What can the median full time male wage buy in your area?

[Bland Unsight]

55 minutes ago, disenfranchised said:

RentRoad is being defeated by his own attempts to prove affordability. 

Leveraged landlord logic is a terrible intellectual curse, with no known cure.

The government are getting together a large trial to establish the effectiveness of bankruptcy in restoring normal cognitive function. I momentarily forget the name of the experiment trial - something to do with being sectioned.

Edited April 26, 2017 by Pumpkin Muad'Dib

[MARTINX9]

Waltham Forest - median gross earnings for a male of £530 per week or a mere £27,560 a year. So 4.5 times this would give you a mortgage of £125,000 grossed up for 20% deposit is £160,000.

Bar possibly shared ownership - nothing locally.

 

 

 

[Ah-so]

Cheapest 1 bed flat in my area is £235k. A solidly working class suburb of London that avoided gentrification. I would guess the median wage would probably be under £30k. Perhaps much lower - it was £23k in 2011. 

[canbuywontbuy]

7 hours ago, disenfranchised said:

RentRoad is being defeated by his own attempts to prove affordability.

I helped take him down with that ONS chart - it shows that home ownership for under 50s has collapsed over the last 10, 20 and 30 years.  Only silence from RushRoad after that.  Never a good idea to try and debate against reality.

Edited April 27, 2017 by canbuywontbuy

[CunningPlan]

5 hours ago, canbuywontbuy said:

I helped take him down with that ONS chart - it shows that home ownership for under 50s has collapsed over the last 10, 20 and 30 years.  Only silence from RushRoad after that.  Never a good idea to try and debate against reality.

He's too busy earning his £140k salary. Either that or he has realised that he needs to do a bit more revision before next month's economics A level exam.

 

[Exiled Canadian]

15 hours ago, CunningPlan said:

He's too busy earning his £140k salary. Either that or he has realised that he needs to do a bit more revision before next month's economics A level exam.

 

Of all his claims that was the one I could see the least evidence to support.......

[Ah-so]

They are talking about this sort of thing on Radio 4 this morning. Talking about whether there is a shortage of property, the high multiple of price to earnings. What I've heard has been relatively superficial (no surprise there).

Interview with a FTB due at 7.30.

 

[winkie]

24 minutes ago, Ah-so said:

They are talking about this sort of thing on Radio 4 this morning. Talking about whether there is a shortage of property, the high multiple of price to earnings. What I've heard has been relatively superficial (no surprise there).

Interview with a FTB due at 7.30.

 

Salient points about that piece......the prices are too high, because deposits required are so high....as fast as can save, as fast as prices increase....'help' is not helping......mortgages are long term commitments or a promise to pay every month for 25 or so years,  jobs come and go, so income is not guaranteed always throughout the same period......saving to buy when not paying rent is hard, saving when renting is nigh on impossible to make any impact that would make a difference.....still have to live, unexpected bills still occur.........what good is releasing nice family ex boomer homes to newly married couples who wish to start a family when they couldn't afford to buy them anyway........ they can't afford to buy a one bed flat, or would be foolish to buy a one bed flat, renting is bad enough.

[Ah-so]

1 hour ago, Ah-so said:

They are talking about this sort of thing on Radio 4 this morning. Talking about whether there is a shortage of property, the high multiple of price to earnings. What I've heard has been relatively superficial (no surprise there).

Interview with a FTB due at 7.30.

 

The piece started at about 7.35.

A newly married couple just moved into a box sized flat  up in Liverpool. Turns out they had just blown all their savings on a wedding and road trip so had to ditch their plans to buy. He worked for an estate agents. 

Had to stop listening when the landlord came on. She was going on about investing for her future and hard work and sacrifice. All the normal self-justification. 

Didn't hear how it ended. 

[winkie]

The old landlord speal is.....very irritating, is they have a mortgage to pay.....nobody forced them to borrow money to buy a BTL...... don't like it, sell.....they have choices, people that require a home to live in do not always have choices apart from making their landlord richer by repaying their mortgage debt for them..... don't want a mortgage don't borrow the money....period.

[rantnrave]

11 hours ago, willie said:

I actually wondered if he was the ghost of a previous poster 

The legendary Sibley reincarnated??

[Ah-so]

23 hours ago, Ah-so said:

The piece started at about 7.35.

