I was surprised by the first house to be honest. Everything is relative though as the in laws first house was £800(50's) now probably over £450,000(just guessing). That shows how far the market has gone. Their second house I think they bought for £3,000(60ish) sold for £140,000 then in a year for £200,000.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Yes we probably did but only generally, we went through ****times as well.
I've said before, my other half works in housing, so see's all the figures ahead of time.
The biggest grouped problem presenting as homeless now is not smackheads or dossers, it's working couples. How do you provide a strategy or solution to a council for that ?
Soldato
same
The average wage for most of the 1950's was around £600 per year.
I have no idea what your in-laws were earning, but if they were around the average then their house cost approximately 1.3x one person's annual salary.
If it's worth £450k today, then it's above average, so it would be like a single, average earning person today, being able to purchase a significantly above average house (perhaps a 3-4 bed detached) for around £40-45k.
Grossly oversimplified obviously and this is just back of a fag-packet maths, but still...
Last edited:
But everything is NOT relative, that is the whole point! Houses were vastly cheaper in terms of the multiples of salary in the past.
What 175 years of data tell us about house price affordability in the UK
What we've learned from nearly 200 years of housing data - and is property really a better investment than a pension?
www.schroders.com
"The average house in the UK currently costs around nine-times average earnings, based on data as at 30 November 2022. The last time house prices were this expensive relative to average earnings was in the year 1876, nearly 150 years ago."
I am sorry, but the "boomer" generation (and the generation before that somewhat) had it immensely good during their peak adult years. From 1950 it was mostly at 4x, with a couple of peaks at 6x. Since the mid 90's it has gradually grown to 9x!!
Not only did that generation get the advantage of being able to buy their houses much cheaper and more easily (making life and finances easier during their early adult years and middle age), they have in the last 25 years benefitted massively from watching their properties shoot up in value to an insane degree, helping them in retirement.
No anecdotes or stories from anyone's younger years make any difference to the simple, cold hard statistics.
Last edited:
And it had land that was sold off, not by them. The father in law made the wrong decision of not paying out to have a bathroom put in(used the old tin bath).The average wage for most of the 1950's was around £600 per year.
I have no idea what your in-laws were earning, but if they were around the average then their house cost approximately 1.3x one person's annual salary.
If it's worth £450k today, then it's above average, so it would be like a single, average earning person today, being able to purchase a significantly above average house (perhaps a 3-4 bed detached) for around £40-45k.
Grossly oversimplified obviously and this is just back of a fag-packet maths, but still...
Soldato
House prices relative to average wage only tell part of the story though, you also have things like interest rates which essentially inversed since the 80's.
Not saying it's not hard to buy a house now, it is, but those insane interest rates also made it difficult as well but in a different way.
Still probably about as hard as it's ever been to get onto the housing ladder today, and we can't even boast 1-2% mortgages anymore for cheap credit.
Not saying it's not hard to buy a house now, it is, but those insane interest rates also made it difficult as well but in a different way.
Still probably about as hard as it's ever been to get onto the housing ladder today, and we can't even boast 1-2% mortgages anymore for cheap credit.
Ok, I take your point but the housing market has had to adapt to that in order for it to continue hasn't it?But everything is NOT relative, that is the whole point! Houses were vastly cheaper in terms of the multiples of salary in the past.
What 175 years of data tell us about house price affordability in the UK
What we've learned from nearly 200 years of housing data - and is property really a better investment than a pension?
"The average house in the UK currently costs around nine-times average earnings, based on data as at 30 November 2022. The last time house prices were this expensive relative to average earnings was in the year 1876, nearly 150 years ago."
I am sorry, but the "boomer" generation (and the generation before that somewhat) had it immensely good during their peak adult years. From 1950 it was mostly at 4x, with a couple of peaks at 6x. Since the mid 90's it has gradually grown to 9x!!
Not only did that generation get the advantage of being able to buy their houses much cheaper and more easily (making life and finances easier during their early adult years and middle age), they have in the last 25 years benefitted massively from watching their properties shoot up in value to an insane degree, helping them in retirement.
No anecdotes or stories from anyone's younger years make any difference to the simple, cold hard statistics.
Soldato
No one in their right mind is saying to drop rates back to 0.5% are they. We need to be mindful that having rates higher then they need to be is like pressing the brakes on the economy. If people don't borrow, the economy goes nowhere. In my mind it makes sense to drop by 0.25% now, and you obviously review at the next juncture. It's not like you've committed to hammering rates down for the foreseeable.
Last edited:
Caporegime
And thats ignoring the fact the boomers are the largest voting block and have, throughout their lives largely dictated policy for the country and unsurprisingly its changed as their desires have changed.
Caporegime
What do you mean. The adaptation has been the requirement for two people to be contributing a decent salary to be able to buy a house. The adaptation has been that a huge number of people get help from their family to be able to buy a house. The adaptation has been that more and more people are buying later and later in life. The adaptation has been that people with jobs that would previously have afforded them a very nice house are now in very average houses while the older generation own the nice ones. The adaptation is that people are spending less money in the general economy because so much of their income is going towards housing.
We haven't even seen many of the consequences. That will happen when we have a large chunk of a generation who have never owned a house and hit retirement with a stonking great monthly outgoing they can't afford any more because they aren't working. Or they will never be able to retire.
Are these couples renting or buying?
Caporegime
There is clearly a North&Midlands/South divide here as you can quite easily get a very nice 2 bed semi with even a garage for 150k in these parts.
Any couple can afford a mortgage of 150k. Even a single person could afford it as long as they were on circa 40k a year.
Any couple can afford a mortgage of 150k. Even a single person could afford it as long as they were on circa 40k a year.
Last edited:
Neither, otherwise they wouldn't be presenting as homeless, would they.
It's going to be for all sorts of reasons, rents becoming unaffordable or arrears during Covid and being evicted, extended family breakdowns, I'm sure we will see more and more bank evictions from mortgaged properties, that hasn't really kicked off yet.
The point is it wasn't even a category 5 years ago that anyone thought about.
Can you easily get a 40k job in those parts ?
That's one thing for an individual. But it's not a solution to the problem. Not everyone can move up north.
Not sure how many jobs are available in these cheaper areas either.
Caporegime
I think the gulf in house prices is quite extraordinary now that even a lesser paying job will give you a lot better quality of life compared to down south.
Our house is worth at most 300k and in a commuter town like St Albans for example is 600k for the same house. 300k is quite a gulf to make up over a 25 year mortgage. You are talking 2k+ extra a month on repayments and you need close to a 6 figure salary to match someone on far less North of Watford.
I expect it would be more in St Albans right?
We have a 3 (2.5 really) bed detached. It's not big at all. But it is properly detached with (for a newish build) a lot of garden.
Its 320-340ish on right move/zoopla.
In St Albans.. Not sure what an equivalent would cost!
Well.. Ours is better than this
Last edited: