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I can't stand the doom crew anymore
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I agree that's true to a degree, but I was responding specifically to boyse7en's post, where he was talking about 'buying my first house back in the early 1990s'. I was disagreeing with him that it was hard then - not that it has never been hard.
Backtracking a bit now carolt?
The trouble with your premise that it was easier to buy a house in the 90's 'because house prices were lower compared with wages then' is that we were in a recession and so people were out of work, had overtime taken away or were fearful for their jobs. Hence the lower price of housing. Interest rates were also much higher then.
The same will happen in this recession, houses will be cheaper but people will still struggle to afford them because their incomes will be affected. Interest rates will also start to climb soon when the BoE finally stop listening to the government and start grappling with inflation (their primary task).Mortgage Free in 3 Years (Apr 2007 / Currently / Δ Difference)
[strike]● Interest Only Pt: £36,924.12 / £ - - - - 1.00 / Δ £36,923.12[/strike] - Paid off! Yay!!
● Home Extension: £48,468.07 / £44,435.42 / Δ £4032.65
● Repayment Part: £64,331.11 / £59,877.15 / Δ £4453.96
Total Mortgage Debt: £149,723.30 / £104,313.57 / Δ £45,409.730 -
It has always been difficult to afford to buy a house, whether it was in the 70s, 80s, 90s or 00s
Sorry, but when I brought my first house it was 1 X salary and the market was awash with similar properties and I could afford to go out etc, so whats gone wrong
Control is an illusion, chaos is the reality. A successful warrior dances with chaos, and success means simply that one is still alive.0 -
Sorry, but when I brought my first house it was 1 X salary and the market was awash with similar properties and I could afford to go out etc, so whats gone wrong
Well, I'd be very surprised if you told me that the average person could buy a house at the same price as their annual salary, whenever that was.
I'm sure there are people who can buy a house for the equivalent now (friend of my Sister is on about £130k pa including a bonus, you could buy a house in my town for that now) but that doesn't help the averagely-waged person0 -
although there is some truth in this, I was able to buy a tiny flat in 1993 for 2.5 times my salary. I'm in the same job now, and that same flat would now cost 5 times my salary. So it just isn't comparable at all.
Fine, but interest rates were a lot higher so, your net outgoings would have been similar.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Fine, but interest rates were a lot higher so, your net outgoings would have been similar.
Nowhere near.
Mortage of £35,000 cost something like £270/month when mortgage rates were 8% in 1993. That was about a quarter of my wage.
Now a mortgage of £100,000 would cost £644 on 6% which would be more than half of a comparable wage.0 -
Nowhere near.
Mortage of £35,000 cost something like £270/month when mortgage rates were 8% in 1993. That was about a quarter of my wage.
Now a mortgage of £100,000 would cost £644 on 6% which would be more than half of a comparable wage.
Sounds like you had an above average salary in 19930 -
Sounds like you had an above average salary in 1993
I wish. £15,000 - with MIRAS I'm pretty sure I was paying around a quarter, but certainly no more than 30%.
Surely no-one can be arguing that £35,000 at 8% in 1993 is just as affordable as £100,000 at 6% now?
edit: apologies it was 1996! You'd think I'd remember when I bought my first flat, wouldn't you?! Don't think it makes much difference though to the basic point.0 -
Thanks CaroleT, I must have forgotten the lavish parties and new cars that I was buying while I was paying the 2p per month mortgage on my first house:rolleyes:
Obviously you had friends richer than I was in those days, which is fine for them. It was fine for me too, as I managed to afford to save a deposit and pay the repayments (on an endowment mortgage, but that was another story), by scrimping and saving, but the idea that it was easy for everyone to buy is ludicrous.
It is harder for FTBs now, and house prices are daft compared to wages, but that doesn't mean that everyone could waltz into an Estate Agent and flop their wad on table and have their pick of properties in the past either.
No - as I said, you must have been on a rubbish salary OR buying an unnecessarily lavish property.
I was a recent graduate then and I am referring to new grads with no more than a year or 2's work experience, buying an average 2 bed flat in London. Price then - 60K (or 72K in Camden - how expensive!). Salary - new grads average 14K so probably 16-18K after a year or 2. Mortgage = 3 times salary plus small deposit.
Same flats now - 250-500K. New graduate salary - 20K ish? I believe. Maybe 22-24K after a couple of years? So 10-20 times salary multiple to get the same flat.
Of course it was just as hard then. My ar5e.0 -
I wish. £15,000 - with MIRAS I'm pretty sure I was paying around a quarter, but certainly no more than 30%.
Surely no-one can be arguing that £35,000 at 8% in 1993 is just as affordable as £100,000 at 6% now?
I'd forgotten all about MIRAS - The level of Miras was 10% of the first £30,000 of the price of a cost of a house.
Also, interest rates were higher than your quoted 8%...
www.thinkmoney.com
"In recent terms, the price of mortgages is relatively high. Interest rates loosely follow the Bank of England base rate, and the base rate in 2008 (5.25% in February) has been at its highest since 2001.
But compare this to a decade ago – when the base rate was around 7-7.5%, or indeed the early 90s when the base rate was 10-15% - and you will see that historically, mortgages have been much more expensive."Mortgage Free in 3 Years (Apr 2007 / Currently / Δ Difference)
[strike]● Interest Only Pt: £36,924.12 / £ - - - - 1.00 / Δ £36,923.12[/strike] - Paid off! Yay!!
● Home Extension: £48,468.07 / £44,435.42 / Δ £4032.65
● Repayment Part: £64,331.11 / £59,877.15 / Δ £4453.96
Total Mortgage Debt: £149,723.30 / £104,313.57 / Δ £45,409.730 -
Dithering_Dad wrote: »You're such an unpleasant person Carolt. Why can't you just make your point without having to add all the nasty stuff?
Oh dear - back to getting personal again. I should have guessed, you were making sensible posts for a while which always precedes your sudden, inexplicable bouts of picking fights :rolleyes:
(best not to respond, carol)--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0
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