Monday, May 18, 2009
Why house prices are still way too high
Household income
Nothing new here, but a very good chart that shows household income in quintile groups. The bottom two quintiles comprise people in social housing and pensioners who can get by on a low income because their houses are paid for; but look at the middle sector - the third quintile. These are the 20% of households for whom houses must be affordable to buy; for whom 20% of our housing stock must be readily affordable. These are people who need housing that costs no more than £75k. Try looking to see what percentage of homes for sale cost less than that..
Posted by uncle tom @ 07:56 PM (784 views)
2 thoughts on “Why house prices are still way too high”
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Fildi101 says:
So, using a generous multiple of 4 times household (i.e. combined) income, and an equally generous 20% deposit, and even assuming the buyer gets to count whichever is larger of their pre- or post-tax/benefit income….. then the average mortgage, and house price affordable are :-
Bottom – 60k mortgage, 75k house
2nd – 80k mortgage, 100k house
3rd – 96k mortgage, 120k house
4th – 152k mortgage 190k house
Top – 292k mortgage 364k house
In the real world, is it really only the top 20% who’ve paid over 200k for a house?
uncle tom says:
– don’t forget that not everyone borrows to the max – some high earners choose to live in smaller properties