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People Underestimate Past House Price Rises


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Over the last 30 years I have worked it out (other than London which I have no knowledge of) as 6% compounded whereas wages have risen over the same period (this is harder to estimate) as roughly 3-4% componded.

How does this figure feel to others.

.....the less you earn the more they seem to be willing to lend you....the big proviso is your up front deposit, you will lose that or any equity before lenders lose their debt and debt income......interest rates and oil prices are falling, you can afford it, phone a friend. ;)

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In 1988 I was earning £7,000 and I did have a look at 2 bedroomed terraces in a very meh area which were going for £28,000 to £30,000, so 4 times my wage or a bit more. (I didn't buy.)

Today I gather that the equivalent job would pay just under £18,500 a year, and equivalent houses in the area, which is still meh and definitely not gentrified, are being sold for £122,000 to £140,000.

This is in Cardiff.

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In 1988 I was earning £7,000 and I did have a look at 2 bedroomed terraces in a very meh area which were going for £28,000 to £30,000, so 4 times my wage or a bit more. (I didn't buy.)

Today I gather that the equivalent job would pay just under £18,500 a year, and equivalent houses in the area, which is still meh and definitely not gentrified, are being sold for £122,000 to £140,000.

This is in Cardiff.

1988 was getting towards the peak of the last housing boom, so prices would have been inflated then too. Although it was a molehill compared to the stupidity mountain we're living through.

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In 1978 I left university, started work in Bristol on salary of 3,500. Bought a 3 bed end of terraced 'villa' for 10K (not in the best part of town), i.e. about 3x salary. Recent sales on that street suggest that house would now cost approximately 150k - maybe more. I do not know for sure, but I think starting salaries for new grads in that line of work would now be about 20k, at most 25k. So multiple is now at least 6x, more likely 10x.

Absolutely whacko!

I will not be owning real estate in UK until prices come back to a level where they are even half-vaguely long-term affordable for all - and therefore potentially stable.

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Over the last 30 years I have worked it out (other than London which I have no knowledge of) as 6% compounded whereas wages have risen over the same period (this is harder to estimate) as roughly 3-4% componded.

How does this figure feel to others.

Plausible. 4% compounded over 30 years is a little over x3, which is the right ballpark.

One significant adjustment: after-tax pay has risen quite a lot more. Especially at lower levels, where the rising tax threshold has wiped most of it altogether.

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  • 440 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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