Two Examples Of What High Cost Of Living Means In Hard Cash Terms

[stratocaster]

A mortgage monthly repayment 12 months ago was 989 pounds per week. This month repayment was 1,690 pounds. That is for a 300,000 pound house slightly up from the 225,000 average UK price.

Yearly motor car insurance 12 months ago 438 pounds, this month 657 pounds for a Dacia Jogger the cheapest seven seater in the UK.

My niece has a maximum no claims bonus, clean license, and pays 2,345 pounds for a 4 year old Audi TT up from last renewal of 1,766 pounds.

 

 

[sqwakvfr]

9 minutes ago, stratocaster said:

A mortgage monthly repayment 12 months ago was 989 pounds per week. This month repayment was 1,690 pounds. That is for a 300,000 pound house slightly up from the 225,000 average UK price.

Yearly motor car insurance 12 months ago 438 pounds, this month 657 pounds for a Dacia Jogger the cheapest seven seater in the UK.

My niece has a maximum no claims bonus, clean license, and pays 2,345 pounds for a 4 year old Audi TT up from last renewal of 1,766 pounds.

 

 

That’s tough from where I come from 300K won’t get you a house or a condo.  It’s tough oll over.  Even getting homeowners or even auto insurance from my home state is difficult because some insurance companies have stopped writing new policies.  

[BritManToo]

37 minutes ago, stratocaster said:

This month repayment was 1,690 pounds. That is for a 300,000 pound house slightly up from the 225,000 average UK price.

My mortgage repayment is 10kbht (225 pounds), and I bet it's a nicer house (3bed overlooking countryside). Prices for housing in the UK are crazy.

 

Did I mention the car insurance on my pickup is 500bht (12 pounds).

Edited July 25, 2023 by BritManToo

[stoner]

was reading this morning that the average price of a toronto home is now over 1.5 million cad. so in real money like 1.2 or so usd.

[youreavinalaff]

3 hours ago, stratocaster said:

A mortgage monthly repayment 12 months ago was 989 pounds per week. This month repayment was 1,690 pounds. That is for a 300,000 pound house slightly up from the 225,000 average UK price.

Yearly motor car insurance 12 months ago 438 pounds, this month 657 pounds for a Dacia Jogger the cheapest seven seater in the UK.

My niece has a maximum no claims bonus, clean license, and pays 2,345 pounds for a 4 year old Audi TT up from last renewal of 1,766 pounds.

 

 

To have borrowed £300000 the borrowers would need an income of £75000, unless they thought it was all easy, interest rates would stay low forever and talked the lender into letting them borrow more than 4x salary. Stupid if so.

 

A monthly salary, take home, on £75000 is circa £5000. So, new mortgage payments are less than 30% of income.

 

In 1989, my girlfriend and I were paying over 15% interest and over 50% of our salary went on the mortgage. 

 

Nothing to see here. 

[topt]

6 hours ago, BritManToo said:

Did I mention the car insurance on my pickup is 500bht (12 pounds).

I take it this is the govt. compulsory?

[RayC]

7 hours ago, youreavinalaff said:

To have borrowed £300000 the borrowers would need an income of £75000, unless they thought it was all easy, interest rates would stay low forever and talked the lender into letting them borrow more than 4x salary. Stupid if so.

 

A monthly salary, take home, on £75000 is circa £5000. So, new mortgage payments are less than 30% of income.

 

In 1989, my girlfriend and I were paying over 15% interest and over 50% of our salary went on the mortgage. 

 

Nothing to see here. 

Given that the average house costs 8.5 times average earnings now compared with 4 times in 1989 - plus the fact that annual rental inflation is currently 4.7% - I'd suggest that there is plenty to see and discuss wrt the UK housing market. 

[youreavinalaff]

7 minutes ago, RayC said:

Given that the average house costs 8.5 times average earnings now compared with 4 times in 1989 - plus the fact that annual rental inflation is currently 4.7% - I'd suggest that there is plenty to see and discuss wrt the UK housing market. 

