Priced out people: What % drop in house prices do you need?

meme_3 · 3 August 2007 at 9:06PM

Nenen wrote: »

As a comparison, many of my colleagues who bought in this area on a teacher's salary 20 years ago are now in houses worth over £500,000 and could certainly not afford them if they were just starting out now! Even if prices fell by 33% I doubt whether many teachers could afford to buy the houses they afforded fairly easily 20 years ago if they were just starting!

Take it you're a teacher!

Just thought you should know, those of us in industry are not necessarily earning a fortune.

I earn 30K - after 20 years in the industry.

I have a bachelor's degree and a research degree to add to it.

New graduate's at our place get £12K - yes, honestly.

kmate · 3 August 2007 at 9:08PM

well said Dithering Dad.

Whatever happened to having dreams and aspirations in life? Yes, sometimes they are unrealistic, but strange things happen. There is not much joy in working hard and never having a goal to aim for, and for many (myself included) it is "the next step on the ladder" that motivates us. (obviously there are other things in life too!)

In my opinion, if people cant reply in the spirit the post was obviously intended, they shouldnt reply at all.

Nenen · 3 August 2007 at 10:31PM

meme wrote: »

Take it you're a teacher!

Just thought you should know, those of us in industry are not necessarily earning a fortune.
I earn 30K - after 20 years in the industry.
I have a bachelor's degree and a research degree to add to it.
New graduate's at our place get £12K - yes, honestly.

Sorry if my post didn't come across well... yes I am a teacher but try hard not to be too condescending/patronising honestly!

I'm certainly not assuming everyone earns more than teachers! My dh and ds (recently graduated) certainly don't!

I was quoting my profession more as a kind of 'middle of the road' yardstick (not because I think everyone else earns a fortune)! I assume that most people know that teachers earn a 'reasonable' salary (i.e. a bit above the national average but not into 'silly money'). We are considered to be a 'safe bet' by mortgage lenders etc too because, as everyone knows, teachers are always sensible! :rotfl: :rotfl: :rotfl: (I assume the real reason is because we have higher than average job security).

As teachers earn a bit above the national average and can get a decent mortgage, one might expect that a teacher could afford a slightly above average (but not palatial) home. My post was intended to demonstrate how someone who 20 years ago could have afforded a decent home in this area would now be priced out of the market and would need at least a 33% reduction in house prices to be able to afford something similar to that colleagues in the same job used to be able to buy.

Unfortunately, we originally bought in a much cheaper area and this, coupled with some financial difficulties some years ago which set us back somewhat, means that in our late 40s, we are unable to buy something we like while trying to move into an expensive area for my job... it's just so frustrating not being able to afford more than a small 3 bed semi in a really grotty area and knowing that if the 'threatened' HPC occurs it would be possible!

However, I have much to be thankful for... a job I get immense satisfaction from, 26 years of happy marriage to a dh I adore and three great children who are my pride and joy! IMHO that's worth more than a big house... so when I'm feeling really jealous of those who bought lovely houses in this area on a teacher's salary 20 years ago I try and remind myself of that!
(That's not to say I don't have a winge sometimes and wish I'd done things differently re finances, house buying/selling etc!

)

Running_Horse · 4 August 2007 at 6:42AM

Dithering_Dad wrote: »

Oh, off again are you keeperbear?

Just because you don't like his answer, doesn't mean he doesn't have a valid point.

We just moved from an urban Victorian terrace to a village because we want somewhere nice for our daughter to grow up. The old house would have been perfectly "appropriate" for a manufacturing worker like myself.

According to the Upmystreet profile we have just moved from the correct blue-collar area to the wrong white-collar area for middle managers. We managed it because I have always been careful with money; making mortgage overpayments, wearing cheap clothes, and not going out much.

Meanwhile my old terraced street is now full of flash cars (I ride a bike) owned by professionals who didn't buy at the right time, or spent their money on other things. One tiny house even has a kid at posh private school and a Polish nanny.

No doubt some would say our house is not "commensurate with our income", or "appropriate for our family and lifestyle", when compared with our old and new neighbours.

Dithering_Dad · 4 August 2007 at 7:31AM

Running_Horse wrote: »

Just because you don't like his answer, doesn't mean he doesn't have a valid point.

To be honest I don't see what his point was. He had a go at the OP as the though his/her post was just a whinge about not being able to afford a 4 bed detached house, when all s/he actually asked was how much an appropriate house would have to drop before you could afford it. Now, I took this to mean (and so did the more reasonable posters) that although a family of four could afford an "entry level" 1 bed flat or studio, it would be totally inadequate for their needs. They may also be able to afford a 2 bed house but again, if their 2 kids are opposite sex over 7 then the house would not be appropriate for their needs either.

Keeperbear, as per usual, got on his soapbox about people 'making do' with whatever they can afford. He can do this because he is single and lives alone in his 1 bed flat and so can live on the first rung of the ladder. The trouble is that while the OP could afford his flat, they certainly could not 'make do' with with only 1 bedroom between 4 and so may have to wait for an adjustment in pricess before they can afford a property "appropriate for their family" and "commensurate with their needs".

