Housing Affordability has peaked, now decreasing

Emy1501

Graham_Devon wrote: »

Fair enough.

The statistics show somehting different. Though I would imagine 1 bed's in the the very inner of big cities did well.

Up until 2006 probably. In many inner cities in England apart from London. ie Manchester, Birmingham, Nottingham, prices are probably 40-50% less than peak for many flats.

I suspect people who bought in areas like central London and then moved further out would have benefited from HPI but I suspect the majority of people going up the ladder would not have

[Deleted User]

rumbaba wrote: »

UOTE=ThrowingStonesAtYou;28207137]Ignoring the fact that you're clearly only here to wind people up, I can't get my head round this 'housing ladder'.

Firstly you said FTBs buy 1 bed flats and later sell for a profit, but this implies that the next 'rung' has moved even further away, so they are even worse off as a result, despite the apparent profit.

Also, my daughter will be 18 when I am 42, so I expect she'll be leaving home just after I've made it into my 40s. Why am I going to want a 4 bed detached once my kids have left home? Seems to me people have most need for 3 bed semis when they are in their mid-late 20s and in their 30s, after that you're probably better off downsizing as you don't need the space..

I got onto the first step of the property ladder at the age of 19. I was on a very low wage and couldn't afford anything other than a tiny 2 room and bathroom delapidated cottage in a not very nice area. It cost me £6,000. I did it up myself and lived in it for about 10 years. It wasn't pleasant living there and friends in rented property had nicer houses. But I made a profit of a few thousand when I sold.

I then moved in with my now husband who bought his first flat for £30k. We sold that about a year later for £39k and bought a new detached house in a nice area for £100k. I think we had something like £10,000 profit from previous houses and a few thousand pounds of savings for a deposit.

We got a flexible morgage and paid off as much as we could each month. We didn't have holidays or nice cars. We wanted rid of the morgage. We got it all paid off a couple of years ago. The house had doubled in value.

Just recently we decided to move out to the country. We got a nice house by the sea with a huge 1/3 acre garden backing on to open countryside. This house is more than twice the size of the previous one and luxurious by comparison. It's a HUGE step upwards. This house would have cost half a million where we used to live. But out here in the sticks it cost less than our old house.

So at the age of 46 I upgraded to a MUCH bigger house - and paid for it in cash. We've been carefull with our money and now, largely because of investment in property, we are well off and able to really enjoy life.

All of my friends and family are in the same boat. Most are wealthy and most of that wealth has come through property.

I've no idea whether or not things will change in the future. I supsect not as people always need a place to live. No matter how hard up I think there's always a way onto the property ladder if you're willing to set your sights low enough in the beginning and make sacrifices. That *might* mean waiting until you're older to have children. That's what a lot of people do. You can make good money out of property - everyone I know has done so. But it's not always easy money in the beginning (although it is for a lucky few). You have to be prepared to make sacrifices.

nollag2006

Deleted_User wrote: »

I got onto the first step of the property ladder at the age of 19. I was on a very low wage and couldn't afford anything other than a tiny 2 room and bathroom delapidated cottage in a not very nice area. It cost me £6,000. I did it up myself and lived in it for about 10 years. It wasn't pleasant living there and friends in rented property had nicer houses. But I made a profit of a few thousand when I sold.

I then moved in with my now husband who bought his first flat for £30k. We sold that about a year later for £39k and bought a new detached house in a nice area for £100k. I think we had something like £10,000 profit from previous houses and a few thousand pounds of savings for a deposit.

We got a flexible morgage and paid off as much as we could each month. We didn't have holidays or nice cars. We wanted rid of the morgage. We got it all paid off a couple of years ago. The house had doubled in value.

Just recently we decided to move out to the country. We got a nice house by the sea with a huge 1/3 acre garden backing on to open countryside. This house is more than twice the size of the previous one and luxurious by comparison. It's a HUGE step upwards. This house would have cost half a million where we used to live. But out here in the sticks it cost less than our old house.

So at the age of 46 I upgraded to a MUCH bigger house - and paid for it in cash. We've been carefull with our money and now, largely because of investment in property, we are well off and able to really enjoy life.

All of my friends and family are in the same boat. Most are wealthy and most of that wealth has come through property.

