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getdoon_weebobby

Northern Irish House Prices 1990-2008

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(taken from page 17)

http://www.parliament.uk/commons/lib/resea...ep-01922.pdf#17

scroll to page 17

Year £House £Salary Ratio

-------------------------------------------

1990 31,849 14,583 2.2

1991 35,392 16,404 2.2

1992 38,287 18,077 2.1

1993 38,880 16,678 2.3

1994 38,651 16,293 2.4

1995 42,810 18,341 2.3

1996 47,678 19,197 2.5

1997 53,309 20,457 2.6

1998 59,376 21,505 2.8

1999 66,267 23,176 2.9

2000 72,514 24,202 3.0

2001 79,885 26,326 3.0

2002 83,829 28,057 3.0

2003 95,217 27,643 3.4

2004 110,188 30,576 3.6

2005 129,229 34,619 3.7

2006 169,259 41,177 4.1

2007 229,701 46,532 4.9

2008 218,282 46,803 4.7

good chart .

looks like around 2004/05 wages started getting into liar loan bullsh1t territory.

also ratio of price to earnings broke 3.5 times

being as bullish as I can be ( for a bear ) 2004 (£110k average,30k wage,3.6x earnings) looks like the year where prices still had a degree of sensibility.

i guess this would amount to about rateable value - 20%

thoughts based on table?

Edited by getdoon_weebobby

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http://www.parliament.uk/commons/lib/resea...ep-01922.pdf#17

scroll to page 17

great chart .

looks like around 2004/05 wages started getting into liar loan bullsh1t territory.

also ratio of price to earnings broke 3.5 times

being as bullish as I can be ( for a bear ) 2004 (£110k average,30k wage,3.6x earnings) looks like the year where prices still had a degree of sensibility.

i guess this would amount to about rateable value - 20%

thoughts based on table?

I would agree. We returned around that time and although I felt a crash was on the cards then, we decided to buy back in for stability as we were both near work and reasonably good schools.

I had been a frequent visitor to this site and if I'm not mistaken I started the Northern Ireland thread with my first post in 2006.

Things really accelerated in 2005 and rocketed in 2006 when I discussed with mrs hm the possibility of STRing as prices had become so ridiculous.

I think mrs HM and I were lucky as we agreed in Nov 04 and completed in Feb 05 just before the blue touch paper was lit. I've always maintained prices will gravitate back to 04/05 levels but I can remember thinking back then that prices were a bit toppy.

I'm prepared to wait another 2-3 years before moving up the ladder but as I have said on here before I know quite a few people in a similar position.

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More interesting is the wage inflation. Did we really get nearly a 60% rise in earnings from 2002-08??? Or is this a combination of Liar loans +/- and only rich people able to afford a house?

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Where did they get the average income figures from? Have household incomes increased by 220% in the last 18 years? :blink: I think you are right Vespasian, those income figures are just to result of a jobs, credit and fraud boom. The question is: when the boom in jobs, credit and fraud is removed by the recession where will house prices return to?

At the moment the government are trying to fill the gap left by unemployment, credit crunch and liar loans. When will the govermenment max out the UK credit card? Can't be far away - look at all the cuts being talked about by all the political parties.

How do you quantify the effect of a jobs, credit and fraud boom on those figures? I guess that is why I prefer the Nationwide/ONS chart in my signature. The way I see it the Nationwide/ONS ratio only has 2 easily quantifiable factors average house prices and average single incomes.

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B.B, the report said this was simple average house prices compared with the average income of buyers, rather than the average income of the population as a whole. You can see then how priced out of home ownership the average person was, and how rubbish a house even the better off could afford by stretching their affordability.

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the rise from 30k-46k is def liar loans in my opinion

Rubbish - just about everyone I know in NI is on at least £46000 quid a year :lol:

...but even if you did earn 46k, the average price is still a massive 4.7x salary :blink:

Good Lord - did no-one sit down and take a look at these figures and wonder just WTF was happening with the declared wages???????

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Hmm, thats something I've always wondered.

Are these type of graphs using 'declared' wages, or is there some sort of official record?

I'm guessing there's a lot of 'rounding up' going on!

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Never in my life have I read such deluded horsesh!t......

If this is the type of 'research' that the govt is basing its calculations on then the country is truely, utterly, ****.

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It does seem a bit hard to understand - were only richer people buying houses? What about all those "investors"? What about the mad mortgage multiples we used to hear about - were some people getting 6X their salary, while others bought at only 2X?

Perhaps someone who knows something about this could comment.

Mind you, some bloke baz who's never done commenting on the BT website reckons the fact he knows someone who was granted 6.5X her salary means the new housing boom is on its way. He's bound to be right.

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Just for anyone who might not have downloaded the PDF and scrolled through it to the NI page, here is what we are talking about:

(taken from page 17)

Year £House £Salary Ratio

-------------------------------------------

1990 31,849 14,583 2.2

1991 35,392 16,404 2.2

1992 38,287 18,077 2.1

1993 38,880 16,678 2.3

1994 38,651 16,293 2.4

1995 42,810 18,341 2.3

1996 47,678 19,197 2.5

1997 53,309 20,457 2.6

1998 59,376 21,505 2.8

1999 66,267 23,176 2.9

2000 72,514 24,202 3.0

2001 79,885 26,326 3.0

2002 83,829 28,057 3.0

2003 95,217 27,643 3.4

2004 110,188 30,576 3.6

2005 129,229 34,619 3.7

2006 169,259 41,177 4.1

2007 229,701 46,532 4.9

2008 218,282 46,803 4.7

Just look at the supposed average salary from 204-2008 ....

