Mitchy260

Average salary = £26kpa
Average couple salary = £52k pa
3x cap = £156k lending
+10% deposit = £175k spending power

What is the problem here?

Where has it said anywhere that this is restricted to 3x singular earnings?If so what is to stop Mr Smith using his 3x entitlement to buy the family home and Mrs Smith using her 3 x entitlement to buy a BTL home?

Average couples having multiple homes will set the whole thing off again at a much faster rate. The bubble will be twice as big next time round

It isn't happening

cookstar

iTrader: (6)

So...has it been officially capped then or not, does anyone know?

EddScott

So that will be next year before anything is done. Can't see it myself. I think its a good idea to control peoples borrowing and should have a control on over inflated housing. The amount of people who think they are loaded because their house is a worth a bob or two yet they can't afford a night out is absurd.

So the government wants people to keep borrowing, the government get a hard on for giving the banks more and more money to lend to us - and then they plaster the media with "threats" of buying restrictions.

So unsurprisingly in the next few months new mortgages will be up and the government can say look how well we are doing to get us out the ****.

FlightMan

You truly believe the average couple bring home £52k a year do you?

rickya

iTrader: (18)

& can people buy a family size home in London for £175k currently?

cookstar

iTrader: (6)

Surely that's where the "average" comes into it, 1 might bring £35 and the other £15.

What do you reckon the average household income is then?

Mitchy260

I suppose it is how you view an average i suppose.

If the average person is earning £26k, then you could assume Mr average is earning £26k and Mrs average is earning £26k so will have a combined income of £52k

If you have 1 average earner earning £26k and a lower £15k earner are they a true average couple?

In answer to your question, no i do not believe the average houshold income is £52k, mainly due to the millions of working PT mums, but if you so happen to get Mr and Mrs average together earning £26k apiece then they will have a £52k income.

Mitchy260

I have seen a £37k average household income figure floating about.

Note.. Not average working household income, the above no doubt will include all those unemployed and claiming benefits.

The table below shows regional average income data from the ONS. A survey of 30m jobs or so, so i would say fairly accurate

You have the tabs along the bottom to delve deeper into FT average salaries which for a male is around £35k mean £27.5k median (Right click save as)

http://www.statistics.gov.uk/downloa...08/tab7_7a.xls

According to the ONS above, an average FT working male should be earning £35k and an average FT working female should be earning £25k so a combined £60k if both get together.

£60k x 3 + deposit and you are looking at £200k spending power.

Even if you look at the median data so 50% above and 50% below, the figures are £27.5k male and £21.5k female = £49k x 3 = £147k lending + 10% deposit = £165k

There has been no mention of capping singular earnings, people are just assuming.

FlightMan

According to the ONS, average household income is just under £30k.

cookstar

iTrader: (6)

Blimey that is lower than I would have thought, but how many households do you know with that kind of income though? Just basing it on personal experience I'm not sure i know any individual that earns less than that let alone a household.

Not ***** waving just curious.

Mitchy260

You will see that is just under £30k AFTER deductions, i.e the light blue portion.

The table is also a few years old now, 2005/06

The stats i showed are upto date 2008 data from the ONS. It is clear to see that the average FT working male is earning £35k so how the above can be true is beyond me.

All households is taking into account benefit household data also.

unclebuck

Nail on the head I reckon. Another Nu Labour 'con trick'. "Quick, panic, get a mortgage now before all the new restrictions arrive"



But of course they never will.

Mitchy260

This data suggests household income at £32,800 back in 2005

BBC NEWS | UK | The UK family: In statistics

£32779 in 05/06

Allowing for 3% inflation pa

£33,762 in 06/07
£34,775 in 07/08
£35,818 in 08/09
£36,893 in 09/10

So £37k or thereabouts, like i originally quoted

Same ONS data in that article above

MrLouKnee

im in financial services, its nulab propaganda, theyre just trying to grab the headlines in the papers on a topical issue, its called spin

interest rates are grrreeaat tony the tiger style at the mo, there are loads of excellent mortgage offers at the mo as long as u have a 25% deposit.

