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Capital Keith

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Posts posted by Capital Keith

  1. Precisely!! I can`t imagine why any city worker would waste 3 hours a day commuting to work out of choice..Anyone on a decent wage in the City would choose to live closer to work (or so I would have thought)

    So where exactly does the 'commuter belt' end? I don`t think you can use the 'commuter belt' excuse in order explain away hugely inflated prices in areas 60-100 miles outside London..

    More green space, better schools, more space for your money the list is endless (including having a smaller place in London too to reduce travel).

    Also, a journey from somewhere attractive like Highgate to the City is 40 minutes on a tube, so why not sit on a train for an hour and a bit, read the paper and so on - you can walk from London Bridge Station to the City in minutes - and get more for your money.

    You can get travel to work data from ONS - it comes on CD-ROM so can't give you a link (contrasting place of residence with place of work), but give them a call, they'll send you one for free.

    But broadly - and I don't like to sound like I'm stating the obvious - people pay a premuim to live somewhere nice, and more so if they can continue to earn London wages while living outside. To be flippant, you can live in safety and in greater space and not worry about little Timmy getting gunned down at the ice rink. Folk reckon that's worth paying for.

    Or you can use ASHE again and contrast pay by place of residence and place of work to get a feel for whether money is earned locally or not.

    EDIT to add the ASHE bit. Now off to the supermarket to measure inflation in my basket of goods.

  2. Where did you get the 57k figure from? I don`t know many people around here who earn 35k, let alone 57k. I hope you haven`t included London in your calculations as City wages are bound to massively skew average earnings upwards.

    Sorry, forgot about this bit. The link was in a post from a few minutes before.

    This is the source: http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

    You'll need to go to ASHE 2006 - then table 7 for place of work by local authority or one of the others for Government Office region (table 5?, occupations at table 2 is interesting too). The South East does not include London, which is a seperate region.

    If you live in the commuter belt you will have to consider City salaries though - they have to live somewhere and that has an effect on the housing market as you have found with your £300,000 2 bedders.

  3. Maybe I am overestimating my earnings but I suppose 70k should be right up there.. In any case, a decent 2 bed flat where I live is 300k plus & although I may be able to afford it WITH A STRETCH, I prefer to rent as its far cheaper (and the fact that I aspire to something better than a tiny flat next to a crack den). I only gave my example to highlight the difficulties other FTBs on lower earnings are facing in getting on to the wretched 'ladder'

    PS: You do not take home £ 3542 pm on 57k. Its more like £ 3200 (& that's before pension contributions). Repayments on a 300k property with a 10% deposit would be around £ 1900 pm.


    Agree that take home pay is a bit less - I make it £3275, before pension as you say - but that hardly weakens the argument, you are left with £1733 per month. So again, if that isn't affording it comfortably, I don't know what is. (You could save that and live off the girlfriend's earning without hardship).

    Even with the figures you provide - leaves you with £1300 per month. You could overpay by £500 per month and be mortgage free on place witha £300,000 mortgage at 6 per cent 107 months early.

    You must have high standards if you think the only decent places are £300,000 - even if you live in Windsor - one of only a very few boroughs in the SE where average flat prices are over £300,000. I think I was right saying you need to get better at searching for property!

    But, I think we are agreed in saying places to live cost too much!

    All the best


  4. The fact that all that I can afford (comfortably) where I live, despite being on an extremely good wage even by SE standards (top 1% maybe), is a pokey 2 bed flat in a grotty part of town suggests that there is something fundamentally wrong with the housing market in this country. The price increases in recent years have little to do with supply & demand as bulls here often suggest ..well, I see ensuite rooms in town regularly advertised for 30-40 ppw & its likely that most immigrants end up in places like that, rather than in overpriced BTL properties. You don`t need to be a bear brainwashed by hpc.co.uk to realise that the current trend of double digit HPI is purely driven by speculation & lax credit & the longer it continues, the more painful the consequences would be for those caught up in it(and that includes you, soon to be homeowner Madasafrog). Once property starts being viewed as an investment rather than a place to live, its bound to behave in the way other asset classes do, with rapid upturns & equally spectacular downturns..

