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SarahBell

Back In 1967 ...

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The noteworthy point above is how much is spent on food - 38%. How much was spent on 'tat' (plasmas, iphones, etc etc) - zero obviously, as the consumer culture hadn't really got going. Shows how much dependancy we have on cheap food from overseas. Other posters on HPC complaining about rises in the cost of living via food and electricity might like to think that we are just 'reverting to the mean'....... :lol:

Also if you look at construction costs for Edwardian period houses the material costs are far far higher than the labour costs. Today it's completely the opposite.

Transportation of materials must have been a logistical nightmare and I know small temporary railway lines were run when new estates were being constructed.

The wood was mainly very good quality and not grown in 6 months. Many things were constructed on site out of neccesity. As pointed out food costs were high and many families would have had an allotment providing much of their food. This was recognised in the Allotmant Act.

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Housing association are a bit more expensive. Why do you ask?

Not much more expensive, but then they are more recently built properties. Why should it be the responsibility of a local authority to provide you with a house?

Planning consents now insist that if a development is more than a certain number of dwellings then a proportion should be made available for social housing. That means the builder has to sell to a housing association. A consequence is that there is a tendency for recently built developments to mix people with different types of behaviour. Unfortunately most of the unacceptable behaviour is found to be from the tenants of the housing associations.

On the development I live in a house has recently been boarded up because it was being used as a "crack den". Any guesses as to whether the tenant was an owner occupier a private tenant or a housing association tenant?

Are you fortunate to be allocated a council house? If that was the case then why did so many purchase them when they were permitted to? Even though tenants were allowed to buy almost forty years ago, I bet you can find a large number where the original tenant never sold. People bought their houses because they wanted the sense of security of owning their own home. In most cases it was also a rational financial decision, buying was thought to be cheaper than renting over the long term. How right that turned out to be. I was brought up in a council estate. The rationale espoused by most of my parents friends and acquaintances was that mortgage installments remained relatively fixed over the term of the mortgage whereas rents increased annually. Most could give examples of people they knew who were buying their own home whose mortgage payments were substantially lower than current rents. Most wished they could be in a position to buy their own home and were a bit envious of those that were.

Of course when the original occupants did vacate their house the houses still rented out by the local authority or the housing association who subsequently acquired them became home to some tenants with undesirable behaviour. And we all know that one or two badly behaved families very quickly have a detrimental effect on entire neighbourhoods. Now look at the number of sink estates that we have.

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My parents bought a 3-bed detached house in a village suburb of Stockport in 1954..for £1,600.Dad was a bank clerk;Mum didn't work.It's been extended a bit now,but is now worth about £280K,well out of reach of young bank clerks.

But in 1954 Banks were banks and not casinos, bank clerks were bank clerks and not croupiers.

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Up until the very early 1980's I remember everyone being actively encouraged to save regularly with building societies.

Why? Because we were told, when you come to want a mortgage you will have a track record, be seen to be prudent and have a relationship with the institustion.

Then in about 1983-4 it all changed.

Walk in any building society , qualify , get a mortgage. Of course no repayment - no sir. Must be an endowment.......(another story we are all familiar with).

1987 housing on a very nice bull trend

1989 becoming ridiculous but the masses keep buying

1990 total madness

1991 market falls out of bed.

Where are we now? In my opinion Dec 1990.

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It is the percentages in the opening post that tell the story.

Housing 9%

Bills ( rates, coal, elect, ins) 20%

Clothing 7%

Hols 7%

save 7%

Entertainment 10%

Food etc 38%

Well, today, probably for an ordinary person, food is about 9% and housing 38%. And that is when everyone cooked at home. And bills actually aren't so much

although obviously it isn't clear how big the family might have been ( 10 kids to feed maybe?)

My split, for example is approx :

Housing 30%

Bills 8%

food 9% ( for 1 but shop in all the expensive places and rarely cook )

ents 9%

clothes 5%

hols 9%

save 14% ( pension)

car 5% ( running costs only)

sports 5%

when food costs soar again, housing prices will fall.

The noteworthy point above is how much is spent on food - 38%. How much was spent on 'tat' (plasmas, iphones, etc etc) - zero obviously, as the consumer culture hadn't really got going. Shows how much dependancy we have on cheap food from overseas. Other posters on HPC complaining about rises in the cost of living via food and electricity might like to think that we are just 'reverting to the mean'....... laugh.gif

That's not the way I read it, with food being 38% of the take home pay. The 38% is just what was left over after all the other bills were paid. I wonder why they didn't include food in the breakdown? Perhaps because a lot of people grew their own back in them days?

