. sure i got paid more then average but certainly not more then two incomes combined.