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

olly300

property.advert wrote: »

Does no-one look at this before going to university and say to themselves that if a decent house in the area they want costs £1m then they will need to earn about £150-200k within a few years and then aim for that ? No point in knowing you need £1m but choosing a career which pays basic wage and then bleating on about it is there ?

Most people's undergraduate degrees have no link to what they ended up doing as a career.

So being idealistic at a 17-19 year in your choice of degree subject is not usually a problem unless you decide to do certain subjects like Fine Art, as skills learnt on a degree are transferable.

Even those who do more vocational degrees where the government and industry state the skills are needed, often find their degree doesn't lead to a well paid career. There are a lot of engineering graduates who work in IT, Accountancy and Finance because of this.

pqrdef

asc99c wrote: »

It just doesn't work this way. I had an income-contingent loan (now paid off), and it just isn't like normal debt. Until you've paid it back, it is in effect just like an additional income tax.

That was then. In the new Osborne scheme, there'll be interest mounting up.

Hereward

pqrdef wrote: »

That was then. In the new Osborne scheme, there'll be interest mounting up.

Interest mounts up under the old scheme. It's just that the rate happens to be pegged to RPI. Under the new schem it will be linked to government borrowing rates (which may be less than RPI).

ukcarper

Hereward wrote: »

Interest mounts up under the old scheme. It's just that the rate happens to be pegged to RPI. Under the new schem it will be linked to government borrowing rates (which may be less than RPI).

From what I understand if you don’t earn enough you don’t pay.

If you come into a lump sum you don’t have to use it to pay off loan although any interest will be added to your total income to determine what you have to pay.

35 years after you start paying it is written off.

I could be wrong.

Hereward

ukcarper wrote: »

From what I understand if you don’t earn enough you don’t pay.

If you come into a lump sum you don’t have to use it to pay off loan although any interest will be added to your total income to determine what you have to pay.

35 years after you start paying it is written off.

I could be wrong.

You're right: There is a minimum income threshold where you don't have to pay anything back. The new scheme's threshold is higher than the current one.

I'm not sure about the interest earned on savings (or income from other sources) being taken into account when setting the repayment rates.

Under both the existing and current scheme, the debt is written off after a number of years. Under the very old one (before top-up fees ) the debt is never written off.

gauly

Hereward wrote: »

Interest mounts up under the old scheme. It's just that the rate happens to be pegged to RPI. Under the new schem it will be linked to government borrowing rates (which may be less than RPI).

Interest rates at inflation (RPI) mean that the loan stays exactly the same in real terms.

The new interest rates are between RPI and RPI+3% (never lower than RPI from anything I have read) so they are at least as high as the old scheme and increasing in real terms if you are earning.

Silvercar2

gauly wrote: »

Interest rates at inflation (RPI) mean that the loan stays exactly the same in real terms.

The new interest rates are between RPI and RPI+3% (never lower than RPI from anything I have read) so they are at least as high as the old scheme and increasing in real terms if you are earning.

Yes but even if the loan stays the same in real terms the value or purchasing power of each unit of fiat currency is going down.

pop_gun

GDB2222 wrote: »

You certainly get a lot of property for your money. What about this one?
http://www.rightmove.co.uk/property-for-sale/property-28136074.html

Or this one for £380k which comes with 6 garages!
http://www.rightmove.co.uk/property-for-sale/property-27430456.html

I don't have the money but if i did i would move there in a heart beat. for those prices, the properties sell themselves. :T

Malky

Property number two in your link can't be worth £380K. Look at the state of it? Looks like it needs ripped apart inside and out and started again.
I certainly wouldn't pay that kind of money for such an unkept house.

GDB2222

Malky wrote: »

Property number two in your link can't be worth £380K. Look at the state of it? Looks like it needs ripped apart inside and out and started again.
I certainly wouldn't pay that kind of money for such an unkept house.

In London, you'd get maybe a 3 bed semi for that money, so it seems excellent value by comparison even if it needs a lot doing to it. I checked the date of my original post (last October) and the house is still on the market, so I guess lots of people agree with you. Some people are happy with a doer-upper, as long as the cost is reflected in the price.