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

Loughton_Monkey

lazer wrote: »

......I don't like my example is the extreme, and to be honest if I can do it so can anyone - I have always lived within my means - so not having debts probably helped me start off on the right foot with the saving, but maybe everyone should live with their means - is it such an alien concept these days?

Apparently it is!

You don't have to be Einstein to work out that [in very round figures] our first 20 years is OK financially because we are generally supported by parents. Then we spend 40/45 years earning money, after which we have to live on what we've saved, plus what the government throws at us.

Lottery wins/large inheritance apart, it is blindingly obvious that it is impossible to spend all that income for 40 years, and still have as good a standard of living in retirement. And most of this always comes down to choices.

But these days, people pretend it's down to 'luck' or 'blame'. In other words, your own success will be down to the 'luck' of being born at the right time, the ability to live with your parents for a short while, the luck of not 'needing' a loan, the luck of finding a good job.....

Whereas others with the same opportunities will blame the bank for letting them borrow on their credit card and charging 20% interest, the government for keeping house prices up, the landlords for charging too much rent, the insurance company for charging too much to insure an expensive car....

Every person within every generation will get a different 'bag' of external financial conditions - some good, some bad. Your low mortgage interest rate ('luck') is my bad savings rate ('blame the bankers'). So-called 'boomers' are supposed to have had it good - but I'd love to see how the current young generation would cope with double-digit inflation up to 27% as we saw for most of the 70's?

ukcarper

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.

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.

Is there anything wrong with that.

OffGridLiving

Loughton_Monkey wrote: »

Apparently it is!

You don't have to be Einstein to work out that [in very round figures] our first 20 years is OK financially because we are generally supported by parents. Then we spend 40/45 years earning money, after which we have to live on what we've saved, plus what the government throws at us.

Lottery wins/large inheritance apart, it is blindingly obvious that it is impossible to spend all that income for 40 years, and still have as good a standard of living in retirement. And most of this always comes down to choices.

But these days, people pretend it's down to 'luck' or 'blame'. In other words, your own success will be down to the 'luck' of being born at the right time, the ability to live with your parents for a short while, the luck of not 'needing' a loan, the luck of finding a good job.....

Whereas others with the same opportunities will blame the bank for letting them borrow on their credit card and charging 20% interest, the government for keeping house prices up, the landlords for charging too much rent, the insurance company for charging too much to insure an expensive car....

Every person within every generation will get a different 'bag' of external financial conditions - some good, some bad. Your low mortgage interest rate ('luck') is my bad savings rate ('blame the bankers'). So-called 'boomers' are supposed to have had it good - but I'd love to see how the current young generation would cope with double-digit inflation up to 27% as we saw for most of the 70's?

Absolutely brilliant post. Nail on head.

black_taxi_2

deposible income London is beans on toast,after house purchase

wotsthat

Loughton_Monkey wrote: »

Lottery wins/large inheritance apart, it is blindingly obvious that it is impossible to spend all that income for 40 years, and still have as good a standard of living in retirement. And most of this always comes down to choices.

There was a thread here once based on your idea that if, say, someone lived on 80% of their salary it would have two advantages. Firstly that 20% could go into savings and provide a future security and, secondly, someone living on 80% of salary is effectively training themselves not to need 100% of earnings into retirement.

One poster saw it as anything but blindingly obvious and the thread descended into arguments about whether our saver was eating Kelloggs corn flakes or an own brand version i.e. the thread was muddled to death which was a surprise given the site is dedicated to financial matters.

The basic question is if someone on say, £30k, can't save £6k how come we can find examples of people living on £24k who aren't building up £6k of debt per year?

Our poster wanted to believe that everyone lives a life of drudgery and can't save a penny (don't know why) but to most people it's not about being blindingly obvious but just something they really don't give much thought to.

It's easier to play the blame game although not as lucrative.

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.

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.

System

OffGridLiving wrote: »

Why did you 'quote' the guys post, then delete the part of it that said:

"I was renting a one bed flat (That wasn't in great condition) and didn't spend money on rubbish - i found saving to be addictive"

And then have a go at him with your remark "Also free board and rent at home enabling you to save your entire income? "

Desperate muddling going on here Graham, even by your own shoddy standards!

My god :laugh:

chucky

OffGridLiving wrote: »

If you're quoting someone in order to undermine their argument, then at least quote their full argument, not just the bits you feel will help your own.

You also invent statements that aren't there - such as the zero rent at parent's house and information about student debts.

That's what you're muddling.

It's very sad when people have to resort to that. I actually feel a bit sorry for them with what must be going on in their life that they have to lie on a forum with about 20 users.

wotsthat

lazer wrote: »

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.

I note from your signature that you lost some weight. 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'. You know how your fat office friends glazed over before you even got to the word 'exercise'? Well that's the same look you're getting now reading about how you didn't have debt, a flat screen TV, an Iphone or expensive clothes.

People don't want to hear about common sense or the bleeding obvious - they want to hear about a quick fix, a magic cure and I'm afraid you're not delivering so have to run the gauntlet of doubting Thomas'.

They won't be happy until they've found something that identifies you as lucky. If they can't find it you'll have to be branded a reclusive freak.

martinsurrey

here is the data that makes a lot of your analysis pointless, and its even next to your own link...

I guess most people would assume FTB's would be saving their deposits in their 20's

http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/2012-provisional-results/stb-ashe-statistical-bulletin-2012.html#tab-Earnings-by-age-group

Median 22-29 earnings in the UK is a shade over £400 a week (from the above reliable source),so I assume London would be a lot higher and the north east a lot lower, but your analysis used all age groups median, which is over £450 for every region,c learly the median north east 22-29 year old will be on less than the £450+ figure you have used...

Your analysis is based on someone in their mid 30's starting to save a deposit, once they are fairly high up the food chain.

Do it again with regional age banded data and I might just believe you, but I bet the numbers would be scary in every region.

for example, drop £100 from the north east disposable income and it would take 7-8 years for them to save a deposit...