Wednesday 16 January 2008

"The £60,000 house that's now worth £10m"


See article in today's Metro.

House prices go up in line with earnings in the long run. If we index up £60,000 in 1972 in line with earnings to 2006 using this, we get £928,000. He's been offered ten times that amount, so he's beaten increases in average earnings by 2.8% a year, compounded. In other words, 1.028 to the power of 36 = 10.

Which is pretty good but not as spectacular as you'd first think, really.

3 comments:

Anonymous said...

The Daily Mail carried a photo of Sandbanks and the caption said it was an island. Pah!

Gregg said...

Blimey Mark, after reading that I can understand, even better now, why I am not an accountant!

Vindico said...

Lol. Gregg, you and me both!
Very interesting Mark. It just shows you how sensationalist reporting can spin a story any which way desired!