Houses are affordable!

capital0ne

In 1957 the average wage was £7 10s - equates to £390 per year
The average house cost £2,000 - 5 times salary

Fast forward to now

The average wage is about £20,000 per year (starting point for a civil servant in their early 20's)
A quick search on Rightmove and you can find two bed terraced houses or similar for under £100,000 (not in London of course)

So where's the problem?

Apparently all of us oldies are now glorying in our 'cheap' houses we bought back in the day in our twenties. Well it was just as hard for us back then as it is now, so what's different?

The difference is that we had a bit of discipline, we wanted to get our own place, and we saved, we bought what we could afford and where we could afford, and we didn't look for our four bed detached forever home full of brand new furnishings.

We bought second hand and made do for the first few years.

Sadly youngsters today 'need' and iPhone X (£50/month), Netflix/Amazon Prime £100+/year), gym membership (£100+/yr), Costa coffee(£60/month), Takeaways (£100/month), new card (£199/month) plus others - this is all adding up to £5,000+/yr, which is your 5% deposit saved in one year.

It is doable - you just need to do it - get out of your parents house now and get on with your life while you know everything!:D

zagubov

Staying with parents is the best bargain the average person will ever encounter.

The amount of "keep" a young person contributes is usually peppercorn compered with the amount needed by landlords.

The landlords need this to pay the mortgages they took out that will pay the mortgage companies who will have to reward the lenders/depositors that lent the funds that were used for the landlords purchases.

And the lenders or landlords may be drawing capital out of the country so....

juniordoc

Clearly you're out of touch with the reality of today's 20-somethings. Yes some do over-spend but the picture you paint is so far wide of the mark of the average.

Personally I spend nothing like the amount you describe. Have never paid more than £25 a month for a phone, have never owned a new car or bought on PCP, have never in my life bought a takeaway coffee, share a Netflix account with friends (much cheaper than cinema tickets!) and go to the cheapest gym in the city.

Despite this it has taken over 6 years of saving since graduating to save a deposit, the public sector pay cap holding my wages below inflation every year of my career to date, astronomical rental costs and letting agents fees I have been unable to avoid as my job forces me to move every year, student debt totalling tens of thousands with repayments eating into my ability to save, and house prices in the south-west putting a property purchase out of reach until now. And after all that what am I able to buy with my partner-also a public sector professional...?
A very modest 2 bed flat with no outdoor space, hardly ideal for starting a family. This situation has prevented us from doing so before now.

Something has to change.

boliston

In the 50's it was more common to marry young and buy a house together - nowadays people settle down with a partner at a much later age (if at all) so often have to buy a house with only one salary rather than two - there also seems to be a trend to live in more urban areas where prices are much higher which makes it doubly difficult to buy

Cakeguts

juniordoc wrote: »

Clearly you're out of touch with the reality of today's 20-somethings. Yes some do over-spend but the picture you paint is so far wide of the mark of the average.

Personally I spend nothing like the amount you describe. Have never paid more than £25 a month for a phone, have never owned a new car or bought on PCP, have never in my life bought a takeaway coffee, share a Netflix account with friends (much cheaper than cinema tickets!) and go to the cheapest gym in the city.

Despite this it has taken over 6 years of saving since graduating to save a deposit, the public sector pay cap holding my wages below inflation every year of my career to date, astronomical rental costs and letting agents fees I have been unable to avoid as my job forces me to move every year, student debt totalling tens of thousands with repayments eating into my ability to save, and house prices in the south-west putting a property purchase out of reach until now. And after all that what am I able to buy with my partner-also a public sector professional...?
A very modest 2 bed flat with no outdoor space, hardly ideal for starting a family. This situation has prevented us from doing so before now.

Something has to change.

In the 50s lots of people started their married life in rooms in shared accommodation with a shared toilet and bathroom and shared kitchen. Some people had their first child in this type of accommodation. They lived like this in order to save money so already you are proving that you have spent more money on your accommodation if you have rented more that a room in a shared house. You now have a two bed flat so you are doing better than a lot of people were in the 50s and you have spent more money than they did on somewhere to live by choice.

Someone I know of who needed somewhere to live before ww11 had a flat with a mattress in it. That was all they could afford. They gradually saved up to get some furniture and floor coverings. People have much higher expectations and will put up with a lot less than they used to.

My phone costs £7.50 per month. I could afford more but I don't waste money on things I don't need. I don't need a £25 per month phone. I have never been to a gym in my life. You would be better to sell the car and get a cycle and then cycle to work to keep fit that will save the gym fees and the cost of the car. I know someone who never pays more than around £1200 for a car. They last a few years and then get scrapped. Really old second hand cars are the cheapest way to run a car but even this is more expensive than cycling or using public transport.

Most people in the 50s didn't have cars they either walked cycled or used the bus. Young people don't realise how much people went without in order to buy a house. If there was a car there would only be one car. They didn't tend to have a car each.

So start again and do this.

Find out how much you could have saved if you had lived in one room in a shared house all the time you were working. Then how much you could save if you had had one cheap phone, no car had cycled to work and hadn't paid for a gym. The result is how someone managed to buy a house in the 50s and 60s.

