UK Affordability still very good

MPD

ukcarper wrote: »

Average pay £26400k £1750 a month take home. Rent a room £500 per month leaving £1250. They suggest save 22% £275 a month leaving £975 the savings sound much to low to me.

No pension or student loan then?

ukcarper

MPD wrote: »

No pension or student loan then?

Ok £35 or £50 student loan same on pension so £875 a month although might be better to put pension on hold for a couple of years and might not have a student loan.

Graham_Devon

ukcarper wrote: »

I am arguing that if you are serious about buying you can save more, if you choose to spend on entertain etc that's your decision but thats what you and Graham don't seem to understand if you want to buy and you are not one of the lucky people who get help you have to make sacrifices, when I was saving I save almost all my money after food and keep my only form of entertainment was a couple of drinks at the weekend.

Hey don't speak for me and suggest I don't understand stuff.

You are right, if you earn the average wage and live for a few years in a house share, probably with a shared kitchen, bathroom, very little personal space and no stability whatsoever... you could save a deposit quicker than you may otherwise be able. (and you'd better just hope that your saving keeps up with price increases, otherwise it's all a little academic).

The problem with this for most people is what we call an acceptable standard of living. For some, that choice is limited due to funds, but there are not many that I know that choose to live their 20's through to their 30's in house shares. That's just reality. It's also something that I don't know anyone to have bought 20-30 years ago to have done for years on end either.

The reason for the above is quite simple. The vast majority of people want to have a half decent standard of living commensurable to their income. They want to join in the social circle of their peers. This is a basic human psychological and emotional need.

You can't do any of the above by excluding yourself from society by returning to your house share and sitting in all night every night while counting your money (extreme, but makes the point)

The reality is also kids, whether we like it or not. We can't keep excluding over half the nation (probably) who have children and are in rented wanting to buy.

Again, kids are a biological and psychological need. Were built to want to recreate. So I don't think it's that reasonable to keep suggesting everyone who's young should forgo all this when no one in history ever has while they are in prime child bearing age.

It's always reality which undoes the "great on paper" scenarios. Some of this reality is unavoidable in many cases.

Yer, it would be fantastic to own your own home by the time you are 35 or whatever. But you know what, if I'd have had to sacrifice my children and all my life experiences to get there? Well, I don't think that;s a price worth paying for a roof.

That last sentence? That's where we differ the most. It's just you are coming from hindsight having enjoyed all of that already but still having the house.

You have talked time and time again about a 2-3 year period in the 70's. But that's all it is and was....2-3 years where interest rates were high and therefore mortgages crippling. Were talking about 15 years for people in the same position as you were today.

Yes. people can be serious about buying a house and forgo years of experience, and, if they are really emotionally with it, avoid the pressing need to settle down with someone. BUT, is it really worth it? We live once. It never has been all about buying a house, so I don't see why it should be now.

Yes, save. I'm not suggesting people shouldn't. But taking it to the extremes you are describing? It's a big ask.

I'm sure I remember reading somewhere that saving 10% of your income when on an average income is psycologically and socially the optimum level, allowing for other life experiences and general living costs.

Windofchange

ukcarper wrote: »

I am arguing that if you are serious about buying you can save more, if you choose to spend on entertain etc that's your decision but thats what you and Graham don't seem to understand if you want to buy and you are not one of the lucky people who get help you have to make sacrifices, when I was saving I save almost all my money after food and keep my only form of entertainment was a couple of drinks at the weekend.

But it's a bit of a pointless argument. I am sure you can find people who live like monks and save a hefty sum of money. I'm not disagreeing with you that people could save the money to put a deposit down on a small flat, although I would disagree that this is possible currently in London / the S.E without substantial outside assistance. I'm sure one of the two Ronnies will be along in a bit to tell us about all the people they know who have brought houses in Mayfair on two median salaries...

There is then reality. Most 20 somethings that I have met like to party, like to go on holidays etc etc. They're not necessarily frivolous, but heck you're only young once. They've come out with 50k of student debt into a world that is cheap yet expensive all at once. Banks are throwing money at people - loans, houses, cars, and debt is increasing at record pace. Everything is accelerating upwards - inflation, house prices, stocks. What happens when you fill the economy with cheap money? Asset bubbles. That is where we're at. How long it'll keep going for is anyone's guess, but end it must.

