Jump to content
House Price Crash Forum
Sign in to follow this  
co2_is-not_man_made

Average Income

Recommended Posts

£112,000: Average new mortgage for house purchase

£40,000: Average income of new mortgage holders

25% (£37,000): Average deposit

14.6%: Average interest payment as proportion of income

Source: CML December figures

http://news.bbc.co.uk/1/hi/business/7711689.stm

intersted to know how this changes peoples veiws on the eventual bottom on prices, most on here seem to state £25k a year ?

Basically this says that at the moment, you have to be in the top 15th percentile of earnings in order to buy an average house.

Crash on!! :lol:

Share this post


Link to post
Share on other sites
Okay :blink:

No probs - it took my partner (who is also an hpcer!) a while to get me to understand the importance of yield. He was smart enough to STR, so we are now renting at a yield to the landlord of about 4%, and that's without allowing for the agent's fees. The old-fashioned rule of thumb for landlords is 12-21; buy if prices are 12 times annual rental, sell at 21 times. In other words, sell if the yield (annual rent divided by value of property x 100%) is less than 4.8%. The housing market indicators have been red-lighting "sell!" recently, and no way have prices fallen far enough for professionals to buy back in. So we've a long way to go to the bottom yet.

Share this post


Link to post
Share on other sites
It is perfectly feasible as long as average house prices fall below £100k. But people have become so brainwashed by "profits" from housing that they are convinced if prices fall that low, we will be swept away by a tidal wave of speculative BTLers. What they don't seem to realise is that i. banks won't lend on the scale needed and ii. tenants won't be able to pay the rents needed for yields to add up. Of course with savings rates at near zero an argument can be mounted that yields of 3% from BTLing look attractive, but this doesn't allow for capital losses and maintenance/transactions/running costs. Unless we get Zimbabwean-style inflation in which case anyone who possibly can should buy...but that's another argument.

Meanwhile Victorian slum dwelling looks positively humane compared to the 21st century equivalent version of "affordable housing" for those on modal wages - HMOs.

I worked for an EA in the early 1990s on Saturdays,. Honestly, no-one was interested, not buyers or sellers.

I spent the majority of my 'employment' getting stoned with the boss in the back office and being paid for it! He did insist that I brought my extra TV in to watch the football, however.

It's happening again now.

Share this post


Link to post
Share on other sites

I have to respond to GirlyGirls posts re childcare. Frankly GG is talking ********. GG may have played around with entitledto.com, but in the real world in which I live, the govt contributes nothing to childcare unless the family income is less than about 16K. If you are in this level of income the govt does step in and pay I think 80% of childcare costs. Hwr, if you are on this sort of family income, you are not going to be in the market for buying a house, especially in the South East

As for tax credits - on a family income of between about 27K and 50k, you get about £38 per month tax credits - working or not. That just about pays for the packed lunches for the kids for the month. Whoopy do.

Childcare vouchers are paid for by the employee. The only benefit to them is that they are taken out before tax. You save maybe £40 per month in tax. It is rubbish people are given vouchers for £200 pr month, complete ********.

The averagely paid p/t woman worker with two children tends to spend the first few years after having children working for about £40 er week - about enough to cover transport costs - once childcare is taken out. It is a fallacy that the govt supports them. It does support families, but only those on pretty much minimum wage jobs. I think it is misleading to suggest that this has a positive impact on peoples' ability to buy a house, and shows a Daily Mail type of ignorance.

The 'incidental' costs (even aside from the huge costs of childcare ((about £500 a month for a 3 day week)) ) associated with having children add up to much more than the small saving on tax, and income from tax credits and child benefit. Women tend to go back to work though, because that the £40 they take home helps a tiny bit, and it keeps them in the job market so they don't get completely de-skilled.

It is very frustrating that people let misinformation be taken as fact.

Share this post


Link to post
Share on other sites
I have to respond to GirlyGirls posts re childcare. Frankly GG is talking ********. GG may have played around with entitledto.com, but in the real world in which I live, the govt contributes nothing to childcare unless the family income is less than about 16K. If you are in this level of income the govt does step in and pay I think 80% of childcare costs. Hwr, if you are on this sort of family income, you are not going to be in the market for buying a house, especially in the South East

As for tax credits - on a family income of between about 27K and 50k, you get about £38 per month tax credits - working or not. That just about pays for the packed lunches for the kids for the month. Whoopy do.

