JSA, Income Support, ESA and Child benefit all to be CUT

[Cyclone]

I mean cost. As in how much it costs to buy. Asking price doesn't matter, what people actually pay (commonly know as the cost) does.

 

I think you missed what I was getting at though. The cost (how much it costs to buy a house) on average, compared with the average income.

 

There is a long term average, at the moment house prices are still above it, but they are slowly normalising. It's taking quite a while, because whilst house prices are pretty flat, so is wage inflation.

 

The long term average btw is approx 4*. Ie the average house costs 4* the average wage (on average over many years). At the moment it's still up at 5* or 5.5*, putting them out of reach of many.

[I1L2T3]

I mean cost. As in how much it costs to buy. Asking price doesn't matter, what people actually pay (commonly know as the cost) does.

 

I think you missed what I was getting at though. The cost (how much it costs to buy a house) on average, compared with the average income.

 

There is a long term average, at the moment house prices are still above it, but they are slowly normalising. It's taking quite a while, because whilst house prices are pretty flat, so is wage inflation.

 

The long term average btw is approx 4*. Ie the average house costs 4* the average wage (on average over many years). At the moment it's still up at 5* or 5.5*, putting them out of reach of many.

 

Ah, understand better what you mean. There's two barriers really - price and cost.

 

Price like you say is 5+ times average salaries. That is a barrier to entering the market.

 

Costs long term. This is the scary bit for recent entrants. Costs are only ever going to go up in the long term because current interest rates are so low. Only decent wage inflation will counter that but as we can see the government is trying to suppress wages. Long-term costs for recent entrants represent for many a barrier to completion of the mortgage term IMO.

[Cyclone]

I'm not convinced that the cost of buying a house will continue to rise in real terms. It's been falling slowly since 2007. It would fall quicker if the rest of the economy was inflating a little bit quicker (but this is held back by the historically low interest rate).

Even so, the house value to average income multiple is slowly coming back down towards it's long term average, which is a good thing.

[I1L2T3]

I mean cost. As in how much it costs to buy. Asking price doesn't matter, what people actually pay (commonly know as the cost) does.

 

I think you missed what I was getting at though. The cost (how much it costs to buy a house) on average, compared with the average income.

 

There is a long term average, at the moment house prices are still above it, but they are slowly normalising. It's taking quite a while, because whilst house prices are pretty flat, so is wage inflation.

 

The long term average btw is approx 4*. Ie the average house costs 4* the average wage (on average over many years). At the moment it's still up at 5* or 5.5*, putting them out of reach of many.

 

Hopefully costs will continue to fall. Hopefully it'll never come to this again.

[WeX]

Hopefully costs will continue to fall. Hopefully it'll never come to this again.

 

costs will rise again as we have a shortage of supply. successive governments have artificially restricted supply to insure the cost of land and housing remains high, benefiting them and their mates.

[maxmaximus]

I mean cost. As in how much it costs to buy. Asking price doesn't matter, what people actually pay (commonly know as the cost) does.

 

I think you missed what I was getting at though. The cost (how much it costs to buy a house) on average, compared with the average income.

 

There is a long term average, at the moment house prices are still above it, but they are slowly normalising. It's taking quite a while, because whilst house prices are pretty flat, so is wage inflation.

 

The long term average btw is approx 4*. Ie the average house costs 4* the average wage (on average over many years). At the moment it's still up at 5* or 5.5*, putting them out of reach of many.

 

According to this it'll be a while before they are back to trend.

House prices rise three times faster than wages over a decade

 

From 2001 to 2011 the price of the average home increased by 94%, while wages rose by just 29%, according to the NHF

 

In 2001 the average price of a home in England was £121,769, and the average salary was £16,557. In 2011 the price of the average home was £236,518 – an increase of 94% – while wages had risen by just 29% to £21,330, the National Housing Federation said.

 

I bought my first house at age 21, my kids couldn't hope to buy that house now even though they have much better jobs than I had. For them to afford the first house I bought, I would say wages need to double or house prices fall by half.

My first house is valued at six times their income and it was three times my income 30 years ago.

[L00b]

According to this it'll be a while before they are back to trend.

If Ireland is anything to go by (and I tend to believe it is, for the UK market), considering it's taken a good 4 years there for the 'market adjustment' to start properly (and which is starting from a much higher differential relative to the UK, in admittedly a much worse economy), probably 8 years for the UK (allowing for market/population scaling effect)...if we're still not out of the woods by then.

 

That's dead-reckoning by my tea leaves-powered crystall ball, though, so obligatory pinch of salt and all that.

[woodmally]

Is it just me or have people noticed that a lot of the benefits are towards people with kids. With population of 62 billion and rising (some say its nearer 7bn). Why should people like us who choose not to have children pay for those that do. Surely reducing the population should be encouraged rather than procreation.

[truman]

If Ireland is anything to go by (and I tend to believe it is, for the UK market), considering it's taken a good 4 years there for the 'market adjustment' to start properly (and which is starting from a much higher differential relative to the UK, in admittedly a much worse economy), probably 8 years for the UK (allowing for market/population scaling effect)...if we're still not out of the woods by then.

 

That's dead-reckoning by my tea leaves-powered crystall ball, though, so obligatory pinch of salt and all that.

 

Did we have the big building boom that Ireland experienced as a "Celtic Tiger"? ..I thought the issue in the UK was one of short supply..

[L00b]

Is it just me or have people noticed that a lot of the benefits are towards people with kids.

As a recent opt-out of child benefit (on behalf of my stay-at-home wife), allow me to put your mind at ease: it's just you!

 

(joke )

 

Did we have the big building boom that Ireland experienced as a "Celtic Tiger"? ..I thought the issue in the UK was one of short supply..

Yes. Not as dramatic (because the UK was not starting from as "empty a table" as Ireland was) but, at the national scale, just as sustained. The supply was just as short in Ireland, in fact I dare say more so (particularly because most of the boom stayed in/around Dublin, so further amplified still, and Irish developers were just as smart/shrewd as any other in ramping up land price before laying a single brick...in some cases if and when they ever did, that is. Irish land transaction values in/around Dublin continually broke European (maybe even world-) records in the 00s).

 

I've always tended to see Ireland as a 'micro-UK', wherein socio-politico-economical developments occur very rapidly (because in a microcosm), but which are (and their consequences) entirely comparable to what socio-politico-economical developments occur in the UK (over a longer term, due to the difference of scale). If it wasn't for the (now quite important) €-club variable throwing a large-ish spanner in the comparison, it would really be a case of same issues, same causes, same effects (higher boom, lower bust, faster transitions in Ireland).