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The Masked Tulip

National Housing Federation: Devon Homes Too Expensive

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First they came for Dorset, then they came for Devon... Tomorrow they will come for Dyfed... Um, then Durham I presume...

http://www.thisisthewestcountry.co.uk/news/devon_news/8485466.National_Housing_Federation__Devon_homes_too_expensive/

Some very interesting average local wage to multiples re house prices listed.

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First they came for Dorset, then they came for Devon... Tomorrow they will come for Dyfed... Um, then Durham I presume...

http://www.thisisthewestcountry.co.uk/news/devon_news/8485466.National_Housing_Federation__Devon_homes_too_expensive/

Some very interesting average local wage to multiples re house prices listed.

Hehe. Devon ain't expensive. You can pick up a flat for loose change!

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Relating the average income to the average house prices misses an increasingly important point...owner occupancy rates are down to about 70% and falling, so the average person doesn't actually own the average home.

Put it another way, the average home is owned by someone who is an average earner...after eliminating the bottom 30% of earners from the calculation.

And this is only getting worse.

In 1900 only about 11% of the population were owner occupiers, the rest rented. I doubt we'll get back to those levels (and if we did it's a racing certainty that legislation would change in favour of the tenant rather than the landlord), but France and Germany are perfectly content with owner occupancy rates in the 50-60% range, and this where I think we're heading. Which in turn will make the relationship between average incomes and average house prices even more irrelevant.

The future will be one where house prices are lower in real terms than today, but fewer and fewer and fewer people will be able to take advantage of the lower prices because they'll be unable to raise the necessary deposit.

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Relating the average income to the average house prices misses an increasingly important point...owner occupancy rates are down to about 70% and falling, so the average person doesn't actually own the average home.

You haven't presented any evidence for (or against) that assertion.

Put it another way, the average home is owned by someone who is an average earner...after eliminating the bottom 30% of earners from the calculation.

Wrong. Home ownership has largely become decoupled from earnings, as the latter have been devalued by HPI. Plenty of bottom-30% earners - most obviously pensioners - own houses (some of them big and luxurious).

And this is only getting worse.

In 1900 only about 11% of the population were owner occupiers, the rest rented. I doubt we'll get back to those levels (and if we did it's a racing certainty that legislation would change in favour of the tenant rather than the landlord), but France and Germany are perfectly content with owner occupancy rates in the 50-60% range, and this where I think we're heading. Which in turn will make the relationship between average incomes and average house prices even more irrelevant.

The future will be one where house prices are lower in real terms than today, but fewer and fewer and fewer people will be able to take advantage of the lower prices because they'll be unable to raise the necessary deposit.

High home ownership was a phenomenon of the post-war era, and was caused by policy that favoured home ownership and treated tenants as trash. That then becomes self-fulfilling as everyone aspires to ownership. Take away the economic distortions and the social stigma of renting, and maybe we could have a healthy mixed market.

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Hehe. Devon ain't expensive. You can pick up a flat for loose change!

You're a very naughty boy, Porca Miseria. Winding up the regulars, indeed !

There's no way you'd ever live in Neswick St. even if they gave it to you rent-free. Stop encouraging them - everone will think the likes of Salcombe and Noss Mayo are affordable, too !

When Totnes prices come down to 'loose change' levels, then I'm ready to be convinced. Until then ...

:lol:

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You're a very naughty boy, Porca Miseria. Winding up the regulars, indeed !

wot, me? :huh:

There's no way you'd ever live in Neswick St. even if they gave it to you rent-free. Stop encouraging them - everone will think the likes of Salcombe and Noss Mayo are affordable, too !

Hey, it's the Cathedral area, very salubrious. You make it sound like North Prospect!

When Totnes prices come down to 'loose change' levels, then I'm ready to be convinced. Until then ...

:lol:

:wacko:

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Relating the average income to the average house prices misses an increasingly important point...owner occupancy rates are down to about 70% and falling, so the average person doesn't actually own the average home.

Put it another way, the average home is owned by someone who is an average earner...after eliminating the bottom 30% of earners from the calculation.

And this is only getting worse.

In 1900 only about 11% of the population were owner occupiers, the rest rented. I doubt we'll get back to those levels (and if we did it's a racing certainty that legislation would change in favour of the tenant rather than the landlord), but France and Germany are perfectly content with owner occupancy rates in the 50-60% range, and this where I think we're heading. Which in turn will make the relationship between average incomes and average house prices even more irrelevant.

