Is the Property ladder a dated myth from another time?

Ivana_Tinkle

I think the opposite principle to the property ladder is very powerful, in the sense that, if you don't buy a property early on in your career, it can be much more difficult to do so later. eg if you don't buy that one-bedroom flat in your twenties, then jumping straight in to the 3-bed semi when you've got a couple of kids is very difficult. (With, of course, a thousand disclaimers because not everyone's life follows the same path!)

Idiophreak

I think you're confusing the property ladder with a property escalator.

The idea is you put in a bit of effort and get up to the next rung.

The idea isn't that your circumstances remain the same and yet you magically float up the thing.

"Climbing the ladder" has normally looked something like this:

1) You're young, you're living at home.
2) You move out, rent a place, save a bit.
3) You decide to "get on the ladder"
4) You get married, your Mrs moves in or whatever. You've now two incomes. You take a little step up the ladder.
5) You're getting older, your income's gone up a little, you think about starting a family. Take another step.
6) Maybe your parents die, or you get a good bonus from work, you've got a bit of spare cash..you take another step.
7) There you are, "atop" the ladder!

If you don't have more cash...and you don't want to move to a cheaper area...I don't really understand how you expect to afford a bigger house...?

moneyistooshorttomention

BitterAndTwisted wrote: »

There never has been a "ladder" it's always been a figment of the imagination. In the past people bought whatever sized home they could afford and stayed there until retirement. Now, after three minutes of ownership some think they should be able to "move up" into a detached house with massive garden, a utility, en-suites to every bedroom, plus a home office, a "playroom" (whatever that is) on the same salary they have always earned.

There is indeed a ladder. Well, there certainly was. My parents climbed it and my sibling climbed it. Each time, they went bigger and better. I expected to climb it too, but things didn't go according to plan (mainly down to being single and therefore only one salary to pay for everything).

Most "ladder climbers" are probably not looking to have things like a massive garden/utility/en suites/etc.

My parents went:
- 2 bed Victorian terrace
- 3 bed semi-detached in better area
- 3 bed detached in better area again

and that's basically exactly what I thought I would do too. Nothing fancy or luxurious. Just an ordinary house in a reasonable area.

I think it's possible some?/all? of the rungs are in the process of going missing for a wider group of people these days, but I'm sure some people still plan to climb it and manage to do so.

The standard method basically boiled down/boils down to pay back mortgage as far as possible and get real salary increases from getting older/more experienced/etc. A bit of luck helps as well.

Thrugelmir

emmet1 wrote: »

Unless wages start rapidly increasing how do people afford to keep moving up?

Unless you've made an effort to save in some form. In 2 years you'll have hardly paid anything off the mortgage. If you want to move up. Then you'll need to make choices as to how you spend your money. As there's no free lunches.

emmet1

Thanks for all your replies.

We are fully aware that we are lucky to have that amount of equity in the property, I didnt mean for it sound like I was complaining.

I was more interested in how the property market can keep sustaining itself given that most peoples wages haven't increased anywhere near the levels property prices have risen yet this doesn't seem to be affecting the market.

mufi

You could try climbing the career ladder in tandem with the property ladder?

Thrugelmir

emmet1 wrote: »

I was more interested in how the property market can keep sustaining itself given that most peoples wages haven't increased

Ever increasing amounts of debt aren't the answer. Borrowing or owing less is. Save before you spend.

lessonlearned

Ivana_Tinkle wrote: »

I think the opposite principle to the property ladder is very powerful, in the sense that, if you don't buy a property early on in your career, it can be much more difficult to do so later. eg if you don't buy that one-bedroom flat in your twenties, then jumping straight in to the 3-bed semi when you've got a couple of kids is very difficult. (With, of course, a thousand disclaimers because not everyone's life follows the same path!)

I think the problem is a lot of people now see I bed flats and two bed terraced houses as rentals. For whatever reasons a lot of buyers want to skip straight to a three bed property - possibly because a lot of first time buyers are much older these days and they may well have already started a family.

Now I don't want to sound judgemental and there are often very good reasons why people have children before they buy a property -mainly economic ones but on the whole people of my generation tended to buy a property first and then have a family second so we did start with flats and terraced houses.

I think it is still perfectly possible to climb the property ladder however it does take more effort these days.

My youngest son has set out to do exactly this - with a bit of. Help from yours truly. He has bought a wreck in an "improving" area and he is slowly licking it into shape.

When he,s done he will sell and then start the process again.

Rinse and repeat -as many times as it takes.

bristol_pilot

It takes more effort to climb the property ladder now because inflation is low and so debt is not so rapidly eroded. Plus, the London market is dominated by foreign cash buyers.

Kynthia

Climbing the ladder doesn't mean you get as good a property as you want each time. It also usually takes a lot longer than 3 years between rungs. After only 3 years most people would be worse off trying to move with all the selling/buying fees, little paid off on their mortgage and salaries unlikely to have increased much! I'm guessing that people on average would move once a decade between their 20's and 50's before downsizing.