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

economic

kilby_007 wrote: »

I understand things have changed, that was my point! The market is the market, also correct, but it's not a just and fair market, is it? Are you a multiple homeowner by any chance?

It's as fair as it ever has been. There is no "inside corrupt system". I think it's pretty fair tbh. Mortgage availability is good which favours those with less deposits.

I only own one home. My own. Modest two bed flat in Highgate. I wouldn't want anything more.

kilby_007

wotsthat wrote: »

Prices were cheaper 20 years ago but you're kidding yourself that the gap would fund annexes, carers, experiences, holidays, family and the bus fare home.

I'd wager your parents were paying a higher proportion of income to put a roof over your head than you're willing to pay.

My parents were earning around the average salary when they bought. My mum was a waitress and my dad did a 9-5 warehouse job. The average salary now wouldn't buy you an average family home. I'm on around 3x the average salary, ergo 20 years ago I would've had at least 2/3 of my salary as disposable income. It's not fanciful at all.

economic

kilby_007 wrote: »

My parents were earning around the average salary when they bought. My mum was a waitress and my dad did a 9-5 warehouse job. The average salary now wouldn't buy you an average family home. I'm on around 3x the average salary, ergo 20 years ago I would've had at least 2/3 of my salary as disposable income. It's not fanciful at all.

Average job being a waitress and warehouse worker. That was many years back. He economy and type of jobs change. And so do the earnings distribution. There's a lot more people on higher wages then 20 years ago. This is one of the drivers behind house prices going up

kilby_007

economic wrote: »

There's a lot more people on higher wages then 20 years ago.

This is something I have little knowledge about (I can't even remember being 11!) but could you explain what you mean by this? I've got most of my statistics on house prices from reports/charts and this isn't something I've looked into but if there are more people on higher salaries now, then wouldn't that bring the average salary up too?

economic

Sorry I should have explained clearer. Compared to 20 years ago the inequality levels have gone up a lot. One of the factors is wages where there is a bigger spread of lower and higher income workers. Now the average wage hasn't gone up inflation adjusted. It's gone down as there are a lot more lower income workers then 20 years ago. But the average wage means nothing in property. It's all about the marginal buyer. And there are many of them as there's many people who earn enough to afford current prices. Plus you have gifts too which baby boomer generation are passing down in the millions of not billions.

kilby_007

Thanks for clearning that up, I can see how that adds up but the only affect that would have on the market, (if the property market wasn't treated like stocks/shares) is that you'd get more big houses, more smaller/affordable houses and fewer average properties. As we've agreed though, the "many people who can afford current prices" aren't the average cross section of society that it was 20 years ago, there is a clear shift and I think we're agreed on that. Everything has been skewed ultimately by the concept of property as investment. I think we're somewhat in disagreement on that one. The main thing is though that the property market has changed leading to inequality in property, the only difference of opinion on that is that you think it's fair and I don't!

lisyloo

economic wrote: »

Sorry I should have explained clearer. Compared to 20 years ago the inequality levels have gone up a lot. One of the factors is wages where there is a bigger spread of lower and higher income workers. Now the average wage hasn't gone up inflation adjusted. It's gone down as there are a lot more lower income workers then 20 years ago. But the average wage means nothing in property. It's all about the marginal buyer. And there are many of them as there's many people who earn enough to afford current prices. Plus you have gifts too which baby boomer generation are passing down in the millions of not billions.

I don't get the last bit (literally).
Many people are living into their 90's meaning that inheritances won't happen until the "kids" are in their 60s and 70's, plus more than ever before it'll be spent on care fees.

We paid off our mortgage at 44/46, but parents haven't got to a home yet.

Yes sure some people will die early but on first death it would usually go to the spouse not the kids.

Do we have any stats on inheritances?

Some of my friend/colleagues late 40s/early 50s are losing their parents, however most have also paid off their mortgages.

economic

kilby_007 wrote: »

Thanks for clearning that up, I can see how that adds up but the only affect that would have on the market, (if the property market wasn't treated like stocks/shares) is that you'd get more big houses, more smaller/affordable houses and fewer average properties. As we've agreed though, the "many people who can afford current prices" aren't the average cross section of society that it was 20 years ago, there is a clear shift and I think we're agreed on that. Everything has been skewed ultimately by the concept of property as investment. I think we're somewhat in disagreement on that one. The main thing is though that the property market has changed leading to inequality in property, the only difference of opinion on that is that you think it's fair and I don't!

How do you know btl folk have had such a big impact on prices? I heard somewhere that by far the majority of the demand is from ftb and people moving up or down the ladder. Btl is a small part even in London.

economic

lisyloo wrote: »

I don't get the last bit (literally).
Many people are living into their 90's meaning that inheritances won't happen until the "kids" are in their 60s and 70's, plus more than ever before it'll be spent on care fees.

We paid off our mortgage at 44/46, but parents haven't got to a home yet.

Yes sure some people will die early but on first death it would usually go to the spouse not the kids.

Do we have any stats on inheritances?

Some of my friend/colleagues late 40s/early 50s are losing their parents, however most have also paid off their mortgages.

Not just inheritances. Gifts. Parents willing to pass some of their savings to help their kids get in the ladder. I was surprised by how much my parents have saved over the years. They have no degrees and are probably just below average wage earners throughout their lives. But they have managed to save quite a bit. I imagine they are not the only ones. There are many parents like this. Now imagine these parents passing on large gifts say 100k to their kids to help them buy a house. This would have a massive impact on demand and prices dont you think?

kilby_007

economic wrote: »

How do you know btl folk have had such a big impact on prices? I heard somewhere that by far the majority of the demand is from ftb and people moving up or down the ladder. Btl is a small part even in London.

Not just BTL. Foreign investment and housing shortages (in my opinion a planned shortage - we'll have to agree to disagree on that one!) which has lead to booms and crashes and off the back of that there's people who've played the market and won vs those who've lost, causing inequality. There's no singular factor, but the concept of property as an investment has kicked all of this off, post 70's.