7x average income, topped out

michaels

MaxiRobriguez wrote: »

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.

Of course the hike in stamp duty makes a big impact, locally the cost of adding a loft extension to a 3 bed semi is similar to the cost of moving to a house the same value, want to move up and you pay the move costs on top of the extra cost for another bedroom or 2.

The other problem with a multiples approach is it is predicated on housing remaining a constant proportion of income. If I earn 20k and spend 10kon housing and 10k on everything else then get a pay rise to 30k there is no reason why I can't still spend 10k on everything else and I now have 20k to spend on housing -is as real incomes increase the odds are that it will be possible to spend a higher proportion on housing, especially Ivan imbalance between supply and demand is bidding up prices.

spadoosh

thickasabrick wrote: »

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

That things says we earn higher than 60% of everyone else, with a joint income of £37k from two full time jobs.

If thats the case, people simply arent working (full time). We live in the north west and can easily afford our lifestyle. We bought our house at 24, holiday a few times a year, should be mortgage free a bit after 40.

The house we bought was about 2.5 times our salary, issue is its ex local authority so were a bit stuck in it. To buy a better (read larger) house wed need to spend £100k (practically double) more than ours, and that would give us a smaller plot but with the bonus of a dining room.

snowqueen555

kabayiri wrote: »

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.

I think you're missing the point, an aging population means more pressure on the working population to support the welfare of a growing unworking population. Technology can't help, unless technology made available jobs older people could do.

kabayiri

snowqueen555 wrote: »

I think you're missing the point, an aging population means more pressure on the working population to support the welfare of a growing unworking population. Technology can't help, unless technology made available jobs older people could do.

One of the big research fields in robotics is indeed cooperative working.

This will allow people to overcome physical limitations, due to health or even disability, by co-opting the workspace.

The ageing issue is a global problem. Elderly care worker is the #1 growth job in USA. Solving this problem will mean big big returns for whoever manages it.

I've been to China; I've seen the research. But there are plenty of articles easily accessed, if interested.

System

PasturesNew wrote: »

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

Much more relevant might be the cost of the average small first-time home compared with say the average salary of someone two years into his/her career, or age 25.


Also a national average is nonsense too. It should be London houses v London salaries, and likewise for Midland, NE, Scotland, Cornwall, etc.

lisyloo

compared with say the average salary of someone two years into his/her career, or age 25.

I think it should be household income, where that was often 1 perons in the 60's and would more likely be 2 now.

AG47

lisyloo wrote: »

I think it should be household income, where that was often 1 perons in the 60's and would more likely be 2 now.

His argument is ridiculous

Because women are In The workplace now house prices should be double

System

AG47 wrote: »

The housing crisis in the UK is dire. Shelter reports that the cost of an average home is seven times the average annual salary.

This is the top, it is ridiculous.

Distortions always correct eventually and usually overshoot on the correction.

Yet next week my 23 year old son and his girlfriend complete on a 3 bed semi detached house for just over 3x joint income.

Take London and the South East out of the equation and the picture is a lot better.

wolvoman

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.

If the gender pay gap is reducing the surely the figures are becoming MORE relevant?

MaxiRobriguez

AG47 wrote: »

His argument is ridiculous

Because women are In The workplace now house prices should be double

You have stumbled on part of the supply and demand equation...