    With regards to FTB salaries, my partner, who has three university degrees including a professional one, is currently looking for a job & the most she is being offered is around 15-17k..go figure

    Again using ASHE - If you are in the top 1 per cent of earners in the South East, you must be earning well over £57,000 - 10 per cent of males working full-time in the South East earn over £57,000. Either you are earning less than you thought, or you need to get better at searching for property.

    If you borrowed 3.5 x salary at £57,000 (and you claim to earn more) - you could raise £200,000. Even at 8% (£1542 per month repayment) that would leave you £2000 per month to spend - how comfortable do you need to be?

    EDITED for grammar

  5. And you are making the schoolboy error of assuming that a FTB earns the average salary...

    Just some thoughts...

    The average salary quoted much higher is £24,000 pa. This includes full and part time salaries. If you only take full time salaries it is £29,331. http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101. Not unreasonable to assume those taking out mortgages work full-time?

    Only 70 per cent of UK properties are owner occupied - http://www.statistics.gov.uk/CCI/nugget.as...=2&Rank=224 - what proportion of the population live in the other 30 per cent - do we need to exclude their salaries from the analysis - SOC 7,8,9 for example - what does that do to the averages?

    Those buying houses will be mainly drawn from SOCs 1,2 and 3. Average full time salaries being: £48,000, £37,000 and £29,000 respectively. (wtih 25 per cent of full time salaries being below: £22,000, £27,000 or £21,000 respectively).

    If the average first time buyer is now 34(!) - no link to hand, but an oft-used figure - then why assume they do not have well-established careers?

    So, although a schoolboy error, it may in fact a more useful assumption than you have given it credit for.

    It may be more sensible to use medians rather than means. A few big salaries and a few expensive houses have a big effect and may not be equal.

  6. How the hell can they allow that to happen? empty for 30 years with a planning permission. Scandalous

    Development rights are nationalised. Planning permission simply means that particular land has development rights granted for a particular land use. So having planning permission simply means that an area of land can be developed in a particular fashion. There is no compulsion for development to take place once planning permission has been granted.

    It is possible that this piece of land had planning permission granted and that the residents of the houses in the background bought it to stop the permission being implemented. Or it has been landbanked - which is a bit more scandalous in human terms, but it's capitalism innit?

    Anyway, this is a post in defence of the public sector - I assumed they are the 'they' of your post. The lack of development will be due to private individuals and I doubt the case for compulsory purchase is all that strong in this instance.

    Go planners!

  7. It keeps coming up on threads, so I made a little chart showing the divergence of national median wage away from ftb income (using ONS and CML figures).

    Think it is quite telling on 'affodability'

    Any comments appreciated. When I get the time I will try and add in 'Affordability' at base rate.


    Really interesting. Important to note that your ONS figure is for those working full-time as you would expect FTBs to be. Using the national average does of course you include everyone, it might not be unreasonable to remove those employed in elementary occupations (about 10 per cent of the workforce) from the analysis as this group are often in social housing and with their median salary of £16,000 dampen the national stats. You could also probably exclude SOC 6 too to remove another 1.5 million.

    Interestingly, your analysis shows that median salaries are equivalent to those for full time employees at SOCs 1 and 2 - managers and professionals (which accounts for a third of the population working full-time), and is well ahead of the median annual pay of every other occupational group. That certainly seems to reflect reality with nurses (at SOC 3 as associate professionals) being the classic priced out example in the press.


    Excellent work - quite livened up my tea break! Thanks.

  8. They're all going down Keith because they all have one reason, and one reason only, for wild appreciation: Ultra Loose Lending. It was so loose in fact that's it's hard to actually call it lending in the accepted sense of the word. Isn't there an inherent understanding that when you lend money you expect to get repaid? The lenders here were basically "gifting" people with money. Sounds sick I know, but it's true. The people who initiated the "loans" collected their fees then sold the "loan" off to Wall Street.

    In a twisted way, you could call it the "little guys revenge". The little guy gets to "buy" a big house, pay a few months/years mortgage payment then live there for free until he leaves voluntarily or the sheriff comes to escort him out. Meanwhile, the world financial markets tremble and implode, all because of the "little guy" and his friendly "lender", or, should I say, "temporary money-gifter".

    Thanks for these comments and I am in sympathy with those views, but the state level analysis (p. 18) shows only five states showing negative growth on the previous quarter and only three showing year on year falls.