Really?

 

My most recent purchase, 3 months ago, was priced at 3.8 times our salary.

 

Any couple working 35 hours a week on minimum wage has a choice of 84 properties, from within 10 miles of where I am, at under 4 times what their salary would be.

[RayC]

7 hours ago, youreavinalaff said:

Really?

 

My most recent purchase, 3 months ago, was priced at 3.8 times our salary.

 

Any couple working 35 hours a week on minimum wage has a choice of 84 properties, from within 10 miles of where I am, at under 4 times what their salary would be.

That might well be true but those figures need putting into context e.g. where in the UK are those properties located? 

 

In any event, it doesn't negate my previous comment i.e. that the average house now costs 8.5 times average earnings now.

 

Some more data to support my case. Even the cheapest type of accommodation (flats) cost an average of £230k in the UK. The problem of housing affordability is, of course, even more marked in London. The average price of a flat (not all housing) in the cheapest London borough (Barking and Dagenham) is £250k. The average price for London flats as a whole is £558k. Even in my own borough - Lambeth - gentrified but hardly, Mayfair chic - the average flat will set you back £465k.  UK average rental prices are £1200/ month (London - £2500) and UK average wages are £30k (London - £35k). £30k gives take-home pay of +/£2k/month; £35k gives £2300/month.

 

These figures suggest that outside London 50%+ of average take-home pay goes on rent; in London it  doesn't even cover the rent, so yes really, I'd say that there is plenty to see and discuss when it comes to the UK housing market and that there is an affordability problem for many of the UK population.

[youreavinalaff]

6 hours ago, RayC said:

That might well be true but those figures need putting into context e.g. where in the UK are those properties located? 

 

In any event, it doesn't negate my previous comment i.e. that the average house now costs 8.5 times average earnings now.

 

Some more data to support my case. Even the cheapest type of accommodation (flats) cost an average of £230k in the UK. The problem of housing affordability is, of course, even more marked in London. The average price of a flat (not all housing) in the cheapest London borough (Barking and Dagenham) is £250k. The average price for London flats as a whole is £558k. Even in my own borough - Lambeth - gentrified but hardly, Mayfair chic - the average flat will set you back £465k.  UK average rental prices are £1200/ month (London - £2500) and UK average wages are £30k (London - £35k). £30k gives take-home pay of +/£2k/month; £35k gives £2300/month.

 

These figures suggest that outside London 50%+ of average take-home pay goes on rent; in London it  doesn't even cover the rent, so yes really, I'd say that there is plenty to see and discuss when it comes to the UK housing market and that there is an affordability problem for many of the UK population.

Your figures are high. Too high.

 

I know where you got them from as I've seen them before.

 

Nothing more than propaganda. In the real world those figures just don't fit.

 

London is a big issue, I'll give you that. Then again, most capital cities around the world have the same issues.

[youreavinalaff]

Using average figures distorts the real situation and scares people. Propaganda.

 

I've already explained in my town there are 84 properties within reach of a couple on minimum wage at 3.8 times their salary.

 

Using the same property website, taking the first 50 properties when listed "highest to lowest" and the first 50 when listed "lowest to highest", the average figure is £750k. This mainly due to properties in the affluent area peaking at £2.6 million.

 

Many people seeking housing right now would fall into the first time buyer bracket. Lottery win aside, they are not looking at properties £1m and above. When reporting about those wishing to get on the property ladder, average prices of properties that estate agents describe as "ideal first time buyer properties" should be used.

 

The figures in my home town then go from "average property prices £750k" to "average prices of properties ideal for first time buyers £142k"

 

This is not the most expensive area of UK but far from the cheapest. SW England.

 

 

 

 

[RayC]

1 hour ago, youreavinalaff said:

Your figures are high. Too high.

 

I know where you got them from as I've seen them before.

