7x average income, topped out

kabayiri

snowqueen555 wrote: »

I don't think immigration is an issue, we need it. Our economy relies on slow population growth, without immigration we would see a worser demographic crisis similar to what Japan and other places are experiencing, where people are not having enough kids and developing an aging population.

If everybody had more kids that would be another story and a solution.

Technology could finally change that equation entirely.

Since the late 80s, Western companies have been able to shift tens of millions of jobs to the East, from manufacturing to call centre service jobs. Technological innovation like global comms and container shipping have enabled this.

The next phase is AI and greater machine involvement in fields previously difficult to automate.

There is no guarantee we can find work for the growing population.

kabayiri

MaxiRobriguez wrote: »

...
I'm in that boat - early 30's, couple hundred grand in equity/cash from aggressive saving and investing, to the point whereby I could almost pay off the mortgage on the property we live in, plus earning enough to be in higher tax band, partner works too above national average salary - could we afford a jump up to a house that would be befitting of those factors? Nope - too expensive. We're stuck where we are.

If you have land then the option of expanding the home is there.

That is what is happening around here. Yesterday, I was looking at a plot where the family have basically demolished their old detached house to build a new one, much more ambitious in scale.

Separate garages are being rebuilt; or even integrated into the main home.

Could we see the government encourage bigger but multi-generational homes?

wesleyad

PasturesNew wrote: »

The average home is not 1-2 beds... it includes 4-5 beds and detached.

To use the average home -v- the average salary has always been a nonsense.

True, and to complicate things to use the average salary is also nonsense. This is massively warped by the top 1%. Median salary is a much better indicator and that is currently around 21k (vs 28k for average)

ukcarper

Nationwide publish figures showing earnings to house prices
https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2018/Oct_2018.pdf
I believe these use median male earnings.

lisyloo

I believe these use median male earnings

Which are less relevant these days as the picture has changed.
i.e. a lot more women working and gender pay gap closing.

thickasabrick

Agreed 101% , totally distorted by the top earners.

If I enter my income into the "Institute for Fiscal Studies" "Where do you fit in" it says I "have a higher income than around 96% of the population".
https://www.ifs.org.uk/tools_and_resources/where_do_you_fit_in

I should be overjoyed with this but it horrifies me. I live in the South West of England and the house cost multiplier to average income is about 11.4 here (according the centreforcities survey 2017).

I cannot even comprehend how it is possible to have any quality of life on an income below mine and certainly not on 21k. Yet clearly a large proportion of people do, although I suspect quite a lot are "just surviving".

http://www.centreforcities.org/data-tool/#graph=map&city=show-all&indicator=housing-affordability-ratio\\single\\2017

wesleyad wrote: »

True, and to complicate things to use the average salary is also nonsense. This is massively warped by the top 1%. Median salary is a much better indicator and that is currently around 21k (vs 28k for average)

Malthusian

AG47 wrote: »

Most old people will have to sell their home or use the equity to pay for their old age care.

Most people who need to move house have to sell their old one, full stop.

lisyloo

AG47 wrote: »

Most old people will have to sell their home or use the equity to pay for their old age care.

Do you have a link for that as I believe that most people do NOT go into a care home.
Furthermore if your spouse lives in the home it is disregarded.


If you have carers in your home provided by by the LA this is mean tested on your income (your home is disregarded). IME (having done it twice) you are allowed about £300 per week income before having to pay.

MaxiRobriguez

kabayiri wrote: »

If you have land then the option of expanding the home is there.

That is what is happening around here. Yesterday, I was looking at a plot where the family have basically demolished their old detached house to build a new one, much more ambitious in scale.

Separate garages are being rebuilt; or even integrated into the main home.

Could we see the government encourage bigger but multi-generational homes?

Limited land. Have an old single story garage which could be knocked down and replaced with a double storey but I'm not sure it'd give us the space we want. We are keeping options open for now.

The new developments around us are packed on top of each other, I'd hate to live in them. Size of house fine but it *feels* cramped.

ukcarper

lisyloo wrote: »

Which are less relevant these days as the picture has changed.
i.e. a lot more women working and gender pay gap closing.

They are the only consistent figures I can find and give the best picture of prices to earnings over the last 30 to 40 years. Here is a similar graph gong back to 1965. https://www.google.co.uk/search?q=house+price+to+earnings&client=safari&hl=en-gb&prmd=nisv&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjGwenBpr3eAhULBsAKHT6bCoAQ_AUIEygC&biw=1024&bih=666#imgrc=aCKstx2hX-iH3M

I think that straight median earning to average house price in themselves don't tell us that much as interest rates and the amount you can borrow has changed over time. Also earnings and house prices vary greatly across the country.