Average house price now 8.7 times average income

[Previous]

Needs too much work = too expensive for the asking price and the renovation costs would mean spending more than the place would be worth.

Two FT incomes are now required to cover the mortgage too.

As a poster above highlighted, the average age of a FTB is now 30. By this time many are at points in their lives (i.e kids) where they need what would have previously been rung 2 of the now defunct ladder.

I do however agree that many people have lost any idea of how to live frugally. Part of that comes from the constant pushing of financing for seemingly every minor purchase. Part of that may well be cultural attitudes of the younger generations but where did they learn it from, and who changed the financial regulations on this stuff to enable them?

[AlexC1981]

Sheets Tabuer said:

Tango13 said:

Spare tyre said:

Fella at my work told me to sell my iPhone and that’d help

I take it you've curtailed your consumption of artisan avocado toast too?

Had fewer costa coffees too.

These sort of comments actually make the situation worse for young people as you're basically telling them to give up, it's hopeless and they shouldn't need to make any effort.

You do have to give up coffees. And the gym subscription, spin classes, alcohol, vapes, TV subscriptions, Spotify, Apple products, Just Eat, and designer clothes. Find budget options for food and holidays. A bloke at work spends £50 at the hairdressers every few weeks for a very average haircut that any barber could do. Buy a car for £3500 instead of paying off monthly an expensive newer car with interest.

Two young people earning £25k each can easily afford to buy a flat together if they save hard for a year.

Puzzles said:

Evanivitch said:

Average age first time buyer - 34
Average age first time mother - 30.9

Is it obvious yet?

Agreed. For women in particular are keen to get started before it gets more difficult.

Imagine having a couple of kids in your mid 30s and having to renovate an entire house, they don’t have the time, money or skills. Living in a building site for a decade isn’t going to work.

Edited by Puzzles on Saturday 16th March 00:12

They could have got on the property ladder earlier by buying a flat when they were younger.

You can redecorate a place in a few weeks if the walls are good and you leave the woodwork. If not, lining paper is a DIY friendly option instead of a plasterer. There's no shame in having an old bathroom or kitchen in your house, particularly not your first place.

You can freshen up a bathroom by changing the taps, bath panel and using a grout pen to brighten up old grout. Kitchen cabinets and tiles can be painted. Most people change their bathroom and kitchen because they are unfashionable rather than unserviceable.

[PistonRings]

To add to the frustration, the value of typical first time buyer properties our way are being pushed up by developers grabbing them and turning them around quickly.

A neighbours bungalow went on the market in a terrible state for 220k and was sorted and sold a year later for 400k. Another a few roads away, similar story, first sold for 200k and has now been extended and fully refurbed and back on at 420k.

The first would have been uninhabitable for a ftb so really only leant itself to a developer, however the work done to it (extensions etc) make it then unaffordable.

[vixen1700]

It still makes my head explode thinking that the terraced houses that everybody I went to school with in the early 1980s and were owned by normal working class people and were priced accordingly are now so insanely expensive.

For example:

https://www.theydons.com/property/ashville-road-le...

Used to walk past this twice a day going to school:

https://www.theydons.com/property/matcham-road-ley...

Edited by vixen1700 on Saturday 16th March 11:01

[ATG]

The point being missed by those saying "they could get on the ladder if they bought younger, rebuilt half the house themselves, ate gruel, turned tricks outside Lidl" is that ... they shouldn't have to. Houses shouldn't be this expensive. The fact that they are is indicative of a market failure.

If the market is ever sorted out, prices will tumble. That'll be great for the young ... but it'll torpedo a lot of the older population whose "wealth" is all unrealised profit in their property. That is unthinkable to a load of people, but that ain't a good approach to financial risk management and they should have a Plan B for their retirement.

[Puzzles]

AlexC1981 said:

They could have got on the property ladder earlier by buying a flat when they were younger.

You can redecorate a place in a few weeks if the walls are good and you leave the woodwork. If not, lining paper is a DIY friendly option instead of a plasterer. There's no shame in having an old bathroom or kitchen in your house, particularly not your first place.

You can freshen up a bathroom by changing the taps, bath panel and using a grout pen to brighten up old grout. Kitchen cabinets and tiles can be painted. Most people change their bathroom and kitchen because they are unfashionable rather than unserviceable.

I looked at the prices of flats in a very typical village I lived in when I was younger.

There aren’t enough do er upper flats for all the young people.

You can get a 2 bed flat for £225k which seems reasonable but it has a very chunky service charge of £3k a year.

If you wanted to buy it yourself you’d still have to save at least £22.5k which will take the average person a few years, but also would probably need to be earning £40k a year.

Outside PH that’s going to take mr or ms average a while to achieve.

By that time they quite rightly want something bigger.


I’m not saying the way you propose can’t be done as that’s exactly what I did, but imo it works better for people with larger resources, it’s not possible for everyone.

[ChocolateFrog]

Slow.Patrol said:

They wait for their Boomer Grandparents to shuffle off.

We don't have kids. All nieces and nephews have managed to get on the housing ladder, so great nieces and nephews might get lucky. Unless we end up in a care home.

To b fair, it is still possible to buy a house as long as you are not in the south east.

ETA. Also, not everyone will be a home owner. My sister is 68 and never owned her own home being a single parent.

Edited by Slow.Patrol on Friday 15th March 19:09

A colleague is about to retire and has never bought a house.

She has a decent pension so will be OK but I conservatively estimated that she'll need an extra £270k in retirement over me.

Didn't want the worry of home ownership apparently.

