[Rockhopper]

Apologies if this has been already covered butI was just looking at historic petrol prices and noticed that in 1980 the price of a barrel of oil was almost exactly what it is today at 139 dollars a barrel. Interestingly the price for four star petrol then was £1.32. But that was for a gallon of the stuff which means it was less than 31p per litre... The higher the cost of petrol the more tax the government rake in because of tax but I can't help feeling it helps the
agenda to move to electric cars.

 

[Bytesguy]

Accounting for 42 years of inflation that is more like £1.40/L so not quite so dramatic (but still cheaper that right now)

 

[jase_llan]

Accounting for 42 years of inflation that is more like £1.40/L so not quite so dramatic (but still cheaper that right now)

Whilst inflation is usually relevant, the OP mentioned that the price per barrel was the same as today i.e. not inflation-adjusted - so although things like wages etc. will have gone up, the raw material cost is the same as it was 42 years ago.

 

[Keithsson]

It's a bit like when football teams and boxers from different generations get compared this.

Would Ali beat Fury?, would the Arsenal 'Invincibles' beat modern day Man City?

The answer is the same for all of them... there is absolutely no way on gods earth to compare the circumstances, the times they inhabited. One 'moment' is incomparable to another 'moment'. So no, I don't feel there's any conclusion or significance that can be drawn at all.

Except to point out a lesson from history. With inflation now at 11% that's chicken feed to the 'winter of discontent' times when it peaked at 24%. Inflation stayed high for a very long time, much longer than it should have, because the unions got bolder and bolder, wage demands were caved into and everything kept getting more and more expensive. You want everything to get cheaper?, petrol included? ... you need Putin to stop being a stroker and to grab the throat of bolshy unionism back home.

Funny really because having witnessed both 1980 and 2022 first hand, they may be 42 years apart but what defines both periods is exactly the same... widening industrial action and the threat of Russian troops. And there was us thinking class war and cold war had been consigned to history🙄

 

[mintmansam]

Old but interesting, it’s really only been below a £1 per litre pre 1950 with respect to inflation

so difficult to compare though. This is just a guide

 

[AMc]

Apologies if this has been already covered butI was just looking at historic petrol prices and noticed that in 1980 the price of a barrel of oil was almost exactly what it is today at 139 dollars a barrel. Interestingly the price for four star petrol then was £1.32. But that was for a gallon of the stuff which means it was less than 31p per litre... The higher the cost of petrol the more tax the government rake in because of tax but I can't help feeling it helps the
agenda to move to electric cars.

Tax is and always has been a % though, so as with inflation the amount doesn't actually change. Yes the figure will get higher, but so do all the others, so it is void in that sense.

Also, what was the quality of the fuel like back then? How large an operation was it back then (no where near as many cars on the roads/stations to keep full)?

As above, so many factors.

It's like people moaning about house prices now. "They cost £4,000 in my parents generation..."

Yeah, but your dad was earning £2.50 a year mate 😂

 

[Rockhopper]

Interesting comments gents. Just a thought though with inflation and all the other horrors going on relatively speaking the cost of a barrel of oil must now be massively lower than in the 1980's. After all 139 then had considerably more buying power than today. As a youngster in the 80's I could fill my motorcycle up for what seemed next to nothing including a dash of two stroke oil. Whilst filling a can for my lawnmower the other day cost £10. I am infinitely better off than I was then but that made me wince.There is a disconnect somewhere here that needs a better explanation. Tax on petrol is a percentage but the higher the price of petrol goes then the more the government take so it is not void and they have a complete disincentive for finding political ways to reduce the cost of petrol. That is how percentages work. It does seem something of a coincidence that all this is a occurring whilst the green agenda is in full flow and every one is being forced in a few years to buy super green electric vehicles that will apparently be fuelled by unicorns and pixies and batteries that have no detrimental effects on the environment either in their disposal or manufacture.

 

[AMc]

All fair, but then as humans we are predisposed to try and find patterns and meanings in everything... And so forth come the conspiracy theories.

 

[VESTO]

Tax is and always has been a % though, so as with inflation the amount doesn't actually change. Yes the figure will get higher, but so do all the others, so it is void in that sense.

Also, what was the quality of the fuel like back then? How large an operation was it back then (no where near as many cars on the roads/stations to keep full)?

As above, so many factors.

It's like people moaning about house prices now. "They cost £4,000 in my parents generation..."

Yeah, but your dad was earning £2.50 a year mate 😂

Houses back then were cheaper.

The introduction of mortgages and a change of view towards housing. Houses were seen as a place to live but now are a financial investment and then a place to live. mortgages allowed prices to be set a lot higher.

Houses could be paid off during the 70's and 80's with about 5-10 years wage after expenses. now 5-10 years gets you a down payment. But hey this a car thread and im ranting about housing so i shouldn't even be talking HAHA.

 

[Keithsson]

"The introduction of mortgages" as you put it happened in the 12th century.

So when you say 'things have changed since the 70's' you mean the 1170's right?

In which case I agree, much has changed since the 1170's 👍🏻

 

[VESTO]

"The introduction of mortgages" as you put it happened in the 12th century.

So when you say 'things have changed since the 70's' you mean the 1170's right?

In which case I agree, much has changed since the 1170's 👍🏻

Sorry I should have been more specific.

I meant the creation of the “modern mortgage”.which was the 30 year mortgage created in 1970’s by Freddie Mac. 1170 back in the good aul days

 

[Keithsson]

Ah, I see, it did read very boldly and confidently inaccurate 🤣

Even so, I think that's wrong anyway. I'm going to ask the old man what his first mortgage was and his annual wage at the time. I feel it won't be as far off todays ratio as you make it out to be.

