What changed

[Woodworks]

My simplistic view is women were encouraged out to work and briefly double incomes homes were better off but house prices rocketed to absorb all the extra income and now both parties have to work to own a home?

[aspenarb]

I get the bit about us all wanting things and wanting them now.

 

This is what got me thinking. Mum and dad had an extension built in the early Seventies, then in the early Eighties they had central heating and double glazing fitted. Where did the money come from?

 

The one and only time they had finance (apart from a mortgage) was when dad got himself a new car in 1984 (A reg).

 

Money must have gone a lot further in those days, or am I missing something?

tHere y0u 6o , ten year gaps there between big spends so they probably skimped and saved. It was only when they had the cash they had the work done. These days folk are still trying to arrange finance on projects like this a week before the builders are finished.

 

Bod

Edited November 24, 2016 by aspenarb

[Mark Bolam]

We borrow money we don't have to buy things we don't need to impress people we don't like.

 

 

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[Mark Bolam]

Well, I don't really like, I spend every penny on drink.

 

 

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[aspenarb]

Well, I don't really like, I spend every penny on drink and loose women.

 

 

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Your a bad man Mr Bolam, dont change

 

Bob

[lux]

Well at least Mr Bolam didn't waste any.........

[Mark Bolam]

[emoji3]

 

 

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[eggsarascal]

tHere y0u 6o , ten year gaps there between big spends so they probably skimped and saved. It was only when they had the cash they had the work done. These days folk are still trying to arrange finance on projects like this a week before the builders are finished.

 

Bod

 

I don't see where there was room to scrimp and save. They raised three boys, had holidays, went to the local club on a weekend, all on one wage.

 

Something don't add up in my mind. Either wages were good back in the day or dad was a part time crack dealer. Or have wages stagnated that much?

[Gary Prentice]

Well, I don't really like, I spend every penny on drink, prostitutes and drugs

 

 

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Don't hide your light beneath a bushel Mark.

[agg221]

I don't see where there was room to scrimp and save. They raised three boys, had holidays, went to the local club on a weekend, all on one wage.

 

Something don't add up in my mind. Either wages were good back in the day or dad was a part time crack dealer. Or have wages stagnated that much?

 

Unverified figures but I think the simple answer is the multiple between wages and house prices.

 

In 1970, the average house price was apparently £4,995 and the average wage was £1,664 (Guardian 2004 figures) so a house was just under 3x the average salary. The old, fairly rigidly applied mortgage criteria at that time were 3x single salary, 2.5x joint salary, over 25yrs, so it was quite affordable for one person to buy a house and so long as the interest rates didn't go silly (like they did in the early 1980s) you could comfortably make the payments. This was also a time of inflation, so wages were going up but of course the mortgage wasn't, so it actually got much more affordable pretty quickly.

 

Today, the average house price is £216,750 (Land Registry Sept 2016) and the average wage is £26,500, a multiple of over 8. Even allowing for extended mortgages (35+ yrs) the payments simply aren't affordable on a single salary. Static wages due to low inflation and a weak economy (today's estimate is that they won't reach 2008 values for at least another 5yrs) also mean that the mortgage does not become more affordable over time.

 

High house prices also drive up the rental value.

 

Funnily enough, the relative cost of other essentials such as food and clothes, together with a lot of luxuries such as televisions and foreign holidays, has actually come down, but the mortgage is such a dominant figure in the total income that spending money on pointless luxuries is pretty much an irrelevance in the overall figure.

 

Alec