Two numbers I would like to see

[andrewducker]

1) Average age of first-time home buyers as a graph covering the last 50 years.
2) Average monthly mortgage repayment over a similar time period - adjusted for inflation.  Because this would adjust (somewhat) for house prices going up while interest rates are low.

Between them these would tell us something about the affordability of housing over a long period.

Comments

[erindubitably.livejournal.com]

Might this article be relevant to your interests?

(Doesn't answer all your questions, but has a bit of info and might have links to more answers)

[andrewducker]

That is actually very useful.

"Affordability for potential first-time buyers has improved substantially over the past two years and mortgage payments in relation to earnings are currently significantly below the average during the past 25 years," said Martin Ellis, housing economist at Halifax.
is particularly interesting, because it contradicts what marrog was saying about housing being less affordable than it used to be.

[marrog.livejournal.com]

http://www.ifaonline.co.uk/ifaonline/news/1349455/average-buyer-age-reaches-34

I think though that by going back 50 years you would skew your figures unrealistically, since the very idea of owning your own home (for the non-aristos) is a comparatively new thing, and my undestanding is very much that pre 1979 in the cities in particular people just didn't bother to own their own homes - renting throughout one's whole life was normal.

[andrewducker]

2007 was the very top of the boom - so I'd expect that to push up the age of first time buyers. But since then interest rates have dropped, and so have home prices, as the bubble burst, so I'd like to see a comparison to now - and over time.

Good point about the 50s/60s. My parents bought in 1970 - and I know that at that point it was the same cost to buy as to rent where they were. But I know it varies up and down. When I first bought in Edinburgh it was cheaper to buy my flat than the rent I'd been paying, but it was a pretty bad area I was moving into.

[cheekbones3.livejournal.com]

Problem with that is that mortgages are much less gettable. I bought a flat in 2007, and even though I'm much more prosperous now, I'd have no chance of buying anywhere at all.

[andrewducker]

Absolutely - which is why the age of first-time buyers is as important as affordability.

[marrog.livejournal.com]

http://www.compareandsave.com/news/Average-age-of-first-time-buyers-to-increase/
http://www.telegraph.co.uk/education/educationnews/3324876/Top-up-fees-will-raise-average-age-of-first-time-buyers-to-40.html
http://www.yourmortgage.co.uk/showPage.html?page=3625183

An interesting (in parts) messageboard thread here which has a list up to 2005 (although read around it) and a lot of links:
http://www.economicsuk.com/forum/viewtopic.php?f=1&t=49&start=0

[andrewducker]

I generally don't trust that kind of articles/press releases - because they're of the format "If trends carry on as they have done for the last three years, then by the year 2030 we'll all be living to 3000 and have TVs that are five miles on a side!" - you need longer term trends than they're talking about, and the economy is generally cyclic.

The stats, on the other hand, are fantastic - see latest post, which confirms that the trend from 2005 onwards makes mortgages much more expensive. Sadly, I couldn't find stats for older than that yet. Still digging though!

[communicator.livejournal.com]

Most middle class families owned their own homes in the seventies. There was another chunk of people, like my family, who lived in rented council housing - under the Thatcher administration the top end of the council renting group was bumped up into ownership. Personally I think the long term effects were very bad.

Another issue, by the way, from those days was that building societies were much more cautious about allocating mortgages - for example we were advised to set up building society accounts as teenagers, because long term account holders were more likely to get mortgages when they needed them in their twenties. The mortgages were more affordable, but harder to gain.

[marrog.livejournal.com]

Most middle class families owned their own homes in the seventies. There was another chunk of people, like my family, who lived in rented council housing - under the Thatcher administration the top end of the council renting group was bumped up into ownership. Personally I think the long term effects were very bad.

I think the second half of this statement is certainly true, but how sure are you about the first half, and how are you defining middle class - band B or band C1? I'd be surprised to find hear that a majority of social class band C1 owned property in the seventies. This nice wee essay seems to have pulled out some info suggesting that I'm right in this assumption, particularly given that economic differences between individuals are more polarised now than they were then.

[communicator.livejournal.com]

In the 1970s middle class people - by which I mean managerial, skilled white collar workers and professionals - typically lived in mortgaged private accommodation. A young secretary or receptionist wouldn't have a mortgage, though, and this represents a certain proportion of those classed as C1. My father was a clerical worker, in a junior role because he is disabled, with 4 children and we didn't have a mortgage. Our neighbours were skilled manual workers, such as bus drivers, railwaymen, machine operators. There was a relatively good supply of clean safe cheap public housing for this intermediate class of upper working/ lower middle.

I think the biggest change under Thatcher was to remove the possibility of living a quiet respectable life like that on a fairly low income.

[momentsmusicaux.livejournal.com]

I don't think house prices are going up. There's not enough house sales for the data to be meaningful.

[andrewducker]

If there's not enough data to be meaningful then why do you think they're not going up?

[momentsmusicaux.livejournal.com]

Good point. I'm not seeing them go up; I think the data can be made to mean anything.

[andrewducker]

I can see your point. Housing is something that's really hard to judge as a market - the houses that were being sold at the top of the market are not necessarily the same kind of houses as are being sold now.

[pete stevens (from livejournal.com)]

The land registries methodology is sound (similarly the FT) - they use sales of the same house as they have a complete list of sales. You need lots of data points so that wear and tear and homeowner improvement cancel each other out, plus the effect of auctions (depressed price) and new houses (no previous data).

The nationwide / halifax indexes only include houses that require mortgages so exclude lots of investment buys, and that cash buyers generally get better prices. However, they do lead the LR/FT index by a few months so general trends are picked up there first.

Nationwide / Halifax currently differ over the last 12 months by a huge margin - NW is up 6%ish, H only 2%ish. A 2% rise is roughly matching the rate of inflation so isn't a rise at all in real terms.

[andrewducker]

Which is why those "mortgage payments/income" ratios are so handy :->

[pete stevens (from livejournal.com)]

I was a first time buyer in 2001. I am a first time buyer again this year.

This is because first time buyer means someone buying a house who doesn't have a house to sell as part of a transaction. Should you sell your house and move into a rented house, then buy a house you become a first time buyer, you get a better price on the sale because there's no chain, and a better price on the purchase because there is no chain there either.

[andrewducker]

Yup - there was a link somewhere that said that about 10% of first time buyers weren't buying for the first time.

But so long as we're comparing like for like it's still useful.