Childcare vouchers are paid for by the employee. The only benefit to them is that they are taken out before tax. You save maybe £40 per month in tax. It is rubbish people are given vouchers for £200 pr month, complete ********.

The averagely paid p/t woman worker with two children tends to spend the first few years after having children working for about £40 er week - about enough to cover transport costs - once childcare is taken out. It is a fallacy that the govt supports them. It does support families, but only those on pretty much minimum wage jobs. I think it is misleading to suggest that this has a positive impact on peoples' ability to buy a house, and shows a Daily Mail type of ignorance.

The 'incidental' costs (even aside from the huge costs of childcare ((about £500 a month for a 3 day week)) ) associated with having children add up to much more than the small saving on tax, and income from tax credits and child benefit. Women tend to go back to work though, because that the £40 they take home helps a tiny bit, and it keeps them in the job market so they don't get completely de-skilled.

It is very frustrating that people let misinformation be taken as fact.

Agreed. I stuck to my guns when my partner wanted me to go back out to work. I calculated about £1 an hour extra through doing this. And the time you have with your children is priceless.

So, you can read your child a story about rabbits and then show them where and how they actually live?

They can read fluently before they turn four? Surely this should be a right for our children.

Share this post


Link to post
Share on other sites
If the average mortgage is £112,000, and the average deposit is £37,000, then the average house price is £149,000.

I thought the latest Halifax figure was about £160,000.

Somebody's figures are wrong.

Also you have to bear in mind that the average salary of a homebuyer is probably higher than the average salary in general (lots of people priced out) and that the £40,000 figure quoted above is often spread between two people.

That's the average price for a house purchase. Halifax figures also include re-mortgages, and they might be going down at higher amounts.

Share this post


Link to post
Share on other sites
A salary of £40k would put you well up the income distribution curve. Do you really think ~70% of people are living in social housing? Get real.

A lot of them live in houses they bought many years ago when they were much cheaper than they are now. Others, like me, live in private rented accommodation.

Share this post


Link to post
Share on other sites
No probs - it took my partner (who is also an hpcer!) a while to get me to understand the importance of yield. He was smart enough to STR, so we are now renting at a yield to the landlord of about 4%, and that's without allowing for the agent's fees. The old-fashioned rule of thumb for landlords is 12-21; buy if prices are 12 times annual rental, sell at 21 times. In other words, sell if the yield (annual rent divided by value of property x 100%) is less than 4.8%. The housing market indicators have been red-lighting "sell!" recently, and no way have prices fallen far enough for professionals to buy back in. So we've a long way to go to the bottom yet.

Oh jees, I understand the points you were making.

My points are lost on you, hence the :blink: .............

You have extrapolated mode wage into your yield calcs on btl's and then used the same data to support the model earlier to put a case for what house prices should be. You need to look at the market as a HOLE ffs...............Plus, one further thing to factor in. Houses are firstly homes, hence the buy decision is not purely based on economics if it were we would never had got to 2007.

Anyway, stick to mode wage who cares, but house prices have never got to mode wage. You put an argument forward for 'average' then I would listen. You said MODE, wrong wrong wrong.

I sold TWO houses in 2008 and STR'd (that makes me twice as clever as your partner ;) joke btw ), mainly my central point is that if the market was allowed to be a true market then we would have a hell of a lot further to fall. But, it isn't and it sickens me because its not being allowed to be.

I have recently begun the process of buying back in.....................you know why? Because me and my wife were scared into it. Our STR fund is in £'s, however I got 30% off so for me even if prices were to get to 60% I have gained 50% of the benefits from our strategy. Which is never a bad place to be in a deal, the other option, sitting it out further is a risk we ain't going to take.

Share this post


Link to post
Share on other sites

The only thing that matters is the average income in the particular area/street you want to move into ...no point basing valuations on the national avergage is 20k when you want to move into a chav free nice area with good schools, close to trains is it ....

Edited by mercsl

Share this post


Link to post
Share on other sites
Wrong, if a couple earning £25k each have children then they get their childcare paid for by tax credits plus at least £100 childcare vouchers, making them able to easily afford £150k mortgage, when will this fact sink in on this board.