 

Nothing more than propaganda. In the real world those figures just don't fit.

 

London is a big issue, I'll give you that. Then again, most capital cities around the world have the same issues.

You do not know where I got my figures from because I did not state my sources, yet you confidently pronounce that "Your figures are high. Too high" without offering any explanation other than "They are nothing more than propaganda" and ".. in the real world those figures don't fit".

 

The sources of the data in my previous post were, in fact, ONS; gov.uk and Statistica. I'm sure that these bodies will be interested to know why their figures are wrong and how they can improve their methodologies. I'll leave others to decide whether to give more weight to figures derived from these sources, or from the observations of one person who has a different narrative.

 

Perhaps in your neck of the woods, and in your world, there is no housing affordability problem. Unfortunately, in many other parts of the UK and THE real world, a sizeable number of the population do have a real problem.

 

6 minutes ago, youreavinalaff said:

 

 

 

[youreavinalaff]

12 minutes ago, RayC said:

Perhaps in your neck of the woods, and in your world, there is no housing affordability problem. Unfortunately, in many other parts of the UK and THE real world, a sizeable number of the population do have a real problem.

I don't recall saying there weren't problems.

 

I did point out that mortgage payments being 30% of salary, as in the example, is nothing new.

 

I also pointed out that using average house prices exaggerates the issues faced by first time buyers, who are those most likely to be facing decisions about what they can and can't afford to buy.

[RayC]

1 hour ago, youreavinalaff said:

Using average figures distorts the real situation and scares people. Propaganda.

 

I've already explained in my town there are 84 properties within reach of a couple on minimum wage at 3.8 times their salary.

 

Using the same property website, taking the first 50 properties when listed "highest to lowest" and the first 50 when listed "lowest to highest", the average figure is £750k. This mainly due to properties in the affluent area peaking at £2.6 million.

 

Many people seeking housing right now would fall into the first time buyer bracket. Lottery win aside, they are not looking at properties £1m and above. When reporting about those wishing to get on the property ladder, average prices of properties that estate agents describe as "ideal first time buyer properties" should be used.

 

The figures in my home town then go from "average property prices £750k" to "average prices of properties ideal for first time buyers £142k"

 

This is not the most expensive area of UK but far from the cheapest. SW England.

 

I agree that averages can distort the data. I would prefer to use median values but I cannot find a source which gives median property prices. Nevertheless, averages can tell a story.

 

A rough calculation: I'll assume that your figure for a first time property purchase of £142k is correct. The average rent in SW England is £993/ month. The median salary is £27k/year which gives take-home pay of £1820/month, and therefore an average disposable income of  £827. Average food, transport, council tax and utility costs add up to +/-£520/month, which means that someone on a median income could save +/-£300/ month living a lifestyle where 'leisure time' involved absolutely no expenditure whatsoever and there was no contingency for clothing or unexpected events. If this median-income person wanted to buy a property in SW England and took out a mortgage based on 4*salary, they would need to find a deposit of £34k (142-108). Saving £300/month@5% compound interest, it would take them 8 years to save the deposit! +/-50% of the population would struggle more than this median-income person.

 

There is an 'housing affordability issue' in the UK and it is not just limited to London.

Edited July 26, 2023 by RayC
Grammar correction

[youreavinalaff]

5 hours ago, RayC said:

I agree that averages can distort the data. I would prefer to use median values but I cannot find a source which gives median property prices. Nevertheless, averages can tell a story.

 

A rough calculation: I'll assume that your figure for a first time property purchase of £142k is correct. The average rent in SW England is £993/ month. The median salary is £27k/year which gives take-home pay of £1820/month, and therefore an average disposable income of  £827. Average food, transport, council tax and utility costs add up to +/-£520/month, which means that someone on a median income could save +/-£300/ month living a lifestyle where 'leisure time' involved absolutely no expenditure whatsoever and there was no contingency for clothing or unexpected events. If this median-income person wanted to buy a property in SW England and took out a mortgage based on 4*salary, they would need to find a deposit of £34k (142-108). Saving £300/month@5% compound interest, it would take them 8 years to save the deposit! +/-50% of the population would struggle more than this median-income person.

