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!

I just think there has to be a way back for the average working family to be able to afford a decent home

Noddyholder. I think many of us have grown up with the idea of near universal homeownership. And there was a post war strategy to make home ownership more widely spread. But it may have just been a historical blip. I think that there used to be long term rental before that for many many so called average families. But then I think people used to be able to rent under much more favourable terms than they can now.

Nothing is certain except death and taxes, The market goes up and down. I remember the day rates went from I think 8% to 12%. In some ways with the "low" rates you lot are paying you have never had it so good. I was just reading my mother's diary I had typed up from 1974. Food prices went up 100% in that year. Dreadful dreadful times. I remember tax rates over 80% in this country. We are now in a fairly stable easy situation here. We don't have so many out of work as we used to have or anything like that. But we certainly have had rising house prices. In 1983 we found it hard to buy too.

When we had negative equity in the last crash we could continue to pay the mortgage so it didn't matter except psychologially.

But inflation used to be our saviour. You'd buy at one price, wages and prices going up 10% a year, compound all that and a high price and high mortgage mattered not. Also couple that with jobs like mine when you can end up earning 10x what you start on over 20 years and you don't fear high temporary debt.

In today's Times (p23) it says in about 1913 10% of people owned their own home and there was virtually no council housing. In the Edwardian period house prices crashed by 40% and rents did not rise. in London average middle class family would spend 5 - 15% of their income on rent. Then in 1915 rents were controlled so good landlords stopped renting out properties and rented property became the awful badly upkept stock only. Landlords sold houses to sitting tenants etc.

In 1928 there were 500,000 borrowers and 1.4m in 1939. By 1939 a third of houses were under home ownership. The article ends with since "1945 house price inflation has been the single biggest source of the increasing wealth of the middle classes. How otherwise would have it become our national obsession".

People who have 'grown up' with the idea of near-universal home ownership are presumably younger than me. As it was Thatcher who brought that one in. Before her regime, young working or lower-middle class couples would put their name down on the council waiting list. They could reasonably expect to get a secure tenancy in the medium term so they were able to raise a family without having to move every six months or live in sub-standard accommodation. (At least where I grew up, in West/South Yorkshire, don't know about cities.)

Since Maggie sold off council housing and banned councils from building new, we have an entirely predictable housing crisis. Forcing the price of homes up. Add in changes in tenancy laws so tenants are at the whim of landlords every six months, foreign tax exiles buying in London (did you know this country now classifies as a tax haven because Russian billionaires and so on don't have to pay UK tax?) and developers sitting on vast land banks with planning permission that they ain't developing, and you have too many people chasing too many homes. And a buggered economy because people can't easily move to where the jobs are. And people are getting into serious debt because the value of their home makes them feel rich. And buying lots of imported goods for the same reason.

Xenia - where did you get that information about an Edwardian period property crash?

NKF it's in the Times article today but does not give a source.
edam, may be but if what the Times says is right until about 1914 we didn't have social provided housing except in a very few areas so we got people like my grandfather in 1901 living in a house with 25 other young men presumably all earning very low wages. They were things like "draper's assistant". By about 1928 when my father was born his father who did very well for himself, sold horses, ran an estate agent's and auctions, had bought a house. I would guess my mother's family rented from private landlords as they weren't so well off. Go back to the 1840s and some my relatives were escaping starvation in Ireland and presumably would be lucky to have any sort of room over their head and were grateful they had food.

So it looks like we had private rented housing as the univeral provision just about and people like the Rowntrees and others building a few model villages for their employees until 1918 or more likely 1945 when we started all that council house building and provision when socialism took off in this country. A very very short period then of rent controls and social housing. Most of the time we've had people renting on a "free market" from private landlords.

Xenia - sorry, was there a link? I'm researching something similar at the moment and it would be interesting to see it.

If the link works
www.timesonline.co.uk/tol/comment/columnists/graham_s tewart/article1906626.ece
Otherwise look on the Times web site searching "Homeowners of 1945" which is in the heading.

In my mother's diary I was looking at today she is writing in 1974 about the huge property prices, inflation (food doubling in a year in price) etc. and she mentions a neighbour's house going for £74,000 (it is a wonderful house with land, near the city centre). My parent's house 2 doors up which is also detached but much smaller was bought in 1961 for £6000 which was a huge amount to them then and they had to wait until they'd been married about 13 years to buy anything.

Thanks.

I'm not aware of the Edwardian property crash either. There were some glitches mid Victorian, but were caused by a global trend, not a local bubble.

Not sure about Edwardian price crash, but it's a fact that in the early 20th century a 3 bed semi cost around £2000. Very few houses were built between 1914 and 1920, then there was a gradual increase followed by a building boom in the 1930s, which led to the price of a new 3 bed semi falling to around £600 - £800.

An Edwardian 3 bed semi wasn't worh £2000 in Herts until the late fifties. Imagine that - pay £2000 for it in 1910 and it won't be worth that sum for another 60 years!

Oops! 50 years not 60

During the depression there was deflation on the prices of many things. It's not obvious, but it does seem that deflation is much more economically. painful than inflation

The fact is that 10* salary is wholly unreasonable. House prices will have to either plateau or fall soon, as the alternative is far worse for the UK as a whole.

I've heard of second homes in Wales being torched by angry locals, and I can see this scenario being repeated across Britain if things don't improve. I've heard the area of land in land banks across the South East totals 700,000 acres; mass trespass/caravan squat anyone?

If thing don't get sensible, where's the point? I get to pay tution fees, student loan, stupid mortgage, my pension, higher taxes for all the baby boom pensioners who never got a pension or had it eaten by Maxwell, more council tax (pensions again)... there comes a time when you start looking around for what other countries have to offer because a 50 year treadmill of continual stress and overtime is not what I want.