The First Time Buyer - How do they have it really?

thedalmeny

J_i_m wrote: »

Laser
Thedalmeny, you're obviously fairly gifted with mathematical and statistical analysis and have spent some time producing an impressive bit of research.

However as someone has already pointed out, individual life generally does not follow bar and pie charts. I do not believe that the data holds the answer to whether first time buyers have it easy or not. There are too many factors that this analysis can not hope to cater for.

Forgive me for this quip, but I am not about to produce a PowerPoint presentation to persuade you on this view.

I would most definitely agree mate, unless you use a more granular level of data any analysis is only going to show a broad interpretation.

The purpose of this was always to show a general look at the country down to a regional level, rather than how the press often tend to present house pricing and affordability on a national scale. It is also to answer some relatively simple and broad questions, as stated in the first post. Anywhere beyond that would require much more detail and far more analysis.

Unfortunately a couple of people want to debate the findings, when i don't think they can be debated.. The statistics are clear and conclusions made are broad.. However, if people want to discuss further refinement then i think they need to at least present some data to support it. Otherwise you end up in the endless circle of opinion.

What i may do in the future is a similar analysis to this but break down the regions, whether i can find the source data so i'm able to is another thing...

J_i_m

lazer wrote: »

I obviously wasn't saving £500 a month when on my £10k salary - during my training contract my savings were very small, it was after I completed the taining contract was I was able to save the £500 a month.
However I didn't get in debt when on the low income - so it meant i was able to save straight away after the training contract and I continued to to live on the same money i was living on during my training - saving the extra money - before this I was saving around £100 a month when I was on about £14k.

So thats 2 and half years saving £500 a month - that would be £15,000 - enough for a 10% deposit on a £150k house (although my earnings wouldnt have been high enough for this anyway, so it was enough for a 10% deposit on a £120k house with £3k for fees etc!)

I lived in a house share during my training and was paying £250 a month and was miserable, so I found a one bed flat for a very attractive rent of £300 - so yes i did have low rent - but the house was not nice and I wouldn't imagine many people would have been happy living it - half the storage heaters didn't work!
A decent one bed apartment would have been around £500, and up to about £700 for a nice one. If i hadn't found one at such a reasonable rent - I would have continued to house share.

so i was eaning around £1500 a month, saving £500, rent & utilities would have been around £450 - £500 (high electic bill, but no sky, no landlone, no internet etc) which left me £500 to run the car, buy food and live - whats so difficult about this?

IMO the real reason I found it relatively simple i because I never ran up debt, so therefore never had the debt repayments, also didn't have the latest gadgets and technology - mobile phone contract has never been over £15, my TV is still a CRT and about 90% of my clothes are probably from either primark or charity shops - it was a question of priorities really.

Ah, there's the missing information. That now sounds far more realistic. Apologies if I implied that there was anything wrong with your method as that was never my intention it's just that your original post left the reader having to make a few too many assumptions, I see that mine were not too far off the mark though

martinsurrey

thedalmeny wrote: »

The purpose of this was always to show a general look at the

Unfortunately a couple of people want to debate the findings, when i don't think they can be debated.. The statistics are clear and conclusions made are broad.. However, if people want to discuss further refinement then i think they need to at least present some data to support it. Otherwise you end up in the endless circle of opinion.

see my above post.

your analysis is based on someone in thier 30's (median wage is in the mid 30's) saving up for a flat.

do it on 22-29 earnings by region for a flat, or its not FTB.

Loughton_Monkey

wotsthat wrote: »

.....During your weight loss journey someone will have been asked you how you did it and your reply will have been along the lines of 'well I cut back on the eating, drinking and tried to exercise more'.......

.. but maybe, instead, he followed the famous "Devon Diet"....

• Hard Cheese
• Sour Grapes
• Cooked Goose
• Half baked Alaska
• Spilt Milk
• Devonshire Fool with whipped cream
• ...all to be taken with a huge pinch of salt

thedalmeny

martinsurrey wrote: »

see my above post.

your analysis is based on someone in thier 30's (median wage is in the mid 30's) saving up for a flat.

do it on 22-29 earnings by region for a flat, or its not FTB.

No, my analysis is based on the source data from the ONS and the FTB average age. Neither of which support your request to do the analysis based on the age bracket of 22-29.

Average first time buyer last year was 35, the average first time buyer in 1992 was 28.

According to the ONS 2012 earnings report;

22-29 age bracket is just below the average weekly income
30-39 age bracket is just above the average weekly income

Statistically it is then around 25-35 where most reach the average earnings according to the ONS findings. Which is reflective of both an average FTB now and average FTB age in 1992.

lazer

J_i_m wrote: »

Laser, obviously you've done well for yourself. You made a solid plan and largely stuck to it and achieved your goal.

However, to save £500+ whilst renting and paying all the associated living costs of your own back, I think one of the following conditions may have applied to your situation;

a) You house shared and split the costs
b) Your rent was extremely and attractively low
c) The property you bought was very low price
d) Your starter salary of 10k per annum increased fairly rapidly

Forgive me for I am not criticising you for it, but I do find the notion of renting and saving £500+ per month on a 10k salary to be slightly unrealistic for wider society.

