From The early Mini years: "The purchase price of the 1959 Mini was £496 including tax when it was launched to the public on 26th August 1959" which by all accounts was broadly equivalent to one year's average wages. For comparison, according to the Nationwide, the average price of a house in that month was £2,124, i.e. a house cost four times as much as a Mini.
The on-the-road cash price of today's basic Mini is £11,810 (about half a year's average wage) and an average house costs £166,597. So nowadays, a house costs fourteen times as much as a Mini.
I strongly suspect that today's basic Mini is vastly superior to the original one in terms of comfort, safety etc (although it doesn't have bumpers) so that is much, much better value, but the average house today is barely better than one fifty-two years ago. Sure, it might have double glazing, central heating and a new kitchen, but all those things probably cost half as much as they did sixty years ago as well, and by and large the fabric of the building is the same, or even inferior if you're looking at new builds.
Sunday, 6 November 2011
It's a Mini adventure
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26 comments:
Ho Ho. Did the same sum myself a couple of weeks ago for a piece I write for the local paper - only I used Ford. To whit, a Ford Prefect in 1957 cost about £630 but the equivalent Ford Focus Edge can be had today for £12,995. That Focus is an immeasurably better car than the Prefect. But in real terms it cost more - about £13,350 in today's money.
This is an excellent example of capitalism doing more for less every day.
Ah, but there's a difference between cars and houses. Houses seem to be crashproof these days.
Very interesting comparison. In 1959 my father was able to support a family of four on an average wage. Of course he didn't have a stonking great mortgage round his neck.
December '61, my Dad's wage is light/Still on that salary we all four could sleep tight/Right now if you drank from that very same well/You'd need a run-o'-luck to score a bed in a trick hotel.
From "Legacy" by The Gone Jackals.
L, great minds think alike, is that article online?
QG, touché.
AKH, RA, it is easy to romanticise the past, but that is the general impression that I get. Young people nowadays are in a real bind, and it's not as easy as it was (except perhaps early 1980s when it was even worse).
MW No, I'll email it to you - I'm off work at the moment after heart surgery, so it may be a few days. I'll try and get a minion to look it out.
I've used the analogy for years to try and dispel the "rising house prices create 'wealth'" nonsense. I've failed, of course.
The average house now costs £166597, just like the original mini, including tax. That tax is the privately collected land rent. And as you point out houses have not got much better over 50 years, so the increase in the cost of housing is due to a massive increase in the take of this privately collected tax.
L, sorry to hear about heart, get well soon. As to the politics, my motto is that all political careers end in failure, so you might as well start as you mean to go on.
QP, thanks. That was (part of) the point of my post of earlier today, if the govt arranges things so that some private individuals HAVE TO pay money to other private individuals, despite the recipients not having to do anything in return, then that transfer is privately collected tax/welfare.
Ironically, housing has actually gone down in quality. My mid-1930s house is far more solid than the one I owned that was built in the 1980s.
JT, I think it was you who explained about the diagonal wiring in new builds. But as I've only ever lived in old houses, I've no first hand experience of all that.
Yes, it was me. My cousin's husband told me about it. Not his job (he does roofing) but he was appalled that it was being done.
This is the absolutely key argument
and I am going to learn the 1959 figures: I've been making them up for a while,but not too badly out.
Priced Out should be plastering them everywhere.
MW - Thanks
JT - Quite. The cost of land inhibits quality innovation by developer builders. Nearly all innovations are geared towards cost saving, not quality improvement. Capitalism works by doing more for less every day. At the commodity level UK house building fails this test. Nevertheless, builders in general do do a better job than in earlier times due to both technique improvements and developments in the quality and range of materials - a good example is adhesives.
Mind you the Humble Housebrick is still the most flexible module for house construction. Nominally (inc 10mm mortar joint) 225 x 112.5 x 75 (9" x 4.5" x 3") and 4 lbs weight. Unsurprisingly these dimensions (+ 25mm / - 10 mm)are almost universal.
End of lecture...
DBCR - I am glad you said that - I've been making this point for years - to absolutely zero effect, needless to say...