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Up until the very early 1980's I remember everyone being actively encouraged to save regularly with building societies.

Why? Because we were told, when you come to want a mortgage you will have a track record, be seen to be prudent and have a relationship with the institustion.

Then in about 1983-4 it all changed.

Walk in any building society , qualify , get a mortgage. Of course no repayment - no sir. Must be an endowment.......(another story we are all familiar with).

1987 housing on a very nice bull trend

1989 becoming ridiculous but the masses keep buying

1990 total madness

1991 market falls out of bed.

Where are we now? In my opinion Dec 1990.

I(t's what happens when you replace traffic lights with a roundabout. With traffic lights, traffic moves a bit slower but everyone has a fair chance. Stick in a roundabout and the traffic appears to run smoothly until the exits get clogged up.

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Up until the very early 1980's I remember everyone being actively encouraged to save regularly with building societies.

Why? Because we were told, when you come to want a mortgage you will have a track record, be seen to be prudent and have a relationship with the institustion.

I remember getting our first mortgage, about 1977 i recall. Our mortgage was approved in February but as was normal then the funds weren't available until September.

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My parents bought a 3-bed detached house in a village suburb of Stockport in 1954..for £1,600.Dad was a bank clerk;Mum didn't work.It's been extended a bit now,but is now worth about £280K,well out of reach of young bank clerks.

Thank god sanity has returned to this site.

A call for better pay for bankers. I wholeheartedly agree.

B)

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If you take your parents case just imagine for a second that they knew how to use finance to their advantage. Imagine they borrow the lot including the deposit and got it on an interest only deal can you see how much of a beautiful wealth creation model that this would have been.

Especially as bank workers then were able to get a preferential interest rate on their mortgages.

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...is it just coincidence that house prices started to run away in relation to income when banks started to do mortgages....before the early eighties the big four midland, lloyds, natwest and barclays provided bank accounts and loans to business, not for the purchase of private homes...if you wanted to borrow money for a home you went to a building society hence the name......responsible lending and borrowing....then the tables turned. ;)

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Funny, I was chatting to my dad (born 1941) the other week about the 60s. He reckons all this hype about the 60s being rock 'n roll, swinging etc is just that, hype. However he noticed a big difference when he returned to London in 1975 after leaving to go to France in 1968. Bowler hats in the City were dying out, accents had got worse, there was a drugs scene and the Arabs had replaced the Jews (of which he was one) as the big spenders in restaurants, casinos* and then of course when the Shah of Iran got booted out, Persians piled into London property but even the 70s property boom was OK because WAGES WERE INCREASING.

* Told me he went to Crockfords in the late 70s and Heikh Yamani had a wad of 50s so big he couldn't fold them and was giving the doorman tenners.

Edited by shermanator

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Guest Absolutely Fabulous

We bought a home in 1967 for £4300 when my OH earned £1900 pa. Spouses salaries were not taken into account and you had to prove what your job was etc. before you could get a mortgage.

Even at that low ratio it took us about 20+years to pay off, by which time we had actually paid back - to the lender - £28000!!Who would NOT lend money fro those sorts of returnsrolleyes.gif - Imagine what they will be on today's homes, if anyone ever pays one off - that is.

Hubby had the formula for compound interest - used in mortgages - which few punters understand. I feel sure that if this formula was made more accessible and taught in schools, we would not have folk rushing to put a financial millstone around their necks in buying overpriced houses, and the sellers/bankers would have to whistle for their custom, hopefuly bringing house prices into a realistic range again.

House prices should ALWAYS be tied to salaries in no more than a 3.5 ratio.

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Not much more expensive, but then they are more recently built properties. Why should it be the responsibility of a local authority to provide you with a house?

Planning consents now insist that if a development is more than a certain number of dwellings then a proportion should be made available for social housing. That means the builder has to sell to a housing association. A consequence is that there is a tendency for recently built developments to mix people with different types of behaviour. Unfortunately most of the unacceptable behaviour is found to be from the tenants of the housing associations.

On the development I live in a house has recently been boarded up because it was being used as a "crack den". Any guesses as to whether the tenant was an owner occupier a private tenant or a housing association tenant?

Are you fortunate to be allocated a council house? If that was the case then why did so many purchase them when they were permitted to? Even though tenants were allowed to buy almost forty years ago, I bet you can find a large number where the original tenant never sold. People bought their houses because they wanted the sense of security of owning their own home. In most cases it was also a rational financial decision, buying was thought to be cheaper than renting over the long term. How right that turned out to be. I was brought up in a council estate. The rationale espoused by most of my parents friends and acquaintances was that mortgage installments remained relatively fixed over the term of the mortgage whereas rents increased annually. Most could give examples of people they knew who were buying their own home whose mortgage payments were substantially lower than current rents.  Most wished they could be in a position to buy their own home and were a bit envious of those that were.

