Average house price now 8.7 times average income
Discussion
A few points I feel I need to make.
The average wage is very different to the average houshold income.
The amount one can borrow is vastly different to the 1970's
The fact first time buyers don't want to buy a 1 bed home like people used to do in the 70's.
Houses in the south east may be 15x average income but average income in the south east is most likely far higher than the national average.
In my mind average houses are affordable to average families as they always have been, just right now the average family has 2 incomes not one, therefore house prices will be higher. This is proved by the fact there are very few houses that do not sell, and they can't all be owned by boomers.
The average wage is very different to the average houshold income.
The amount one can borrow is vastly different to the 1970's
The fact first time buyers don't want to buy a 1 bed home like people used to do in the 70's.
Houses in the south east may be 15x average income but average income in the south east is most likely far higher than the national average.
In my mind average houses are affordable to average families as they always have been, just right now the average family has 2 incomes not one, therefore house prices will be higher. This is proved by the fact there are very few houses that do not sell, and they can't all be owned by boomers.
I can't help but feel it's another problem we manage to kick down the road a bit using more and more external stimulus like Help to Buy, 40 year mortgages and the like.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
P-Jay said:
I can't help but feel it's another problem we manage to kick down the road a bit using more and more external stimulus like Help to Buy, 40 year mortgages and the like.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
Depends on the area, I’m in my 20’s. From the southwest, 75% of people in my friends group have their own homes. Even the ones working minimum wage jobs. The ones that don’t are the ones who went off to London or expect to move into houses the same as the one they grew up in as their first house.It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
P-Jay said:
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
This is what might push things into total brokenness. If a house buying market is stacked against a person of modest means, there really has to be a functioning rental market to make life tolerable.
In many ways it sounds like it's becoming worse than buying.
ChocolateFrog said:
borcy said:
If there's no issue now, at what point would there be an issue? 10, 12 20x av incomes?
40 year, 50 year, lifetime mortgages?We might get another 10, even 20 years of housing prices rising 3x the rate of inflation if we do that, and it would still be a better bet than renting.
Tigerj said:
P-Jay said:
I can't help but feel it's another problem we manage to kick down the road a bit using more and more external stimulus like Help to Buy, 40 year mortgages and the like.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
Depends on the area, I’m in my 20’s. From the southwest, 75% of people in my friends group have their own homes. Even the ones working minimum wage jobs. The ones that don’t are the ones who went off to London or expect to move into houses the same as the one they grew up in as their first house.It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
x5tuu said:
LimaDelta said:
borcy said:
If there's no issue now, at what point would there be an issue? 10, 12 20x av incomes?
When the houses stop selling at (or above) the asking prices?LimaDelta said:
borcy said:
If there's no issue now, at what point would there be an issue? 10, 12 20x av incomes?
When the houses stop selling at (or above) the asking prices?borcy said:
Should we wait that long? I'm not sure leave it all to supply and demand is a good idea. The gov is heavily involved with the housing market and will carry on doing so.
Exactly. We know that given the freedom to do so the house builders would be converting every office block and flood plain into homes. But government (all levels) regulation and economic limitations (workforce, materials) prevents that freedom. As well as other factors like insurance industry (I.e. non standard builds).GroundEffect said:
That's a presumption that houses are being bought as primary residences. They are also being bought by the rich as assets (either as rental income, pure asset inflation or both), and that portion is accelerating away.
Indeed. My prediction for the next few decades is a further stratification of society, into a landlord property owning class, and a serf rental class, With the latter increasingly renting rooms in HMOs, at what used to be full house rental money. And for the lucky few (just) able to buy without family help, 40/50 year mortgages on smaller properties propped up by more crackpot government incentives.GroundEffect said:
That's a presumption that houses are being bought as primary residences. They are also being bought by the rich as assets (either as rental income, pure asset inflation or both), and that portion is accelerating away.
Hardly surprising when interest rates were paying 0.25% on savings. The average UK person doesn't have the confidence to invest in the stock exchange or the trust is paying someone to do it for them, so property is a safe bet.
Now interest rates have risen, landlords and second home owners might start selling.
The continuous increase of house prices is absolutely by design.
It makes all home owners feel wealthy, so they borrow and spend equity on extensions, bathrooms, kitchens, cars and holidays.
The price of a 1 bed flat makes a £50k car appear inexpensive. Heck there's many a 3 bed semi with a range rover outside it these days.
House price growth and associated borrowing has fuelled the UK economy for many years.
It makes all home owners feel wealthy, so they borrow and spend equity on extensions, bathrooms, kitchens, cars and holidays.
The price of a 1 bed flat makes a £50k car appear inexpensive. Heck there's many a 3 bed semi with a range rover outside it these days.
House price growth and associated borrowing has fuelled the UK economy for many years.
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