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Long term UK Housing Affordability video

This 1 minute video from Interactive Investor is great for looking at all sorts of topics. I like that it fuels discussion on the combined impact of house prices (and all the factors going into that) and average UK salary. It's great context for both the microeconomic debates around housing and the macroeconomic debates around cost of living and intergenerational inequality. Plus, because it looks at the last 100 years, it won't 'age' as quickly as other resources.

There is also a nice article to go with it, here are some questions you could use.

Comprehension Questions:

  1. When was the last time housing in the UK was as unaffordable as it is now, according to the article?

  2. How has the ratio of house prices to the average UK annual salary changed, particularly in 2022?

  3. Who does the article suggest are the "new aristocracy" in the context of housing affordability?

  4. How did real wages and house price affordability change during the 20th century, according to the article?

  5. What was the percentage of home ownership among Brits in 1899, 1960, and 2000?

  6. In the 1920s, how did changes in wages and house prices affect home ownership?

  7. How did Margaret Thatcher’s Right to Buy scheme affect home ownership during the 1980s?

  8. What factors are given as reasons for the increasing unaffordability of houses since 2000?

  9. What are the average age of first-time buyers in 2022, and how much is their average deposit?

  10. What predictions are made for house prices in 2023, and how might these predictions affect first-time buyers?

Vocabulary Questions:

  1. What is the meaning of the term 'real wages'?

  2. What does the term 'burgeoning' mean in the context of housing stock in the article?

  3. How would you define the term 'landed gentry' as used in the article?

  4. What does 'generation rent' refer to?

  5. What is the meaning of 'council houses' in the context of Margaret Thatcher’s Right to Buy scheme?

  6. Can you define the term 'housing ladder' as used in this article?

  7. What does the phrase 'wealth divide' mean?

  8. What does the term 'eye-watering' imply when referring to the average first-time buyer deposit?

  9. What does the term 'outright' mean in the phrase "own their homes outright"?

Quantitative Skills Questions:

  1. If the average UK annual salary is £30,000, what would be the average house price according to the ratio given in the article (8.5 times the average UK annual salary)?

  2. How much did the real wages increase between 1900 and the 1950s in percentage terms?

  3. If an average first-time buyer deposit is £53,935, what percentage of a £30,000 annual salary is that?

  4. What was the percent decrease in house prices between the October and November according to the Nationwide House Price Index?

  5. If the average house price falls by 10% in 2023, what would be the new price of a house that was originally priced at £250,000?

Bigger Questions

  1. Discuss the possible implications of the housing affordability crisis on the UK's economy

  2. How could government policies or economic strategies address the current housing affordability crisis in the UK?

  3. To what extent was the 'Right to Buy' scheme beneficial for the UK?

  4. Research and compare the housing affordability crisis in the UK with another country (this data might be useful)

  5. Should the Government take action to increase the affordability of housing?

  6. Discuss the long-term effects of 'generation rent' on the UK housing market and economy.


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