Of course when the original occupants did vacate their house the houses still rented out by the local authority or the housing association who subsequently acquired them became home to some tenants with undesirable behaviour. And we all know that one or two badly behaved families very quickly have a detrimental effect on entire neighbourhoods.  Now look at the number of sink estates that we have.

Why the hell should I pay taxes to the state, the local authority, on my wages, beer, cigarettes, petrol, food etc.?

Unacceptable behaviour is found in all social classes, it should be dealt with by the police, it does not matter whether the person is a tenant/landowner/mortgagee, poor/rich.

If I were to get a mortgage, it would be cheaper than renting now, even if interest rose to 7%

My rent increases annually above the rate of inflation, the rent eats up more and more of peoples wages over time. The HA makes massive profits, it is not subsidised and money is paid to the government also. Yet it is supposed to be no for profit.

You seem very anti-social housing, yet you were brought up in it (when it was far cheaper too), maybe you should have been left homeless as a child and the world would be a better place, they should have never housed statistically likely to be scum people like yoursef.

The state has a duty to house people, it imposes land ownership and taxes upon us, it restricts us from acquiring land and building properties for ourselves.

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For what its worth.

1967, a sizeable semi in a desirable area in Gloucester was 2700 pounds.

We bought our first property in 1974, we had to save 10% for at least a year until the BS would grant the mortgage.

Guess what, we still had a bubble from 1970 to about 1972.

What drove that bubble though - high inflation, rising wage claims meeting inflation leading to higher prices based on earnings multiples or housing bubble with inflationary wage claims playing catch up?

The difference now though half the population are in jobs that can be offshored / onshored with migrant labour - result, one totally fecked working population linked to gross levels of leverage. Pensions already dumped, savings dumped, unnecessary outgoings dumped - not muc else left to go in the face of an inflationary wave that will leave their bank accounts beached.

Edited by OnlyMe

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Why the hell should I pay taxes to the state, the local authority, on my wages, beer, cigarettes, petrol, food etc.?

Try defence of the realm, public order, transport infrastructure, legal system, health service. Don't see housing as a government responsibility.

Unacceptable behaviour is found in all social classes, it should be dealt with by the police, it does not matter whether the person is a tenant/landowner/mortgagee, poor/rich.

Totally agree, but from what I see unacceptable behaviour is more prevalent in some social classes than others.

If I were to get a mortgage, it would be cheaper than renting now, even if interest rose to 7%

My rent increases annually above the rate of inflation, the rent eats up more and more of peoples wages over time. The HA makes massive profits, it is not subsidised and money is paid to the government also. Yet it is supposed to be no for profit.

Then save until you have the deposit.

You seem very anti-social housing, yet you were brought up in it (when it was far cheaper too), maybe you should have been left homeless as a child and the world would be a better place, they should have never housed statistically likely to be scum people like yoursef.

My my, such vitriol. The difference is I didn't expect anyone to be responsible for me when I grew up.

The state has a duty to house people

No it doesn't.

it imposes land ownership and taxes upon us, it restricts us from acquiring land and building properties for ourselves.

Would a free for all with land being retained by individual force be better? Might work for some for a while until someone stronger and more violent came along.

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We bought a home in 1967 for £4300 when my OH earned £1900 pa. Spouses salaries were not taken into account and you had to prove what your job was etc. before you could get a mortgage.

Even at that low ratio it took us about 20+years to pay off, by which time we had actually paid back - to the lender - £28000!!

The thing is, you may have paid back £28k in total, but how many of those twenty eight thousand pounds were expensive 1960s pounds and how many were much cheaper early-80s pounds? It's not a fair test just to add up all your mortgage payments across two decades without accounting for how much you were earning at the time you made the payment. The real measure of the cost of a house is how much you paid for it, in total, in terms of % salary at the time you made each mortgage payment. On average over the last few decades this calculation has probably worked out to roughly 5 years' net single income for a house.

Now couples are signing up for 4.5x joint salary mortgages (plus a 1x salary deposit). If historically average interest rates return they could well end up paying 20 years' net single income for their house by the time they've finished paying for it. That's four times what their parents paid.

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Try defence of the realm, public order, transport infrastructure, legal system, health service. Don't see housing as a government responsibility.  

Totally agree, but from what I see unacceptable behaviour is more prevalent in some social classes than others.

Then save until you have the deposit.

My my, such vitriol. The difference is I didn't expect anyone to be responsible for me when I grew up.

No it doesn't.

