If house prices had continued on their trajactory from 1996 until 2007, when they reached their peak, the average house price in Britain (currently just under £200,000) would be £1 million in 15 years.
The average salary in 15 years is likely to be no more than £45,000 before tax (based on a 4% increase in salary per year over the next 15 years).
In other words, the mortgage repayment on an average house would be greater than the income of an average salary.
Between the Spring of 1997 and the Spring of 2007, the average house price increased from just over £70,000 to about £180,000 - an increase of £110,000 or about £11,000 a year. If you earned less than £15,000 a year on average (before tax) over that ten year period, an average semi in Britain earned more money sitting there doing nothing than you did going out to work.
© Andrew Hawkins 2008
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