JT, historically, "cheap" housing was always badly and cheaply built, although the poor could always live in an old house built for a wealthy person before old houses were treasured for their age. Of course, most of the jerry-built stuff from the past has fallen down or been demolished, but sufficient survives to show that things weren't necessarily better then. I'd say that basic housing is probably a lot better than it was in the 60's, especially in terms of ease of heating, but nothing like as better as cars are and certainly not justifiying the difference in price.
It would be interesting to compare the build cost of an average house now and then (excluding the land price, of course).
One thing that gets lost in these cost comparisons is a sense of how different the way of life was then,undominated by property."Look Back In Anger" shows people in shared rented accommodation sitting around all Sunday afternoon reading the papers and arguing.None of the "What are we going to do on the House?"stuff,like now.In "Billy Liar"it is perfectly feasible for him to go to London and realise some of his dreams/illusions: he does n't go because he knows they are too unworldly.I cannot think of any plays novels from the era (people read a lot then) where people have conversations about cars.There is a very feeble conversation about football in "Roots" by Arnold Wesker.
In my first job (late 70s), there were only two topics of conversation at break time: football and gardening.
Something else that has just occured to me about this. Since about 1945 pretty well all the capital return on equities can be attributed to inflation - inflation in the Austrian sense as a function of money. It may be, ex the special factors affecting homeownerism, that a goodly proportion of the house price growth may be similarly affected.
I live in a 1930s house and it is crap; solid and not very straight brick walls do not keep the heat in well. The plot of land it sits on however is sizable and in a nice location and this is why I bought it (before I even new of the concept of LVT). With the idea that there is the potential to extend (local planning rules have scuppered that idea). Without doubt technology in building materials and techniques have improved loads since the 50s. However when land prices become so elevated I think there is more pressure on developers to cut corners since their margins as a proportion of total cost are smaller, with more risk from any change in land value. So I'd be confident that if the land value aspect was removed from property development we would all be living in better quality housing.
L, bricks hold their value incredibly well. A builder told me that he can sell the old Victorian bricks which he gets from demolition jobs for 50p each.
It may well be the case that the bulk of the increase in share prices is down to (price) inflation, but fair enough, at least they seem to hold their value, a bit like bricks. But land prices are clearly racing ahead of everything.
B, QP, it strikes me that building houses is quite labour intensive and techniques have not changed much for a century or two, so we'd expect to see the cost of building houses go up at the same speed as wages.
Stuff like fancy kitchens, double glazing, central heating and so on almost certainly has got cheaper (just like cars) but installing it is labour intensive so the price reductions are barely noticeable.
But I've every reason to believe that building standards are being driven down (primarily, rooms are very small in new builds, but see also JT's diagonal wiring example) because such a large proportion of the price goes on land prices, and because people are prepared to buy over-priced crap because they think it will go up in value anyway.
Cars are quite the opposite - you know it will go down in value after you buy it, which is why people still look for the best value/quality when they by a new one.
"L, bricks hold their value incredibly well."
Not any more they don't. You can sell Victorian bricks for 50p each because the lime mortar used in those days is easy to remove. With modern cement mortar, bricks from demolition go straight into the skip.
There used to be an Irish website that gave clear evidence that British houses were smaller by international standards and getting smaller.British furniture has to be of standard sizes apparently :on some "prestige" developments locally they have not been able to get standard size bits of furniture in.
B, aha, that might explain why he only mentioned Victorian bricks. But he took down a recently built chimney which was old 'London' bricks and cement mortar, chipped the mortar off and took those as well.
DBC, there are plenty of sources showing that the UK has the smallest and crappest housing in Europe.
MW As I've just realised.Quite good on the Net is "Shoebox houses become the UK norm" from the BBC which depicts two elderly sisters moving from an old two-bedroomed house to a new three-bedroomed place and finding none of their furniture would fit in.This story has a side-panel of comparative international figures for house sizes telling the same old story.
DBC, link to that article.
"on some "prestige" developments locally they have not been able to get standard size bits of furniture in."
Some friends of mine went round a show home on a new development. One of them, who was over 6ft tall, lay down on the bed in the "master bedroom". When they saw how far his feet stuck out over the end, they realised that all the furniture had been specially made small to make the room look larger.
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