.... Sweet mother of God!

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I think the early figures are roughly representative, but to take salaries of buyers only is very irrelevant, surely the point is to compare affordability. Also noone seems to have mentioned that the figures are per house hold;

"As previously noted a significant proportion of households contain more than one earner. Therefore, house price to earnings ratios based on individual earnings tend to overstate the extent of affordability difficulties. CLG publish information on the ratio of simple average house prices to the average total recorded income of mortgage borrowers. The information is based upon data from the Council of Mortgage Lenders (CML), a trade association for mortgage lenders in the UK whose members undertake around 98% of UK residential mortgage lending."

They have just moved the goal posts, if you take both salaries then maybe 2.2 is a more reasonable figure to use.

We know FTB have increased significantly in age, but I think its the multiple earner incomes is the main reason for the increase.

Also the 3.5x salary figure is inflation related, this is why it was 2.2 in the early 90s with double digit inflation. I paid 2x mine+partners salary on a 100% mortgage in 1990 and that was hard, but only for a few years as wages jumped up aswell due to the inflation. Its just that banks have given credit multiples of both partners when it used to be restricted. House prices are just a function of credit.

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I think the early figures are roughly representative, but to take salaries of buyers only is very irrelevant, surely the point is to compare affordability. Also noone seems to have mentioned that the figures are per house hold;

"As previously noted a significant proportion of households contain more than one earner. Therefore, house price to earnings ratios based on individual earnings tend to overstate the extent of affordability difficulties. CLG publish information on the ratio of simple average house prices to the average total recorded income of mortgage borrowers. The information is based upon data from the Council of Mortgage Lenders (CML), a trade association for mortgage lenders in the UK whose members undertake around 98% of UK residential mortgage lending."

They have just moved the goal posts, if you take both salaries then maybe 2.2 is a more reasonable figure to use.

We know FTB have increased significantly in age, but I think its the multiple earner incomes is the main reason for the increase.

Also the 3.5x salary figure is inflation related, this is why it was 2.2 in the early 90s with double digit inflation. I paid 2x mine+partners salary on a 100% mortgage in 1990 and that was hard, but only for a few years as wages jumped up aswell due to the inflation. Its just that banks have given credit multiples of both partners when it used to be restricted. House prices are just a function of credit.

Thank you. So to buy a house you must both work full time. So you have too few kids and neglect them, leading to more delinquency, school failure, marital rows.....welcome to the modern world.

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Thank you. So to buy a house you must both work full time. So you have too few kids and neglect them, leading to more delinquency, school failure, marital rows.....welcome to the modern world.

How else will the select few get richer and richer, while the everyone else gets poorer?

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Rubbish - just about everyone I know in NI is on at least £46000 quid a year :lol:

...but even if you did earn 46k, the average price is still a massive 4.7x salary :blink:

Good Lord - did no-one sit down and take a look at these figures and wonder just WTF was happening with the declared wages???????

£135,000 divided by 46k = 2.7

Im sure this is household income and it appear high. This is from the House of Commons, perhaps they wanted to boust the average income to take the bad look off their own.

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£135,000 divided by 46k = 2.7

Im sure this is household income and it appear high. This is from the House of Commons, perhaps they wanted to boust the average income to take the bad look off their own.

To reiterate. 46k is the average income of people buying houses, not the average income of the population as a whole, (which I don't know but the median is 32k and medians are used in these situations to express affordability, for obvious reasons.)

Also, BVI, you are dividing the current median house price by a simple average salary of buyers from 2008 so all you're showing is that the better-off buyers can now afford a better house than they could in 2008. Mathematically you have not demonstrated that affordability has returned to the market, which I am presuming was your purpose.

In order to show affordability, divide median house price by median earnings (household or single, depending on how you want to skew the figures to suit your argument.)

Edited by polythene pam

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I think the relaxation of lending criteria around the 2004 timeframe - specifically less stringent criteria for self-certification - might have had quite a bit to do with the sudden, amazing rise in NI mortgage borrowers' salaries. :lol:

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To reiterate. 46k is the average income of people buying houses, not the average income of the population as a whole, (which I don't know but the median is 32k and medians are used in these situations to express affordability, for obvious reasons.)

Also, BVI, you are dividing the current median house price by a simple average salary of buyers from 2008 so all you're showing is that the better-off buyers can now afford a better house than they could in 2008. Mathematically you have not demonstrated that affordability has returned to the market, which I am presuming was your purpose.

In order to show affordability, divide median house price by median earnings (household or single, depending on how you want to skew the figures to suit your argument.)

I didn't put forward an argument or attempt to skew the figures, apart from pointing out that the figures looked high. I was correcting the earlier post that stated that 'even using these figures the ratio was still 4.7

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£135,000 divided by 46k = 2.7

Im sure this is household income and it appear high.

It is, but you'd have to have read the document or my post to know that.

"As previously noted a significant proportion of households contain more than one earner. Therefore, house price to earnings ratios based on individual earnings tend to overstate the extent of affordability difficulties"

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