I can't stand the doom crew anymore

boyse7en

mr_magoo wrote: »

Ha! Ha!
It wasn’t difficult for those guys with the 125% sub prime mortgages, they were quite easy to get.
I have brought properties throughout all the decades you mention, so I put this to you.
A big factor throughout all this time has been the ever increasing multiples of wage ratio you could borrow. This, has caused these massive and false equity bubbles. I had friends lose houses in the early nineties because of the crash, you may have benefited from that as you say you purchased then, why did you buy then? Was it because it was more affordable, as these ratios had dropped (good decision) or did you buy late on when prices were higher and not so affordable (not so good decision). What ratio did you buy at?
Of course buying a house is expensive but there are times when it is cheaper to buy, one of those times will be coming up when this cycle is finished.
With this being a money saving forum I suggest if anyone is thinking of buying now, weigh up your options and hold fire, because contrary to what this guy thinks it will be easier on your wallet.

I bought my first house in the 1990s (1994 from memory) because I had left University, moved back with my parents, got a job and wanted to move out from my parent's house (I'd got used to having my own space while renting at uni)
I didn't really have any idea about whether it was a particularly good time to buy - I wanted a house and bought it when i could. I never considered it as an investment.

I suggest if anyone is thinking of buying now, weigh up your options and hold fire, because contrary to what this guy thinks it will be easier on your wallet

Look, i don't think now is a good time to buy. My point was to a previous poster who stated that he wanted things to go back to the time when a FTB could get a house and not have to make sacrifices in lifestyle - my experience was that to afford to buy a house in the 90s I had to scrimp and save.

ad44downey

Great news.

justpurchased aka Mr Yo-yo makes a 'triumphant' return.

This has really made my day.

carolt

boyse7en, I remember 1994 well, and I like you, was a recent graduate too - I suspect we are the same age. I also well remember house prices, interest rates, and graduate salaries.

I'm genuinely baffled as to how it was such a struggle for you. Could you do us all the favour of telling us what your salary was at the time, and what the house price was, or any other info to make sense of this for me?

Much appreciated.

boyse7en

House price was just under £40k (2 bed Victorian End-of-terrace, needed some minor work doing), salary was £9k.

Don't know how that really compares to elsewhere, but North Devon has always had (in my memory) high house prices (due to second homes, city-dwellers downsizing, etc) and low wages (a report from 2005 I found says that average wages here are about 75% of the national average)
No idea what the interest rate was at the time, but I'm sure you can find out somewhere if you're interested

savvy

exup wrote: »

unlike the call centre that called me to buy a phone and I politely wound him up until he swore at me, then I put the phone down on him and laughed myself silly..:rotfl:

LOL I had one one trying to sell me Pomegranate juice or something.............but I mistook him for the Fonejacker TV programme, when I worked out he was being serious I ended up crying with laughter at my mistake so much I couldn't talk to him and everytime he spoke I just laffed even more..................awww bless, he spent 30 mins on my mobile listening to laffing and screeching down the phone....................and STILL didn't get a sale :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

carolt

boyse7en wrote: »

House price was just under £40k (2 bed Victorian End-of-terrace, needed some minor work doing), salary was £9k.

Don't know how that really compares to elsewhere, but North Devon has always had (in my memory) high house prices (due to second homes, city-dwellers downsizing, etc) and low wages (a report from 2005 I found says that average wages here are about 75% of the national average)
No idea what the interest rate was at the time, but I'm sure you can find out somewhere if you're interested

Gosh - high high price at the time, I agree, and low wage - though if London paid say 16K for someone in your position, can easily believe Devon paid 9K. Did you put down a deposit, as it sounds a highish salary multiple for that time - I thought 3.5 times multiple was the maximum then?

And out of interest, do you have any idea what the equivalent salary/house price would be now?

Dithering_Dad

carolt wrote: »

Gosh - high high price at the time, I agree, and low wage - though if London paid say 16K for someone in your position, can easily believe Devon paid 9K. Did you put down a deposit, as it sounds a highish salary multiple for that time - I thought 3.5 times multiple was the maximum then?

And out of interest, do you have any idea what the equivalent salary/house price would be now?

Very friendly post carolt, now that you know the full details.

It's a shame that you don't seem able to just hold back on your attacks for a moment to get all of the facts. Not everyone lives in London. Had you simply taken the time to find out a bit more about boyse7en's personal circumstances you would have found that he actually did know what he was talking about, as far as his experiences in the 90's.

I'm not trying to start another argument (as you can see, I've bailed out as soon as I saw it kicking off in this thread), I just think you should put a curb on that temper and give people a chance before you jump in.

Just an opinion and I hope you take it in the way it was meant. Some of your posts are pretty good but a lot of the content is lost in the aggression and a lot of newbies are chased away by your tone.

boyse7en

I had a deposit of about £4000 (summer jobs since age 13, living in a tourist area has some advantages:)) Can't remember exactly without looking up all the paperwork.

Equivalent is difficult to say with any precision but I employed an assistant last year straight from Uni at £17k to do the same work as I did. The house is probably worth about £150k now (house next door sold for £185 in Summer 2007, so extrapolating/guessing from that).
Now is obviously far worse on a P/E ratio, but then that isn't a surprise.

carolt

boyse7en wrote: »

I had a deposit of about £4000 (summer jobs since age 13, living in a tourist area has some advantages:)) Can't remember exactly without looking up all the paperwork.

Equivalent is difficult to say with any precision but I employed an assistant last year straight from Uni at £17k to do the same work as I did. The house is probably worth about £150k now (house next door sold for £185 in Summer 2007, so extrapolating/guessing from that).
Now is obviously far worse on a P/E ratio, but then that isn't a surprise.

Maybe our views are not that dissimilar then, though as I've stated, your initial post suggested otherwise. I suppose paying a mortgage on 9K a year must have been hard just because it's so low that there's not much left after you've paid for the basics (and certainly, food, clothes etc were relatively higher then than now, let alone non-essential electricals). How long did it take for you to realise a reasonable salary? (As a graduate, it must have been pretty depressing, especially if you had friends from uni working in London, or in the professions etc, where salaries were much higher, even in Devon.)

What was your line of work, if you don't mind my asking?

neverdespairgirl

boyse7en wrote: »

House price was just under £40k (2 bed Victorian End-of-terrace, needed some minor work doing), salary was £9k.

In 2006, £40,000.00 from 1994 was worth:

£54,990.29 using the retail price index
£54,405.91 using the GDP deflator
£64,871.79 using the average earnings
£72,815.63 using the per capita GDP
£76,244.87 using the share of GDP

So looks pretty cheap to me, do you think you could get it now for the equivalent price?

I think your earnings were low:

In 2006, £9,000.00 from 1994 was worth:

£12,372.81 using the retail price index
£12,241.33 using the GDP deflator
£14,596.15 using the average earnings
£16,383.52 using the per capita GDP
£17,155.10 using the share of GDP