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Jonnybegood

What Would Be A Decent Average Price Of A Uk Home

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Current house prices in the UK stand at £168k, which I suppose most on here feel is too high hence "House price crash".

So how much would be a fair accessible price?

Alot of folk I tend to speak with about house prices bought in the mid 80s where they tend to agree an average 3 bed semi would of set you back £50k - £65k (£165k - £180k same houses today).

So in 25 years average house prices here have trebled in value:

So what should the average house price be today???

Please consider:

The different types of mortgage products now available

Record low IRs - Both effect on borrowers and savers

The major rise in 2 income families

The drop in new home construction

Lack of available land

Restrictions on building

The cost of new home construction - Insulation , raw material costs , new regs

Location of the best properties - supply & demand

The boom in the private rental market

The sell off of council housing stock

The fear of future inflation - NS&I pulling their inflation linked products

Money still left from a decade of boom

A small percentage of very high paid individuals - Footballers , bankers , top public sector workers

Influx of eastern Europeans

Overseas millionaires buying up property in London - Ripple affect

The price crash of electrical items - TVs , DVD players , Microwaves

Inflation adjusted the average price today should be around £115k - £120k or 30% - 35% less than today's prices, but considering the above and perhaps a few others what are peoples feelings of what today's average should be.

For me it would be around 15 - 20% off todays prices - £135k average and staying there about for the next 5 years or at least until things in the economy are a little clearer

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Markets are made up by buyers and sellers - the buyer ultimately decides the price.

Houses will in the future be at the price buyers can pay.

In the past it was at the prices buyers could get away with borrowing from the banks.

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*****1998 Sold Prices*****

for way too many reasons to list/ All been discussed before.

Or not playing ball

*Most of the 'average' earning people I know, [a lot] in the North, in all sorts of different careers are earning about £18k - 24k Per Year.

Average House Price at start 1998 was around £80k.

I would not like to pay so much, as 4x salary is excessive, but I would hold my breath, [and nose, if Estate Agent was there] and [seriously consider] getting one.

Would have to be bloody nice though. Would be happier with £65k

Edited by Dan1

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There was an academic on a "history of British housing" programme about three years ago that said for Britain to be a dynamic modern economy where capital, employment, productivity etc were running at an efficient capacities, the average house price would need to be about £60K.

He made the argument so many HPCers have made: that high house prices cripple the economy -- they take money from productive investment, stop workers relocating, reduce the amount available for consumption on all socio-economic levels, and incur debt.

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I would say 3.5 x average salary which i believe is about 34k (Male full time employment, so not actually average :rolleyes: )

so £119000

I'd rather use the average earnings from the ONS so around £25k. Which would make it £88k. In my area an average FTB starter home/flat is about the national average and I'd probably be happy with £119k TBH.

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Average Wage 1970 was £1801.30pa, Average house price was £4874.00, ratio of 2.7058

Average Wage 2009 was £24,000, so by same assumption they should be £60,081.80.

Edited by Salz

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If house prices were £60k on average - think of how much more disposable income people would have. :huh:

Actually - I'm sure there are lots of people who have a house that cost £60k on average and have almost no mortgage now.

And I'm sure there's people who have a house that cost £60 and are sitting on a £160k mortgage.

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If house prices were £60k on average - think of how much more disposable income people would have. :huh:

Actually - I'm sure there are lots of people who have a house that cost £60k on average and have almost no mortgage now.

And I'm sure there's people who have a house that cost £60 and are sitting on a £160k mortgage.

Exactly, then we could get back to the spend, spend spend that NewLab loved so much and the "recovereh" would be assured.

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Current house prices in the UK stand at £168k, which I suppose most on here feel is too high hence "House price crash".

So how much would be a fair accessible price?

I've been recently reading my family history. When new people moved in it always seemed to take three months to build themselves a house - just with an axe, a saw and some hammers.

I assuming increased costs are balanced out by new technology. So without government intervention a new house would cost around 0.25 * salary or about £6,000.

Shows how badly the tyranny of the majority has affected people's lives.

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I would like to see it around £60k but my expectation is for a bottom of about 90k in todays money, though what it'll be in numbers when it happens is anyones guess.

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*****1998 Sold Prices*****

for way too many reasons to list/ All been discussed before.

Or not playing ball

*Most of the 'average' earning people I know, [a lot] in the North, in all sorts of different careers are earning about £18k - 24k Per Year.

Average House Price at start 1998 was around £80k.

I would not like to pay so much, as 4x salary is excessive, but I would hold my breath, [and nose, if Estate Agent was there] and [seriously consider] getting one.

Would have to be bloody nice though. Would be happier with £65k

What would the repayments on a 65k mortgage? IR etc.. permitting... £150 - £200 a month?

