The Housing Ladder

[Habeas Domus]

[The Knimbies who say No]

May I ask about the source of the graphic?

Needs some more explanatory text on the right hand arrows.

Strongly rising prices and wages which regularly outpaced RPI by a few points was the mix which allowed 70s buyers to get better terms and see the burden drop relative to wages.

[Bloo Loo]

May I ask about the source of the graphic?

Needs some more explanatory text on the right hand arrows.

Strongly rising prices and wages which regularly outpaced RPI by a few points was the mix which allowed 70s buyers to get better terms and see the burden drop relative to wages.

the burden dropped in the 1970s, not because of the inflation per se, but because lending was based on income mulitples and the job sector you were in.

if they used "affordability" in those days, houses would have soared in value and we would have had a busted banking system in the early 1980s.

as it happened, we had one banking scare in the early 1990s.

[200p]

So the 3rd final graphic is the odd one out, wage rises are outstripping house price increases. Thus property is cheap?!

[Bloo Loo]

So the 3rd final graphic is the odd one out, wage rises are outstripping house price increases. Thus property is cheap?!

I think the graphic is showing what should happen in a sustainable economy.

financialisation has perverted the ladder though.

[TheCountOfNowhere]

IT'S NOT A LADDER....IT'S A PYRAMID.

the bottom layer of the pyramid price goes up 10%, they make £5K, the top layer makes £500K

A ladder would be £5K all round.

Edited April 24, 2014 by TheCountOfNowhere

[19 year mortgage 8itch]

There is no ladder.

The ladder is a metaphorical construct designed to sucker FTBs on to the "first rung". That boomers have been able to trade up over their lives to bigger and better properties does not mean that there is a ladder there for subsequent generations to climb, nor that there should be one. HPI has made the rungs too far apart and in some instances the ladder has been pulled up away from the average FTB altogether as boomers recycle their equity to their offspring to give them a leg up (the levitating ladder).If there ever was a ladder it was during a period when boomers were expanding the economy and marching onwards and upwards in a demographic bulge. The economy is no longer doing that and for most people their first property may be their last.My late grandfather, a machine tool maker in the North East, bought his first and only house in the '30s. He never moved, his first house was adequate for family needs (he had 4 children and his wife did not work). He was not wealthy by any objective measure but by today's standards he seems to have been, which shows what a nonsense the UK property market has become.JY

Edited April 24, 2014 by 7 Year Itch

[Bloo Loo]

There is no ladder.

its an illustrative example.

like a pay scale is a ladder of success.

[Bloo Loo]

IT'S NOT A LADDER....IT'S A PYRAMID.

the bottom layer of the pyramid price goes up 10%, they make £5K, the top layer makes £500K

A ladder would be £5K all round.

it is a financialised ladder, hence the rungs get further apart.

[Habeas Domus]

May I ask about the source of the graphic?

I threw it together myself to demonstrate that "the ladder" doesnt work when no-one is getting wage rises - suggested improvements welcome

the left and right arrows are supposed to show that the steps are getting smaller each year

[TheCountOfNowhere]

it is a financialised ladder, hence the rungs get further apart.

It's a financial ladder used to climb the housing pyramid !!!

When them at the top of the pyramid are gifting their children money to bolster their own equity then it's turned from a pyramid into a pyramid scam.

[TheCountOfNowhere]

I threw it together myself to demonstrate that "the ladder" doesnt work when no-one is getting wage rises - suggested improvements welcome

the left and right arrows are supposed to show that the steps are getting smaller each year

The BBC inform me that wages are rising faster that inflation ( RPI not CPI ) and that we are recovering.

House prices will shoot up.

Debt is wealth.

Dont believe me, then read this latest bit of news propaganda.

http://www.bbc.co.uk/news/business-27054416

"

Lansdown, unlikely personal debt capital of Britain""

"Now the rate of pay increases has caught up with the inflation rate (which charts the rising cost of living) for the first time for years, both men are suggesting that people are more confident to borrow."

"t also gives an area-by-area breakdown of £901bn of outstanding mortgage debt, revealing that 44% of this is owed in London and the South East of England where house prices are the highest and average earnings are the biggest."

"For some, increasing debt is a sign of trouble, especially for personal finances. However, it also tends to rise when the economy is stronger."

"He sold 72 new cars last month, a record for March, and describes the market as "buoyant" at present.

Significantly, he adds that 82% of purchases are made on credit. Drivers, he says, are taking advantage of 0% finance deals that mean there is not much point paying the full price up front."

"Cars are a good barometer of the economy. We've got more than just green shoots. People are optimistic."

[crashmonitor]

Why is the third ladder wrong, are we that London centric on here............East Midlands Q3 2004....560.0, Q1 2014.....561.0 (source Halifax House price index)

House price rises have been ZERO for a decade. Don't start getting confused with the recent rally or the fact that we mainly comment on hot spots on here.

Edited April 24, 2014 by crashmonitor