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In one episode set in 1941 the rent for a house was £1 per week.

According to the bank of england inflation calculator that is £51 per week. 

A) Is that true?

B') If A is true - then why has it gone up so much?  I doubt there are many places on the south coast where a house costs £220 pcm today.

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Great series

Beer was probably 2 old pennies

I will have to check next time I watch it what other prices were.

 

 

b) Bretton Woods - we came off the gold standard, fiat currency isn’t pegged to anything other than confidence and central banks have been printing like billy-o pumping up asset prices.

Although rent is an asset price so shouldn't it go up with inflation?  Or is it because rent goes up with affordability rather than inflation.  I.e if tomorrow all food prices tripled rents should start going down?

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Oh the temptation to announce "werrrrrrrre dooooomed". Obviously I shouldn't, as I'm not Scottish so that's cultural appropriation 😒  I presume though transport, heating and food was a higher proportion of your weekly spend back then.

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Oh the temptation to announce "werrrrrrrre dooooomed". Obviously I shouldn't, as I'm not Scottish so that's cultural appropriation 😒  I presume though transport, heating and food was a higher proportion of your weekly spend back then.

I think you are probably right.  I can't remember other figures from the programme.

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In one episode set in 1941 the rent for a house was £1 per week.

According to the bank of england inflation calculator that is £51 per week. 

A) Is that true?

B') If A is true - then why has it gone up so much?  I doubt there are many places on the south coast where a house costs £220 pcm today.

Yes, it's true.

Ramsey McDonald built our way out of the Great Depression (all those nice 1930s semis). I'm not sure if the National Government at the time directly financed any of the buildings (although they did clear slums and replace those with new stock), but there was very little land use legislation. There were also still rent controls and a huge surplus of labour (nearly a million in the building trade back then, struggling for work).

Those houses would have cost less than 50K to buy as well.

 

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For a fair comparison you would have to look at average incomes back then.

I suspect that rents have indeed outstripped inflation, but then so have average incomes.

But we can't find historic average incomes anymore.  I'm sure when this internet thingy was young a decade or two back, we would have easily found out some stats on average incomes in deep time.  Not now though.

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also depends how you calculate inflation as for the last 10-15 years the official figures are heavily manipulated down. You would have to somehow get the real rate of inflation and work it out from that, perhaps using wages vs electricity prices for example.

very hard to compare a period that long ago (before time began) to modern day.



 

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I will have to check next time I watch it what other prices were.

 

Although rent is an asset price so shouldn't it go up with inflation?  Or is it because rent goes up with affordability rather than inflation.  I.e if tomorrow all food prices tripled rents should start going down?

Rents will always rise and fall with the maximum the local market can bare long term. I BR income tax was slashed to 10% next week, within a year house prices and monthly rents would rise to absorb this extra income, as you couldn't say you didnt have it. And all landlords would be the same so you would be paying some degree of higher rent rise. 

Buying wouldn't help, house prices would rise by the same amount that the monthly payments on a mortgage could be paid with this extra money saved from tax. 

If BR tax doubled to 40% , the opposite would happen, rents and house prices would fall to account for the loss of monthly income.

Without a Land Value Tax the local market monthly rents and house prices will always rise and fall with incomes. 

This is how the world works, without LVT or rent controls.

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also depends how you calculate inflation as for the last 10-15 years the official figures are heavily manipulated down. You would have to somehow get the real rate of inflation and work it out from that, perhaps using wages vs electricity prices for example.

very hard to compare a period that long ago (before time began) to modern day.



 

I know the average wage for people my dad employed in the 40s was about a fiver a week. Old money of course.

That's about £300 a week in today's money.

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Rents will always rise and fall with the maximum the local market can bare long term.

There's one thing missing from your analysis and that is demand.  

so, population pressure, and foreigners buying UK housing as an investment, would have been far less back then.

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In one episode set in 1941 the rent for a house was £1 per week.

According to the bank of england inflation calculator that is £51 per week. 

A) Is that true?

I think we should bear in mind this could be a figure plucked out the air by the scriptwriters.  There is no reason to think £1 a week is any more than a number that would sound more or less correct to the average viewer, bearing in mind there would've been viewers who would have memories of 1941 still alive in the 1970's.  It is a suspiciously round figure for one thing.

Also, towns on the south coast would've been very different to today.   I doubt there were high level jobs, if you were working class you probably worked on a farm.  And of course there was a war on, which must've distorted things a bit.

 

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There's one thing missing from your analysis and that is demand.  

so, population pressure, and foreigners buying UK housing as an investment, would have been far less back then.

Yep, falling supply and ever rising demand, means prices go one way, up!  And if the supply can never be increased, and will only ever fall forever, until supply is zero moving forward, then prices really rise as any increase in demand pushes price up. 

Bitcoin. 

 

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I think we should bear in mind this could be a figure plucked out the air by the scriptwriters.  There is no reason to think £1 a week is any more than a number that would sound more or less correct to the average viewer, bearing in mind there would've been viewers who would have memories of 1941 still alive in the 1970's.  It is a suspiciously round figure for one thing.

