Why is property unaffordable for even the relatively well-off among the population?

DervProf

REAL_MEN_DONT_RENT wrote: »

Property isn't a right. We worked damn hard for ours now you should too.

So, you are one of those "hard working families" that I used to hear about.

Tell me, just how hard did you work ? Did you lick road clean with t' tongue ? Or did Gordon bail you out with low interest rates and a nice dollop of tax credits ?

Jim_B_3

REAL_MEN_DONT_RENT wrote: »

Property isn't a right. We worked damn hard for ours now you should too.

You got !!!!ed over and had to work hard, so now everyone else should too? Nice.

Do you refuse to let your kids have any toys that weren't available to you when you were their age? After all, why should they benefit from an improved society?

Do you think young people today shouldn't be treated using medicines that weren't available when you were their age? After all, why should they benefit from an improved society?

Losing_the_way

REAL_MEN_DONT_RENT wrote: »

Property isn't a right. We worked damn hard for ours now you should too.

The attitude of many students is understandable as they have the added disadvantage of student loans to payoff. The market is knackered for the medium term and there is little evidence that anything will be done to improve things for the next four and a half years. Best that can be hoped for is that things stabilize, a sudden rate increase or further tightening could collapse the market and start a second banking crisis. If that does occur then we'd inevitably devalue sterling with all that that in tales. :doh:

ILW

Losing_the_way wrote: »

The attitude of many students is understandable as they have the added disadvantage of student loans to payoff. The market is knackered for the medium term and there is little evidence that anything will be done to improve things for the next four and a half years. Best that can be hoped for is that things stabilize, a sudden rate increase or further tightening could collapse the market and start a second banking crisis. If that does occur then we'd inevitably devalue sterling with all that that in tales. :doh:

Plenty of non grads buy houses, they just get out there and earn the money and have no loan to pay back. Nobody is forced to go into higher education.

Mike_parsonnage

Loughton_Monkey wrote: »

Back to the original question - "Why is property unaffordable.."

I must admit to being baffled by this.

One major thing I have noticed, though. We bought our own first house in 1973. If you saw a cat with a tail in the area, you knew it was a tourist. I still cringe at the house - a characterless, mid-terrace, house in a "rabbit hutch" estate. It came with "Lounge Carpet" included, but we had not a stick of furniture between us.

The vendors were the meanest people on this earth, as evidenced by (a) not a single light bulb left in the house, and (b) yes, they left the lounge carpet, but took the underlay!

We slowly built up some furniture by scrounging from relatives, and buying "distressed" items in sales.

This was quite 'acceptable' in those days, even for a young professional.

We have lots of nieces/nephews either buying or looking, and we have spoken to many younger people about buying a house, and it seems to me that these days, it is unacceptable to slum it like we did. Most young people, it seems to me, want their 3-bed semi in a 'decent' area straght away, with enough money to buy up half of IKEA.

The point was, I think, that it was natural, back then, for people of my generation to work out what they could get on their salary/deposit. And then simply went and bought the 'least bad' of the bunch. At least it got us 'on the ladder' and gave us relief from the rather poor flat we were renting. And when mortgage interest rates went up to 18% or so, the bulk of people just kept their heads down and paid it without too much moaning.

Thanks to that early start, I have been able to 'upsize' several times along the way and now have a very decent house. Even so, although I live in quite an expensive area (on Central Line and close to very good schools etc.) it is still possible to buy here at the low "100K's", and also well under £100K by going some distance away.

With mortgage rates as they are, now, the sensible people will be buying, I think. But those who want to 'start' in a house that they envisage staying in for, say, the next 20 years are entitled to think and act that way. I am convinced that there will be lots of young people in Nottingham (where we were at time of first purchase) desperately moaning about not being able to afford, but actually could afford a house like mine.

So I am convinced that one part of the problem is simply higher expectations.

The highest interest rates went was 15% not 18% , then the first 30k of mortgage( quite a lot back then ) attracted tax relief bringing the the net rate down to about 12% . 15% gross was also for a very short time . Back then the fairy god mother of wage inflation made big mortgages small very quickly, that is not happening now.

Dinerodeplata

ILW wrote: »

So maybe easily available credit should not be considered the norm, but a bit of a recent blip.

Easy credit just pushes up house prices artificially until the bust. Then the cycle continues?

julieq

Student loans aren't debt in any normal sense, because they're only allowed to become a liability when the recipient is earning enough to pay them off. In fact they're a bounded tax - a "graduate tax" would be open-ended and have no relationship to costs incurred, like NI it eventually becomes income tax by proxy. And the system of fees is very reasonable - since the student receives the direct benefit of their education, it's perfectly reasonable they're asked to pay for it. Why should school dinner ladies be asked to pay for a benefit they don't actually benefit from?

There's an argument that everyone benefits from a well educated workforce so we should all share the load. However that's spurious, since the indirect benefits are contingent on the direct benefit to individuals. If they do well, they get the first slice of the cake.

It's ultimately the price you pay for moving from the situation 40 years ago where only an elite got degrees and the cost of university education could fairly easily be absorbed, and now where it's far more accessible to everyone. Ultimately you have to pay the cost, and it's not really fair to place the burden onto those who haven't had the benefit themselves, which is most of the adult workforce at this point.

gauly

julieq wrote: »

It's ultimately the price you pay for moving from the situation 40 years ago where only an elite got degrees and the cost of university education could fairly easily be absorbed, and now where it's far more accessible to everyone. Ultimately you have to pay the cost, and it's not really fair to place the burden onto those who haven't had the benefit themselves, which is most of the adult workforce at this point.

I would argue going to university is not a "benefit" for the current generation - it is a necessity. From my time at university I would say that the majority would have prefered to be in a well paid job instead of being treated like children, still studying and supported by their parents. So many students told me they hate their course and stick it out just to get the qualification at the end. 40 years ago you could leave school at 15/16 and earn enough money by your 20s to buy a house and support a family. That simply isn't the case any more (well, unless you are willing to live off the state).

I'm not saying students shouldn't contribute to the cost of their education but the proposed levels seem too high to me. And I do think the current adult workforce should contribute too.

ukcarper

gauly wrote: »

I would argue going to university is not a "benefit" for the current generation - it is a necessity. From my time at university I would say that the majority would have prefered to be in a well paid job instead of being treated like children, still studying and supported by their parents. So many students told me they hate their course and stick it out just to get the qualification at the end. 40 years ago you could leave school at 15/16 and earn enough money by your 20s to buy a house and support a family. That simply isn't the case any more (well, unless you are willing to live off the state).

I'm not saying students shouldn't contribute to the cost of their education but the proposed levels seem too high to me. And I do think the current adult workforce should contribute too.

Employers were prepared to fund the cost of training themselves back then that doesn’t seem to be the case for most employers now.

ILW

gauly wrote: »

I would argue going to university is not a "benefit" for the current generation - it is a necessity. From my time at university I would say that the majority would have prefered to be in a well paid job instead of being treated like children, still studying and supported by their parents. So many students told me they hate their course and stick it out just to get the qualification at the end. 40 years ago you could leave school at 15/16 and earn enough money by your 20s to buy a house and support a family. That simply isn't the case any more (well, unless you are willing to live off the state).

I'm not saying students shouldn't contribute to the cost of their education but the proposed levels seem too high to me. And I do think the current adult workforce should contribute too.

A bright, hardworking person will generally do allright for themselves with or without a degree. You do not need it to start your own business, which to me is the ultimate test of ability.