Household Income compared House Value, with Age

[Seav]

Bit of a nosy question (I'm not asking for exact figures though) for home owners:

What number do you come up with when you divide the approx. value of your home by your current household income (ignoring how much is equity/mortgage)? What is your age/average age of the homeowners?

Ours comes out as 3.0 (and could be as low as 2.5 if I go with a more conservative house price estimate and upper end of income fluctuation) with an average age of 46.

I was thinking that it was a fairly low figure for our age (3.0) i.e. our house is worth less than you would expect for people of our age and income - just wondered where we fitted in? Obviously, how much actual equity you have/how much has come from family help/inheritance and other factors play a part but...ignoring all of that for now...

14
But it doesn't really mean anything does it

I could have salary of £100k and a house for 1.4m
Or 10k and £140k

Er - value/income = 5. Equity/income = 4ish. Not sure what that really tells you tbh other than we have a lot of equity!

This is a meaningless calculation.

Mine is 8.69 we are both 50.
Not sure what this means though.

I agree - the number needs a lot of other information to have real meaning! Just interested in what the average seemed to look like - probably more suited to chat that money - sorry!

I've found it interesting anyway, especially the number for those around the same age as us - thank you.

We are mortgage free so the 2.5 - 3 is obviously the same for house value and equity. If we put all our savings into a house and got the max mortgage we could over 13 years (until oldest is 60) then the absolute max we could 'afford' to get to would be 8.

I guess Warren Buffett's could be something like 0.00000001...or less!

Ours is about 1.3. Cheap ex miner's terrace in the NE, paid off long ago, though. We're in our 40s, but it's DH's first house and I started again after divorcing someone who ran up huge debts.

Vera - to me 14 is a fairly high multiple (for my age) in both of your examples. The actual values skew the perception slightly but not by that much.

We didn't have any family help to get on the property ladder and no inheritances. We bought when property was still relatively affordable, extended rather than moved and didn't bother moving up the ladder income increased. Can clearly see with hindsight where we could've been more savvy but no regrets.

It is clear from various comments I've had over the last few years that some people (acquaintances/neighbours/salespeople) to do make assumptions based on age (for those not yet retired or in semi retirement job) and the house you live in - I don't mean just about us but other people (within a small town range).

2.2.average age 49

i think you have the bones of an interesting question in your head - if you want to torture yourself comparing, never compare! - but I agree with others, it's equity divided by income over age that would give a clearer picture.

Yes - it would but people don't know your equity (unless you tell them) - just your approx. house value. The original thought wasn't about comparing how well someone is doing financially compared to someone else. It was about perceptions and really how much of a wide range there must be in reality due to a whole host of reasons.

I am usually a bit surprised (both that they made it and said it out loud!) when people have made financial statements to me based upon their assumptions of mine and others incomes - purely taken (well I assume!) by approx. house value . I guess I shouldn't be because I clearly do the same, although with a wider range (now realised it was 2 - 8 without significant inheritances or exceptionally high incomes/net worth in areas that haven't had extreme house price rises like London)...but up until now keep that to myself.

Our house value/equity is only about 25% of our net worth (well over 50% of our net worth is in pension savings) so even looking at equity vs income would be tricky to use to compare too.

oh right, so you're focusing on appearances? I don't mean that as a dig! it's just interesting that that's the angle you ran with. I know others might perceive me to be poor in a tiny house that probably has a rented glow off it :-p but I'm single and I 100% own it. So I feel kind of secretly privately financially secure dykwim?

But you can just ASK us here! I know obviously in real life you can't ask people their equity but on this thread you should just ask people their equity divided by income.

Well, if the point was to be nosey , you should just ask for direct figures for
(1) Household Income : 138k
(2) House Value : £750K - no mortgage
(3) Age : Late 40's

6.6 and 31.

However If we based it on what we paid

3.8

Yes - that would be an interesting thread Brog but, no, that wasn't my main interest for this thread.

I only asked because of the [slow] build up of comments that make it clear that people do come to some kind of conclusions. We had a very patronising estate agent when we looked into moving (to a house worth approx. 2 x current house before the work) rather than extending for example. When we looked around the bigger house he was very enthusiastic - when he then came to value ours...very much less so and quite patronising about the jump (despite never discussing budgets, mortgages or incomes with him).

5.5

Avg age 33

In London

Paid ours would be 0.5 and paid + spent (on extensions) 1.2...been here a while!

Direct figures with multiple would be more revealing cloisonne but I can conclude that you have got further up the property ladder compared to income than us with your 5.4 (we earn approx. 30% more but our house is worth approx. 40% less - so we have a multiple of 2.5 ish depending of which figures I use) and our fairly similar ages.

Having said that - I do still agree with the 'pretty meaningless' comments given all the other factors that could be involved. Sorry! I'll slink away now slightly embarrassed .

I'm 40. Do I win?

6 to 8 (range is base salary at low end of income and expected bonus at top end of income). AV age 31.

I'm 40. Do I win?*

YES!

Possibly won't be included in the mean calculation though...I've heard Warren is very nice - so good company in the anomaly lounge though.

1

I'm 40, dh a bit older.

Now this is interesting:

DH 2
Me 23.8

6.3x

Currently about 2, but soon to be nearer 5.6 as we buy our 'forever home'. We bought at about 3.5 and have been constantly overpaying on this house, in an attempt to get a good deposit for the next one.

It is interesting, that people often assume we're not very well off (also drive an older car, as we only use it for recreation, so an easy place to save at the moment. We also haven't had any big holidays recently, as neither eDH or I fancied doing them with very young children. I know many of my 'mummy' friends were very surprised when I told them which house we were buying - they all seemed to think it'd be way beyond our means.

3.2 average age of 30.

North West.

One SAHP one income of 43k.

Multiples in double digits are terrifying to me.