Graham_Devon

ukcarper wrote: »

Ok £35 or £50 student loan same on pension so £875 a month although might be better to put pension on hold for a couple of years and might not have a student loan.

Worst advice anyone can ever give in truth. Especially with the big question mark over the state pension for anyone aged 35 and under.

Now were not only avoiding living at a young age, but were ignoring the benefits of starting a pension ASAP for older age too?

Nope nope nope nope nope. Line crossed there.

ukcarper

That person who earns £26k could borrow £104k so a 10% deposit would be about £12k so if he save £500 of the £975 he would have deposit in 2 years. Now whether he could find a property for £115k is another thing, but as I've said all along if you can get a big enough mortgage you can save.

But of course it's up to you if you don't want to rough it for s couples that's your choice.

ukcarper

Graham_Devon wrote: »

Worst advice anyone can ever give in truth. Especially with the big question mark over the state pension for anyone aged 35 and under.

Now were not only avoiding living at a young age, but were ignoring the benefits of starting a pension ASAP for older age too?

Nope nope nope nope nope. Line crossed there.

So you own a property a live rent free when you retire or you put another couple of grand in a pension which won't go anywhere near to covering rent.

As an example my pension which I've paid all my working life would only just about cover rent of a similar property to mine.

Graham_Devon

ukcarper wrote: »

That person who earns £26k could borrow £104k so a 10% deposit would be about £12k so if he save £500 of the £975 he would have deposit in 2 years. Now whether he could find a property for £115k is another thing, but as I've said all along if you can get a big enough mortgage you can save.

But of course it's up to you if you don't want to rough it for s couples that's your choice.

If a room costs £500, it's highly unlikely there will be a house available in the area for £104k. Your sums don't add up, though I'm handing you a gift here...

There's probably what, 30% of England where you can buy a house for that price?

It's all relative when it comes to wages and house prices. Houses available for £104k? Good luck with securing the job paying £26,000 per year. The better the wages of an area, the higher the cost of housing.

But sure, your point still stands, based on lots of if's which, let's face it, will match an incredibly small section of society.

Graham_Devon

ukcarper wrote: »

So you own a property a live rent free when you retire or you put another couple of grand in a pension which won't go anywhere near to covering rent.

As an example my pension which I've paid all my working life would only just about cover rent of a similar property to mine.

Carper, the choice shouldn't be "save for a pension or save for a house".

If that's the choice, you are making our point for us.

If you can't afford to save for a pension, it would suggest housing is pretty unaffordable, or at best, extremely expensive.

Sure, talk about the coffee's, the holidays if you must (but don't pretend every holiday costs 5k), but to start talking about forgoing a pension to afford a house? Too far IMHO and just conveys our point beautifully.

And stop framing everything as "a couple of years". It's not and we both know it's not. That;s based solely on your sums which ignore every hint of realism.

I mean, seriously, £375 per month to pay all your bills, food, clothing, car / travel expenses, insurance, phone and still have money for life's unknown such as needing to replace a broken laptop? Come on, get a grip. What next? People should steal shoes from a shoe collection bin?

What on earth do you expect these people to wear to work? Shoes, shirts, trousers from the clothing fairy? Or are people required to be in jobs where the uniform is handed to them now too?

ukcarper

Graham_Devon wrote: »

If a room costs £500, it's highly unlikely there will be a house available in the area for £104k. Your sums don't add up, though I'm handing you a gift here...

There's probably what, 30% of England where you can buy a house for that price?

It's all relative when it comes to wages and house prices. Houses available for £104k? Good luck with securing the job paying £26,000 per year. The better the wages of an area, the higher the cost of housing.

But sure, your point still stands, based on lots of if's which, let's face it, will match an incredibly small section of society.

I agree and in areas where you can as you say to rent a room would cost less so he could save more. But what I've have always said if you earn enough to get mortgage you can save. Yes prices in large parts of country are to high for the majority to buy and I sympathise with people it those areas what I don't accept that if you earn enough to get mortgage it's impossible to save.