Is it really that hard?

moneyistooshorttomention

The one point I would agree with from OP's post - is that I don't understand why people have children before they are financially in a position to do so.

Cue for me reading a Guardian article that didn't do the writer of it any favours yesterday with astonishment - with the article being about how hard-working families cant afford to live BUT the big flaw in that article was it did look rather like the families concerned had had their children after getting into financial trouble, such as being on a very low wage, (rather than before) and one of them had two children and were pregnant with a 3rd (which had come onto the scene obviously quite some time after things had already become difficult for them).

So - some people don't help themselves - but will then go and ask for help and sympathy.

But - we all know houses cost a lot higher multiple of income than they used to. Never mind graduates (genuine or otherwise) - what about people who have never been to University and are trying to buy a house based on NMW or similar level?

I can recall when (many years back) I was on around £2,500 pa income and starter houses were around £8,000-£8,500 and I might have stood some chance of getting one - but the employer I had at the time was doing things that affected my wages/borrowing power and I couldn't. Fast forward some years and I hadn't got an "awkward b&gger" employer making it difficult - but, by then, houses had gone up to a lot higher multiple of my income and I still couldn't get one.

Since then - I've just been watching that income multiple necessary to buy a house going up and up and....

princeofpounds

Don't feed the troll folks. If we are going to have a debate, let's make it a high quality one based on a daily mail or grauniad article or something ;-)

lisyloo

I think it's harder for young people now to get good career jobs.
There's far more competition because we are educating about 50% of the population to degree level, plus immigration, plus we can offshore (I'm not saying those things are bad per se).
House price are high without doubt which makes it hard for people to save for pensions and I'm concerned about a time bomb there but politicians dont' see concerned with anything but the short term.

Of course moaning has now gone to greater levels because we have social media.

I think it's harder and I have no vested interest in saying that.

Cornucopia

When I was a new graduate, I bought a tiny flat in a nice area of London for 4x my salary. That was tricky, but always doable. I suspect those same flats are still reasonably affordable for graduates on a graduate salary, even though there are many more graduates now than there were then.

lisyloo

I suspect those same flats are still reasonably affordable for graduates on a graduate salary

Really?
I'm looking at poky flats in London and anything below £300K is in a not-so-nice aera. To give you an example there are sub £300K flats on Falcon Rd near Clapham Junction station in a "gated community" (q. why do you need locked gates?)

Can you give us an example of which flats and which graduate salaries you are talking about?

What do you mean by London? Croydon or Clapham? Makes a big difference.
Unless you're talking about a reasonable commute (which can be costly) then I can't see it.

theEnd

bigfreddiel wrote: »

My house cost me £5,000 two bed tiny terrace interest rate 6%

Forty years later my salary is £28,000 - 10 fold increase

House prices £250,000 - 5 fold increase and interest rate 0.5%

This post is too stupid to reply to.

danothy

Running those numbers it seems that it'd be five times harder now to save the deposit and almost three times as much of the take home each month on the mortgage payment. I wouldn't like to comment on if it is 'that hard' now, but it does look 'that easy' in the forty year ago example.

-40 years
Wage: £2,800.00
Take home: £176.05
House value: £5,000.00
5% deposit: £250.00
Rate: 6%
Mortgage payment: £30.65
Saving 50% of take home: £88.03
Months to save deposit: 3
% of take home on mortgage: 17.41%

Now
Wage: £28,000.00
Take home: £1,760.50
House value: £250,000.00
5% deposit: £12,500.00
Rate: 0.5%
Mortgage payment: £842.35
Saving 50% of take home: £880.25
Months to save deposit: 15
% of take home on mortgage: 47.85%

tom9980

danothy wrote: »

Running those numbers it seems that it'd be five times harder now to save the deposit and almost three times as much of the take home each month on the mortgage payment. I wouldn't like to comment on if it is 'that hard' now, but it does look 'that easy' in the forty year ago example.

-40 years
Wage: £2,800.00
Take home: £176.05
House value: £5,000.00
5% deposit: £250.00
Rate: 6%
Mortgage payment: £30.65
Saving 50% of take home: £88.03
Months to save deposit: 3
% of take home on mortgage: 17.41%

Now
Wage: £28,000.00
Take home: £1,760.50
House value: £250,000.00
5% deposit: £12,500.00
Rate: 0.5%
Mortgage payment: £842.35
Saving 50% of take home: £880.25
Months to save deposit: 15
% of take home on mortgage: 47.85%

The take home in the final example does not factor in pension and student loan payments, my wifes wage is about 1.5k more but her actual take home is £1703 because of that. So we are talking what £80-100 a month which makes all the difference.

somethingcorporate

So much fail in that opening post.

danothy

tom9980 wrote: »

The take home in the final example does not factor in pension and student loan payments, my wifes wage is about 1.5k more but her actual take home is £1703 because of that. So we are talking what £80-100 a month which makes all the difference.

You're correct that it doesn't factor in pension payments, but it does include a deduction for a student loan payment.