Saturday, May 24, 2014

House prices to earnings

The house prices-to-salaries map which shows why you may never get a mortgage

This is a great. A map of the UK showing house prices to earnings since 1999. Average house price in Kensington and Chelsea now 32.4 times earnings!

Posted by frizzers @ 11:37 AM (3157 views)
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3 thoughts on “House prices to earnings

  • britishblue says:

    Great find. I like the interactive bit where you can stop it on a year. So in 1997 there were parts of London where you could buy a house for less than 3x everage earnings. Where i live in Kingston it has gone from 4.8 x to 11.9 x. in 2013. But that is based on 2103 figures, so it is probably more like 14x now..Amazing results considering we hit the great depression bang in the middle of this and the standard of living has dropped in the last 5 years. There is an argument to say that we have been in a bubble since 2003 and people have got so used to this bubble, like they are now doing with cheap credit, that it no longer feels like a bubble for most, becuase it is normal

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  • britishblue says:

    sorry based on 2013 figures not 2103

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  • bidin'matime says:

    BB – “There is an argument to say that we have been in a bubble since 2003 and people have got so used to this bubble … that it no longer feels like a bubble..” Precisely. If we go back to the graph (see Lifecycle of a bubble) we are in the ‘return to normal’ phase.

    We’ve reached the point where housing is being bought at wafer-thin borrowing costs (whether by owner-occupiers or BTL) and using up almost every spare penny the resident (whether the owner or the tenant) has in order to live there – so that it will only take a small rise in interest rates or a small rise in other living costs (relative to incomes) to bring the whole lot tumbling down. Obviously the government and BoE hope that they can keep the lid on it until incomes rise, but it’s now so unstable, that the chances are slim.

    And when people tell me I’ve been saying there’s a bubble for nearly 10 years now, I point out that just because the bubble has been successfully inflated further without popping, it doesn’t mean it’s less likely to pop now.

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