Monday, Jan 28, 2008
Proeprty consumes more of our incomes
BBC: House costs up as food bills drop
UK households spend more of their budget on housing and less on food comapred to 50 years ago, according to the Office for National Statistics.
Spending on food and non-alcoholic drink fell from a third of the average weekly budget to 15%. Meanwhile mortgage interest payments or rent accounted for 19% of spending in 2006, up from 9% in 1957.
UK households spent on average £572 per month on all housing-related costs in 2006, out of an average monthly spend of £1824.
The ONS figures are used to calculate the RPI.
Posted by little professor @ 02:55 PM (765 views) Add Comment
11 Comments
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1. little professor said...
2. maddison said...
We spend much more on gadgets now from white goods/TV to ipods than we did in 1957...
3. Gregspam said...
The image isn't showing the full picture. The image totals 75% of overall spending for 1957, but only 62% for 2006. Where's the full 100% picture?
4. Drewster said...
The 1957 figures add up to 75%; the 2006 figures add up to 62%. Presumably the rest is our "disposable" income.
5. japanese uncle said...
19% share for housing must be seriously skewed. From from the reality. May well be more than 35% now for the population except for those who finished mortgage repayment..
6. C'mon Correction said...
What this doesn't show is the huge increase in house prices and thus mortgage interest that has only happened in the last 8 years or so. Within the average of UK mortgage holders, the majority by far had started their mortgage years ago before the boom, so this is very much a lagging indicator behind a boom. Even with the correction in prices over the next few years, the percent of mortgage costs is going to be greatly skewed in the medium-term (and who knows what interest rates will be in the future) due to the massive amounts of debt people have taken on recently.
All my mortgage holding friends give at least 40+% of their wage in interest each month for their pile of bricks.
7. drewster said...
@JU,
Presumably the figures are averaged across the whole population. Housing costs are small or non-existent for pensionners, the unemployed, and the mortgage-free. Costs are low for young adults who still live with their parents. People living in council housing also pay far below average costs. Anybody who bought property more than ten years ago pays relatively little too - in 1997 the national average house price was just £70k*.
(*Source: http://www.houseweb.co.uk/house/market/prices/average.html)
8. japanese uncle said...
drewster
I suspect these stats are on the basis of gross income, rather than net income, which explains why each shares would not sum up to 100%.
The same applies income multiple. 4 times annual income should be on the basis of net income rather than gross.
9. enuii said...
This again exemplifies the inherent dangers of one set of figures suits all statistics as typified by the 19% figures for housing costs which would not buy Mr Dave Average the average house even if the figures were before tax.
In fact what would 75K buy you?
10. paul said...
Amply demonstrates the dangers of choosing dodgy inflation measurements.
CPI indicates costs going down, RPI indicates costs going up. D'oh.
11. Jolo said...
Drewster,
some of the people who bought a house in 1997 for around 70K are the ones who now own 130k+. But the new car,TV,furniture etc...... look great! What with those Mums and Dads whose endowments are short by the odd 10-15k as well.