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There was an academic on a "history of British housing" programme about three years ago that said for Britain to be a dynamic modern economy where capital, employment, productivity etc were running at an efficient capacities, the average house price would need to be about £60K.

He made the argument so many HPCers have made: that high house prices cripple the economy -- they take money from productive investment, stop workers relocating, reduce the amount available for consumption on all socio-economic levels, and incur debt.

Nail on head, thread over :)

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When my family moved back here in 1991 my father took a job as an unqualified prison tutor on £19,000 and purchased an extended ex council house for £41,000.

Almost 20 years later that job pays £17,000-£23,000 and similar houses are on the market for £155,000. The cost of living has also risen sharply, insurance, petrol, taxes, food etc in that time.

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When my family moved back here in 1991 my father took a job as an unqualified prison tutor on £19,000 and purchased an extended ex council house for £41,000.

Almost 20 years later that job pays £17,000-£23,000 and similar houses are on the market for £155,000. The cost of living has also risen sharply, insurance, petrol, taxes, food etc in that time.

I actually think this nails it on the head. House prices / cost of living have risen but wages have not. Well at least not for those in ordinary jobs, maybe it's been OK for some.

High house prices would not be a problem if our wages had kept up with HPI, but they haven't.

I work freelance, the day rate I can get is basically the same as it was 10 years ago, but the house prices are now 3 X what they were back then. It don't make sense, something will have to give.

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Current house prices in the UK stand at £168k, which I suppose most on here feel is too high hence "House price crash".

So how much would be a fair accessible price?

Alot of folk I tend to speak with about house prices bought in the mid 80s where they tend to agree an average 3 bed semi would of set you back £50k - £65k (£165k - £180k same houses today).

So in 25 years average house prices here have trebled in value:

So what should the average house price be today???

Please consider:

The different types of mortgage products now available

Record low IRs - Both effect on borrowers and savers

The major rise in 2 income families

The drop in new home construction

Lack of available land

Restrictions on building

The cost of new home construction - Insulation , raw material costs , new regs

Location of the best properties - supply & demand

The boom in the private rental market

The sell off of council housing stock

The fear of future inflation - NS&I pulling their inflation linked products

Money still left from a decade of boom

A small percentage of very high paid individuals - Footballers , bankers , top public sector workers

Influx of eastern Europeans

Overseas millionaires buying up property in London - Ripple affect

The price crash of electrical items - TVs , DVD players , Microwaves

Inflation adjusted the average price today should be around £115k - £120k or 30% - 35% less than today's prices, but considering the above and perhaps a few others what are peoples feelings of what today's average should be.

For me it would be around 15 - 20% off todays prices - £135k average and staying there about for the next 5 years or at least until things in the economy are a little clearer

Most of the cost is the land price. We all know that a small basic semi or terrace would actually only cost about £40-60k to build. If mortgages were properly regulated so only 2.25 x income was allowed, houses would move between 1.9 and 2.5 average incomes for each region. There is no reason why this should not happen. It is simply the reverse of the former situation where people have been borrowing up to 6 x income (or more with self cert) because they were allowed to. People can only offer what they are allowed to borrow plus deposit.

So, I suggest the current av of £168k could be brought down in nominal terms to about £110k and then hover/stay there until inflation makes it lower in real terms (ie as if it were about £80k today). This means, property is unnecessarily over valued by 50%.

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I actually think this nails it on the head. House prices / cost of living have risen but wages have not. Well at least not for those in ordinary jobs, maybe it's been OK for some.

High house prices would not be a problem if our wages had kept up with HPI, but they haven't.

I work freelance, the day rate I can get is basically the same as it was 10 years ago, but the house prices are now 3 X what they were back then. It don't make sense, something will have to give.

Yes correct

The figures just do not add up . You can not lie where numbers are concerned 2+2 will always add up to 4. However over the last 15+ years we have had lies where the inflation figure is concerned , so pay rises linked to that figure have not kept up. Also income tax's on earned income have risen. They tell you that the basic rate of tax has dropped ( true ) but NI has risen and personnel allowances have been frozen some years , So on wages that are not keeping pace with inflation people are also loosing more in tax's.

This has now lead to an unbalanced economy and the fall out is now starting.

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Perhaps its worth considering the cost of renting compared to buying. Everything costs as much as the seller can get away with charging. Renting is a better measure of actual affordability, being that it is actual money that a person has to find every month. Buying is based on how much credit the 'buyer' can blag from the banks.