[ChocolateFrog]

vixen1700 said:

It still makes my head explode thinking that the terraced houses that everybody I went to school with in the early 1980s and were owned by normal working class people and were priced accordingly are now so insanely expensive.

For example:

https://www.theydons.com/property/ashville-road-le...

Used to walk past this twice a day going to school:

https://www.theydons.com/property/matcham-road-ley...

Edited by vixen1700 on Saturday 16th March 11:01

That sort of stuff is the preamble to end of days type stuff for me.

Just fking nuts.

My parents nearly bought an investment house walking distance from Liverpool City centre in 2005. Looked at loads of houses in the 20-25k range, all decent 2 and 3 bed terrace type jobs.

It's only post Covid that the 50-60k houses have disappeared round my way too.

The SE needs nuking from orbit and starting again.

[CLK-GTR]

I'm tired of hearing about how mortgage rates were 25%. They were for all of about 5 minutes, and annual wage increases were nearly 30% at the same time. That generation had enormous luck handed to them to climb the ladder and have well and truly pulled it up after them.

I'm quite proud that I bought without any family help. I can count on one hand the people I know who have done that and it's going to be even harder for my kids' generation.

[AlexC1981]

ATG said:

The point being missed by those saying "they could get on the ladder if they bought younger, rebuilt half the house themselves, ate gruel, turned tricks outside Lidl" is that ... they shouldn't have to. Houses shouldn't be this expensive. The fact that they are is indicative of a market failure.

If the market is ever sorted out, prices will tumble. That'll be great for the young ... but it'll torpedo a lot of the older population whose "wealth" is all unrealised profit in their property. That is unthinkable to a load of people, but that ain't a good approach to financial risk management and they should have a Plan B for their retirement.

Hey, I'm the one trying to inject some positivity here You can't do anything about the market, so start telling kids to save up instead of give up.

The days of the husband being the sole earner in the family and buying the house are over, and that isn't just a UK thing.

House are expensive, but that isn't as artificial as people think. House builder margins have dropped hugely post-covid. It costs a lot more to build a house or flats now than it did in the 60s when you take into account higher specification, higher wages, land costs, tighter building regs etc.

[BoRED S2upid]

Take London out of the equation and it’s a lot less. Still 3 x oop north which it always has been.

[borcy]

London and the SE do have an entirely different housing market to the rest of the country. Probably needs sorting through some sort of levelling up, try and get more of the bigger better paying employers out to various parts of the country.

[CLK-GTR]

BoRED S2upid said:

Take London out of the equation and it’s a lot less. Still 3 x oop north which it always has been.

Average house price in the North East is 189k. Average salary is 27k. That's far from 3x. Try 7x.

[Evanivitch]

Previous said:

Needs too much work = too expensive for the asking price and the renovation costs would mean spending more than the place would be worth.

All their cash is tied into the deposit. The. They have little left for renovation after mortgage payments.

[Evanivitch]

BoRED S2upid said:

Take London out of the equation and it’s a lot less. Still 3 x oop north which it always has been.

No, it's not. Even in South Wales there aren't many houses sub-100k, they used to be easily found for 60-80. Salaries haven't gone up anywhere near as fast.

[Evanivitch]

AlexC1981 said:

They could have got on the property ladder earlier by buying a flat when they were younger.

And sink all their cash on a short term solution? Why?

[LimaDelta]

CLK-GTR said:

Average house price in the North East is 189k. Average salary is 27k. That's far from 3x. Try 7x.

The 'average house' is not going to be bought by a single person. The average house will be a typical starter family home, for a family with an average household income (according to the ONS) is £32k after tax, or about £45k gross. So 4.2x, rather than 7x or 3x.

The fact is that overpriced or not, houses are still selling. They aren't all going to developers, landlords, or foreign speculators. It is self evident that if they are selling at these prices, then people are buying them at these prices, therefore, they are still by definition affordable, otherwise there would be a glut of unsellable bargains on the market, rather than the reality of many properties still selling above list. All bought by people who apparently can't afford houses. Go figure as they say

[CLK-GTR]

LimaDelta said:

The 'average house' is not going to be bought by a single person. The average house will be a typical starter family home, for a family with an average household income (according to the ONS) is £32k after tax, or about £45k gross. So 4.2x, rather than 7x or 3x.

The fact is that overpriced or not, houses are still selling. They aren't all going to developers, landlords, or foreign speculators. It is self evident that if they are selling at these prices, then people are buying them at these prices, therefore, they are still by definition affordable, otherwise there would be a glut of unsellable bargains on the market, rather than the reality of many properties still selling above list. All bought by people who apparently can't afford houses. Go figure as they say

You can apply that maths logic to any part of the country, at any time point in history. Fact remains, houses are orders of magnitude more expensive relative to salary than they used to be. When you're looking at averages across the board the multiplier is now apparently 8.7. 7 in the North East. It used to be more like 2 or 3.

What you're seeing in the market now is a pool of buyers that already own property, chopping and changing or buying additional property in their own name or that of the kids they're funding. Very few are genuine first time buyers from their own pocket.

[crankedup5]

And then to add to the housing shortage the Country has hundreds of thousands of migrants coming into the Country every year. They are not snails with a home attached to their back.

[matrignano]

tr7v8 said:

This, the critical bit is "house" everyone these days, wants turn key perfection. Not a rough place that needs work and buy furniture later. I'm currently selling my mothers bungalow, nice edge of village location Norfolk/Cambs location for 185K, BUT it needs work. Various youngsters have looked and quote "It needs too much work.

Too much work required can also mean - £££ required to make it liveable, meaning less £££ available for deposit, increasing LTV to potentially untenable/unmortgageable levels