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josesbicycle

Average House Prices

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We all know that average house prices in a country so diverse as ours are perhaps without any value. However, even they can be used to see that prices will fall when using the other sets of averages we are given.

average house prices when evening out the peaks and troughs since the second world war are around 4 times average yearly wages. Interest rates are around 5%.

So in my area, average joint wages are £30,000 per year when we x 4 = £120,000. House prices are higher because the third element, the interest rate is 2.5%.

The low interest rates have allowed another £60,000 in my region to be added to the average price.

As we all know, interest rates will rise at some point. Unless the Chinese or Russians move out of London house prices will fall because of affordability when interest rates rise.

it's all very simple.

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We all know that average house prices in a country so diverse as ours are perhaps without any value. However, even they can be used to see that prices will fall when using the other sets of averages we are given.

average house prices when evening out the peaks and troughs since the second world war are around 4 times average yearly wages. Interest rates are around 5%.

So in my area, average joint wages are £30,000 per year when we x 4 = £120,000. House prices are higher because the third element, the interest rate is 2.5%.

The low interest rates have allowed another £60,000 in my region to be added to the average price.

As we all know, interest rates will rise at some point. Unless the Chinese or Russians move out of London house prices will fall because of affordability when interest rates rise.

it's all very simple.

There you go, joint income mortgages now accepted as the norm.

In 1997 when the average wage was £17k the average house was £59k and possible on 3 times main income.

Joint income mortgages have removed the life choices of women. Not all of them want to work, some want to look after their children.

Average wage now £25k houses should be about £90k. At £170k that's an extra £80k debt plus interest on it for banks.

Banks have enslaved women who didn't want to work. Previously those who did work had more disposable income. Now it goes on servicing debt.

"Yeah but my house is worth more" - what a pity it's valued in pounds that are worth less due to so much credit expansion that pushed house prices up. So the pounds buy less of everything.

The government want high house prices.... joint income mortgages means two lots of income tax.

Women's lib.... what have they done?

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Women's lib.... what have they done?

Unfortunately, the unintended consequences didn't really occur to anyone (afaik). I guess, if they'd known, they'd have argued for 1 income households, but without the assumption that the earner should be the man.

Posted many times before, but the full impact is laid out pretty clearly in this lecture from Elizabeth Warren:

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We all know that average house prices in a country so diverse as ours are perhaps without any value. However, even they can be used to see that prices will fall when using the other sets of averages we are given.

average house prices when evening out the peaks and troughs since the second world war are around 4 times average yearly wages. Interest rates are around 5%.

So in my area, average joint wages are £30,000 per year when we x 4 = £120,000. House prices are higher because the third element, the interest rate is 2.5%.

The low interest rates have allowed another £60,000 in my region to be added to the average price.

As we all know, interest rates will rise at some point. Unless the Chinese or Russians move out of London house prices will fall because of affordability when interest rates rise.

it's all very simple.

But house prices were higher in 2007 and the base rate back then was around 5%.

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Didn't want to suggest that both partners in a family should work, however, it is now the norm and should be included in any calculations.

All I'm trying to say is that prices are controlled mainly by affordability, eventually interest rates will rise and prices will fall. Unless we get rich foreigners to buy in places other than London, wages rise by 30% or the government passes a law that not only the husband and wife's income can go towards a mortgage but the children's paper round can count as well.

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we all know, interest rates will rise at some point.

it's all very simple.

So if it's all that simple when will interest rates rise and by how much? Or to look at it another way, can your simple model predict when we'll next see the "normal" 5% bank rate?

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Overall though, I dont buy any 'wage related' argument. An increase in Female participation in the workforce has been almost exactly mirrored (to the percentage point!) by a drop in the male participation rate. Hours worked has been falling, NIC has risen as PAYE has fallen...whatever extra income people have to spend on housing is negligible.

Its fairly plain to see in the FTB income vs median income charts. The two have diverged incredibly since '97. Vast numbers of would be FTBers are simply frozen out.

If house prices wont fall its not due to wages, its due to yield being crushed, everywhere, with BTLers taking over.

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