i live in the suburbs of London. How do people afford houses?

vivatifosi

When I was younger (late 1980s) my best friend and I bought our first homes for a similar price. Hers was a new one bedroom flat conversion in Crouch End, London; mine was a new one bedroom house in Hertfordshire. Both have gone up in price substantially since. If we both still owned our first homes, hers would now be worth double that of mine.

That tells you everything you need to know about what has happened to London house prices, they are mad. It's also worth mentioning that for many years the population of London was falling, it has now been rising again for a long time. Hence areas that were previously considered less desirable are now very expensive. Stoke Newington is a good example.

ruggedtoast

It hasn't sunk into the national consciousness yet how radically the social fabric of the UK has changed, and how quickly.

People without equity or savings, having to rent, on average salaries, have next to no chance of being stakeholders in the SE. All they can do is watch as rents rise, prices spiral and zeros are added to houses that used to be affordable on one salary.

There is a video on the front page of Priced Out stating that a house in Mitcham, adjusted for general inflation should cost £18,000 - £33,000 now. Yet they go for £300,000, a sum that is considered absurdly cheap for a dormitory town now.

More than ten times an average salary.

92203

Blacklight wrote: »

It's sickening that a person earning £22k can't afford to buy one of these places. That's the average wage and these are average houses!

Before too long some buyers are going to start going on strike to combat this insanity!

There's nothing that can be done, and you can't really fight against the system. The government and their paymasters (the banks) want high house prices, no matter what the cost.

Inadequate supply (due to restrictive planning regulations, IMO designed to cause a shortage and drive prices up)combined with population growth and financial meddling by the government/central bank (FLS, Help to Buy, low interest rates etc) will only push house prices further.

You're not alone in feeling despondent on the matter.

What we have could almost be described as an intergenerational apartheid ;

Those who were able to buy houses pre-boom (2002 or earlier) were able to afford homes at a reasonable ratio to their earnings, in many cases it was possible to afford a house on a single income. These people now enjoy very low mortgage repayments as the equity they hold allows them to get
low interest rates on their mortgages.

Anyone who made the mistake of being born 5-10 years too late will now have to pay 2-3 times as much for the same house, meaning that they have to be more indebted, have better jobs and ultimately work harder to get the same house as the people who were old enough to buy when prices were more reasonable.

This for instance could make the difference between being able to have a happy family life, or a strained one (both parents working and child at nursery/childminder), or even not having a family at all.

I'm not even referring to London here, I imagine that prices have increased significantly more there than elsewhere in the country.

noodle_doodle

MAFLATSE

Move Away From London And The South East


(And don't move to Aberdeen unless you're a rig monkey. Friend was telling me about his brother who got $1,000 a day for sitting on a rig and monitoring it (i.e. playing fifa) as it was towed across the ocean. )

ruggedtoast

noodle_doodle wrote: »

MAFLATSE

Move Away From London And The South East


(And don't move to Aberdeen unless you're a rig monkey. Friend was telling me about his brother who got $1,000 a day for sitting on a rig and monitoring it (i.e. playing fifa) as it was towed across the ocean. )

Thats a good idea, we'll need to find new jobs though and you don't seem to have any spare over there, so I suppose we'll just have to take yours.

Still want the MAFLATSE exodus coming to the job market near you?

chucky

92203 wrote: »

There's nothing that can be done, and you can't really fight against the system.

Damn!!! So all of those doom mongering threads that were created by the usual suspects have been a waste of time?!?!

That's shocking.

noodle_doodle

ruggedtoast wrote: »

Thats a good idea, we'll need to find new jobs though and you don't seem to have any spare over there, so I suppose we'll just have to take yours.

Still want the MAFLATSE exodus coming to the job market near you?

Deffo, eventually the loss of people who aren't wealthy arabs and bankers will force either london houses prices down or the wages up and then you'll all run back again claiming you miss jellied eels and how could you leave your door open when ronnie and reggie were about.

I 'only' earn about 35K. I worked out for a similar house in a similar area of london (i.e. 3-bedroomed, outskirts, decidedly middle class) would cost so much I'd need a wage of 75K in the smoke just to keep parity. And I'd want an extra 20K on top just for the pain of moving.

Generali

The_White_Horse wrote: »

that is what I want to know. I know people that are buying 3 bed semis for £800k. of course, these prices are madness and people are mugs BUT - where are they actually getting the £800k from to buy these houses?

these people are moving up - not selling houses in mayfair and kensington and moving out to the suburbs - these are people that are selling £400k homes and then buying £800k homes.

even if these people owned their first home completely - which 99% of them don't - they would still require mortgages of £400k and a single earner on £100k would be lucky to get that.

the reality is, they might have £150k-200k in equity. so are getting mortgages of £600k. how are they managing this??????

The people I know that are buying houses of that value work in IT, banking, insurance, actuarialism (is that a word?), accountancy and law.

It might sound obvious but rich people buy expensive houses.

One friend is looking to buy a £1million pound+ house but he's on £300k a year plus he's got a load of equity. You'll be glad to hear that his missus is on a year maternity leave as she works for the Government so gets that much paid. That's a pretty substantial saving over childcare.

Well actually it would be a substantial saving over childcare if she didn't get such a massively subsidised childcare service at work too.

Cornucopia

London is a special case within the UK property market.

I think there are 2 special factors (maybe more).

1. It plays in an international property market (as well as the national ones).

2. Fashions have changed. 30 years ago, most couples would never want to live in Zone 1/2 London, and bring up children there. But all that has changed (I assume partly because of longer working hours & 2 income families).

Those 2 factors are creating over-demand for Central London properties, and previously unfashionable areas are now becoming as over-heated as the rest.

TruckerT

I live close to the Grand Union Canal north of London, and I spend a lot of time walking and biking the towpath (sad git?). In the last few months I have spoken to at least half a dozen young people who have bought a boat in the midlands, and plan to moor up near King's Cross because they cannot afford any other way to live close to their jobs.

I can only guess that there are many many others with the same idea - it's a bit like some kind of gold rush which can only be doomed to failure.

TruckerT