FlightMan

The results of the 2008 ASHE show that median weekly pay for full-time employees in the UK grew by 4.6 per cent in the year to April 2008 to reach £479. Median earnings of full-time male employees was £521 per week in April 2008; for women the median was £412.

Now I fully recognise median isn't average, but from that I cannot believe average household income is greater than £30k.

rossyboy

iTrader: (8)

We pay full time cleaners up to £16k , so put 2 of them together and that alone is £32k.

Mitchy260

Median is 50% below 50% above.

Look at the table that i posted up (You need excel) It has regional breakdowns of what areas earn what.

Why can't you believe that average households have incomes greater than £30k seeing as the average male salary is £35k or in median terms £27.5k

Households generally have 2 working people in them so you are saying the average household consists of 2 x £14k earners?

Your data is 05/06, way out of date.

MattW

This is a stupid idea, 3 times salary on 20k a year would be difficult, whereas 4 times salary on 100k is easy. Another broad brush which is restricting the higher earners

chocolate_o_brian

iTrader: (22)

You know me

When I was in work (many, many moons ago ), I was on about £20k a year, which in this area unless you were a skilled tradesman/manager etc. was seen as a respectable income. In comparison, my Mrs is on minimum wage, so at the time our income was about £30k per annum.

It all depends on where abouts you live. You have to remember though, the average member on here is probably relatively successful and earns a decent wage; to me anything over £20k per annum (in this area of Lincs) is a good wage. However elsewhere, it could be seen as a pittance, or viewed as such by the DINKY generation.

All imho ofcourse, but I don't for one minute belive the average couples income around here is £52k.

Oh, and as for the comment made earlier by someone re. "if you can't buy, rent"... erm, a look in a recent local paper sees monthly rent being pretty much the same as a mortgage equivalent. A good example? My mortgage is £485 a month (on £86k). 2 doors down is being revamped and advertised at £500 a month. Same size house, nothing fancy, 3 bedroomed terraced. I don't understand where that comment came from unless Scun.thorpe is different to the rest of the UK?

Again all imho.

(p.s. for the record, when I bought my house I got just under 5x annual salary (was working day shifts and earning circa £15k a year. Mortgage was for £75k then and comfortable paid it alone until Mrs moved in). I do personally agree with a cap around 4x, but believe in the current climate, 3x is too little unless you wanna be a FTB at 30-40.

rossyboy

iTrader: (8)

According to this, households earning more than £30k are affluent

BBC NEWS | Business | Affluent 'facing debt problems'

cookstar

iTrader: (6)

Since I joined way back in 2005, I don't read any newspapers or watch the news either, incase it conflicts with NSR.

MattW

Jeez, my first mortgage was for 36k and I was on 13k (a good few years ago) and I struggled massively. In fact I sold and moved to another job before my fixed rate ended, Thankfully!

chocolate_o_brian

iTrader: (22)

I should mention that at the time of buying (March 2005) I was 20 going on 21 and wasn't driving or learning to drive. Lived on my pushbike

EddScott

According to that table, the average wage for a male in Pembrokeshire is £27,389?

I find that hard to believe. I guess they only asked the refinery workers.

austinwrx

is the average income though looking at waged or unwaged?

In bradford, the average household income, across the board was £17.5 k a few yrs ago.

stuart n

I thought the average wage was closer to £21K, £26K seems high to me. I guess stats never lie

Capping the mortgage lending at 3.5 times combined salary seems a token gesture to me, most banks won't lend anywhere near that now anyway.

FlightMan

Look at the NR mortgage calc. Works out at 3.5x salary.

MikeCardiff

iTrader: (2)

I think some people are forgetting here with the average salaries.... the idea isnt that FTB's spend £175K on a house they will live in for 25 years.

As used to happen, young couples earning less money will buy a cheap house or flat to get started ( we could even call them 'starter homes' ! ), then as they get older, promoted, earn more etc... will sell that and buy a bigger place - average joint income for a professional couple in their mid 40's is going to be a lot higher than that of two graduates 20 years younger, meaning they can afford a house that is a lot more expensive than the national average ( or even a shoe box in London ).