Is it really that hard?

padington

According to the inflation calculator, sadly I was earning a shed load more in 2001 than i am now.

http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html

ukcarper

Samsonite1 wrote: »

I just Googled to find information on earnings from 1986 compared to now. In any case £40k is what you can find on a job site for a junior PM (often less), so there is no argument to be had really.

Even if I wanted to take your statistics. £15k would mean that my parents' house was 3x salary compared to 12x today. Not sure what argument you are trying to make here.

You are just taking one antidotal example which is not typical my example is more typical although my house has increased in price by more than average but then it is in the south east.

dktreesea

Graham_Devon wrote: »

All that is fantastic, but the biggest problem which it appears to have passed you by is the mobility.

You have suggested, for instance, that a 5k deposit and £400 a month will buy you a house.

However, forgetting stamp duty, fees etc for a moment.... it will buy you a house in areas with low job prospects.

Why would people take it upon themselves to uproot their families, leave their friends and everythign they know, leave their job and move somewhere where job opportunities are low?

These sorts of suggestions are fine if you have a job where you can work from wherever, or even a job whereby you can move locations.

But most people avoid moving to new areas areas precisely because they have to give up their incomes to do so. Giving up your income is hard to do when the sole reason for doing so is to get a mortgage (which requires a solid income!)

I would agree if the areas in question were in the middle of nowhere, but instead they are in commuting distance of fairly large cities. Are you seriously suggesting there is no work to be had in places like Glasgow, Edinburgh, Manchester, Newcastle, Birmingham and Cardiff?

The vast majority of locals don't live in London, or anywhere near it for that matter. We lived in Manchester for a while, in one of the inner city northern suburbs. We knew a fair few people who were looking to buy, mostly the now grown up children of friends. Would they consider North Manchester? Not on your life. Nor any of the satellite towns around Manchester. They all wanted to live in Trafford (good state schools) or, failing that, around Didsbury/Wilmslow. They liked those areas because that's where they were renting.

When we started out we bought in unfashionable areas, not quite what we wanted but what we could afford. The houses/flats may not have gone up quite so quickly, but at least they belonged to us and we weren't shelling out dead money.

A 24 year old with quite a good job (financial services in the City) grew up in Acton (London W3) and was whinging to me recently about how he can't afford to buy where he grew up. He wants a 2 bedroom place, going rate around £350k. When I suggested he consider Gravesend, Kent and commute, going rate for a 2 bedroom place around £190k and nicer than what he was showing me, (e.g.
http://www.rightmove.co.uk/property-for-sale/property-34291692.html) he looked at me as if I were mad. And yet it's only 35 miles from where he lives now, just over an hour by car.

Samsonite1

padington wrote: »

According to the inflation calculator, sadly I was earning a shed load more in 2001 than i am now.

http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html

I think individual statistics do not work too well. I assume you are doing ok, rather than trending with statistics?

In any case, having checked right now, it turns out my parents' old house is worth about £600k, so I was a bit low on my estimates. Let's say that a junior project manager outside of London was on £60k (not possible, but whatever) - that is still 10x property price of today. My folks got the same house for less than 2x salary of £25k or as someone mentioned 3x their £15k salary.

However you slice it and use the most convenient figures for your argument, the difference is massive.

dktreesea

padington wrote: »

According to the inflation calculator, sadly I was earning a shed load more in 2001 than i am now.

http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html

Yes, people who are delaying and delaying buying should perhaps keep that possibility in mind. It could well be that what they are going to earn in their 40s is less than what they are now earning in their 20s. Maybe even in absolute terms, let alone after adjusting for inflation.
I too earn less now in real terms than I did 20 years ago.

princeofpounds

A 24 year old with quite a good job (financial services in the City) grew up in Acton (London W3) and was whinging to me recently about how he can't afford to buy where he grew up. He wants a 2 bedroom place, going rate around £350k. When I suggested he consider Gravesend, Kent and commute, going rate for a 2 bedroom place around £190k and nicer than what he was showing me, (e.g.
http://www.rightmove.co.uk/property-...-34291692.html) he looked at me as if I were mad. And yet it's only 35 miles from where he lives now, just over an hour by car

Gravesend - London Terminals season ticket is £3252, and that's assuming he is within walking distance of the terminus.


£3252 capitalised at 2.6% 5 year fixed mortgage rate is £123,181.


That travel cost instantly wipes out most of the so-called saving from commuting, at a significant cost to time and lifestyle.