I've no idea whether or not things will change in the future. I supsect not as people always need a place to live. No matter how hard up I think there's always a way onto the property ladder if you're willing to set your sights low enough in the beginning and make sacrifices. That *might* mean waiting until you're older to have children. That's what a lot of people do. You can make good money out of property - everyone I know has done so. But it's not always easy money in the beginning (although it is for a lucky few). You have to be prepared to make sacrifices.

Good for you scarter - what a lovely post!

Hope you have many happy years in the countryside !

Graham_Devon

Scarter, good post.

Just wondering.

Put yourself at 19 years old today. You said you were on a low wage, so lets say you are on £8 an hour working 39 hours a week.

Thats £14,179 a year after tax (very roughly).

Take a property at 90k. Don't think thats unreasaonable for a starter place.

Could you do what you did then, today, do you think?

chucky

Graham_Devon wrote: »

Scarter, good post.

Just wondering.

Put yourself at 19 years old today. You said you were on a low wage, so lets say you are on £8 an hour working 39 hours a week.

Thats £14,179 a year after tax (very roughly).

Take a property at 90k. Don't think thats unreasaonable for a starter place.

Could you do what you did then, today, do you think?

probably not - but each generation has different challenges.
you have to be lucky and also to an extent you have to make your own luck.

bernard_shaw

Deleted_User wrote: »

So at the age of 46 I upgraded to a MUCH bigger house - and paid for it in cash. We've been carefull with our money and now, largely because of investment in property, we are well off and able to really enjoy life.

All of my friends and family are in the same boat. Most are wealthy and most of that wealth has come through property.

I've no idea whether or not things will change in the future. I supsect not as people always need a place to live. No matter how hard up I think there's always a way onto the property ladder if you're willing to set your sights low enough in the beginning and make sacrifices. That *might* mean waiting until you're older to have children. That's what a lot of people do. You can make good money out of property - everyone I know has done so. But it's not always easy money in the beginning (although it is for a lucky few). You have to be prepared to make sacrifices.

Scarter, your self-serving post more than adequately illustrates some of the opportunity cost of chasing profit through property.

What a damning indictment of how skewed values have become in our property-fever Christmas-consumption economy.

In your case, those "sacrifices" you recommend have included half of your life. You suggest that only by the age of 46 can you "really" enjoy life. I'm sorry, but you're too old to fully enjoy life now - you've missed it, you've wasted half of it chasing money. You even advise delaying childbirth in order to "make good money". Preposterous.

You have mistaken money for wealth. You are confusing standard of living with quality of life. You are not "well off". You have impoverished yourself.

[Deleted User]

Graham_Devon wrote: »

Scarter, good post.

Just wondering.

Put yourself at 19 years old today. You said you were on a low wage, so lets say you are on £8 an hour working 39 hours a week.

Thats £14,179 a year after tax (very roughly).

Take a property at 90k. Don't think thats unreasaonable for a starter place.

Could you do what you did then, today, do you think?

As I said, back then the typical starter flat was £30 K or more but I couldn't afford that so I managed to get a place for £6k. It wasn't a palace and I had to put in a bit of travelling time to get from my home (in a little ayrshire villiage called Kilbirnie) to my place of work in Glasgow.

I seem to remember that my salary was £8k pa before tax back then. And I'm pretty sure that I could have got a mortgage of £20k but would also need something like a 10 or 20% deposit. So I was looking for somewhere under £22k. There were a few flats available at this price back then but I chose the much cheaper, smaller and in worse condition cottage as it would be easier for me to do up. In retrospect it was a mistake - I'd have made a bigger profit had I gone for one of the flats. But anyway...

Could I do the same today? Yes - you can still get very cheap little properties if you're prepared to travel.

Say for example that on the salary you quoted you could get a mortgage of £45k if you had a deposit of 20% or so (not sure exactly what's possible now). In the same little villiage where I bought my first house I could buy this for £34,950 (which is an absolute palace compared to my first place):

http://www.primelocation.com/chain-free-property/details/id/THXP5354737

Now that's just one of many that would fall within budget and if you really searched long and hard I'm sure you could pick up something much cheaper. It took me a while to find my little place - although back then there were lots of flats within my budget.

