Friday, May 29, 2009
Precise, Concise And To The Point
BBC NEWS: How to buy your first home
A good for getting on the property ladder for any first time buyers or buyers with no equity thinking of making the jump.
What I like about this Video is the cold hard facts about buying and it gives a reason why first time buyers are priced out of the market......how many people out there earning on average 12k-15k (Forget the 24k-25k inaccurate and fudged figures) can afford the costs of 18k to secure their family home?
Posted by titaniccaptain @ 12:03 PM (822 views) Add Comment
5 Comments
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1. titaniccaptain said...
That should read "A good and informative article for getting on the property ladder......................."
lack of sleep again.....
2. kruador said...
No figures that I'm aware of say £24-£25k is the average salary.
ONS says the mean full-time salaried male employee takes home around £35k. This is the figure the banks use for their 'multiple of average salary' affordability statistic. It is skewed by much higher relative pay in the upper percentiles of the pay range. That doesn't make it an inaccurate statistic, it just isn't the right statistic for the purpose.
ONS also says that the gross median weekly wage (including overtime) for all employees is £388.40, which, annualised by multiplying by 48 weeks (20 days' holiday is mandatory for anyone employed more than a certain number of weeks in a year), comes to £18,643.20.
The housing market - rental or purchase - must also cater for people who earn down in the lowest ranges. The 10th percentile - 10% of people earn less than this - is £117.20 per week which would be £5,625.60 per year. These people don't pay income tax as the allowance is higher than this amount - £6,475 in 2009-10 tax year.
ONS has this to say about their stats:
"The Annual Survey of Hours and Earnings (ASHE) is based on a sample of
employee jobs taken from HM Revenue & Customs PAYE records.
Information on earnings and hours is obtained in confidence from
employers. ASHE does not cover the self-employed nor does it cover
employees not paid during the reference period. In 2008 information related
to the pay period which included 16 April. The 2008 ASHE is based on
approximately 146,000 returns.
"The headline statistics for ASHE are based on the median rather than the
mean. The median is the value below which 50 per cent of employees fall. It
is preferred over the mean for earnings data as it is influenced less by
extreme values and because of the skewed distribution of earnings data."
3. titaniccaptain said...
http://www.statistics.gov.uk/cci/nugget.asp?id=285
4. kruador said...
You're quoting from the same survey - note the words "full-time" employees in that link. The £18k figure includes part-time employees. At what point is it acceptable to say that house purchases will be unaffordable for these people? We know the mean house price according to Halifax and Nationwide, but we don't know the median or the range of prices.
I admit that I'm not in that position - my salary is in the 80th percentile, more than the mean male full-time employee figure (by a little rather than a lot) and I *still* cannot afford to buy a house in my area, at least not by most lending standards. (Flats at £120k? No thanks.) At that point the market is seriously screwed up. I should be able to buy a four-bedroom house on my salary, and even 10 years ago would easily have been able to if it were at the same position, relative to the labour market then, as it is now.
5. titaniccaptain said...
@Kruador...."You're quoting from the same survey" maybe...."No figures that I'm aware of say £24-£25k is the average salary."
There are many examples of where the average wage is given the figure of 24k+.......some related examples :-
1. From the Metro last year
"The average salary before tax is just over £25,000, but after deductions that sum shrinks to just over £19,000.
http://www.metro.co.uk/news/article.html?Benefits_more_lucrative_than_average_wage&in_article_id=456599&in_page_id=34&in_a_source=
2. From the Telegraph
The average wage in Britain, including bonuses, fell by 0.4 per cent in the three months March – knocking about £95 off annual salaries to £24,000.
http://www.telegraph.co.uk/news/uknews/5314132/Average-wage-falls-for-the-first-time-in-at-least-45-years-but-not-in-public-sector.html
..