all right all those predicting a crash, how about today's headline "houses to cost 10x salary"?

[RanToTheHills]

Discuss.
What do you reckon then?

Having followed some of the house price threads on here, was interested to see today's headline. It fits in wiht my view that although house prices are inflated, a a dire shortage of housing will continue to drive up prices in hte medium/long-term.

Could do wiht the reassurance as about to take on a huge mortgage!

My impression is that this huge boom is being perpetuated by people riding the wave of their huge tax free windfalls. I am very and I just wonder if and when it will ever end.

Of course it will TM, our borrowings will go up.

UCM - I work for my local authority. We put no pressure on anyone to give up a family home, but offer financial incentives to anyone prepared to downsize. That seems like a fair compromise.

I don't want to be controversial, but a council house can't really be a family home forever can it once most of the family has left? They are there to serve a purpose, to give people somewhere to live who can't afford a home in any other way, so I think it IS fair that they go to the people who need them the most.

average salary here is close to 12K, and I would say average hous privce is about £120K I earn an average proffessional salary but I kow very few people in my town who earn what I do.

I agree with people leaving their homes to give way to others. Sadly in London, it means leaving your home to people who you don't necessarily want to have it. I can't help it. They can't help it. But, in London it happens.

Personally I don't care anymore as I don't live there.

Twinklemegan - if you rent a council house you have a secure tenancy so no one can make you leave if you abide by the terms of the tenancy agreement and pay the rent.

That's the massive difference between council housing and housing associations and the private rented sector.

For a lot of people, the only way to get on the ladder is to use the key worker scheme now.

I have been looking for a house and it's very rare to get a 3 bed house for less than 250k, and if any appear, they get snapped up within days.

From what I can see, the more expensive houses £500k+ are taking longer to come off of the market

Is that right though? For example, if you're in a council house and your circumstances become such that you could afford a private rent shouldn't you be expected to give up the council house to someone who really needs it? I know I'm making huge generalisations, but I see so many people round here who live on the council estate and have shedloads of disposable income, affording things I can only dream of. Yet I wouldn't be eligible for a council house.

Twinklemegan - it's preferable to selling them off at huge discounts! Where I work hardly any houses have been sold since the discount was capped at £34K.

OK, didn't quite think through that post. Obviously I didn't mean along the lines of means testing people year on year - that would be stupid. But similarly, there should be a mechanism so that people can't hang onto them forever if they don't need them.

Fortyplus - I do really disagree with selling them off as well. Especially when people can then cash in on it big time - that just doesn't seem fair to me (perhaps it's the green-eyed monster again though).

That's a hard one, though. People living in council housing who become able to afford to buy will do so and give up the tenancy, but why would anyone move to private rented when they can be evicted with a month's notice?

But then there are people like me who were forced to live in private rented because I was so far down the list of priorities for council housing I fell off the bottom.

Edam I am a journalist, not a great one, but people pay me to write things. I know what they are paid, and my nanny gets more than that.
I assume I'm smarter than you because of what you say, though you may for some reason have tricked me into believing you're dumb. You can call that victory if you like.

Motherinferior, I used the term "business", not "economics" correspondent.

Squiffy, it is the case mostly that supply equals demand. That is because price varies to make it so. If having a 2nd home cost nothing, people will go for that. Some people have 3 or even more because they can afford it.

What I was saying is that it's extravagantly unlikely for average house prices to get beyond 6 times average earnings, except in one pathological case.

The "X times salary" is a snapshot of your mortgage vs debt. If we were again to have very high inflation, then you'd be paying off fixed nominal debt with earnings that will usually track this inflation.

I disagree DC, I know that you don't think that I have a brain, but.

People have to be earning a certain amount before they can buy. Lots of the buy to let people are about to find out that their rent is going to go up soon. But their tennants will go back to people who are not buying to let, they will be back at the developers who understand the fall & rise in the market.

I expect to see a huge amount of rentals on the Market around, August.

The average property where I live already exceeds 10x average salary - by virtue of the simple fact that very few single people can afford to buy - therefore the mortgage is a multiple of 2 salaries, not one.

