Sunday, 8 October 2017

Nominal rents index vs nominal wages index, 2005 to 2017

I have been updating The KLN blog (the bulk of which I originally did in 2013) for the past couple of weekends.

The Nationwide last published their chart in 2012, so here's an updated chart showing ONS figures for nominal wages and nominal rents from 2005 to 2017:

7 comments:

Lola said...

What do YOU think that is telling us?

Mark Wadsworth said...

L, it's telling us the blindingly obvious, is all.

Lola said...

Ahhhh. Intriguing drop 2009/2010 though.

Lola said...

MW Do you think the halt in the decline of rents in 2010 has anything to do with ZIRP and QE? (And HB, and HtB etc. etc.). And if so how do we prove that?

ontheotherhand said...

Sort of related. In the news today we are being told that retailers need EU workers to keep wages down otherwise shop prices will go up. I would have thought that similar to changes in VAT at supermarkets, we will see the retailers having to swallow most of the cost, which will make them less profitable and therefore competing less strongly for renting shops. In the medium term therefore wages will go up enough to attract local workers, and rents will go down?

Mark Wadsworth said...

L, in that period rent went too high dropped to too low and then went back to normal.

OTOH, good for shop wages, good for residential rents, bad for retail rents, I would expect.

Ben Jamin' said...

A remarkably consistent 12 point difference(given the financial crash). I wonder how far that goes back?

The appearance of the supply side bandwagon is plain odd. Anything but LVT.