Up until you earn £61k between you, then the government will top you up and make having children and a mortgage affordable. Fact.

Nonsense. Our household income is exactly like you describe (between £50K-£60K) and we got 0, zilch, nada tax credits for childcare. Total benefits are £80 a month for child benefit and £39 a month tax credits. Nothing else.

We looked into childcare and it was £35 a day or £150 for the week (over £600 a month) and all we could have done was offset around £200 a month in vouchers against it (roughly £60 in tax savings) as the wife's work wasn't involved in the voucher scheme (she's a teacher).

In the end, we figured out that childcare would cost over £500 a month, while if my wife went back part time we would only be just over £100 a month worse off, so obviously she went back part time.

That was 2 years ago, maybe things have changed now and you get some sort of nursery voucher but I seriously doubt it will cover anywhere near childcare costs.

Share this post


Link to post
Share on other sites
Nonsense. Our household income is exactly like you describe (between £50K-£60K) and we got 0, zilch, nada tax credits for childcare. Total benefits are £80 a month for child benefit and £39 a month tax credits. Nothing else.

We looked into childcare and it was £35 a day or £150 for the week (over £600 a month) and all we could have done was offset around £200 a month in vouchers against it (roughly £60 in tax savings) as the wife's work wasn't involved in the voucher scheme (she's a teacher).

In the end, we figured out that childcare would cost over £500 a month, while if my wife went back part time we would only be just over £100 a month worse off, so obviously she went back part time.

That was 2 years ago, maybe things have changed now and you get some sort of nursery voucher but I seriously doubt it will cover anywhere near childcare costs.

She's very liberal with her figures is our Girlygirl.

I know couples earning a lot less then £50k between them, and can only dream of drawing such benefit.

Share this post


Link to post
Share on other sites
She's very liberal with her figures is our Girlygirl.

I know couples earning a lot less then £50k between them, and can only dream of drawing such benefit.

Obviously I'm wasting my breath, sit down and play with entitledto.co.uk and if you aren't getting what it suggests you should then get on the phone and sort it out.

The people complaining my figures aren't right also have factors like " the wife's work wasn't involved in the voucher scheme" well there's your problem, doesn't make my figures wrong does it ?

Share this post


Link to post
Share on other sites
Obviously I'm wasting my breath, sit down and play with entitledto.co.uk and if you aren't getting what it suggests you should then get on the phone and sort it out.

The people complaining my figures aren't right also have factors like " the wife's work wasn't involved in the voucher scheme" well there's your problem, doesn't make my figures wrong does it ?

I've been using the Directgov website, I'll give it a go. Sorry, but most people's testimonies seem to contradict your own.

Share this post


Link to post
Share on other sites
I've been using the Directgov website, I'll give it a go. Sorry, but most people's testimonies seem to contradict your own.

I can't account for every variable but I can speak for myself having recently been claiming benefits when my husband had a brief period of unemployment, my neighbour who is a stay at home mum with 4 children whilst her partner works as a teacher and a few others (brothers, cousins) who's financial circumstances i know the ins and outs of.

The jist being that low wages or working part time are not an issue because they are basically topped up to full time working salaries.

You only have to read MSE to get an indication of what's really going on.

Share this post


Link to post
Share on other sites

Based on a couple earning £40k with two children (one in school) the tax credits they'd be entitled to comes out at a princely £10.50 a week.

Share this post


Link to post
Share on other sites
Wrong, if a couple earning £25k each have children then they get their childcare paid for by tax credits plus at least £100 childcare vouchers, making them able to easily afford £150k mortgage, when will this fact sink in on this board.

Up until you earn £61k between you, then the government will top you up and make having children and a mortgage affordable. Fact.

and you should know!!!! living the dream, eh ? :rolleyes:

Share this post


Link to post
Share on other sites
and you should know!!!! living the dream, eh ? :rolleyes:

Excuse me ?

According to many of you that's exactly what I am doing after all I have a house and a husband who seems to earn 4 times what many of you claim is average, pass the champagne !

Share this post


Link to post
Share on other sites
Excuse me ?

According to many of you that's exactly what I am doing after all I have a house and a husband who seems to earn 4 times what many of you claim is average, pass the champagne !

Yeah, get him told.

Where's your avatar gone? I used to stir when I saw that. ;)

Share this post


Link to post
Share on other sites
Depressing fact.