A newly married couple just moved into a box sized flat  up in Liverpool. Turns out they had just blown all their savings on a wedding and road trip so had to ditch their plans to buy. He worked for an estate agents. 

Had to stop listening when the landlord came on. She was going on about investing for her future and hard work and sacrifice. All the normal self-justification. 

Didn't hear how it ended. 

Here is an article giving further detail.

http://www.bbc.co.uk/news/uk-politics-39743452

"The home that Michael Junior and his wife Francine dream of buying in Liverpool is upwards of £200,000: on a combined salary of £40,000 per annum, they could be years away from it."

on a joint income in Liverpool, they could easily afford to buy somewhere. 

[A third of everything]

On 27/04/2017 at 2:15 AM, canbuywontbuy said:

I helped take him down with that ONS chart - it shows that home ownership for under 50s has collapsed over the last 10, 20 and 30 years.  Only silence from RushRoad after that.  Never a good idea to try and debate against reality.

He's not quiet on MSE in debate house prices, his thread "UK affordability is still good" is actually hilarious. Shows what a tool he is, he's pretty much on par with Ros Beck

[canbuywontbuy]

2 hours ago, A third of everything said:

He's not quiet on MSE in debate house prices, his thread "UK affordability is still good" is actually hilarious. Shows what a tool he is, he's pretty much on par with Ros Beck

A BTL in his death throes trying to convince us the UK housing stock is "affordable" in 2017.  He started out using ONS figures, and was defeated by ONS figures.  It figures. 

[Exiled Canadian]

5 hours ago, canbuywontbuy said:

A BTL in his death throes trying to convince us the UK housing stock is "affordable" in 2017.  He started out using ONS figures, and was defeated by ONS figures.  It figures. 

Poor old Road Kill.....

[Tulip_mania]

12 hours ago, Ah-so said:

Here is an article giving further detail.

http://www.bbc.co.uk/news/uk-politics-39743452

"The home that Michael Junior and his wife Francine dream of buying in Liverpool is upwards of £200,000: on a combined salary of £40,000 per annum, they could be years away from it."

on a joint income in Liverpool, they could easily afford to buy somewhere. 

A joint income of £40k, i.e. total is £40k, not £40k each. It's a bit of a stretch to buy a £200k house on that, which in Liverpool would be a 3 bed semi in a reasonable area. On that money they're going to be looking at compromising on the area or a terrace. They can buy somewhere in Liverpool, just not their dream place.

[Ah-so]

3 hours ago, Tulip_mania said:

A joint income of £40k, i.e. total is £40k, not £40k each. It's a bit of a stretch to buy a £200k house on that, which in Liverpool would be a 3 bed semi in a reasonable area. On that money they're going to be looking at compromising on the area or a terrace. They can buy somewhere in Liverpool, just not their dream place.

Agreed. They could buy somewhere, and if they are renting for 500 pm it will not take them too long to build up the deposit for a flat. 

[CunningPlan]

Ranty Road's entire argument is that if you and you other half work 40 hours per week each and save hard for 5 years then you could just about afford to buy a place in a street where everyone else is living off your tax. They will all be able to have kids but if you do you will no longer be able to afford your mortgage.

Technically he may be right but morally and aspirationally he is just totally wrong.

[canbuywontbuy]

1 hour ago, CunningPlan said:

Ranty Road's entire argument is that if you and you other half work 40 hours per week each and save hard for 5 years then you could just about afford to buy a place in a street where everyone else is living off your tax. They will all be able to have kids but if you do you will no longer be able to afford your mortgage.

Technically he may be right but morally and aspirationally he is just totally wrong.

His argument has to forgo the notion of aspiration. It's all about owning at all costs.  Forget about a decent area, decent school for your children (children? hahaha), short commute, good neighbourhood.  It's like a magic trick - now you see it (aspiration up until the early 2000s), now you don't.  When there's no aspiration, nobody talks about its absence.  It's like it never existed.  If it is ever brought up by the likes of RushRoad, it's only under the guise of "kids want too much these days". Now you have to "make do" with what you can get.  If that means a professional in Manchester has to live in Moston if he wants a family home, school his kids in Moston, commute from Moston, then so be it.  And that's on a 4.5 multiple of his salary to pay the mortgage at record low lending rates.  And talking of lending rates, RushRoad has to assume they will always be low.  IF so, it means the country is mired in a perpetual zombie state.  I fear for Mr Professional living in Moston in that case.  The company he works for is likely just about surviving in a low-demand economy.  And if lending rates rise....well, we know what can happen then.