J_i_m wrote: »

Ah, there's the missing information. That now sounds far more realistic. Apologies if I implied that there was anything wrong with your method as that was never my intention it's just that your original post left the reader having to make a few too many assumptions, I see that mine were not too far off the mark though

I disagree - you assumptions are off the mark -
1) most it the time I was saving well I wasn't in a house share
2) This one is spot on - I did have a very attractive rent - but attractive rent is available in a lot of places if you look hard enough and are willing to sacrifice luxuries like working central heating! - As i said decent one bed properties cost around £500 - so this gives you an idea of the state mine was in!
3)The property I bought was not at a very low price, it was probably around (or even above average for first time buyers - excluding London) - going for the figures in the following link
http://www.theguardian.com/news/datablog/2013/jul/24/first-time-buyer-house-cost
the average in England is £139k, with 5 of the 9 regions below £100k. My house was just under £120k - so not a very low price.
4) My Salary did not rise until I completed my training contract - and then it rose to about £25k - which is the average graduate salary in the UK, i just got there 3 and a half years later.

martinsurrey

thedalmeny wrote: »

No, my analysis is based on the source data from the ONS and the FTB average age. Neither of which support your request to do the analysis based on the age bracket of 22-29.

Average first time buyer last year was 35, the average first time buyer in 1992 was 28.

According to the ONS 2012 earnings report;

22-29 age bracket is just below the average weekly income
30-39 age bracket is just above the average weekly income

Statistically it is then around 25-35 where most reach the average earnings according to the ONS findings. Which is reflective of both an average FTB now and average FTB age in 1992.

22-29 median is £412 national average is £509 30-39 is £557 straight line this makes average at around 32.


all your analysis says is that a 32 year old can afford to start saving and get a 10% deposit for a flat in 3-4 years, then being 35-6 living in the bottom rung of the property ladder...

that is far from comfortable...

what about thier children?

the fact is that since the average age of FTB's has risen, the property needs of FTB's has risen (its okay being in a studio at 22, but try that at 34 with 2 children).

the average FTB deposit in 2012 was £26k+, MUCH MUCH higher than your 10% of a flat, due to the fact they needed a bigger place as 30 somethings, and so large that a lot of people are frozen out of the property market, they have a choice of have children and rent, or dont and buy.

now you can argue the rights or wrongs of it, but the fact is, your analysis shows that it takes an average salary earner (so 30+ year old) 3 years to save the minimum deposit on the smallest properties in every area, and that is not healthy.

martinsurrey

FYI the mean age of a first time mother is 27.9

http://www.ons.gov.uk/ons/rel/vs!!!/characteristics-of-Mother-1--england-and-wales/2011/sb-characteristics-of-mother-1.html

your analysis assumes 30-odd year old single person with no dependants, which is just not the case for the avearge want to be FTB (again points to my point about have children and rent, or dont and buy)

thedalmeny

martinsurrey wrote: »

22-29 median is £412 national average is £509 30-39 is £557 straight line this makes average at around 32.

all your analysis says is that a 32 year old can afford to start saving and get a 10% deposit for a flat in 3-4 years, then being 35-6 living in the bottom rung of the property ladder...

that is far from comfortable...

what about thier children?

the fact is that since the average age of FTB's has risen, the property needs of FTB's has risen (its okay being in a studio at 22, but try that at 34 with 2 children).

the average FTB deposit in 2012 was £26k+, MUCH MUCH higher than your 10% of a flat, due to the fact they needed a bigger place as 30 somethings, and so large that a lot of people are frozen out of the property market, they have a choice of have children and rent, or dont and buy.

now you can argue the rights or wrongs of it, but the fact is, your analysis shows that it takes an average salary earner (so 30+ year old) 3 years to save the minimum deposit on the smallest properties in every area, and that is not healthy.

Ok a few issues with this.

• You are now speculating on determining factors, such as the impact of children. This has always been stated looking at a single first time buyer in full-time employment. I've made no attempt to account for household income or family types, this was stated in a post within the thread.
• I have already stated the average cost of a 10% deposit by region and term it would take for them to purchase it. Your "Average FTB Deposit" statistic i'm assuming is national, this is a regional study and has been stated several times. Furthermore, it's the subject of the analysis.
• Your interpretation of the ONS figures are incorrect.

I'll explain in a more simple manner;

Since we do not have a recent regional breakdown of weekly earnings by age range. We take the data available from the ONS;

• Average UK weekly earnings: 505.9
• Average UK weekly earnings 22-29: 412.0 (-93.9 the average)
• Average UK weekly earnings 30-39: 557.2 (+51.3 the average)

Essentially that means we're somewhere in-between in terms of answering the questions 'What age range earns the UK average'... Roughly.... 27-35

The average FTB has typically been around 28-32 since the 80s, most studies highlight this but if you want some more detailed analysis of this you should look at the CML report. It's typically on the higher range of that now due to house prices but recently that average has gone higher (Some state upto 38!) but the recession and a restrictive mortgage market will undoubtedly be impacting this.

Here is an online publication in 2011;
http://www.cml.org.uk/cml/publications/newsandviews/104/390

So considering the following;

• The average FTB is around 30-32
• The average person will enter the average earning salary range at 27.

Your request to do an analysis based on the 22-29 age range can't be supported by the data, as the average FTB age is bang in the middle of the average earner age range.

ess0two

Loughton_Monkey wrote: »

.. but maybe, instead, he followed the famous "Devon Diet"....

• Hard Cheese
• Sour Grapes
• Cooked Goose
• Half baked Alaska
• Spilt Milk
• Devonshire Fool with whipped cream
• ...all to be taken with a huge pinch of salt

You missed 'chip on the shoulder ' off the lsit.