The aim of this policy might be laudable but it ends up as an indirect subsidy to the banks because the most of the extra money ultimately ends up being used to service bigger mortgages.

It is far more a subsidy to the owners of real estate, because they are clean and clear recipients of the increase in price.

Share this post


Link to post
Share on other sites
Excuse me ?

According to many of you that's exactly what I am doing after all I have a house and a husband who seems to earn 4 times what many of you claim is average, pass the champagne !

now now, i can't work out whether that's hubris or sarcasm, either way you've become immensely annoying.

i have to say the post that loren i think it was made, was far more on the money than anything you've contributed in this thread. :P

Share this post


Link to post
Share on other sites
Excuse me ?

According to many of you that's exactly what I am doing after all I have a house and a husband who seems to earn 4 times what many of you claim is average, pass the champagne !

Let them eat cake, eh? Pass the Bolly.

Share this post


Link to post
Share on other sites
a solicitor, most of whom I have only used for the purposes of procedural skills rather than knowledge of the law which I can look up for myself.

That exactly sums up how I feel about the legal profession, I was recently involved in a Landlord and Tenant dispute where the legal bill came in at nearly £30k (it was recovered from the other side in full - only because the lessee had the property pulled from him by an Law and Property Act Receiver, who wanted to move the property on

When I look through the six inches of paperwork there are no pearls of wisdom, all decisions were passed to counsel and time and time again I realised it was only on the procedural matters that I felt ignorant.

To sum it all up there was an emergency hearing faxed by the court to my solicitor at 4pm on Friday advising that a hearing was to be heard at 10am on the Monday. My solicitor (West End firm) could not instruct a barrister in time and the solicitor was not able to attend himself. His advice was for me to attend.

I spent the weekend researching the matter and did a deal with the barrister for the other side on the Monday morning and obtained £250 in costs from the judge for acting as a litigant in person. I advised my solicitor of the outcome only to be patronised by saying “we ought to offer you a job”.

The legal principals involved were hardly relevant or indeed complex what was important was to demonstrate to the judge that I was reasonable in my claim and appear to come over as problem solving individual.

Share this post


Link to post
Share on other sites
Wrong, if a couple earning £25k each have children then they get their childcare paid for by tax credits plus at least £100 childcare vouchers, making them able to easily afford £150k mortgage, when will this fact sink in on this board.

Up until you earn £61k between you, then the government will top you up and make having children and a mortgage affordable. Fact.

How long has this been the case, and is it guaranteed to be so in the future?

Share this post


Link to post
Share on other sites
Obviously I'm wasting my breath, sit down and play with entitledto.co.uk and if you aren't getting what it suggests you should then get on the phone and sort it out.

The people complaining my figures aren't right also have factors like " the wife's work wasn't involved in the voucher scheme" well there's your problem, doesn't make my figures wrong does it ?

Just reading your comments (and others comments on this thread) re. childcare, benefits in general etc confirms for me that the UK is basically a sinking ship. :ph34r:

Sad. But there was a time when families were proud to say they stood on their own two feet and didn't rely on govt handouts. Now it seems they NEED them as routine. There's even websites to help them access these benefits. Don't get me wrong, I'm all for helping the needy. But when you talk about couples earning 50K and above being benefit dependent, then the world has gone mad.

:(

Share this post


Link to post
Share on other sites

The benefits culture has been expanded and extended in order to finance the housing boom. The £500bn in bail-outs to banks, money-printing and "mortgage rescue" are all part of the continuum of that culture. It has been obvious since 2002 that house prices could only rise if ordinary people were encouraged to borrow exceesive amounts of money that they could never afford to repay. It therefore became government policy, to:

1. Top up peoples wages with "credits" to let them take out loans and make repayments

2. Ignore inflation and keep IRs low

3. Indemnify the banks for reckless lending and ecourage the practice.

4. Bail out banks and individuals when rendered bankrupt by reckless lending/borrowing

5. When all the money's gone print more of it and tell banks to lend more.

Six years ago I was earning £60k and was considered very well paid. If I was still earning 60K now I'd be claiming family tax credits and benefits. And this is after a period of "historically low" inflation. Prudence my a""se. Salaries have doubled in that time for almost everyone (with a job).

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 316 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.