OK so the Economist says that the "This ratio (ratio of house prices to average disposable income) is now close to its peak of the late 1980s, and the ratio is flashing red in some cities, such as London ...'. The Financial Times, last weekend (1st Sept) has (Personal Finance page 3) an article on housing titled 'No, it's not the 1980s again'. So who do believe the Economist or the FT? Personally, unless you are a first itme buyer I think that the price of the house has little to do with it. It is the size of the mortgage and the cost of financing it it that determines whether or not you can buy a property. If you are both high earners and you get a massive capital gain on the sale of your existing property, you can probably trade up relatively inexpensivly (i.e. mortgage repayments as a % of your disposable income are probably a lower % than that of a first time buyer starting out). Also 'average' price means little. There are always a few very expensive properties sold each week which distort the 'average' (i.e. arithmetic mean) price. The most important price is the median, i.e. the price you are most likely to encounter when you are looking for a property. This is always less than the average price.