 

There is an 'housing affordability issue' in the UK and it is not just limited to London.

All good in theory but you are using average figures again. Rent in a decent single occupany property, ie one bed flat, I'm using this as an example as you have used a single person in yours, is a  good 40% less than your stated average figure.

 

The £142k price was an average. As you’ve been using them.

 

There is a nice 1 bed flat just down the road from us for 110k and that's not the only one at that price.

 

 You are right. Averages do distort reality.

[RayC]

2 hours ago, youreavinalaff said:

All good in theory but you are using average figures again. Rent in a decent single occupany property, ie one bed flat, I'm using this as an example as you have used a single person in yours, is a  good 40% less than your stated average figure.

 

The £142k price was an average. As you’ve been using them.

 

There is a nice 1 bed flat just down the road from us for 110k and that's not the only one at that price.

 

 You are right. Averages do distort reality.

Whatever the limitations of using the mean in analysing the housing market, the aggregated data set on which the analysis is based has greater validity than the observations of one individual.

 

Your post seems to infer that there is no problem in your area. If so, it bucks the national trend: There was a piece on the six o'clock news this evening about the crisis with rental accommodation (in the North West in particular). I imagine that it will be repeated at 22:00 if you care to watch it. It offers further proof that there are major problems in the UK housing market.

[youreavinalaff]

11 hours ago, RayC said:

Whatever the limitations of using the mean in analysing the housing market, the aggregated data set on which the analysis is based has greater validity than the observations of one individual.

 

Your post seems to infer that there is no problem in your area. If so, it bucks the national trend: There was a piece on the six o'clock news this evening about the crisis with rental accommodation (in the North West in particular). I imagine that it will be repeated at 22:00 if you care to watch it. It offers further proof that there are major problems in the UK housing market.

Once again, I have never said there are no problems.

[RayC]

2 hours ago, youreavinalaff said:

Once again, I have never said there are no problems.

Then we are in agreement.????????

 

The use of the mean in data analysis has its' limitations.

 

There are major problems in the UK housing market.

[youreavinalaff]

Just now, RayC said:

Then we are in agreement.????????

 

The use of the mean in data analysis has its' limitations.

 

There are major problems in the UK housing market.

I don't believe there to be major problems and have never said so, in that respect we don't agree.

 

I believe there are problems but they are exaggerated. Too many people rely on and believe what they see or read in the media or social media instead of getting out and speaking to those who know, namely estate agents. They see the average figures used and just give up thinking about moving.

 

I still, after 2 years, get regular emails from agents offering me rentals and sales. Some of which have been on the market for weeks. All affordable housing.

[RayC]

4 hours ago, youreavinalaff said:

I don't believe there to be major problems and have never said so, in that respect we don't agree.

 

I believe there are problems but they are exaggerated. Too many people rely on and believe what they see or read in the media or social media instead of getting out and speaking to those who know, namely estate agents. They see the average figures used and just give up thinking about moving.

 

I still, after 2 years, get regular emails from agents offering me rentals and sales. Some of which have been on the market for weeks. All affordable housing.

Well I guess that depends upon how you define 'major'.

 

Individual observation can be useful but too many people, like yourself, then extrapolate their own experience and assume that it applies to the wider population. Sometimes it does but in many cases such as this, it does not.

 

My own experience of the current housing market is completely different to yours. You'd be lucky to buy a garage for <£200k in my borough and rents for pokey 1-bed flats are £1200+. According to the aggregated data, my experience seems closer to that of the wider population.

[Neeranam]

On 7/25/2023 at 10:23 AM, BritManToo said:

My mortgage repayment is 10kbht (225 pounds), and I bet it's a nicer house (3bed overlooking countryside).

