Has Crashy and co finally come to their senses...

Out,_Vile_Jelly

cells wrote: »

I think by in large their problems over on that site is that they earn less than average, receive or will receive less than average gifts and inheritances but want to buy more than the average home in a more than average prices area using only their income rather than joint incomes.

Whatever the price level is they will be disappointed until at least one of the factors above changes and for a lot of them with low incomes and high expectations neither changes enough to make it work.

I thought they all had a couple of hundred k in the bank but refused to buy outright because UK houses are overpriced, small and rubbish, and the UK is such a dump generally?

westernpromise

*~Zephyr~* wrote: »

I LOVED that my mum was a stay-at-home mum and I wasn't a latch-key kid, as they called them then.

That might have been partly down to the tax situation. Until 1988 a wife’s earnings were taxed at her husband’s marginal rate. She got no personal tax-free allowance; instead, he got a bigger allowance, whether she worked or not. So a wife was simply a line item on her husband’s tax return, like a BTL is now.

As a result, a man earning just below the then top rate of 83% would find that his wife’s whole earnings would be added to his then taxed in their entirety at that rate. If she made £35 a week, she’d thus get to keep about £5 of it. By the time she’d paid for her work wardrobe and her commuting expenses, she could very well be net paying to work, rather than being paid.

That is also where the hallowed mortgage multiples of 3.5x plus 1x came from, incidentally. When assessing what a working couple could afford in the way of a mortgage, lenders looked at what he had left after tax and at what she did, and correctly concluded that even if her headline salary was the same as his, it was net a lot less by the time the sexist taxman had finished with it. Hence 3.5x the one but not the other. This multiple started to change in the 70s, as people cohabited without marrying because they saved so much tax and thus had two full salaries to throw at a mortgage, but it wasn’t until 1988 that Lawson finally got rid of this sexist anachronism.

This little-remembered bit of tax history does tell you why it’s such a mug’s game to hope that one day, prices in Luton (or wherever) will return to a sensible level of 3.5x one salary in Luton. Unless we start treating women as chattels again - and GLWT in the polling booth to anyone who proposes it - it just ain’t gonna happen.

*~Zephyr~*

Thing is, house buying IS possible on low incomes. You just have to manage your expectations.

My 23 yr old step-daughter bought two years ago with her partner. She's on minimum wage, he's on around £18k but they had saved extremely hard for 5 years prior and had a £10k deposit.

OK, so they couldn't afford to buy in their first choice area, and they had to buy a fixer-upper to afford it, but they bought for £100k and have worked their socks off to renovate, put in heating, new flooring, completely rewired, re plastered and their house is now worth £60k more than they paid for it. Their plan is to stay put for another two years, overpaying the mortgage by as much as they can and they look to move to their preferred area using their equity.

And they do this on pay way below the national average.

*~Zephyr~*

Thank you Western promise. That was a really interesting post. I didn't realise they taxed married women to that degree!

cells

Out,_Vile_Jelly wrote: »

I thought they all had a couple of hundred k in the bank but refused to buy outright because UK houses are overpriced, small and rubbish, and the UK is such a dump generally?

maybe that is a few of them but I think the vast majority perhaps more than 90% of them over there simply earn and inherit less than the average yet want to buy better than the average and with just their income rather than as a couple.

So they are permanently left disappointed as people who earn more are in a couple and inherit more outbid them. That will almost always be the case irrespective of the price which is why some of them have been waiting nearly 15 years and thought prices 1/3rd of today were too much.

padington

Brexit looking like on the cards, crash might be coming before Christmas !

HAMISH_MCTAVISH

padington wrote: »

Brexit looking like on the cards, crash might be coming before Christmas !

Yes but that would be a crash in everything, including employment and bank solvency, not just house prices.

So just like the last time around pretty much nobody would be in a position to take advantage of lower house prices anyway.

westernpromise

HAMISH_MCTAVISH wrote: »

Yes but that would be a crash in everything, including employment and bank solvency, not just house prices.

So just like the last time around pretty much nobody would be in a position to take advantage of lower house prices anyway.

And just like the last time people will stop selling because they're in negative equity, and just like the last time bank will pretty much stop lending against property unless you've got a 50% and need 2x household income because who knows where the bottom is.

I've said it before and I'll say it again - if you want to know who'll own property after a crash look at who owned it before.

kinger101

padington wrote: »

Brexit looking like on the cards, crash might be coming before Christmas !

Current odds on betfair for stay are 1.42, which is 70% implied probability.

padington

kinger101 wrote: »

Current odds on betfair for stay are 1.42, which is 70% implied probability.

The poor are voting out in their droves in London, I work with the long term unemployed, homeless, disenfranchised, they are all really committed Bexiters, I've never seen anything like it. I know they won't vote as much as everyone but from the ground, there seems to be a sea change. I wonder if the gamblers have failed to appreciate the new wind on this one.

It's a different vote to the general election, not many referendums have been played out to learn from after all. Also the brexiters are more likely to bother voting, they seem slightly possessed.