Handy little website courtesy of the IFS - "Where do you fit in"?

Niche

HAMISH_MCTAVISH wrote: »

I have a family member that is a teacher, and is on 34K. Not a department head, just an experienced teacher. A dept head is on closer to 40K.

I bet if there was a debate on Nuclear Scientists you would know one of them as well:rotfl:

michaels

I ran the figures a second time for just me and decided that with the wife and kids under the patio I would be minted

Problem is to buy a house in these parts I am not bidding against the average UK profile so it doesn't really mean anything when typical housing costs for your family size and location are not included.

For example the discussion re teachers' pay - 30k in many parts of the country goes a lot further than 35k in London.

julieq

mbga9pgf wrote: »

No the stats provided in the excel table are titled:

First Time Buyer Gross House Price to Earnings Ratios

Hanish you are a complete loser you know that though dont you?

UK First Time Buyer Gross House Price to Earnings Ratios:

2009 Q2: 4.2 X
1989 Q2 3.9 X

They do teach you how to read in Scotland dont they?

I think Hamish was quoting loan to earnings ratio. Presumably savings filled in the gap. You're both right, but abuse really doesn't help your argument.

HAMISH_MCTAVISH

LydiaJ wrote: »

Consider how your experience of housing might have been different if you'd had some kids, or if your household only had one salary coming in (because of illness, unemployment, relationship breakdown, bereavement... it doesn't matter what reason - some of them aren't things you can just choose to avoid).

We have had several periods of unemployment, up to 6 months for one or the other of us at a time on occasion. Because we are prudent, and both work, it gives us the safety net to be able to afford such a thing.

Then try to understand why so many of your "housebuying is a no-brainer and renting is for losers" type comments are regarded as crass and insensitive by many posters.

The only reason we are in the position we are in today is because we bought our first house very young, and stretched ourselves to the max, long before we made anywhere near the money we do today.

Most of us don't dispute that it has worked out very well for you, but things were likely to work out well for you with a top 5% household income anyway. It isn't as simple for those of us lower down the curve.

Yes but I wasn't just given a top 5% household income. It's something we have both worked bl00dy hard for, and we have it by making tough lifestyle choices and prioritising financial security over other things.

It can work out that well for anyone that puts their mind to it and works hard. Lots of people choose not to do so. Some people prioritise other things over financial security. That is their choice, but that choice comes with negatives as well as positives.

Society owes you nothing. You have to work for everything you want in life. Cheap houses are not a right..... There has always been a great deal of sacrifice involved in getting anything worthwhile, houses included.

I see a lot of people on here in part time work, or on benefits, or choosing to prioritise other things over a career, that moan about house prices today.

But they don't seem to realise it was no different 20 years ago either.

When we started out, house ownership was far more expensive than it is today, we really did put 70% of our income into owning a house when we started, but today it's more like 40% for most people.

And when we started out, we knew a lot of people that could not afford a house then at all, or could not get a mortgage.

I just don't think things have changed a lot since then. In those days it was the high rates that were the problem. Today it's high prices in some places that are a problem.

But either way people still pay less today than 20 years ago as a percentage of income.

PasturesNew

I am 14%
It didn't ask about rent/mortgage though, which can seriously affect what you've got.
Some have £20k and £50/month mortgage; others have £20k and £1k/month rent/mortgage.

mbga9pgf

HAMISH_MCTAVISH wrote: »

But either way people still pay less today than 20 years ago as a percentage of income.

With the lowest interest rates since the BOEs inception. A situation that will not last the 25 year average length of a mortgage.

HAMISH_MCTAVISH

mbga9pgf wrote: »

With the lowest interest rates since the BOEs inception. A situation that will not last the 25 year average length of a mortgage.

Even at peak of the last boom, with the highest rates in a decade, the percentage of disposable income was only 45%. Still a shedload better than 70% 20 years ago.

Cleaver

Apparently we have a income higher than 96% of the population. Not sure I believe that really.

Although we don't have any kids, pay quite low council tax and it would explain why we jet off on holiday every 6 weeks...

mbga9pgf

So, where do you expect rates to be going to then once the BOE start to suck up the QE?

Want to comment on the BOEBR/Typical mortgage rate split between then and now? If rates get up to 4% over the next few years, you will be looking at 8% mortgage rates easily, thats with a 25-40% deposit. Housing is about to get a damn sight more unaffordable, together with rises in taxation and public sector cuts, there are no concerns on my part for runaway inflation. Besides, late 2011 will see me reaching savings at 3X my salary. I wouldnt mind betting I will get a pretty plush pad with the falls we will see between now and then virtually mortgage free.

julieq

Why on earth would there be 8% mortgage rates on 4% base rates?

You're getting desperate now. Long term, mortgage deals in a stable economy track base rate pretty closely. There is no reason at all why there should suddenly be a 100% differential. As you say there's no great inflationary pressure in the general economy, so how long will it be before you get an eightfold increase in base rates anyway?

And if the economy is strong enough to require raises in interest rates, a lot of the underlying problems in the fundamentals which we're told will destroy prices will vanish too by definition.

I think things will get worse over the winter. I'm expecting 4 or 5 year stagnation in prices, which is after all a 10-15% correction in prices in real time on top of the falls we've already had. But the idea that we have big absolute falls to come is yesterday's self delusion, sorry, and the analyis requiring massive inflation and high interest rates at the same time as plunging employment and wage deflation is intrinsically self contradictory.