Does your wife work, to allow you to get a mortgage?

[youreavinalaff]

2 hours ago, RayC said:

Well I guess that depends upon how you define 'major'.

 

Individual observation can be useful but too many people, like yourself, then extrapolate their own experience and assume that it applies to the wider population. Sometimes it does but in many cases such as this, it does not.

 

My own experience of the current housing market is completely different to yours. You'd be lucky to buy a garage for <£200k in my borough and rents for pokey 1-bed flats are £1200+. According to the aggregated data, my experience seems closer to that of the wider population.

No. Not extrapolating.

 

I do research subjects before I post on here. Not just my own observations, unless you call researching housing prices, both rent and purchase, and salaries in different parts of country as personal observations.

 

I've already agreed with you that London is a different kettle of fish. Always has been. 

Edited July 27, 2023 by youreavinalaff

[RayC]

6 hours ago, youreavinalaff said:

No. Not extrapolating.

 

I do research subjects before I post on here. Not just my own observations, unless you call researching housing prices, both rent and purchase, and salaries in different parts of country as personal observations.

 

I've already agreed with you that London is a different kettle of fish. Always has been. 

But it is not just London.

 

The article in the link is an extended version of the piece on yesterday's six o'clock news. The article is damning in its' own right but play around with parameters in the boxes and you will find that (1) in most UK cities, it is impossible to rent a 1-bedroom apartment for < £800 (2) those on mortgages are often finding that their monthly repayments have increased threefold. There will be exceptions but these are the norms.

 

If this doesn't constitute major problems, I don't know what does.

[BritManToo]

9 hours ago, Neeranam said:

Does your wife work, to allow you to get a mortgage?

She pretended to work.

[youreavinalaff]

6 hours ago, RayC said:

But it is not just London.

 

The article in the link is an extended version of the piece on yesterday's six o'clock news. The article is damning in its' own right but play around with parameters in the boxes and you will find that (1) in most UK cities, it is impossible to rent a 1-bedroom apartment for < £800 (2) those on mortgages are often finding that their monthly repayments have increased threefold. There will be exceptions but these are the norms.

 

If this doesn't constitute major problems, I don't know what does.

So, we've now gone from " major issues in the UK housing market" to " most cities".

 

I'm not sure what cities as I've just pick 5 random cities on the list of UK cities and found the accommodation you say us impossible to find.

 

Mortgages threefold, you say? The example in the OP, based on  interest rate rises in the ast 12 months, wasn't even double.

 

 

Edited July 28, 2023 by youreavinalaff

[RayC]

1 hour ago, youreavinalaff said:

So, we've now gone from " major issues in the UK housing market" to " most cities".

 

I'm not sure what cities as I've just pick 5 random cities on the list of UK cities and found the accommodation you say us impossible to find.

 

Mortgages threefold, you say? The example in the OP, based on  interest rate rises in the ast 12 months, wasn't even double.

 

 

Apologies. I forgot to post the link to the article previously.

 

Not that it will make a blind bit of difference as you'll refuse to accept the evidence as it doesn't fit your narrative.

 

(I'll save you the bother of looking for a city where you can get a 2-bed apartment for under £960/month: Dundee fits the bill. Therefore, there is no housing affordability issue' in the wider UK market excluding London)

 

https://www.bbc.co.uk/news/business-66246223

[youreavinalaff]

1 minute ago, RayC said:

Apologies. I forgot to post the link to the article previously.

 

Not that it will make a blind bit of difference as you'll refuse to accept the evidence as it doesn't fit your narrative.

 

(I'll save you the bother of looking for a city where you can get a 2-bed apartment for under £960/month: Dundee fits the bill. Therefore, there is no housing affordability issue' in the wider UK market excluding London)

 

https://www.bbc.co.uk/news/business-66246223

Once again, you twist what I have said.

