The stich up keepiing homes unaffordable

Generali

ukcarper wrote: »

I have a query would the builders have had to borrow to buy the land if so aren't they paying interest on it.

Yes they would and yes they are.

Loughton_Monkey

Graham_Devon wrote: »

..........However, we'd have to accept that the majority could not afford to pay the current prices.

So we'd also have to accept a fall in house values to a point where a sustainable number of new entrants could buy in order to keep the supply and demand in balance. It would be unfair to take away social housing but keep ramping up prices of private housing........

Just a little bedtime story for you Graham.... What I would call a bit of "chewing gum" for your mind....

Conundrum of the prodigal son.

Two twin brothers called Monkey and Graham are born and raised by good parents, given a reasonable education, and have both found reasonable jobs. Both living at home, they have each amassed £30K in investments, but show no signs of moving out....

Their parents are kind and tolerant people, and on their 25th birthday, their father announces: Here you are as adults. Both of you are now out in the world earning a reasonable wage. We love having you here at home, but are slightly concerned in case you are missing a better life elsewhere... But you may now do what you wish. Either or both of you can stay here - for your whole life if you wish - totally rent free. Or you can go out into the world forever, or even come back if you wish....

Graham is fully aware of the world. He knows that houses are vastly overpriced. He has heard the buzzwords "affordable housing" even though no-one can explain exactly what it means. But he knows a bargain when he sees one, and living at home rent free is, by any definition, 'affordable'. So that's where he stays. He finds that his income is OK, and after chipping in for his food and utility contribution, he can "afford" to throw about £600 a month into and ISA and get 6% net. After all, he wouldn't be able to rent much more than a dog kennel for that....

Monkey, on the other hand, thanks his parents profusely for the offer, but confesses that he prefers a bit of independence, and quite frankly would welcome facing the cruel world out there and take his chances. In fact, he announces, he's been doing some research and would like to put his £30K down as a deposit, and take out a mortgage of £120K. He can, after all, afford the £400 monthly interest. He has his eyes on a specific £150K house. It is only 2-bed because it's not the cheapest area, but it's the 'market' price. He thinks an IO mortgage might be better, because throwing another £200 into an ISA should produce an average 6% net, thereby paying back the loan in 25 years...

Graham is aghast at paying such an unrealistic high price. He says as much 15 times in 15 different ways. Monkey explains that his own house gives him extra room to knock around in, and he'd rather prefer to watch the paint dry in his own 'pad' rather than staying with parents having to listen to Graham's economic 'wisdom' every meal time....

Time rolls on. The twins meet to celebrate their 50th birthday.

Graham, of course, wastes no time at all in bringing up the subject of money. Over a gin & tonic, he pulls out his ISA statement which has faithfully returned an average 6% and gloats over the balance of a cool £524K. He gloats over avoiding having been 'conned' by the property world full of 'rampers' all conspiring to profit from a moronoic decision to buy an overpriced house. He gloats over his achievement of never having paid a penny rent with the comment "Now that's what I call affordable housing".

Monkey pulls out his own ISA statement which contains a relatively miserable £132K, but after all, like Graham's, it returned 6%. But he will only see £12K because the rest must pay off his original mortgage. Monkey also announces that his £150K house had also (like most investments) grown at 6%. In fact it has been a wonderful 25 years, but has now decided to sell at the 'market' price of £644K and move back to the family home, and watch his £656K net worth grow......

Tell me again, Graham - asks Monkey - exactly by how much my house was overvalued...... because it strikes me that I am £132K better off than you. No wait. I can work this out. Now what amount invested at 6% for 25 years would produce £132K today? Ah yes. £30,750 I make that. Looks like the house was underpriced by at least £30K. Sour grapes anyone?

Graham responds "yea but no but yea but no but yea....."