I thought you'd be bright enough to work that one out, DC.

The 10 x average salary figure is just a very crude calculation e.g. average salary is £22 000, average house price is £220 000, therefore 220 000 divided by 22 000 is 10. But obviously this situation would only apply to first time buyers with no deposit. We've recently bought a house that cost 6 x my husband's salary but because we bought our first house years ago before house prices rocketed, we had a really good deposit for this one and so have only got a mortgage of about 2 x salary and I suspect this is what is happening in a lot of places where to a casual observer, house prices must be unaffordable (and let's not forget that some people are using all their salary for the mortgage and are relying on their credit cards for everyday living)

In places like the West Country, all it takes is for a few people to buy second homes at overinflated prices and price increases will ripple upwards because those people selling will then be able to afford more etc and at that point locals on small static salaries with no deposit stand no chance. I'm starting to think that the Welsh nationalists burning holiday cottages in the 80s may have had a point.

All this 10x (or 6x or whatever) average salary stuff seems to leave out the fact that we all need money for more than a mortgage alone. Call me extravagant but I like to eat, be clothed, provide for my children and have a few creature comforts. I also have bills to pay, even though I'd obviously rather not pay them. We all do. Whoever comes up with this stuff is either too wealthy to have a clue about how most of us live, or just bored and fancied stirring up as hornets nest.
I mean originally, not on mumsnet, btw.

Like some one else has said, it already is 10x round here. Most people I know earn about 10-12K from their full time job and support a family on that, its a terribly paid area. The main reason its so expensive where i live, i think, is because 10 years ago their were lots of small 2 up 2 down cottages that were about 40 or 50K now they are about £170k and mostly belong to second home owners or are holiday cottages. Its removed those little cheap houses that were traditionally first homes, so there is little we can do, locals can always be topped by outsiders coming in from other parts of the country.

I don't expect to own a house at any point.

Twinklemegan, that was our plan. We were renting privately when I became pregnant with dts (now age 5 1/2.) We managed, thanks to a sympathetic housing officer who wanted to give her brand new allotted houses to families who would look after them, to get a housing association property. The council simply weren't interested.

Our plan was to rent and look for a house to buy, well, of course the prices rocketed so far out of our reach in such a short time that we are now stuck.

Who decides who needs social housing? There are plenty of single people/old people living in 3 and 4 bedroom houses, their families buy it "for them" and that is that. We desperately want to move but there you go.

And about those who look forward to inheriting their parents house. Fair enough, you will have that money but if all houses are stupid prices you will be no better off. It has all become about greed, honestly you would think the Tories were in power, Thatcher would be proud of how Britain turned out under Blair.

Ah, perhaps your risk attitude is important too. I always happy to take huge risk. We had very big borrowings when rates went up to 8% (and then briefly 12%). When we moved here we took on a massive mortgage. But some people can't live with risk so it's partly a mental thing too I suppose.

On wages in some regions people don't realise how low average pay is in places like Devon. They move there (those that don't live there already) thinking the countryside looks great but they don't realise how they might really actually be damaging their children's employment prospect, life hopes etc. In other words your move might please you but shoot to pieces the children's hopes of buying somewhere, whereas staying where the jobs are and jobs which will enable children to buy places can help the children.

To me the problem with the regions isn't just lower pay, it's what happens if your job goes away. That may involve another move to try and get another, or taking a worse job.
Also in the modern world where women are much more likely to work in a "proper job", which is harder to swap, moving to deal with the employment issues of one partner can be painful, and not without stress.

I know that children can move out of Devon to find work but they may not want to as all their school friends are leaving school at 16 or 18 to take the £12k a year jobs etc. They are bound to want to do what the others do.

May be we need to get the mentality back of my grandfather's day. In the 1901 census he is shown as living in a terraced house with 25 other young men aged 16 - 30, all local workers in various trades. Many people never could afford to get married and many men had to put marriage off until they were 40 because they couldn't afford it until then and most people never owned a house.