Thursday, March 22, 2007

House prices (2)

In 1966 the prospective mortgage holder would almost certainly have been male & married. It would be unlikely that his wife was in paid employment, or intend to stay employed once the children came along. But even if she did, it would be unusual for her earnings to be taken into account in assessing how much money the Building Society would lend.

Feminism has probably had unexpected, & unintended, consequences for house prices.

For one thing, it became more common for 2 people getting together to each be owner occupiers in their own right. In the rising markets of the 70s & 80s the sale of 2 single person properties would provide a healthy deposit for a marital home.

And the pressure to take wives earnings into account - even if only at a multiple of 1 or 1.5 compared with the more usual 3 for the 'main earner', only further increasd the amount they could afford to pay for a home.

These effects were multiplied by the fact that like tends to mate with like. (Do I have to repeat that a tendency allows plenty of room for exceptions while still producing very real effects?). So high earner marries high earner. This just skews the distribution of house prices even further, making the long tail of high priced homes longer, & leaving over half the population unable to afford even the average (arithmetic mean) price - even on two incomes