I also feel there's another glaringly obvious factor in this alleged 'unachievability of mortgages' for people today. Back in the 60's and 70's there was far less credit generally, and far far fewer supposed 'must haves'.

Back then kids weren't in debt up to their eyeballs by the the time came to flee the nest. They didn't need such 'essentials' as a fast car on PCP, a Gucci phone on an expensive monthly contract, a foreign holiday or two each year, a posh watch, a killer branded wardrobe, a music streaming service, a sport/movie package on satellite or cable TV, the very latest games console, a Starbucks mochafrappachino and cinnamon whirl on the way to work every day, an eat out lunch followed by a takeaway dinner on the way home etc etc.

The biffs I used to work with enjoyed all of these 'essentials' and then had the flippin' cheek to tell me they "couldn't afford" a deposit for a house 🙄

Priorities. That's what's changed in the last 50 years. Getting your own permanent roof over your head has slipped from the number 1 priority and dropped out of the top 40 altogether.

Meanwhile... petrol is still very cheap 😉

 

[VESTO]

Ah, I see, it did read very boldly and confidently inaccurate 🤣

Even so, I think that's wrong anyway. I'm going to ask the old man what his first mortgage was and his annual wage at the time. I feel it won't be as far off todays ratio as you make it out to be.

I also feel there's another glaringly obvious factor in this alleged 'unachievability of mortgages' for people today. Back in the 60's and 70's there was far less credit generally, and far far fewer supposed 'must haves'.

Back then kids weren't in debt up to their eyeballs by the the time came to flee the nest. They didn't need such 'essentials' as a fast car on PCP, a Gucci phone on an expensive monthly contract, a foreign holiday or two each year, a posh watch, a killer branded wardrobe, a music streaming service, a sport/movie package on satellite or cable TV, the very latest games console, a Starbucks mochafrappachino and cinnamon whirl on the way to work every day, an eat out lunch followed by a takeaway dinner on the way home etc etc.

The biffs I used to work with enjoyed all of these 'essentials' and then had the flippin' cheek to tell me they "couldn't afford" a deposit for a house 🙄

Priorities. That's what's changed in the last 50 years. Getting your own permanent roof over your head has slipped from the number 1 priority and dropped out of the top 40 altogether.

Meanwhile... petrol is still very cheap 😉

I was talking to my uncle about how in 70's there were ques at about 4am just to get fuel as it was so scarce. And how some fuel garages would only give fuel to the "regulars" as thats all the amount they had enough for.

So i guess considering you can show up to any petrol station and fill up with no problems of supply is pretty incredible. Imagine the price people would be willing to pay if when you show up to all the garages in your area they are empty.

 

[Keithsson]

I guess we'll find out in a few short years at the point ICE's get outnumbered by EV's and all the forecourts disappear or cross over to fast charging points @VESTO ☹

 

[Fast H]

1982 Average wage in UK £7117 Average cost of house £20897 so 2.94 times average earnings.
2022 Average wage in UK £24600 Average cost of house £281000 so 11.42 times average earnings.
Therefore houses in real terms (% of average earnings) are 388% more expensive or nearly 4 x what they were in 1982.

 

[Keithsson]

I take it back.

The figures that came back from old man from 1968 were not that bad but also supported a shift. His first house price was £3500, his wage at the time was £500pa.

Underlines the other issue though. If you really want to get on the housing ladder then you really do have to tailor your cloth and not spaff money on fast cars and all the other 'stuff' I listed that millenials consider 'essential' nowadays.

 

[AMc]

All true, but the % of earnings you can now borrow have also gone up, as in they're willing to lend you more.

Today's society is just too used to instant "buy now pay later" schemes that they never have any money left and therefore can't scrabble the deposit together. The actual mortgage payments aren't the problem.

Anyway, digressing somewhat.

Edit: Your ROI is better these days too. For instance my first property, a 1 bed flat, made £50k in 3 years. Current home, been in 3 years too and up almost £100k...

Swings and roundabouts.

 

[mintmansam]

1982 Average wage in UK £7117 Average cost of house £20897 so 2.94 times average earnings.
2022 Average wage in UK £24600 Average cost of house £281000 so 11.42 times average earnings.
Therefore houses in real terms (% of average earnings) are 388% more expensive or nearly 4 x what they were in 1982.

Be interesting to compare average monthly cost. As house prices were indeed cheaper but interest rates would have been much more , thus % wise maybe similar? Also instead of pure % I’d consider disposable income. At £7117 how much was left after the usual costs, eg if £2000 then I would say houses were x10 more than disposable income. But if in 2022 you have £8000 after everything has gone out then houses are 35x more than disposable income. Thus houses are maybe 3.5x more than 1982. These are pure made up examples. Just highlighting alternative way of looking at things.

For clarity I’m 29 years old, so although buying a house is hard, I don’t agree conform with “It’s not possible, people in the past had it easier” crowd. Life is hard for everyone in every moment in time and history. To look back and say everyone had it easy, is taking for granted the massive leaps in wealth and technology we have now.

 

[Fast H]

An interesting point. OK so in 1982 typical mortgage rate was 16% (!!) so based on average house price noted above you would pay circa £3344 (interest only) or 47% of your (gross) income. Today based on a mortgage rate of 3.5% you will pay £9835 (interest only) or 40% of your (gross) income. So YES to buy a house today based on averages it costs less.

 

[Fast H]

Just to add. Thats just the interest though. You still have to repay the capital. That's another discussion though.