Turning to your post, I'm not sure why you're bringing class into the discussion. I will have to look into my deeds to determine whether my house has been deemed "appropriate" for blue collar or white collar workers. Will I have to move if it's the wrong collar colour? :rotfl:

Running_Horse · 4 August 2007 at 8:37AM

Dithering_Dad wrote: »

Keeperbear, as per usual, got on his soapbox about people 'making do' with whatever they can afford.

This a useful way of avoiding disappointment and depression in life. Our new universities are churning out legions of graduates with totally unrealistic expectations.

Dithering_Dad wrote: »

I'm not sure why you're bringing class into the discussion.

I didn't. The OP talking about houses commensurate with income, and the various distressed professionals did that.

There was a time in the 80s I couldn't afford to buy anything at all. I moved to a cheaper area, worked harder, and bought a very basic property. That was my choice.

pamaris · 4 August 2007 at 9:14AM

keeperbear wrote: »

The terms "appropriate for your family" and "commensurate with your income" are extremely subjective, so your question is pretty pointless.

For example, what kind of property should an accountant earning £45k expect to buy? The answer is the property that he can currently get a mortgage to buy. If someone earns 45k, why should they expect to be able to buy a 4 bedroom detached house? Demand and supply will always determine what property your income can get you.

As for "appropriate for your family", I am sure that most parents with four children will believe that they deserve to buy a four/five bedroom property. However, this is completely unrealistic on a small island such as the UK.

If you need a 20%+ drop in house values to afford an "appropriate" and "commensurate with your income" property then, quite honestly, you need to develop realistic and appropriate dreams. Demand and supply is here to stay, and loads of people want to purchase decent properties.

Haven't read all the replies yet, but wanted to address this. By "commensurate with income" I mean using common sense that the house we should be able to buy should be determined our income and not when we happened to be born and thrust into the boom and bust cycle... What I meant by that caveat was that of course someone on 45k with a family of 4 should not assume that they should be able to buy in Chelsea. However, you would think they would be able to buy a modest, clean home with basic amenities in a safe area.

By "appropriate for your family"... I meant what do you need to have a decent, pleasant, peaceful quality of life. I would take a 2 bed terrace if both my kids were of the same gender. Since they are not, the least that will do for us in the long haul is a 3 bed.

So, I should reform my dreams to be "realistic and appropriate"? Did you share a room with a sister as a teenager? I have no problem with kids of the same gender sharing a room, and actually my kids are sharing a room now, but I don't foresee a 12 year old boy and a 15 year old girl peacefully sharing a room in a 2 bed terrace (they are only 2 and 5 now) throughout their whole adolescence.

ETA: I didn't even really have to reply here, because Dithering Dad replied better than me– twice! Thanks. You got exactly what I was trying to say.

Running_Horse · 4 August 2007 at 9:28AM

pamaris wrote: »

Oh, and I'll ask again... could you afford to buy the home you're living in?

No, because we just moved up the ladder. With another 20 years of modest living and saving? Probably. Could we afford our old house? With modern income multipliers and both earning, probably. That's the highs and lows of the property cycle. Prices will not always be this high.

Running_Horse · 4 August 2007 at 9:33AM

pamaris wrote: »

So, I should reform my dreams to be "realistic and appropriate"? Did you share a room with a sister as a teenager? I have no problem with kids of the same gender sharing a room, and actually my kids are sharing a room now, but I don't foresee a 12 year old boy and a 15 year old girl peacefully sharing a room in a 2 bed terrace (they are only 2 and 5 now) throughout their whole adolescence.

You don't want to know about some of the hovels us 6 kids shared. Maybe that's why I am contented with my modest but happy life. Maybe that's why I waited until I could provide a decent home before becoming a dad. Having kids before you could afford to provide separate bedrooms for them was your choice.

Dithering_Dad · 4 August 2007 at 9:42AM

Running_Horse wrote: »

This a useful way of avoiding disappointment and depression in life. Our new universities are churning out legions of graduates with totally unrealistic expectations.

Which is a valid argument but not really connected with what the OP posted. The OP stated as a deliberate caveat the words "appropriate for your family" and "commensurate with your income". I really can't see how much clearer s/he could have made the initial post. I'm not sure where the graduate or class discussion comes into this, though it would be an interesting debate, so why not create a new thread?

Running_Horse wrote: »

Quote:
Originally Posted by Dithering Dad
I'm not sure why you're bringing class into the discussion.

I didn't. The OP talking about houses commensurate with income, and the various distressed professionals did that.

I know builders and plumbers who earn far more than "professional" people, so I'm not sure what income has to do with profession. Again, with this one, you seem to have an issue with a class system that I thought was finally killed off in the nineties, though perhaps this could be discussed in a different thread as it doesn't seem relevent to this one?

Running_Horse wrote: »

There was a time in the 80s I couldn't afford to buy anything at all. I moved to a cheaper area, worked harder, and bought a very basic property. That was my choice.

I don't think there was a time in the eighties, or indeed any other time in history when house prices are so much higher than the average joe's income. There may just not be the option of "moving to a cheaper area" because even the houses in these areas are too expensive - unless you move from say the South East to Hull in order to get a house, which I'm sure you agree is not a viable option for most people.

Priced out people: What % drop in house prices do you need?

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