You can get 3 and 4 bedroom houses for way less than your *reasonable* 90k!! I think the youth of today expect everything to be handed to them on a plate. Back then I don't know of many people that could afford the type of house that today's youth seem to think of as *necessary*. But that's always going to be the case because they've grown up with more than we ever had when we were young. Their expectations are higher.

HAMISH_MCTAVISH

Deleted_User wrote: »

I got onto the first step of the property ladder at the age of 19. I was on a very low wage and couldn't afford anything other than a tiny 2 room and bathroom delapidated cottage in a not very nice area. It cost me £6,000. I did it up myself and lived in it for about 10 years. It wasn't pleasant living there and friends in rented property had nicer houses. But I made a profit of a few thousand when I sold.

I then moved in with my now husband who bought his first flat for £30k. We sold that about a year later for £39k and bought a new detached house in a nice area for £100k. I think we had something like £10,000 profit from previous houses and a few thousand pounds of savings for a deposit.

We got a flexible morgage and paid off as much as we could each month. We didn't have holidays or nice cars. We wanted rid of the morgage. We got it all paid off a couple of years ago. The house had doubled in value.

Just recently we decided to move out to the country. We got a nice house by the sea with a huge 1/3 acre garden backing on to open countryside. This house is more than twice the size of the previous one and luxurious by comparison. It's a HUGE step upwards. This house would have cost half a million where we used to live. But out here in the sticks it cost less than our old house.

So at the age of 46 I upgraded to a MUCH bigger house - and paid for it in cash. We've been carefull with our money and now, largely because of investment in property, we are well off and able to really enjoy life.

All of my friends and family are in the same boat. Most are wealthy and most of that wealth has come through property.

I've no idea whether or not things will change in the future. I supsect not as people always need a place to live. No matter how hard up I think there's always a way onto the property ladder if you're willing to set your sights low enough in the beginning and make sacrifices. That *might* mean waiting until you're older to have children. That's what a lot of people do. You can make good money out of property - everyone I know has done so. But it's not always easy money in the beginning (although it is for a lucky few). You have to be prepared to make sacrifices.

Great post.

Absolutely spot on.

Buying a house has never been easy. It's not supposed to be easy. But the one sure way to get ahead and minimise the amount you spend over the long run is to buy whatever you can as early as you can in life.

[Deleted User]

Bernard - each to his own. All I can say is I've always been satisfied and content with my life choices. When I was young it was the norm to have to work hard and make sacrifices to get the things you wanted. People were happy to work for the things they wanted in life. You accepted that you simply couldn't have what you couldn't afford - and either settled for less or worked longer hours/got a better job.

It never seemed like a sacrifice to me then and now - well, life is easy. I wouldn't do it any other way if I had my time over. Except for perhaps chossing a flat over my little cottage for my first house!

But if you're happier doing things another way then that's all that matters. There is no obligation to make sacrifices to buy a house if you can have a happier life doing things differently. You're clearly very happy with your lot and have found a different route to happiness. I wish you all the best!

[Deleted User]

I will also add that I remember endless lectures from my mum and dad about how *I* didn't realise how easy I had things.

They were married in the early 50's and spent 10 years living in a 1 room (no bathroom, no kitchen) rented room above the paintshop in my grandad's back yard. They saved every penny, went out for walks for entertainment in order to save the 50% deposit that was needed back then for their first house in Surrey. They were in their mid 30's before they could aford kids. I think they paid something like £2,000 for it. They sold it for £6k and moved up to Scotland where they stretched themselves to the limit to buy a house for £11K. We didn't have much as kids - the money went on the house.

They died a couple of years ago and the £11k house sold for £230k. That money came to my brother and I. So my parents taught us to live (and be happy) on very little, not to buy what we can't afford and left us with a very nice little nest egg.

If I had kids I'd want to do the same for them. As it is, I don't have. So our house is essentially a big part of our pension fund. We don't need to save so much as we can release equity from the house.

I don't know - I think get onto the property ladder is well worth a bit of sacrifice. We all think that life's not worth living past 30 when we're in our teens and 20's and we all change our minds when we get there (at least, those of us that are comfortably off do! )