[rantnrave]

ONS Mean Salary Statistics for 2014-15 tax year:

http://www.telegraph.co.uk/money/consumer-affairs/do-earn-less-average-borough/

Mean salary for Birmingham is £26,400 and the article states that median salaries are slightly lower.

[Toast]

Sorry for dragging this thread out of a well-deserved oblivion, but it annoys me enough to attempt to put it to bed properly (although perhaps I'll fail).

It's a nice discussion because RushRoad asked what sounded like a really good question: if the median worker can afford the median house, surely everything is well with the world? It pushes all the right buttons (using median rather than mean) and, superficially seems to capture what's important about housing.

Fortunately, the argument that houses are priced correctly got torn to pieces pretty comprehensively: the salary multiples to support current prices are ludicrous by historical standards; RushRoad had to assume two full-time median (male) workers with the attendant risk of redundancy and no possibility of children; and, most tellingly, there was an avalanche of anecdotals about people from all walks of life being unable to afford the houses they currently live in. Lastly, despite some wriggling with not-quite-relevant statistics, it seems that home ownership amongst non-immigrants is falling.

To my mind though, the crazy salary multiples don't quite cut to the heart of the matter. They may be unprecedented by historical standards, but who knows? Perhaps we are in a new era of high lending multiples going into the distant future (unlikely, but can we be sure?). The thing that really smells rotten though is the observation that current occupiers can't afford their own homes - and I think that's because it undercuts the premise of the whole argument. Essentially, RushRoad is claiming that the housing market is stable in its current state: society is at equilibrium with the current prices. I hate this empty term, but here it might be correct to use it: the idea is that the housing market is "sustainable". Non-affordability for current occupiers is the empirical evidence that this is rubbish, but what is wrong with the question?

I would suggest that RushRoad has just missed a much better question (not by any means perfect, but I think much better), to capture whether a society is at equilibrium with its housing market, namely: "Can the median household afford the median home?".

I don't know the answer to this, so I'm going to look up median gross household income in the UK.

 

Hmm. It's not entirely obvious. According to the ONS, the median household disposable income in 2016 was £26,400. That seems very low. "Disposable income", according to Wikipedia, is "personal income minus personal current taxes". If someone has a value for median household income before taxes (which is what the banks would base a mortgage offer on), then we can multiply it by 4.5 to see if gets anywhere near the median house price of (ONS data for England and Wales for Q3 2016) £215000. I think it will be substantially less than this, unless Mr & Mrs Median are paying a lot of tax.

[Quicksilver]

http://mycouncil.oxford.gov.uk/documents/s31779/NIC response from six LEPs.pdf

 

 

[Quicksilver]

https://www.gam.com/en/insights-content/2016/tailwinds/the-discontented/

 

 

[iamnumerate]

On 30/04/2017 at 1:53 AM, CunningPlan said:

Ranty Road's entire argument is that if you and you other half work 40 hours per week each and save hard for 5 years then you could just about afford to buy a place in a street where everyone else is living off your tax. They will all be able to have kids but if you do you will no longer be able to afford your mortgage.

Technically he may be right but morally and aspirationally he is just totally wrong.

+1

[crashmonitor]

Can't open the link, but another one says Derbyshire Dales has an average salary of £37,000 (12% above national average). The fact that buys a 3 bed detached with change to spare (  could go up to £210,000 on OP formula) overlooking fields and woodland says  it all about the local housing Market really. In spite of being a wealthy area with zero unemployment houses prices have gone nowhere much since 2006.

We need a bit of BTL and immigration to bring us up to date with things. One reason I tend to stick to the Stock market and Off Topic these days, because trying to discern a change in prices in my area is about as interesting as watching paint dry for the last 11 years. Incidentally Astra Zeneca shares have risen by more today than houses prices in my area have in the last 11 years. I think we need a bit help from Cambridge to say where it is all going wrong.

 

http://www.rightmove.co.uk/property-for-sale/property-45209160.html

Edited May 12, 2017 by crashmonitor