redbear Posted February 10, 2011 Share Posted February 10, 2011 So I'm sure most people have seen the long term average of house prices vs average wages. Makes houses looks really over priced. However, has anyone compared house prices Vs average earnings * average number of people in household working ? I'm sure these days more people who buy have partners who are also full time working, making the original average prices Vs average wages a bit pointless. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted February 17, 2011 Share Posted February 17, 2011 You have to realise that households are smaller now than ever before too though. Lots of one person households. So the 'average' house (ie lots of flat conversions) has got smaller too. Making homes even more overpriced. Quote Link to comment Share on other sites More sharing options...
Lepista Posted February 17, 2011 Share Posted February 17, 2011 bump Doccyboy - being such a HPC guru, are you able to dig up any previous threads discussing this for our new fella? Quote Link to comment Share on other sites More sharing options...
longtomsilver Posted February 17, 2011 Share Posted February 17, 2011 It's a good question. The proles minimum wage has gone up 60% since it's inception. The salariat are seeing downward pressures on earnings. The FTSE CEOs have seen their remuneration go up 55% over the last year. The bougeoisie continue to ride high on the wealth divide. House prices do not reflect the present reality. Quote Link to comment Share on other sites More sharing options...
eejit Posted February 17, 2011 Share Posted February 17, 2011 So I'm sure most people have seen the long term average of house prices vs average wages. Makes houses looks really over priced. However, has anyone compared house prices Vs average earnings * average number of people in household working ? I'm sure these days more people who buy have partners who are also full time working, making the original average prices Vs average wages a bit pointless. If you look at the average Polish household in UK, house prices vs (average earnings * average number of people in household working)then house prices seem very affordable. Are you suggesting that we all live 11 to a house, work shifts and hot-bed. Quote Link to comment Share on other sites More sharing options...
Misanthrope Posted February 17, 2011 Share Posted February 17, 2011 Household Income Top to bottom income ratio four-to-one Original income and final income by income quintile group, 2008/09, UK Published on 10 June 2010 at 9:30 am Source: http://www.statistics.gov.uk/cci/nugget.asp?id=334 Quote Link to comment Share on other sites More sharing options...
FedupTeddiBear Posted February 17, 2011 Share Posted February 17, 2011 Average HOUSEHOLD income in UK about £36K pa. Includes multiple earners in one house. 3.5 X = 126K - still at least 30% overpriced. Quote Link to comment Share on other sites More sharing options...
Lepista Posted February 17, 2011 Share Posted February 17, 2011 http://www.housepricecrash.co.uk/forum/index.php?showtopic=154500 Quote Link to comment Share on other sites More sharing options...
Van Posted February 17, 2011 Share Posted February 17, 2011 You could compare houseprices vs GDP too while you're at it. Quote Link to comment Share on other sites More sharing options...
spongeh Posted February 17, 2011 Share Posted February 17, 2011 What about house prices V gold, anyone done that yet? Quote Link to comment Share on other sites More sharing options...
Limpet Posted February 17, 2011 Share Posted February 17, 2011 It's a good question. No it`s not Quote Link to comment Share on other sites More sharing options...
Milton Posted February 17, 2011 Share Posted February 17, 2011 (edited) So I'm sure most people have seen the long term average of house prices vs average wages. Makes houses looks really over priced. However, has anyone compared house prices Vs average earnings * average number of people in household working ? I'm sure these days more people who buy have partners who are also full time working, making the original average prices Vs average wages a bit pointless. In 1997, according to the Office of National Statistics, the national average wage was £16,666. According to the Nationwide Building Society the Average House price in 1997 was £55k. £16,666/£55,000 = 3.3x salary. By 2007, at the peak of the boom [according to the Office of National Statistics] the national average wage had risen to £23.5k The Average House Price in 2007 was £185k. £185,000/£23.5k = 7.8x salary Conclusion: The national average salary in the UK has risen by 41% from 1997 to 2007. The average House Price rose by a staggering 236% over the same ten year period. [From £55k to £185k] [*Other Sources, I.E. The Halifax, has the AHP rising even higher than £185k*] *Interestingly, the average house price rose by only 33.3% from 1987 to 1997. [From £40k to £55k] ** The Average FTB mortgage in 1997 was just £41.5k [Council Mortgage Lenders] ----------------------------------------------------------------------------------------------- Household Income Top to bottom income ratio four-to-one Original income and final income by income quintile group, 2008/09, UK The ONS annually releases 'The Effects of Taxes [AND BENEFITS] on household income' At the Bottom of the .PDF's, are tables of Household Income by Decile. From which the Median household income can be extracted. [Have a look at this data] Contains articles and data looking at how taxes and benefits affect the income of households in the UK. The analysis provides estimates of household incomes, including the average amount of taxes