Would a free for all with land being retained by individual force be better? Might work for some for a while until someone stronger and more violent came along.

It's much easier to hide crime if your rich.Weren't your parents responsible, the state?Your parents were provided with council housing, for one, child benefit, etc, you got a free education.</br>Rational-legal authority uses force, the system works at the minute because the government is strongest. they have the police and military at their disposal.

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It's much easier to hide crime if your rich.Weren't your parents responsible, the state?Your parents were provided with council housing, for one, child benefit, etc, you got a free education.</br>Rational-legal authority uses force, the system works at the minute because the government is strongest. they have the police and military at their disposal.

There was a different situation when my parents got married. There had been large scale devastation caused by the war. A very large proportion of the population had no alternative but to live in rented housing provided by the state. Council houses were not available to purchase no matter whether you wanted to or not. when they were able to purchase a house they did.

Child benefit and free education is still provided by the state.

The system works not just because the government is the strongest but it has the mandate of the people. Brute force only works for limited periods, OK maybe more than an individuals life time but eventually all governments without the mandate of the people fall. The police and the military are two of the bulwarks of our society. They exist not to keep us in order but with the general assent of the populace who undoubtedly realise that no better alternative has been offered.

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In 1967 it was not the norm for people to take on a 25 year debt plus the interest accrued. In fact it terrified the majority of people as in the mid 60s LA housing was in overdrive as those terrible Tower Blocks blotted the skyline.

A mate of mine bought a 2 bed flat with a mortgage of £28 per month + Rates + Water Rates. His parents rented a 3 bed LA flat at £3 per week rent including Rates and Water Rates. ;)

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Guest Absolutely Fabulous

The thing is, you may have paid back £28k in total, but how many of those twenty eight thousand pounds were expensive 1960s pounds and how many were much cheaper early-80s pounds? It's not a fair test just to add up all your mortgage payments across two decades without accounting for how much you were earning at the time you made the payment. The real measure of the cost of a house is how much you paid for it, in total, in terms of % salary at the time you made each mortgage payment. On average over the last few decades this calculation has probably worked out to roughly 5 years' net single income for a house.

Now couples are signing up for 4.5x joint salary mortgages (plus a 1x salary deposit). If historically average interest rates return they could well end up paying 20 years' net single income for their house by the time they've finished paying for it. That's four times what their parents paid.

Which is the point I was making.Why do you feel the need to tell me what I just told you?huh.gif

I am concerned about what happened, as my offspring are caught up in it too.

BTW it is FOUR decades - not two, and we spent money in every decade for forty years - renewing and maintaining to a high spec. and having two extensions.

Difficult to compute costs as such. The point I was making and will try yet again to make:

If young folk were reared to comprehend compound interest, there'd be less chance of them having the wool pulled over their eyes by profiteering.

My circumstances - which I was kind enough to relate to you for information - served as an example, as in , if I paid that in better times how much more will be paid by today's buyers.

My post seems to have been interpreted as an appeal for some sort of sympathy. If that is what I wanted I'd not come on this forum for it.

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In 1967 it was not the norm for people to take on a 25 year debt plus the interest accrued. In fact it terrified the majority of people as in the mid 60s LA housing was in overdrive as those terrible Tower Blocks blotted the skyline.

A mate of mine bought a 2 bed flat with a mortgage of £28 per month + Rates + Water Rates. His parents rented a 3 bed LA flat at £3 per week rent including Rates and Water Rates. ;)

My parents had the chance of a council house at £2 a week they bought for £5 a week , ten years later they were stil paying £5 a week , their friends that took a council house were then paying £10 a week.

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Can you tell us what the value of the house was when you manged to clear the loan ?

The equity also grows at a compounding rate, thats the best bit about time in the market and as the other poster pointed out the repayments and principal are also dropping in monetary value with time.

House prices in Britain have been falling month-on-month this summer. That means the equity is falling at a compounding rate. It works the same on the way up and down.

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It certainly does but in the long term it is overwhelmingly on the positive side as shown by the numbers posted on this thread.

30-40 years is not the long term, it's not even half a human lifetime. 1929 is still within living memory. How did house prices do in the Great Depression?

Edit: With all due respect, you don't seem to realise that you're not living in 1970 or 1995, you live in 2010 and the world is a very different place. Your business model would have been fantastic applied in those earlier years. But now the stock of mortgage debt relative to incomes is about as big as it can possibly get and interest rates are about as low as they can possibly go. Where is the growth in prices going to come from? 10x single income mortgages? -2% mortgage rates? All good things come to an end, including asset price growth driven by ever-cheaper credit.

Edited by Dorkins

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  • 276 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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