It is like a war

Gemmzie

It scares the pants off me, knowing that there's a very good chance I won't be able to ever afford a house in the area I've grown up in (by area, I mean REGION of the country :eek:)

A friend of mine is trying to get affordable housing through a scheme (with all their slightly ridiculous clauses, some make sense, some are just stupid). The cost of the houses £130k :eek: This is affordable!

The average wage here is probably around £12k, which is terrible. The only way to get on the property ladder is to buy a house between 4+ people.

Then we can't retire until 70, although that'll probably rise. And I read recently that if a graduate after 2007 will pay HALF of their wages to tax, student debt repayment and pensions (theirs and the present oversized retired population). This is before mortgages, living costs etc.
It's a scary state...

ZTD

Gemmzie wrote:

It scares the pants off me, knowing that there's a very good chance I won't be able to ever afford a house in the area I've grown up in (by area, I mean REGION of the country :eek:)

You will. Just be patient. The current surge is driven by desperate people doing desperate things. House prices have always risen...and fallen. Inflation is the fun-house mirror that distorts reality, but reality is still there.

HokeyCokey_3

ZTD wrote:

You will. Just be patient. The current surge is driven by desperate people doing desperate things. House prices have always risen...and fallen. Inflation is the fun-house mirror that distorts reality, but reality is still there.

It looks like when it happens, it will be a big fall! :j

Pobby

Great graph!1st peek a ratio of nearly 5x earnings,drop to 3.5,Late 80s peek 5x earnings drop to 3,current peek 5.75, drop to ?.My guess is its gonna be back to around 3.5x earnings!

Gemmzie

Pobby wrote:

Interestingly enough I live in the least affordable county in the UK.Devon,where wages are low and property is high.Plymouth,where I am,has always been cheaper tham any where else in the county but over the last month our so it seems to be having a rally and catching up with the rest of the area.

Oh I don't know about that, wages are worse and property is even higher this side of the Tamar

ZTD wrote:

You will. Just be patient. The current surge is driven by desperate people doing desperate things. House prices have always risen...and fallen. Inflation is the fun-house mirror that distorts reality, but reality is still there

I hope so, but feel that here, the retired are going to kill it all, like the 21st Century Brighton

Pobby

Gemmzie.I take it you are in Cornwall.Lived there myself.I know what you mean about working pay.It`s dreadful there.

Gemmzie

Pobby wrote:

Gemmzie.I take it you are in Cornwall.Lived there myself.I know what you mean about working pay.It`s dreadful there.

Indeed I am

We used to live in Plymouth, but was easier for father this side with his old job. Hasn't helped mum jobwise though.

Unless your in teaching or the NHS, pay is dire

ZTD

Gemmzie wrote:

I hope so, but feel that here, the retired are going to kill it all, like the 21st Century Brighton

Don't be so sure. If the music stops, the retirees will feel it hardest of all.

Does anyone know if there is a floor to the cost of living adjustment? i.e. can it be negative?

MasterBell_2

This is a really great read and a very interesting,
as a young trainee i earnt nothing (in a job which is meant to pay well)
yet everyone around seems to think that i should be doing this and that.

Now i accept that i got my self into this situation and i will eventually get out of it.
but i think that society has a lot to blame, i think its all well and good saying that a school should teach kids basic financial issues and morals but surely the blame is with parents to a certain extent also and the ease of borrowing money from banks etc
at the age of 18 i borrowed more than my yearly salary to buy a car and fund the expenses, yet not once was i asked if i could afford it (apart from my dad) add to this a mobile phone, clothes and other items that us as young people feel we should have then, its a disaster waiting to happen
IMO, hope that makes sense

Big_O

Bit of a ramble here, not sure if I'll make much sense...

I stand by my previous posts (though I'm clearly in the minority ) but there clearly is a problem with debt in this country. I guess the three questions are then:

1) Is this a bad thing?

2) If it is, what's the root cause?

3) What do you we do about it?

Answers, or at least my take on them...

1) Debt is only a bad thing if it's unsustainable. Borrowing money is a good idea when it's for a necessity that you can't afford right now or for an investment. This can be a house, a car to commute to work in (which are both necessities and investments - a car may depreciate, but your return is being able to get to work and get paid) or you're a company borrowing to expand; e.g. a new machine for a factory, bigger premises for a shop. You then should get increased returns to cover repayments. Now, as long as your income covers repayments there's no problems, however much you've borrowed. Currently, as a nation, the level of debt is sustainable and will be for the forseeable future. This assumes that the price of oil doesn't rise to $100 / barrel, the US and Chinese economies stay buoyant etc etc.

2) There're a lot of things at work here. Deregulation, INTENSE competition and a slicker financial system have contributed to easier credit for everyone. I think this ought to be a good thing, as it means that people ought to be able to get access to things they weren't previously, such as a car to get to work or a house. However, as many people have pointed out a fair few people (:)) are using this easy credit for luxuries and/or junk. Whch clearly has no return and is therefore not an investment. Now, is this an argument for limiting cheap credit - 'people are naturally irresponsible and therefore should be denied the choice'? I think not and would rather not have my access to cheap credit limited because someone else will use it to buy junk. I also find it rather patronising to base economic policies on the idea that the average person is an idiot.

3) There are a variety of things we could do. Increased regulation to limit credit is one, but not something I agree with for the reasons ablove. What needs to be doen is a change in attitudes and education. This starts with ALL OF US. I know it's hard, but just don't buy into the keeping up with the Jones's attitude. Do you really need those designer clothes? Of course not and certainly not on credit! Save for your luxuries and spend your disposable income on more fulfilling things. (I am about to pay out to take up a evening college course to learn a new skill) And tell people this! Be proud that you are not spending your money on junk! Try and influence their opinions! And if your friends insist you need the latest junk, ignore them or get new friends! And tell them about MSE!

Yes, I dislike the rat-race of consumerism and the attendant one-upmanship. But that is not incompatible with my earlier posts. I try to opt out of these rediculous fashion trends. My clothes may be cheap and worn, but instead I have a PC that I can access the internet with. I try to pick and choose from products as to how they wil improve my life. I have a mobile phone so that I can call and text my friends and family, bringing us closer. But it's a second hand ancient Nokia. Some people may laugh at it, but who cares? It's improved my life and I spent next to nothing on it.

Sorry if this was a bit long!