Also, towns on the south coast would've been very different to today.   I doubt there were high level jobs, if you were working class you probably worked on a farm.  And of course there was a war on, which must've distorted things a bit.

 

True good point.  Saying that one of the writers was a young man in the 40s.  (Depends on his memory of course).

 

 

There's one thing missing from your analysis and that is demand.  

so, population pressure, and foreigners buying UK housing as an investment, would have been far less back then.

Good point, also benefits push them up rents.

 

 

Rents will always rise and fall with the maximum the local market can bare long term. I BR income tax was slashed to 10% next week, within a year house prices and monthly rents would rise to absorb this extra income, as you couldn't say you didnt have it. And all landlords would be the same so you would be paying some degree of higher rent rise. 

Buying wouldn't help, house prices would rise by the same amount that the monthly payments on a mortgage could be paid with this extra money saved from tax. 

If BR tax doubled to 40% , the opposite would happen, rents and house prices would fall to account for the loss of monthly income.

Without a Land Value Tax the local market monthly rents and house prices will always rise and fall with incomes. 

This is how the world works, without LVT or rent controls.

True

 

 

I know the average wage for people my dad employed in the 40s was about a fiver a week. Old money of course.

That's about £300 a week in today's money.

Interesting but where was this though and doing what?

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I know the average wage for people my dad employed in the 40s was about a fiver a week. Old money of course.

That's about £300 a week in today's money.

Thanks for this, we have to rely on personal memories because Google won't tell us stuff like this.

£5 is £254 using the BoE calculator, 1941 to 2019.  The £1 rent is £50.86 corrected by the same inflation factor.

So that rent was roughly 20% of gross income.

Median income is supposedly about £29k these days, 20% of that is £483 a month.

I guess that is cheap on the south coast these days, but you can rent a house in Lancashire for that.

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Thanks for this, we have to rely on personal memories because Google won't tell us stuff like this.

£5 is £254 using the BoE calculator, 1941 to 2019.  The £1 rent is £50.86 corrected by the same inflation factor.

So that rent was roughly 20% of gross income.

Median income is supposedly about £29k these days, 20% of that is £483 a month.

I guess that is cheap on the south coast these days, but you can rent a house in Lancashire for that.

I would guess the data on wages in the past exists - just hard to find.

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I would guess the data on wages in the past exists - just hard to find.

Undoubtedly it exists but they don't want us to know such things.

You cannot even find a fully reliable source for what the tax and national insurance rates were back in the 1970's.  And that is within living memory.

I have a friend who used to research stuff like this for his website.  He says there was a fundamental change some years back.  Everything now is based on surveys, whereas back in the day, the stats were actual hard numbers from the relevant government departments or agencies.  So he gave up.

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Undoubtedly it exists but they don't want us to know such things.

You cannot even find a fully reliable source for what the tax and national insurance rates were back in the 1970's.  And that is within living memory.

I have a friend who used to research stuff like this for his website.  He says there was a fundamental change some years back.  Everything now is based on surveys, whereas back in the day, the stats were actual hard numbers from the relevant government departments or agencies.  So he gave up.

Seriously?  That is awful.  

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Rents will always rise and fall with the maximum the local market can bare long term. I BR income tax was slashed to 10% next week, within a year house prices and monthly rents would rise to absorb this extra income, as you couldn't say you didnt have it. And all landlords would be the same so you would be paying some degree of higher rent rise. 

Buying wouldn't help, house prices would rise by the same amount that the monthly payments on a mortgage could be paid with this extra money saved from tax. 

If BR tax doubled to 40% , the opposite would happen, rents and house prices would fall to account for the loss of monthly income.

Without a Land Value Tax the local market monthly rents and house prices will always rise and fall with incomes. 

This is how the world works, without LVT or rent controls.

This is only true if you have conditions of scarcity and competitive bidding for housing.   I can understand why you are making this assumption as in most parts of the UK this is all people have ever known given the deliberate mechanisms in place to boost occupational demand and restrict supply.

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This is only true if you have conditions of scarcity and competitive bidding for housing.   I can understand why you are making this assumption as in most parts of the UK this is all people have ever known given the deliberate mechanisms in place to boost occupational demand and restrict supply.

Your scarcity is someone else's lack of oversupply. Makes little sense to have more houses than are needed. And desirable places will always remain scarce (a good way of killing the desirability is to feck the place up by building more).

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This is only true if you have conditions of scarcity and competitive bidding for housing.   I can understand why you are making this assumption as in most parts of the UK this is all people have ever known given the deliberate mechanisms in place to boost occupational demand and restrict supply.

Which is why often, old "unused" housing stock is demolished back to land, to keep supply just behind demand. 

Northern housing stock must be slightly in the oversupply phase long term if prices have been stable for a few decades. Not the case in the Midlands / South. 

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