Another take on 'affordability'.

Thrugelmir

Oberservations.

Once they buy a house their overall budget will increase. More than the difference between the rent and mortgage repayments.

An 88% LTV mortgage is optimisticly priced at a 5% interest rate.

£22k is a good rate of pay for a hairdresser in the majority of salons.

In general people don't have the habit of saving.

What do they spend on furnishing, decorating, improving their new home and garden?

Do they get long term sick pay from their employers?

What's the likelihood of them being together 20 years later?

Graham_Devon

fc123 wrote: »

....2 years later they decide to have a baby and Shaznay doesn't really want to go back to work but the budget doesn't balance despite Geoff gettting a £5kpa pay rise.
So she goes back to work but has to shell out £800pcm on childcare and is exhausted much of the time.

I know tax credits and things kick in but I am going back to watch G Ramsay Nightmares now.....

I don't need to say anything on this thread!

44k coming in isn't bad, and to be honest, I would expect two people to be able to afford a house on this. Don't think it's anything of a surprise.

92203

If only it was so simple.....

No doubt in reality, things would go wrong or circumstances would change while they were saving for their deposit.....

Also, it is very unlikely that both people in the couple would be earning quite that much. This is somewhat of a utopian scenario.

In reality..... the average house price should be 3-4 times the average wage.

Even a person working on minimum wage should be able to afford their own house, even if it is a crummy 2 up 2 down terrace in a rough area. Nowadays, you'd need to be earning 25k to get such a property.

By allowing property speculation and inflation to take place on the scale
it has, the government has set a time bomb which will go off with spectacular consequences. In 50-60 years, when people hit retirement age or are no longer able to work, the government will have to fund their accommodation aswell as their upkeep. Had a lid been kept on house prices, more people would own their own properties and be less of a burden as a result!

To illustrate how badly prices have been inflated, according to zoopla, the lovely detached house my parents purchased for £250,000 two years ago was purchased for £60,000 in 1999.

I earn £27,000 and have only ever been able to afford terraced housing in poorish areas. Had I been working in 1999, my wage would have been equivalent to around £15k, which would have given me the ability to afford a house like the one my parents live in.

Like many people my age, I feel cheated, sold out, and very worried about my future. Why should I pay 4-5 times more for something just because I was born 10 years too late?

Ultimately, for my generation, if you are an average Joe, there is no point in working hard. Ultimately when people my age get to retirement age, they'll get treated the same, irrespective of how hard they've worked, or even if they've worked at all!

PasturesNew

£22k .... I wish I'd been a hairdresser.

To be honest, it was offered during my 2 minutes career slot. I was asked: "Do you want to be a nurse, secretary, hairdresser or work in the factory?" At the time I chose secretary because I'd done typing, hate blood, the local factory smelt funny .... and hairdressing was done by girls who couldn't read/write (they went off on day release from age 14 for it).

Also, as a hairdresser, I'd probably know how to look good ... thus being able to pull a decent bloke ... resulting in being in a 2-income household.

baileysbattlebus

PasturesNew wrote: »

£22k .... I wish I'd been a hairdresser.

To be honest, it was offered during my 2 minutes career slot. I was asked: "Do you want to be a nurse, secretary, hairdresser or work in the factory?" At the time I chose secretary because I'd done typing, hate blood, the local factory smelt funny .... and hairdressing was done by girls who couldn't read/write (they went off on day release from age 14 for it).

Also, as a hairdresser, I'd probably know how to look good ... thus being able to pull a decent bloke ... resulting in being in a 2-income household.

You must have had the same career advisor I did.

I didn't choose anything on the list offered and ended up in engineering.

I can design and layout an efficient production line, amongst other things. Not much call for that sort of thing around Reading now.

Should have been a hairdresser.

carolt

V v few hairdressers earn 22K.

Plus fc is right on the issue of what happens if they have a kid. Obviously, we've not touched on what happens when Shaznay's salon closes down, due to it being uncompetitive to paying it's staff more than all the other local salons. And Shaznay can't get a job; can only get one that pays much less. And the boiler breaks; no landlord to sort it out for free now! That's their emergency fun and holida fund cleared out; might have to borrow a bit from the bank of mum and dad, too...

And their short-term 5% fix runs out, and the only rates they can get are much higher (don't want to be on the SVR as they're bright enough to know that'll shoot up within a year or so...).

Plus Shaznay's run up a credit card bill buying interview clothes to try to get another job, and messed up their credit rating so they're finding it hard to remortgage at all. And their credit card rates have jumped to over 20%.

Plus Geoff (what young person these days is called Geoff? - !!!!!!!) hurts his leg playing football with his mates, tearing his Achilles tendon in the process, so he's off work for a while - then his wages are frozen and all overtime is removed.

Oh, and did I mention that the car packs up, but owing to the car scrappage scheme, they can't find a cheap replacement anywhere... :eek:


Stuff happens. That's 'real' life.

Emy1501

I doubt there are too many Insurance Sales supervisors in the their early 20's. Also outside of South East not sure they would earn that either. Insurance on a car would proably be close to £100 a month and most young people I know will want one each rather than one between 2. Also most I know will be owning a nearly new car probably at least 10K with the loan to go with it.

As for holidays they are likely to want at least 2 or one together and one with their mates.

Also highly likely they will go out most weekends if not every weekend. Most people I know of the age will think nothing of spending £100 each in a weekend. Most will also think nothing of spending £100 on jeans £300 on a bag and shoes etc.

Most youngsters have not been brought up in a saving world. Therefore they spend to 0 each month. They have grown up in the belief they could get 100% mortgages etc.

Its going to take years to train the the young of today.

zappahey

fc123 wrote: »

it'll cost an extra £20 to pay for a babysitter and her cab home.

Heh, I guess you haven't booked a babysitter recently

System

The responses in this thread sum up perfectly why some people will never own a house, for some everything is destined for a negative outcome, like:

92203 wrote: »

No doubt in reality, things would go wrong or circumstances would change while they were saving for their deposit

"no doubt" whatsoever that something is going to go wrong. Seriously? What planet are some of you on?

Millions of people are in a similar situation to the one Cleaver portrayed and people are getting on with it and managing fine, sure a small proportion don't but that's life, the sooner some of you realise it the sooner you'll move on.

lostinrates

I would hope they'd save that weird £80 for maintaining the property they rent.

Is cool otherwise, I thin it makes sense. Who'd argue with that. In reality the hairdresser probably has store cards/credit for fashion purchases.

also, they will get tax credits if they have a kid....won't they?