  9. Where are the mentalist bulls when you need one? :lol:

    Not sure you'll find many, but his report is less gloomy. More robust data and gives a better appreciation of geography. Doesn't exactly present a rosy picture.


    Significant HPI Findings:

    Highest and Lowest Appreciation:

    1. The states with the greatest rates of appreciation between the first quarter of

    2006 and the first quarter of 2007 were: Utah (17.0%), Idaho (12.3%), Montana

    (11.7%), Wyoming (11.7%), and Washington (11.6%). The states with the

    lowest rates of appreciation for the same period were: Michigan (-0.7%),

    Massachusetts (-0.6%), Nevada (0.6%), Ohio (0.8%), and New Hampshire


    2. The Metropolitan Statistical Areas (MSAs) with the greatest rates of

    appreciation between the first quarter of 2006 and the first quarter of 2007

    were: Wenatchee, Washington (25.6%), Provo-Orem, Utah (19.7%), and Salt

    Lake City, Utah (19.1%). The MSAs with the lowest rates of appreciation for

    the same period were: Punta Gorda, Florida (-4.6%), Sacramento-Arden-

    Arcade-Roseville, California (-4.4%), and Modesto, California (-4.4%).

    3. Of the 285 cities on OFHEO’s list of “ranked” MSAs, 237 had positive fourquarter

    appreciation, 46 had price declines, and prices were unchanged in two


    The complete list of state appreciation rates can be found on pages 18 and 19.

    The complete list of city (MSA) appreciation rates is available on pages 31-51.

  10. I'd like to think that I am not a dimwit but I'm just trying to play it straight. Why pussy foot about? I have simply said this is what we can afford and what we think is reasonable. The fact that the house can't and won't sell for asking price is suggestive of the fact that it is overpriced in the current market. So take it or leave it.

    I agree - and they're leaving it!

  11. Absolute tosh. If you recognise that our tax ends up as a salary in some form or other, you will realise that the government has sponsored an additional 3 million extra public service jobs over the past 10 years.

    But private sector employment has only grown by 1.2 million over the last ten years, so what you're saying is that jobs in the private sector not delivering services to government have contracted by 1.8 million. Interesting thesis.

    Because you swallow government spin, you have chosen to ignore what is really going on. Government employees have simply been subcontracting their tasks to private companies and are hanging on to their overpaid jobs.

    You should alert the Audit Commission. It does sound feasible that the receptionist at my Civic Centre has convinced the Finance Department to pay her salary and that of the subcontractor who does her job while she watches Homes Under the Hammer though, I'll give you that.

    There are good points to be made about inefficiency in public services - perhaps you could find a subcontact poster to make one for you!

  12. We are employing more than a million extra public servants than 10 years ago and yet virtually every public service has gone down hill or has been partially privatised.


    We are not actually. But it is half a million. Although levels are currently falling (and have been since Q3 2005).


    Audit Commission agrees some Councils are underperforming.

    Public sector employment much higher under Thatcher.

  13. Hi RB - the articles you posted are for small regions of California. Do you have data showing YoY price falls for California as a whole?

    The best headline state level figures are given by OFHEO at the link below.

    To September 2006 California was showing 10 per cent gains year on year. Q4 2006 is released on May 31st.

    Here is the link:


    Edit: A failed attempt to make the link clicky. [Moderator: fixed.]

  14. How far does £1,000 go!! (See next post). What about food £300. I suggest they are bankrupt.

    For a single person earning £25,000, £1,000 is what is left each month after paying £500 rent.

    Most of the items on the list (except for repairs) have to be paid by renters, so that means the average wage makes you bankrupt!!!

    The £1,000 I mentioned was after £400 per month overpayment.

    If wages increase at 3 per cent pa for both, in threee years things are much rosier, it may be less than in the past, but inflation is still your friend.

  15. When i say to people that i am not going to buy a house, the first question they ask me is "Are you nuts?"

    After i have proven my sanity, and had the discussion that i think there is going to be a correction in the market. They normally ask me what i think an average house should cost.

    Traditionally this would have been three times the average salary but even i can admit that this is probably old fashioned and obsolete with the norm being that both partners will work at least part time.