The future will be one where house prices are lower in real terms than today, but fewer and fewer and fewer people will be able to take advantage of the lower prices because they'll be unable to raise the necessary deposit.

"Owner-occupiers" = 67% ish

Mortgaged owner occupiers = 50% ish

Home owners = 17% +/- ish ish

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First they came for Dorset, then they came for Devon... Tomorrow they will come for Dyfed... Um, then Durham I presume...

http://www.thisisthewestcountry.co.uk/news/devon_news/8485466.National_Housing_Federation__Devon_homes_too_expensive/

Some very interesting average local wage to multiples re house prices listed.

Basically we must all be fcuked, no one can afford to buy a home and those renting cannot afford the rents that people need to get to make it worthwhile for the 'owners'.

We really are screwed? :unsure:

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Basically we must all be fcuked, no one can afford to buy a home and those renting cannot afford the rents that people need to get to make it worthwhile for the 'owners'.

We really are screwed? :unsure:

Basically, yes.

The housing bubble has 'rewarded' those who had bought homes prior to 2000 and, so far, it has rewarded those who took outl iair loans, over-extended themselves, etc... and all - those ust mentioned, politicians, journos, etc - think that this is a fine state of affairs.

But it now means that thousands of houses in each and every town and city in the UK are now simply vastly over-priced compared to average wages. In fact, I will go further and say that many are over-priced even to those on above-average wages.

They will have to keep IRs at 0% for more than a decade to stop this bubble from bursting, which they appear intent on trying to do, but it now siply means that hundreds of thousands, which will soon become millions, are priced out of owning a home.

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Basically, yes.

The housing bubble has 'rewarded' those who had bought homes prior to 2000 and, so far, it has rewarded those who took outl iair loans, over-extended themselves, etc... and all - those ust mentioned, politicians, journos, etc - think that this is a fine state of affairs.

But it now means that thousands of houses in each and every town and city in the UK are now simply vastly over-priced compared to average wages. In fact, I will go further and say that many are over-priced even to those on above-average wages.

They will have to keep IRs at 0% for more than a decade to stop this bubble from bursting, which they appear intent on trying to do, but it now siply means that hundreds of thousands, which will soon become millions, are priced out of owning a home.

I believe what you write to be spot on.

Whilst interest rates are kept as close to 0% those who will suffer will be ALL pensioners and ALL cash savers.

So those who are "going to pay" for the bubble NOT to be burst will be the finacially prudent.

We are clearly in a totally artificial market and it cannot last. Something will "give", (unlikely an increase in rates).

Next January and April/May taxes go up including Council Tax. In 2012 the same again plus further loss of benefits etc.

House prices will slowly deflate over many many many months. Rents will have to come off. Landlords can only charge "what the market will bear".

Moral, it takes a brave man to buy into a falling market.

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Wrong. Home ownership has largely become decoupled from earnings, as the latter have been devalued by HPI. Plenty of bottom-30% earners - most obviously pensioners - own houses (some of them big and luxurious).

Not wrong, just expedited to keep the post short. The fact remains that average income to average house price isn't a perfect fit.

Only the highest earning two thirds of the population will be able to buy a house, so measure the average house price against the income of the highest two thirds.

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The other thing which is going on - has always gone on - but will increase vaslty IMPO is couples who loathe one another staying together simply because neither can afford to buy a house by themselvers if they divorce.

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The top 10 least affordable local authority areas in the region are:

• Isles of Scilly: £405,429 average house price (29.7 x £13,660 average income)

• Cotswolds, Gloucestershire: £318,152 (18 x £17,644 average income) #

• Christchurch, Dorset: £252,564 (15.4 x £16,442 average income)

• South Hams, Devon: £283,420 (15 x £18,949 average income)

• North Devon: £211,073 (13.9 x £15,231 average income)

• Poole, Dorset: £266,029 (13.7 x £19,474 average income)

• East Devon: £248,350 (13.1 x £19,016 average income)

• West Devon: £223,047 (13 x £17,092 average income)

• East Dorset: £268,931 (13 x £20,748 average income)

• Bath & North East Somerset: £256,875 (12.9 x £19,932 average income)

I'd like to see stats for the whole of the UK

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The top 10 least affordable local authority areas in the region are:

Which just goes to show how deceptive those averages can be.

A decent FTB house here in West Devon is something like £100k less than the figure you quote. The average is inflated by inclusion of seriously big places - the farmhouses and stately homes - at seven-figure sums. I'm not sure there was ever a time when earned income (alone) could buy into that level of privilege.

Edited by porca misèria

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  • 201 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% +
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      • Even
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      • up 5%



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