that households pay, and the value of benefits that they receive. The articles highlight the level of inequality across households and look at differences between retired and non-retired households. An article is published annually and has been undertaken most years for 50 years. Median Household Income 1997 was £13,917.00 Median Household Income 2007 was £19,808.00 The Median UK Household Income has risen by 42.3% over ten years. **Remember Over two thirds of the UK earn less than average wage. In 2008 an ONS survey showed that over 6 million people earn £10k per annum or less. These included Hairdressers and Cleaners. ---------------------------------------------------------------------------------------------- Conclusion: Yes one of the features of the bubble has been the increase in two income families. But as you can see from the figures. This has not particularly made houses more affordable. We are still in a 'false economy' . I.E It is clear that if prices fall to the same level of affordability relative to median household income earnings and interest rates, as they did in the mid-1990s, we would be looking at a 50% + fall, from 2007 peak prices. ------------------------------------------------------------------------------------------- The Moral Argument: Why should UK taxpayers who do not own property, pay to recapitalise Banks, who went bankrupt because of toxic mortgage debt? Without this recapitalisation, property prices would have plummeted back to their long term historic average affordability. Which again, would mean over 50% falls in average house prices. In other Words. Your money is being stolen to pay to keep everyone else's property massively overinflated. Keeping you in debt slavery. Making sure you are working for nothing. No capital. And you can never afford your own. Even though you have already been forced to waste tens of thousands of pounds in rent to a liar loan landlord. The Government seem to want this to continue.........When they could relatively easily change the balance to be much more democratic. That's what really grinds at me. I do not see a difference between my neighbour walking into my house every month, and taking a wedge from my pay packet, knowing the government are supporting this Malum In Se, [evil theft] to pay off his mortgage, and the bailing out of bust banks, with my money. Whils another large percentage of my pay packet, goes to pay for my landlords retirement, who should never have been allowed to borrow to buy a number of houses. [*1st Quarter 2010, FSA estimates as many as 43% of housing loans were liar loans. **HBOS whistleblowers state liar loans were endemic, and up to 80% of mortgage loans were liar loans.] Grand Larceny has been rewarded. Whats the difference between a forger printing money in his basement, and the government doing it, if it has the same effect? To devalue the pound in your pocket? Whats the point in working for another ten years for nothing? Once all of this becomes widespread knowledge amongst FTB'ers and subsequently the general public, we will see a MASSIVE drop in house prices. So feel free to copy and paste, and email, blog and post, this in as many places as possible. Join other popular forums, and post it everywhere. Edited February 17, 2011 by Dan1 Quote Link to comment Share on other sites More sharing options...
Caveat Mortgagor Posted February 17, 2011 Share Posted February 17, 2011 (edited) 20 / 30 /40 years ago, a house could be bought with a single wage. If the woman also went out to work, the couple had more disposable income. What the OP is saying is that it is now more common for the woman to work, and rather than allow the couples with both partners working to have more disposable income compared to single earning families, the natural course of things is to allow the banks and other vested interest groups to drive the costs of property ownership through the roof so that the dual income families can now merely afford a place to live with no extras, and the single income families are screwed and shoved to the a lower rung of the property ladder (if any rung at all!) If the lenders had been regulated, the ratio of house price to earnings would have gone up, but not by anything like the magnitude experienced. Edited February 17, 2011 by Caveat Mortgagor Quote Link to comment Share on other sites More sharing options...
Lepista Posted February 17, 2011 Share Posted February 17, 2011 However, has anyone compared house prices Vs average earnings * average number of people in household working ? Also Average household income (does not equal) average earnings * average number of people in household working Quote Link to comment Share on other sites More sharing options...
northwestsmith2 Posted February 17, 2011 Share Posted February 17, 2011 (edited) Household Income Top to bottom income ratio four-to-one Original income and final income by income quintile group, 2008/09, UK Published on 10 June 2010 at 9:30 am Source: http://www.statistics.gov.uk/cci/nugget.asp?id=334 In the second quintile there is a huge bump upwards from benefits, it tends to be 1st quintile is pensioners with no mortgage, second is families and third comes lower as singles. The 3rd quintile is lower than the second then it builds up again, and the 2nd is higher than the first even after benefits. Edited February 17, 2011 by northwestsmith2 Quote Link to comment Share on other sites More sharing options...
Roseland69 Posted February 17, 2011 Share Posted February 17, 2011 All very well basing it on 2 people working - just don't go having any children. Quote Link to comment Share on other sites More sharing options...
