UK Affordability still very good

Windofchange

ukcarper wrote: »

I agree young people face many problems that not say say we didn't just that the problems are different. But the ability to save was no better in the 70s than it is now and I don't accept that is harder to save now than it was then, people might find it harder but that's because of thier attitude.

Sure. People can always save. It's just how much you can save in a given period of time, and what you can (or can't in this case) do with it. You've just got to look at the ONS charts and the fact that home ownership is rising amongst the over 65's and falling for everyone else to see where the wealth is concentrated - i.e. a lot of people managed to buy from the older generations when they were young, but this isn't the case now. I don't think you can attribute this to iPads and holidays.

If you can get a mortgage then it has never been so cheap to service the debt, but given only 46 local authorities in the country have prices at 3 - 5 x salary, you need a whole page of exclusion criteria (as given on here) before you can get one.

ukcarper

Windofchange wrote: »

Sure. People can always save. It's just how much you can save in a given period of time, and what you can (or can't in this case) do with it. You've just got to look at the ONS charts and the fact that home ownership is rising amongst the over 65's and falling for everyone else to see where the wealth is concentrated - i.e. a lot of people managed to buy from the older generations when they were young, but this isn't the case now. I don't think you can attribute this to iPads and holidays.

If you can get a mortgage then it has never been so cheap to service the debt, but given only 46 local authorities in the country have prices at 3 - 5 x salary, you need a whole page of exclusion criteria (as given on here) before you can get one.

I agree it's more difficult to buy now but as I said I think that that is because prices are hight not because it's difficult to save a deposit. In the 70s you needed at least a 10% deposit as now in fact I had to limit my search to post war property as you needed a 20% deposit on older property. Remember there was period when 100% mortgages were available so that help increase numbers of FTB also a large number of people became home owners because of right to buy, that is partly responsible for the growth in home ownership in 80s

If prices fell by 20% the same people would be complaining they can't save deposit it's a choice to make the effort and if you don't make that choice you won't be able to buy that was the same in the 70s.

economic

people who dont make the sacrifices to sav and then complain they cant afford to buy only have themselves to blame. theres nothing unfair about the high property prices. the "young" just have to suck it up. no sympathy at all from me.

GreatApe

Graham_Devon wrote: »

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.

People need a house to live in you either rent or buy and seeing as buying is the money saving expert option 99/100 times then we are discussing what is the medium to long term better financial decision.

If someone can afford the rent for a house they can afford the mortgage for the house. If someone is finding it hard to save a deposit then they must be reckless or ignorant. Spending your 20s on 'experiences' and social events and waking up at 30 deciding now I should start saving but only 10% of my income is ignorant.

westernpromise

Windofchange wrote: »

I wanted to have some fun though whilst still young and I don't think that would be too uncommon a theme amongst those of that age.

Probably so, but if you properly price what that fun is costing you, you might decide it's very expensive fun.

My sister in law spent her 20s and 30s in TV. She had great fun hobnobbing with slebs off the TV and hanging out at the Groucho Club. But TV, while fun, is an ageist and sexist industry in which there is a ready welcome for pretty suggestible middle class graduates in the 20s, but very little room for the mumsy old bags in their late 30s and 40s that the industry considers the same females have turned into.

So for the last 20 years she has struggled for work and is now a meeja studies lecturer at a former poly earning a pittance.

I spent my 20s and 30s working long and stressful hours understanding the often tedious minutiae of an industry in which a small error could cost your company millions and you your job. 20 to 30 years later, I can parlay this into a 6-figure salary doing work that is no longer very hard or boring, or if it is, I delegate it.

A few years ago we were both freelance and were discussing the rate we could charge ourselves out at. She indicated she would be very happy with £1,000 and I said I didn't get out of bed for less than £2,000. After a bit of confusion it transpired that we were at cross-purposes: she was talking about her weekly rate and I was talking about my day rate.

She, like many others, was bitterly jealous of those who have done what I did.Obviously they are very keen for the different outcomes to be the result of unfairness and the brokenness of something or other. But it's not, it's just about how far ahead do you think. If you figure you're in your twenties and entitled to some fun, that's fine, but you need to consider the possible causal connection between spending your 20s having fun and spending your 40s renting.

Fun can often be another word for irresponsibility.

westernpromise

GreatApe wrote: »

People need a house to live in you either rent or buy and seeing as buying is the money saving expert option 99/100 times then we are discussing what is the medium to long term better financial decision.

If someone can afford the rent for a house they can afford the mortgage for the house. If someone is finding it hard to save a deposit then they must be reckless or ignorant. Spending your 20s on 'experiences' and social events and waking up at 30 deciding now I should start saving but only 10% of my income is ignorant.

In effect it is wanting to have your cake and eat it and lose weight.

economic

i had a friend once who had exactly the same oppurtunities as me in banking. he was shocked how much of a nest egg i built up. he always used to say i should live extravegently. i never did but i did not live like a monk either. i went on holidays, went out with friends, have hobbies etc. just that i am not stupid with my money.

my friend still lives with his parents in london and i have my own place and am semi retired. he doesnnt talk to me now as he is very jelous.

economic

remember we all have choices. time is valuable as is money. its all a balancing act. those who spend it all living extravegently and then find themselves not able to afford a house are simply stupid.

sure i may not have had as much fun as a lot of people in their 20s do now, but you can bet i am a lot more financially secure then many of these people will ever be! and i am "only" 34.

economic

its a great carry trade to have buying your own home. with rates low, if you can afford it then one should certainly buy (providing they stay there long term). mortgage interest costs are less then half that have the like for like rent would be.

therefore the only rational (in game theory terms most optimised decision) thing to do is to save as much as possible and to buy a home ASAP.

GreatApe

Another interesting thing about renters is that they are not all would be FTBs a good portion are previous owners. Something like 150-200k owners sell up and move into renting each year (I assume mostly due to divorce).

So what proportion of renters are previous owners? If it takes five years for them to cycle back to ownership it could mean as much as 1/5th of rented property is rented by previous owners

Further proving that private rental is a transitional tenure that most private renters only rent short term before moving onto ownership/social