Why are house prices still so high?

snowqueen555

The demand is there and new supply is low. People are just taking on more debt to buy a house, and those who do cannot afford houses end up renting to landlords who buy houses as investments.

Gwendo40

Goldman2020 wrote: »

When many people in the UK are on a low wage, working the Gig Economy or earning the basic UK salary (which I believe is in the region of £27,271) .

If you exclude the highest 10% of earners then the average UK wage is actually around £13k.

Which makes the house price - wages ratio even more unfathomable, even in the so called ''affordable'' areas.

justjohn

I am assuming this question is regarding house prices in all area's and not the more desirable affluent areas.


Are house prices are actually high?


I think peoples expectations of where/what they want to live in are high and they are unwilling to do what needs to be done to get a foot on the housing ladder.


BTW Its not much cheaper to build your own house even if you can get the land cheap

ukcarper

Gwendo40 wrote: »

If you exclude the highest 10% of earners then the average UK wage is actually around £13k.

Which makes the house price - wages ratio even more unfathomable, even in the so called ''affordable'' areas.

Median income which in my opinion is best measurement is £23k and that includes part time, full time median is just over £28k.

ukcarper

justjohn wrote: »

I am assuming this question is regarding house prices in all area's and not the more desirable affluent areas.


Are house prices are actually high?


I think peoples expectations of where/what they want to live in are high and they are unwilling to do what needs to be done to get a foot on the housing ladder.


BTW Its not much cheaper to build your own house even if you can get the land cheap

I think that depends where you are where I am I would say they are high with cheapest 2 bed house being £240,000

chucknorris

Gwendo40 wrote: »

If you exclude the highest 10% of earners then the average UK wage is actually around £13k.

Which makes the house price - wages ratio even more unfathomable, even in the so called ''affordable'' areas.

Read Hamish's post above, he makes a very valid point about the long term percentage ownership. Also to what he said, I would add that BOMAD and inheritance will also dampen the value of the average salary to house prices ratio further.

Also I have in the past lent money to two different friends enabling them to buy a property that otherwise been out of their reach. Also the last two houses that I/we bought for cash, the first one was when I was not working (and had not been for about 5 years), and the last one (this year) for about 67 times my salary.

HAMISH_MCTAVISH

Gwendo40 wrote: »

If you exclude the highest 10% of earners then the average UK wage is actually around £13k.
.

That's also a pretty meaningless statistic as it includes all the people who choose only to work part time.

To put things in perspective 85% of UK workers earn more than the minimum wage.

And a full time worker on minimum wage earns over £16K a year.

Where I live McDonalds will pay £10.50 an hour to burger flippers and supermarkets pay north of £10 an hour for shelf stackers.

PokerPlayer111

homeless9 wrote: »

- The government keep saying they will build more houses, but they don't..... seems they want house prices to stay high so us sheep work harder,

The type of people who are attracted to powerful government positions aren't high level problem solvers. Even if government were geniune about solving housing it will be slow progress.

chucknorris

HAMISH_MCTAVISH wrote: »

That's also a pretty meaningless statistic as it includes all the people who choose only to work part time.

We definitely fit into that category, my salary is only £11k or £22k (depends if I work one or two days per week), but our joint income is much more than that.

Exodi

Not to be pedantic but you've taken the ONS average UK income (£27,271) from 2017 and essentially compared it to the South East (London) current property prices disregarding rises and inflation. If you're going to compare applies with apples use £39,476 as this is the ONS average London income from 2017.

Secondly, you must appreciate that a lot of property purchases are done with joint mortgages or inheritances (and this accounts for the majority), essentially you should be comparing 2x the average income for a couple (~£79k in London in 2017), account for typical mortgage lenders offering around 4x gross (£315,808 excluding whatever deposit you put in) and you are in the right ballpark for 2017.

If house prices were un-affordable, no-one would sell them and they'd have to drop.