Frugalbride

Has Graham increased his savings payments with inflation? Has the cost of insurance, repairs, renovations etc been deducted from Monkey's total? I would be interested to know if the 'true' cost of monthly home ownership is invested over 25 years what the difference would be. Of course living independently and making a life of your own is much more valuable anyway.

OffGridLiving

As an addendum to the Graham/Monkey story. Graham would be single and a little 'odd' because he didn't have a good woman to keep him in line (i.e. stopping him from spending all his waking hours on internet forums), Monkey would be seen as a 'bit of a catch' because he has his own home and soon has a girlfriend, who without even seeming to, moves in (i.e. by the 'stealth' approach of leaving bits at the house each time she stays over until virtually all her stuff is there). Eventually they marry and have kids. Monkey's life is a bit more hectic, he's a bit poorer, but it's filled with love and happiness.

Monkey has many years of family holidays, watching pantomimes at xmas, standing on football pitches watching them play, being proud of them at graduation ceremonies and helping them get onto the housing ladder. He retires and has his lovely grandchildren stay over. His life is fulfilled and happy.

Graham has many years of sitting in his mum & dad's back bedroom, logged onto internet forums. He's desperately lonely and craves attention, so he gets into a series of arguments by making posts that are designed to provoke people and by ruining decent discussions by muddling them up. He has many years of this, wasting the best years of his life and not realising it. Without a woman to rein him in, he becomes odder and odder and ends up with a drink problem, hanging around shopping centres with a sandwich board proclaiming the End of the World. He shouts unintelligible arguments at passers by and smells of urine. He dies alone and unloved.

chucknorris

OffGridLiving wrote: »

Graham has many years of sitting in his mum & dad's back bedroom, logged onto internet forums. He's desperately lonely and craves attention, so he gets into a series of arguments by making posts that are designed to provoke people and by ruining decent discussions by muddling them up. He has many years of this, wasting the best years of his life and not realising it. Without a woman to rein him in, he becomes odder and odder and ends up with a drink problem, hanging around shopping centres with a sandwich board proclaiming the End of the World. He shouts unintelligible arguments at passers by and smells of urine. He dies alone and unloved.

I don't think this is true, I think like that bloke Brian you are just making this up as you go along and I also suspect LM was as well.

http://www.youtube.com/watch?v=KGaDrE8xXG4

Loughton_Monkey

Frugalbride wrote: »

Has Graham increased his savings payments with inflation?

Officially no. But I happen to think that both Graham and Monkey had 'secret offshore accounts' where they stuffed equal amounts of extra income (due to inflation) at equal interest. No difference really.

Frugalbride wrote: »

Has the cost of insurance, repairs, renovations etc been deducted from Monkey's total?

No. Monkey is very careful and looks after his stuff. No wild parties, just a quiet gin & tonic every now and again.... Monkey did have to have buildings insurance, and mend the odd gutter, but funnily enough the cost was insignificant by comparison, and turned out to be virtually the same as Graham had to spend picking up the tab whenever he went out to dinner with his parents...[/QUOTE]

Loughton_Monkey

chucknorris wrote: »

.....I also suspect LM was as well.

Surely not!!

You suspect me of what exactly?

My biggest, and only sin, is that of being a wise old boomer......

OffGridLiving

chucknorris wrote: »

I don't think this is true, I think like that bloke Brian you are just making this up as you go along and I also suspect LM was as well.

All characters appearing in this work are fictitious. Any resemblance to real persons, living or dead, is purely coincidental.

ILW

chucknorris wrote: »

I don't think this is true, I think like that bloke Brian you are just making this up as you go along and I also suspect LM was as well.

http://www.youtube.com/watch?v=KGaDrE8xXG4

Is smelling of urine a bad thing?

chucknorris

Loughton_Monkey wrote: »

Surely not!!

You suspect me of what exactly?

My biggest, and only sin, is that of being a wise old boomer......

I suspect you of not smelling of urine.

Edit: Please accept my apologies if I have jumped to incorrect conclusions.