It is maybe a bit better if he needs a zonal travelcard now and doesn't if he lives out in Kent, but it's quite likely he will want to travel within London frequently anyway. It only take missing the last train home once or twice to wipe out the monthly saving too.


He is not nearly as stupid as you think he is.

ukcarper

princeofpounds wrote: »

Gravesend - London Terminals season ticket is £3252, and that's assuming he is within walking distance of the terminus.


£3252 capitalised at 2.6% 5 year fixed mortgage rate is £123,181.


That travel cost instantly wipes out most of the so-called saving from commuting, at a significant cost to time and lifestyle.


It is maybe a bit better if he needs a zonal travelcard now and doesn't if he lives out in Kent, but it's quite likely he will want to travel within London frequently anyway. It only take missing the last train home once or twice to wipe out the monthly saving too.


He is not nearly as stupid as you think he is.

Gravesend to zone 1 £3900 Acton to zone 1 £1500 difference £2400, £200 a month Average FTB mortgage rate 3.1% monthly repayments of £40k at 3.1% £195 a month.

Graham_Devon

dktreesea wrote: »

I would agree if the areas in question were in the middle of nowhere, but instead they are in commuting distance of fairly large cities. Are you seriously suggesting there is no work to be had in places like Glasgow, Edinburgh, Manchester, Newcastle, Birmingham and Cardiff?

No, I'm not suggesting that. Though if we look back at your initial post and the £400 mortgage, you were suggesting South Wales, Lincolnshire etc. That's not exactly "near" major cities. You just threw up an entire county.

I know South Wales quite well, and if it were as easy as you suggest you'd not find houses at 30k there. The "easy commute" you talk of could easily be 4 hours a day in loads of parts of South Wales to Cardiff. The cost of commuting is something you have to take into consideration. Many of the places you mention will have very sub standard public transport outside of the cities, so you are into running a car, possibly traveling 60 miles plus a day. You simply have to take these things into consideration.60 miles per day would easily cost you £300 a month for simply running the car, parking it etc, let alone buying it.

What's more, your suggesting was that people up sticks, from say, the South West and move there. As I said, that's grand, but it's a MASSIVE life change just to be able to afford a house. Not only that, but you have to give up your income to buy something whereby you need an income.

You are making out it's all ever so easy, but you don't appear to be taking any of the issues into account. If you sat down an dput yourself in the position and, instead of looking at a BBC map, tried to plan it yourself, you'd be doing anything you could to back out of your easy solution.

As for your £800 - £1,000 monthly mortgage payments as a solution, I'm not sure you quite understand the average income of the average household in the UK. £800-1,000 mortgages for the average family (with kids) in the UK taking home £28,000 pre tax a year and commuting as per your suggestion wouldn't leave much wriggle room. May aswell stay where they are.

Cornucopia

You seem quite upset that anyone should even dare to consult such a map.

I used to work (in London) with someone who commuted to Nuneaton on a daily basis. He simply worked it into his lifestyle - had a group of regular traveling companions, took work to do on the train. It took 90 minutes each way, but he was happy with it, and it enabled him to have a huge family house in the nicest part of the town, as opposed to something much more modest in London.

I assume the figures worked for him & his family. Ultimately a lot of people seem to make the figures work, while a lot of others just whinge.

And that's the bottom line on all of this. The market is not "over-priced" on a whim or to spite the younger generation. People are buying properties at the prices (or near to them) that are being asked. (And I understand the figures show that BTL LLs are only a small proportion of those sales).

Graham_Devon

ukcarper wrote: »

You are just taking one antidotal example

:shocked: ................

ukcarper wrote: »

It's happened before I had the same problem in the 70s. I started looking locally and it took me a couple of months to realise I would have to move out if I wanted to buy. By the time I took the plunge prices on the estate that I bought on had increased by 50% and I realised if I did not buy then I would not be able to buy and true enough by the begging of the following year prices had increased another 50%, I might have beed able to save the extra deposit but I would not have been able to get extra on motgage.

ukcarper wrote: »

In 1986 £25k was a very good salary probably equiv of about £60k now. I bought the house I live in now in 1985 for £60k an identicle house has just sold for £350k this is in commuting distance of London. I bought my first house in 1972 in same area as my present house it was over 5x my salary which was above average same house would now cost about 7x equivalent earnings.

ukcarper wrote: »

If it was the mid 70s I would say he didn't live in the London suburbs. I lived and worked in South London in the early 70s and was earning £1.5k (people doing same job now earn £35k) I could not afford to buy in the area I worked and had to move 30 miles further out and commute the house cost £8k. I did look at a 1 bed flat in Morden that was £6k.