Houses more affordable than 1970s

westernpromise

https://www.independent.co.uk/news/business/news/uk-house-prices-average-earning-ratio-latest-unaffordable-housing-crisis-a8323086.html
Workers in England and Wales need to fork out almost eight times their annual income in order to buy an average house, according to the latest official estimates

Disregarding the leftist spin - which is bizarre anyway, considering leftism started creating a housing shortage the moment they were allowed into office in 1997 - the data actually points to the opposite conclusion to that trumpeted in the rag's headline.

In the 1970s you could borrow 3.5x main salary because the wife's salary was worthless due to sexist taxation (fixed by the Conservatives in 1988). Today therefore you can borrow 3.5x or even 4.5x two salaries, and the mortgage rate you'll pay is about a quarter of what it was back then. Hence the monthly cost of buying a house is less now than then, and that's before you consider that the median wage referred to here is the median of all wages rather than (correctly) the median of the top 70% or so who might reasonably be expected to buy a house.

Snowflakes have never had it so good. I wish property had been this cheap when I was 30...

Graham_Devon

westernpromise wrote: »

https://www.independent.co.uk/news/business/news/uk-house-prices-average-earning-ratio-latest-unaffordable-housing-crisis-a8323086.html
Workers in England and Wales need to fork out almost eight times their annual income in order to buy an average house, according to the latest official estimates

Disregarding the leftist spin - which is bizarre anyway, considering leftism started creating a housing shortage the moment they were allowed into office in 1997 - the data actually points to the opposite conclusion to that trumpeted in the rag's headline.

In the 1970s you could borrow 3.5x main salary because the wife's salary was worthless due to sexist taxation (fixed by the Conservatives in 1988). Today therefore you can borrow 3.5x or even 4.5x two salaries, and the mortgage rate you'll pay is about a quarter of what it was back then. Hence the monthly cost of buying a house is less now than then, and that's before you consider that the median wage referred to here is the median of all wages rather than (correctly) the median of the top 70% or so who might reasonably be expected to buy a house.

Snowflakes have never had it so good. I wish property had been this cheap when I was 30...

So it's more affordable now, as you can take on more debt?

Cracking.

NineDeuce

Just wondering how much you have been sponsored to sound this stupid....

Isnt it the right wing argument that immigration is to blame for house prices going up (with no real statistical evidence)?

I will just assume you had a dumb blonde moment....

caronoel

westernpromise wrote: »

https://www.independent.co.uk/news/business/news/uk-house-prices-average-earning-ratio-latest-unaffordable-housing-crisis-a8323086.html
Workers in England and Wales need to fork out almost eight times their annual income in order to buy an average house, according to the latest official estimates

Disregarding the leftist spin - which is bizarre anyway, considering leftism started creating a housing shortage the moment they were allowed into office in 1997 - the data actually points to the opposite conclusion to that trumpeted in the rag's headline.

In the 1970s you could borrow 3.5x main salary because the wife's salary was worthless due to sexist taxation (fixed by the Conservatives in 1988). Today therefore you can borrow 3.5x or even 4.5x two salaries, and the mortgage rate you'll pay is about a quarter of what it was back then. Hence the monthly cost of buying a house is less now than then, and that's before you consider that the median wage referred to here is the median of all wages rather than (correctly) the median of the top 70% or so who might reasonably be expected to buy a house.

Snowflakes have never had it so good. I wish property had been this cheap when I was 30...

These gloomy articles always overlook the interest payment levels.

Mortgage interest rates were 8% and rising in 1970. I currently pay much less than 1.5% on my main home, and about 2% on my BTL portfolio

westernpromise

Yep, and they also overlook income tax levels. In 1985 I was paying a higher rate of tax on my first graduate salary than a graduate of today would pay on its 2018 equivalent even including student loan repayments.

Houses were 3.5x one income 50 years ago because wives had no personal allowance and their earnings were added to their husbands' and taxed at their husbands' marginal tax rate, meaning they could pay 60 or even 83% on their salary. Even at the median earnings they lost over 30% in tax and NI. Today a couple on median earnings would pay less than 20% and interest rates are far lower.

I wish I was a boomer. I bought in after they'd bid houses right up. Or maybe a millennial, because you get to be a crybaby over having it easier than your parents.

ukcarper

I bought my first house in 1970s got a mortgage of just over 3x our join earnings mortgage rate 8.5% mortgage about 40% of main take pay after Miras.

To buy same house now on equivalent join earnings earnings 5x mortgage at 3% about 48% of main take home pay

Interest rates increase soon after I bought.

westernpromise

The solution is for women to know their place and get back in the kitchen. It's their pesky earnings that have caused prices to rise.

Cakeguts

westernpromise wrote: »

The solution is for women to know their place and get back in the kitchen. It's their pesky earnings that have caused prices to rise.

Err no. It is the cost of the wages of the people employed to build them that have made them go up. How dare bricklayers charge so much for their trade skills? They don't even have a degree......

westernpromise

The price of existing houses has gone up, though, which can't be put down to expensive degreeless brickies. It has to be the evil banksters, who literally want to kill everyone and have made houses expensive, or something.

MPD

In other news renting in most parts of the country takes a lower percentage of salary

http://www.bbc.co.uk/news/business-44046392

so a higher percentage can be saved towards a deposit, just avoid London.

GreatApe

The UK is at least 12 different distinct markets. If we exclude London and the south east the remaining 10 regions where 70% of the population live is not only affordable but is cheap.

Second hand homes cost close to or under build cost? Check
A mortgage is close to or under local social rents? Check

There is no housing problem. The problem is the media is based in central London and so have a very narrow view of £1m plus homes. 70% of the country isn't like this 70% of the country homes cost less now than they did a hundred years ago.

Most the SE is also affordable.
London is the only expensive area but that is justified by being priced on capital and not income