Tortoise Posted February 17, 2011 Share Posted February 17, 2011 (edited) All very well basing it on 2 people working - just don't go having any children. One of the most common reasons for bankruptcy other than sudden illness is the unexpected, or ill planned for, arrival of a child. Edited February 17, 2011 by Tortoise Quote Link to comment Share on other sites More sharing options...
spongeh Posted February 17, 2011 Share Posted February 17, 2011 One of the most common reasons for bankruptcy other than sudden illness is the unexpected, or ill planned for, arrival of a child. Bugger wish I'd known that before, I've got three of the little buggers now Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 17, 2011 Share Posted February 17, 2011 (edited) In 1997, according to the Office of National Statistics, the national average wage was £16,666. According to the Nationwide Building Society the Average House price in 1997 was £55k. £16,666/£55,000 = 3.3x salary. ...... ........////... The Moral Argument: Why should UK taxpayers who do not own property, pay to recapitalise Banks, who went bankrupt because of toxic mortgage debt? Without this recapitalisation, property prices would have plummeted back to their long term historic average affordability. Which again, would mean over 50% falls in average house prices. In other Words. Your money is being stolen to pay to keep everyone else's property massively overinflated. Keeping you in debt slavery. Making sure you are working for nothing. No capital. And you can never afford your own. Even though you have already been forced to waste tens of thousands of pounds in rent to a liar loan landlord. The Government seem to want this to continue.........When they could relatively easily change the balance to be much more democratic. That's what really grinds at me. I do not see a difference between my neighbour walking into my house every month, and taking a wedge from my pay packet, knowing the government are supporting this Malum In Se, [evil theft] to pay off his mortgage, and the bailing out of bust banks, with my money. Whils another large percentage of my pay packet, goes to pay for my landlords retirement, who should never have been allowed to borrow to buy a number of houses. [*1st Quarter 2010, FSA estimates as many as 43% of housing loans were liar loans. **HBOS whistleblowers state liar loans were endemic, and up to 80% of mortgage loans were liar loans.] Grand Larceny has been rewarded. Whats the difference between a forger printing money in his basement, and the government doing it, if it has the same effect? To devalue the pound in your pocket? Whats the point in working for another ten years for nothing? Once all of this becomes widespread knowledge amongst FTB'ers and subsequently the general public, we will see a MASSIVE drop in house prices. So feel free to copy and paste, and email, blog and post, this in as many places as possible. Join other popular forums, and post it everywhere. 100% Bang on the Nail. I have been saying all this for YEARS. Edited February 17, 2011 by eric pebble Quote Link to comment Share on other sites More sharing options...
miko Posted February 17, 2011 Share Posted February 17, 2011 Another reason for high house prices is inheritance coming down the generations. How many people in their 40's have come from 2 children homes so will inheret half a house and are married to someone in the same position. The couple next door to my Dad have inhereted 3 houses , their daughter married a man who was left his parents house. Quote Link to comment Share on other sites More sharing options...
CHF Posted February 17, 2011 Share Posted February 17, 2011 100% Bang on the Nail. I have been saying all this for YEARS. He really has redbear. And usually in big red pen. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted February 17, 2011 Share Posted February 17, 2011 What about house prices v state pension? That might make an interesting graph. After all the people drawing a pension will have had their houses the longest. Quote Link to comment Share on other sites More sharing options...
Reraise Posted February 17, 2011 Share Posted February 17, 2011 Another reason for high house prices is inheritance coming down the generations. How many people in their 40's have come from 2 children homes so will inheret half a house and are married to someone in the same position. The couple next door to my Dad have inhereted 3 houses , their daughter married a man who was left his parents house. I think they'll start taxing inheritance pretty heavily as the boomers start popping their clogs. Quote Link to comment Share on other sites More sharing options...
Milton Posted February 17, 2011 Share Posted February 17, 2011 (edited) I have been saying all this for YEARS. I know Eric, and you deserve a medal. Must be quite a few who of us who are as sick to the back teeth of it all. What was the figure Shapps quoted? 1.4Million households unable to buy their own property? How many millions of voters priced out by 2015? Edited February 17, 2011 by Dan1 Quote Link to comment Share on other sites More sharing options...
silver surfer Posted February 17, 2011 Share Posted February 17, 2011 The average earner doesn't own the average property. Only about 65% of the population (and falling fast) are owner occupiers, the remainder rent. So the average property is owned by the average of the top 65% of earners. Figures distorted of course by retirees living in huge pile bought eons ago, but you get my point. Quote Link to comment Share on other sites More sharing options...
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