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Debate House Prices
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Resentment of this generation
Comments
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the_flying_pig wrote: »
Meaningless rubbish. It's beyond obvious that for a couple witless [unless they're infertile] enough to borrow the very maximum that the very slackest bank will lend them that it's not especially difficult to buy a reasonable house, to be the 'owner' of it in the legal sense, provided that you also rack up enough debt to do so. But, and I hate to be the one to break it to you, as a rule making repayments based on 4*2 incomes is not, all in all, as, how can I put it, nice as making repayments based on (3+1) incomes. it rather means that mummy has to work as a matter of necessity just to pay the mortgage [rather than having the choice to work to spend on things other than the mortgage].
Not if the interest rate is twice as much and other thing are relatively more expensive.0 -
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the_flying_pig wrote: »t
your choice of 1988 is a bit disingenuous since you're talking about a short peak of unaffordability, only a couple of years, when not many people bought, as opposed to the many years we've had now.
also as per my post above wage inflation was licking along at a double digit rate. three years of that and your debt had effectively reduced by one third anyway.
I brought my house at the end of 87 and the prices were moving ridiculously fast, you were chasing houses, being gazumped. It was different to just 2 years previously.
I still had to purchase in said market because their was no knowing it was later going to correct, as it is doing again, now at the time.
No - wages weren't rocketing up after inflation. The funny thing about wages is that they always lag RPI and they always lag interest rates.
What we were lucky to have were progressive jobs with career progression to whittle away and make our lives more comfortable over time.the_flying_pig wrote: »t
also [although I can't prove it] I'm sure that the Halifax 'average house' [price] has changed over time to become weighted more in favour of flats and very small houses [i guess that's because we build more of]. halifax claims that a house now costs 2.5 times what it did in late 1988 [£160k vs. about £65k], but I very much doubt that any boomer who has been in their current house for this long [especially not the ones who like to tell themselves that its value inflates by 20% p.a. no matter what] would find that their particular house [instead of a rather opaque notional 'average' one] has gone up in value by so little.
You may be right on your point about mix I don't know either but a lot of people where also kicking of married life in some pretty grotty terraces that have now been pulled down so it may balance out on quality.
The point re peaks is valid no doubt but I wonder what the average line now looks like with house prices falling steeply in many places.
Certainly where we live it was flattening out before the crash anyway.the_flying_pig wrote: »t
Meaningless rubbish. It's beyond obvious that for a couple witless [unless they're infertile] enough to borrow the very maximum that the very slackest bank will lend them that it's not especially difficult to buy a reasonable house, to be the 'owner' of it in the legal sense, provided that you also rack up enough debt to do so. But, and I hate to be the one to break it to you, as a rule making repayments based on 4*2 incomes is not, all in all, as, how can I put it, nice as making repayments based on (3+1) incomes. it rather means that mummy has to work as a matter of necessity just to pay the mortgage [rather than having the choice to work to spend on things other than the mortgage].
Apart from the exceptions you may have been able to arrange with your local building society or friendly bank manager the multipliers were enforced.
We pretty much had to work within them. We had to put down nearly 20% to get what we wanted and have a pot close to the same to bring it up to standard and slowly refurbish.
That came from saving over several years and prudent management afterwards.
The fact that lending regulations were pushed aside and the lenders went into sales frenzy has not helped one bit but that is not within my control.
When we moved to keep a job we ploughed all our savings into the next one and managed to retain our original repayment mortgage. that was another 30% deposit on top of the equity.
There is no magic formula. We have always lived within our means and have gone without the big holidays, flash cars, latest gizmos and suchlike. We have also kept away from credit cards and other debt apart from the odd car.
I totally agree that straying away from the 3.5 joint income impacts your ability to live."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Graham_Devon wrote: »Could you buy the same house today, as you did back then on the equivalient wages?
It always comes back to this. Regardless of washing machines, holidays etc, could you buy the same house?
Lets take that as an example then house I bought back in 70s is now worth about £190k therefore with a 10% deposit which is what I put down, I would need to borrow £171k which would cost £912 a month at 4%.
Equivalent wage would be £30k and partners £15k therefore I could borrow £180k.
Take home pays me £1896 per month partner £1046 total £2942. Just over £2k a month after mortgage.
Partner goes part time when baby born as my wife did in 70s 10hr a week at minimum wage £260 a month total £2156. £1244 after mortgage, which is more than someone on £18k, takes home.
Yes I think I could buy the house.0 -
Graham_Devon wrote: »Yes, indeed.
But there is a difference in the affordability level and how far out of reach it becomes.
Out of reach is out of reach.0 -
Lets take that as an example then house I bought back in 70s is now worth about £190k therefore with a 10% deposit which is what I put down, I would need to borrow £171k which would cost £912 a month at 4%.
Equivalent wage would be £30k and partners £15k therefore I could borrow £180k.
Take home pays me £1896 per month partner £1046 total £2942. Just over £2k a month after mortgage.
Partner goes part time when baby born as my wife did in 70s 10hr a week at minimum wage £260 a month total £2156. £1244 after mortgage, which is more than someone on £18k, takes home.
Yes I think I could buy the house.
Don't forget that your partner's income wouldn't have been taken into account - at least not in the early 70s.0 -
grizzly1911 wrote: »I brought my house at the end of 87 and the prices were moving ridiculously fast, you were chasing houses, being gazumped. It was different to just 2 years previously.
I still had to purchase in said market because their was no knowing it was later going to correct, as it is doing again, now at the time.
No - wages weren't rocketing up after inflation. The funny thing about wages is that they always lag RPI and they always lag interest rates.
What we were lucky to have were progressive jobs with career progression to whittle away and make our lives more comfortable over time.
You may be right on your point about mix I don't know either but a lot of people where also kicking of married life in some pretty grotty terraces that have now been pulled down so it may balance out on quality.
The point re peaks is valid no doubt but I wonder what the average line now looks like with house prices falling steeply in many places.
Certainly where we live it was flattening out before the crash anyway.
Apart from the exceptions you may have been able to arrange with your local building society or friendly bank manager the multipliers were enforced.
We pretty much had to work within them. We had to put down nearly 20% to get what we wanted and have a pot close to the same to bring it up to standard and slowly refurbish.
That came from saving over several years and prudent management afterwards.
The fact that lending regulations were pushed aside and the lenders went into sales frenzy has not helped one bit but that is not within my control.
When we moved to keep a job we ploughed all our savings into the next one and managed to retain our original repayment mortgage. that was another 30% deposit on top of the equity.
There is no magic formula. We have always lived within our means and have gone without the big holidays, flash cars, latest gizmos and suchlike. We have also kept away from credit cards and other debt apart from the odd car.
I totally agree that straying away from the 3.5 joint income impacts your ability to live.
Like you I can’t see that easing lending restrictions helped and I can’t see that prices would have increased so much if they hadn’t. But going back to the original point of the thread what could the majority of the older generation have done about that.0 -
Oldernotwiser wrote: »Don't forget that your partner's income wouldn't have been taken into account - at least not in the early 70s.
In 1972 I actually got a mortgage exceeding 3x plus 1x by a fair amount.0 -
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Oldernotwiser wrote: »Out of reach is out of reach.
What a stupid thing to say.
Debt is debt.
However, depending on factors, debt can move someone forwards, and cripple someone else.
Out of reach may be out of reach. But theres much more to it than that.0
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