 

I don't have a narrative. I say things how I see them. It there were no properties for £800 a month in all cities or even most cities in UK, I eould agree with you. My searches suggest differently. 

 

I've agreed there are issues of housing prices in UK. Twice in fact, this now 3 times. I just believe they are being exaggerated by the media and social media.

 

So many people these days won't get off their a%#especially and do the footwork. Too busy searching on thier phones whilst sitting on the sofa.

 

Nice to see Dundee has prices under what you quoted.

[simon43]

In February I had to return to the UK after 20 years living in south-east Asia for medical investigations of possible prostate cancer (happily no cancer was found).

 

But during my 3-month stay in the UK I seriously considered if I should remain in the UK permanently, based on my age, health, future outlook etc etc.  I spent some time looking at rightmove.co.uk and their huge database of rental properties in the UK. (Buying a property was a non-starter at my age of 63 years).

 

I had no restrictions on geographical location and I concluded that while it was possible to rent properties starting at say 600 pounds/month, the location or state of those properties, or the amenities on offer were so undesirable (eg remote rural property and no public transport, inner city studio the size of a cat box etc), that I decided that were the choice to stay in the UK or to top myself, then the latter was the preferred option!

 

I returned back to south-east Asia and have now happily 'soft-retired' in Laos, where my meagre UK pension due in about 2 years from now will go far and enable me to live a modest but entirely adequate lifestyle ????

[youreavinalaff]

4 hours ago, simon43 said:

In February I had to return to the UK after 20 years living in south-east Asia for medical investigations of possible prostate cancer (happily no cancer was found).

 

But during my 3-month stay in the UK I seriously considered if I should remain in the UK permanently, based on my age, health, future outlook etc etc.  I spent some time looking at rightmove.co.uk and their huge database of rental properties in the UK. (Buying a property was a non-starter at my age of 63 years).

 

I had no restrictions on geographical location and I concluded that while it was possible to rent properties starting at say 600 pounds/month, the location or state of those properties, or the amenities on offer were so undesirable (eg remote rural property and no public transport, inner city studio the size of a cat box etc), that I decided that were the choice to stay in the UK or to top myself, then the latter was the preferred option!

 

I returned back to south-east Asia and have now happily 'soft-retired' in Laos, where my meagre UK pension due in about 2 years from now will go far and enable me to live a modest but entirely adequate lifestyle ????

I believe you stayed in Blackpool.

 

A quick search brings up 30 properties with at least 1 bedroom, in Blackpool under £600 pcm. Not forgetting rents have risen since you were there.

 

You didn't search hard enough, just like many people.

[RayC]

6 hours ago, simon43 said:

In February I had to return to the UK after 20 years living in south-east Asia for medical investigations of possible prostate cancer (happily no cancer was found).

 

But during my 3-month stay in the UK I seriously considered if I should remain in the UK permanently, based on my age, health, future outlook etc etc.  I spent some time looking at rightmove.co.uk and their huge database of rental properties in the UK. (Buying a property was a non-starter at my age of 63 years).

 

I had no restrictions on geographical location and I concluded that while it was possible to rent properties starting at say 600 pounds/month, the location or state of those properties, or the amenities on offer were so undesirable (eg remote rural property and no public transport, inner city studio the size of a cat box etc), that I decided that were the choice to stay in the UK or to top myself, then the latter was the preferred option!

 

I returned back to south-east Asia and have now happily 'soft-retired' in Laos, where my meagre UK pension due in about 2 years from now will go far and enable me to live a modest but entirely adequate lifestyle ????

I hope that your health has improved.

 

Your experience and the numerous surveys by reputable organisations pointing out the problems in the UK housing are all wrong. 

 

We are both lazy. The solutions are obvious: In my case, I should do my own research, which would clearly show that the various  survey findings are all incorrect. In your case you simply " .... didn't search hard enough".????

Edited July 28, 2023 by RayC
Addition and correction