    So what would be the new "fair level" 3.5x, 4x

    In addition to the new working lifestyles it has come to my attention that one of the main battles that a FTB is going to face is that of multi generational wealth.. I believe that this is a fairly new phenomenon where as previously people (excluding the super ricjh) had one house and passed it on to their kids, nowadays it seems to be fairly normal to hand over several properties and a bunch of cash.

    Is this the end of social mobility and do the kids of people with few assets now have no chance of achieving the standard of living of a substantial proportion of the population, namely the young of the middle class.

    If an average earning man and an average earning woman were to buy a £250,000 property with a 100 per cent repayment mortgage over 25 years at 6.5 per cent they would have to pay £1688 per month.

    As an average man he working full time he would earn £25,769 (median)

    As an average woman working full time she will earn £23,896 (median)

    His take home is £1,604 per month and hers is £1,500.

    So that's £3,104 coming in each month, so take off the repayments, leaving £1,416 to spend.

    They could overpay £400 each month and pay off almost nine years only and still have £1000 per month to spend.

    So 5 times joint seems feasible, but having children might be difficult, although on other hand, wage inflation should help.

  16. It would be really helpfull if you gave a link. The numbers on statistics.gov.uk are lower. The numbers given there a for full-time employment as payment per week for 2006. Multiplying by 52 gives GBP 25324 as median for a full time working male in the UK. For London it would be GBP 29744.

    Yes, sorry.

    You should never use the nuggets! Go to the source!


    I used table 7, but table 8 would arguably be better for this discussion.

    In any case, there's lots of detail to be enjoyed!

  17. Ok dont mean to be rude by i dont see how that is possible, i.e. average salary is 26000 ish. Or are you talking about the average salary of a CEO

    The average gross annual pay of a man working full time in London is actually £50,835(mean) and £33,904 (median).

    The "average" figure (mean is £24, 301) you quote is for men and women and includes both full time and part time work (many more women than men work part-time).

    UK average (mean) for a male working full time is £32,774.

    It's all in the ASHE on the ONS website.

    EDIT: quoted male all, not male full-time in first attempt.

  18. A woman who worked as an analyst at an investment bank in the City (last FTB in the UK?) was complaining that she couldn't afford to buy in Wimbledon as a 2 bed flat typically costs nearly £400k and houses cost around £800k.

    I was confused as to why she was even bothering to look there in the first place. Has she not heard of zones further out or even commuting from the home counties? But then with a job like that she has to do 16 hour days so I guess doesn't have much time to travel.....

    Even Foxtons can find plenty for under £300,000, rightmove even more.

    If you're working 16 hours per day and cannot afford the place you think you deserve, why on earth would you bother to keep doing it? As an analyst, she must know how market forces work?

  19. Barking, a short run to Canary Wharf, the new financial heart of London, City airport, Close to friendly council block communities and talanted graffiti artists, ideal investment for supporters of the BnP, where are the disadvantages?

    E13 8LL

    2000-05-26 24 Adine Road, Newham, London, Greater London, E13 8LL £45,000

    2002-09-27 24 Adine Road, Newham, London, Greater London, E13 8LL £130,000

    2006-04-05 24 Adine Road, Newham, London, Greater London, E13 8LL £150,000

    2006-08-11 24 Adine Road, Newham, London, Greater London, E13 8LL £230,000

    Something funny is going on here, because there is a sale for £170,000 between the £150,000 and £230,000. It is by far the most sold house on the street.

    2006-04-20 24 Adine Road, Newham, London, Greater London, E13 8LL £170,000

    Meanwhile, number 18 which ought to be similar judging by your photo, has done the following:

    2002-12-18 18 Adine Road, Newham, London, Greater London, E13 8LL £148,000

    2006-04-13 18 Adine Road, Newham, London, Greater London, E13 8LL £175,000

  20. Average wages for men in Cornwall were 29% below the UK average in 2002:


    I can't find more recent figures, but I don't think it has improved that much.

    2006 Annual Survey of Hours and Earnings (ASHE) from ONS.

    Cornwall Median Gross Annual Income: £16,166 (all), £21,582 (males, FT)

    UK Median Gross Annual Income: £19,496 (all) £25,769 (males, FT)

    So for all, 20 per cent below, and for male full time 19 per cent below.

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