ooohh lovely bubbly.....
The UK house price to earnings ratio; it is coming down, but painfully slowly. Still, I can't help feeling that it has much further to go.
I always get a bit nervous about posting this chart. In the past, I have received a few rough comments. Some people get very upset with the idea of measuring housing affordability. It seems odd, and I can't explain why.
Anyway, the latest data shows that the ratio is still much higher than the historical average.
6 comments:
Can't think why you'd get rough comments.
It's probably jazza the advfn troll from Aviva Investors York.
http://www.businessinsider.com/the-most-overpriced-housing-markets-in-the-developed-world-2012-2?op=1
I think becuase it does not reflect interestes rates, which have as much impact on affordability as earnings and house price.
I don't want to be flagged as a troll but I am not sure what this stat tells us. A number can not capture the large differences in local property markets.
Eh?
It's not trying to tell you anything about "the large differences in local property markets".
It's an average. The same that any average is, well, an average and doesn't tell you about the extremes.
However, it's still useful as a statistic, because if the average is going down, this means that in general, values are going down.
Well, either that or it means that there are lots more lower numbers or fewer higher numbers.
This is the only house price chart I care about. It has a long, long long very long way to fall until it's back to affordable that is as things used to be: a 10% deposit and 2 1/2 half times the wage buys a place. Knowing how much you dislike personal debt of any kind, I am interested Alice in how you feel about mortgages when they are reasonable, and when this makes more sense than renting (dead money) as opposed to putting money towards something tangible?
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