Ive been renting for 10 years or so, and Ive not noticed much of a variation in what I had to pay for various standards/types of properties - in nominal terms. The greatest variation has come from different areas, for example in and around london has been consistently pretty crazy, but outside less so. This fits the affordability argument when you consider that average wages in and around london are greater and that average wages have stayed largely static over this period.

Broadly over ten years in my experience the rents haven't moved in nominal terms. So I would go with the 1998 answer, 80 odd k. Anything else has been driven by over excessive and irresponsible lending and has no basis in actual affordability.

This is a 50% odd drop from an average of 160k. To me that seems unthinkable due to how fragile the banks are, and how much of 'their' properties peak value the average man on the street has already spent.

So where are we going and how can this possibly be resolved? I can see nothing but a japanese future for the uk.

Am I missing something or are we just utterly scr3wed? All of us.

Edited by cybernoid

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Most of the cost is the land price. We all know that a small basic semi or terrace would actually only cost about £40-60k to build.

I don't think we do, because they don't. 80-100K is more normal

tim

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I actually think this nails it on the head. House prices / cost of living have risen but wages have not. Well at least not for those in ordinary jobs, maybe it's been OK for some.

High house prices would not be a problem if our wages had kept up with HPI, but they haven't.

I work freelance, the day rate I can get is basically the same as it was 10 years ago, but the house prices are now 3 X what they were back then. It don't make sense, something will have to give.

From the late 90s onwards, house prices have become further and further detached from average wage but the reason for this simple and understood by most on here - banks have been lending progressively more. Consider that in 2006-07, half of all mortgages didn't require any proof of income and a third were IO: here you have this detachment at work.

Now we get to 2007 and banks no longer have anywhere near the same quantities of money to lend out and are liable for risk again, so we have the beginning of the reset. However, thanks to the chumps in charge, and the props they installed (particularly SLS IMO), we have just been through a suckers rally.

So now that is over and the correction will continue - however to say that prices will end up as 3.5X average FT wage is too simplistic - as the OP pointed out, a number of things have changed, in particular joint incomes and arguably lending multiples.

However, average wages have been skewed by pay differentials (ie those earning stupid money pulling it up) and P/T work has been more or less replacing F/T so I would suggest that using median household income is more of a useful guide (which I think is around the 30K mark). But then it depends on what the average mortage income multiple is too - so assuming it is 4X then that would give me around 120K (+ 10% deposit) = circa 135K (median price for comparability).

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I don't think we do, because they don't. 80-100K is more normal

tim

Not for major developers doing a row of terraced homes. For a small building firm it's more or for extensions etc. Even then my friend quoted me £180k for a very large detached, 5 bed, 3 bathroom, double garage home with oak floors to ground.

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Current house prices in the UK stand at £168k, which I suppose most on here feel is too high hence "House price crash".

So how much would be a fair accessible price?

Alot of folk I tend to speak with about house prices bought in the mid 80s where they tend to agree an average 3 bed semi would of set you back £50k - £65k (£165k - £180k same houses today).

So in 25 years average house prices here have trebled in value:

So what should the average house price be today???

Please consider:

The different types of mortgage products now available

Record low IRs - Both effect on borrowers and savers

The major rise in 2 income families

The drop in new home construction

Lack of available land

Restrictions on building

The cost of new home construction - Insulation , raw material costs , new regs

Location of the best properties - supply & demand

The boom in the private rental market

The sell off of council housing stock

The fear of future inflation - NS&I pulling their inflation linked products

Money still left from a decade of boom

A small percentage of very high paid individuals - Footballers , bankers , top public sector workers

Influx of eastern Europeans

Overseas millionaires buying up property in London - Ripple affect

The price crash of electrical items - TVs , DVD players , Microwaves

Inflation adjusted the average price today should be around £115k - £120k or 30% - 35% less than today's prices, but considering the above and perhaps a few others what are peoples feelings of what today's average should be.

For me it would be around 15 - 20% off todays prices - £135k average and staying there about for the next 5 years or at least until things in the economy are a little clearer

I want to buy a 3 - 4 bedroomed large house with big garden in a great area for 300 - 400 grand which doesn't need much work to it.

Prices would need to drop by 20 - 30 - 50% depending on the area for this to be achievable for the standard of house I want.

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I'd rather use the average earnings from the ONS so around £25k. Which would make it £88k. In my area an average FTB starter home/flat is about the national average and I'd probably be happy with £119k TBH.

Most people buying now are couples though.

For this prediction to fulfill you'd have to convince the UK population that they should only enslave one of them to debt rather than both.

Most people see having a huge mortgage that they both have to work 9 - 5 in a job then don't like much for their whole lives as something which they just do "because".

So lets up the average salary per couple to 40 - 50 grand and the average price becomes 120 - 150 g.

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  • 146 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%



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