Crashy_Time

Just face it guys, it was a global credit bubble engineered by bankers for bankers...and it popped, when they put rates back up (to benefit bankers) it will pop some more....:money:

Murphybear

My parents moved from a pre-fab into a shiny new council house with us 3 kids in 1954. My father was a low paid teacher, my mother was a housewife. In those days you had to be married, steady job to pay the rent, no housing benefit, requisite number of children to fit the property. Buying in a bombed city was not an option. The house was only given up after my mother died 32 years later.

[Deleted User]

I also will say the OPs idea of what people consider 'essential' is inflated. Yes some people who live like that do exist.., but its no where near the majority. There will always be people who choose to live like this.., but its not the majority.

Stopped using Sky years ago.. spend £9.00 on Netflix shared with my older son. Do have phones. Built my own pc so saved a fortune and just put new components in when absolutely necessary. No car, I walk all the time even if its a couple of miles. I buy clothes and furniture second hand - nice good quality stuff but I wait until something that's good quality comes up at a price I can afford (i.e. really cheap). Even my previous carpets were remnants. We moved 6 months ago, reused rugs and still don't have carpets (even though I've discovered the council floor tiles have asbestos in them). I cook from scratch as my sons have ASD and will only eat limited things so need to keep nutrition in mind and cost.

I DID buy a coffee machine - second hand. So no shop coffees.

But I will never be able to afford to buy a place as I am on benefits. But I do live within my means, even though those means have gotten narrower and narrower in the last couple of years. I live like this to enable us to live.

What the OP is also not taking into account is private rental costs. In my area you have to pay £1k for a 2 bed, and not a smart one. On the coast you can get away with under £800 but then have increased fares. You might be able to share a room, but not usually if you have children. I would propose that relatively speaking, rents are a far higher proportion of wages nowadays.

moneyistooshorttomention

My parents bought their first house back in the 1950s and I believe it must have come courtesy of an inheritance back then - as I certainly recall being told they'd had to have the lodgings in a strangers house to start with.

When I first went to buy a house (ie in the 1970s - when it was due, because I was in my 20s) and it had recently become possible for single women to get a mortgage on their own the trouble was that couples had also been put in a position where the wife had to have her income taken into account and I was competing with them - so I lost out - as house prices shot up because of the competition from them.

Fast forward to the 1980s when their daughter (ie myself) was buying my first house and I could only do so because of a sheer stroke of luck (ie a lump sum of money coming my way) and that didnt happen until my 30s (so I spent all my 20s and the first few years of my 30s in rented accomodation). I hadnt expected that - but I was single and so only one income to buy with.

£20,000 is noticeably lower than average income - but probably all I would be earning:( if I wasnt retired now. Now in my home city a typical starter house (2 bed terrace) is around £200k. My maths is pretty poor - but that is 10 times the sort of salary I'd be on. If I were on the sort of income I thought/assumed I'd be on - then make that £30,000pa say and it still comes to too high a multiple of my "shoulda been" salary level. So your "abstemious lifestyle will do it" assumes:

- I'd be on my "shoulda been" salary level (rather than the one I was actually on)
- been married
- he'd have been on the salary level he was due to be (rather than a lower one this unknown "he" might also have actually been on). There's a good chance "he" would have been - but, since he was conspicuous by his absence then <shrugs>

That's a lot of "ifs".

Davesnave

Despite what money says above, I bought on my own in 1977, just 3 years after starting my first 'proper' job. It was a 3 bed end terrace in what's always been quite an expensive city.

That house recently sold for £350k, but in the 70s I was definitely not on the equivalent of £70k pa, so something's radically different!

Looking within 3 miles of that house, there's nothing on offer at present for £100k except a mobile home. Widening the search to 5 miles catches a 1 bed apartment and a 2 bed shared ownership mid terrace, which is actually more than 5 miles away in a place with no facilities.

What's happened, I think, is the north/south divide.

Sure, there are plenty of £100k houses, just not in the south, and quite often in areas where work is harder to come by, or in places where the surroundings are not particularly pleasant.

Would I move to one of those areas if I was in my 20s now? Probably. Even when I was 19 and renting in fashionable (not) Kilburn, I came to the conclusion that long term location in London was a mug's game.

There are probably some sweet spots left that are worth seeking-out, but would it be like a roll-back to the 70s? No of course not; so much else has changed, just as in 1977 life for most people wasn't anything like it had been in 1937....thank God!

Marcus1991

I am 25 now years old, so people my age are largely described as self entitled snow flakes. I have a 14 year old car (i learnt to maintain it myself) my phone is 4 years old on pay as you go. I own 2 pairs of jeans, I don't have any finance/debt, i didn't go to university to study gender studies. I'm a welder. And i'm proud to say after 5 years of saving, I have just bought my first house. What annoys me is, I have freinds who moan on saying, "oh I wish I could buy a house, how did you do it" so I discuss with them at great lenght how I did it. Then 2 weeks later, they get a BMW 3 series on PCP for £300 a month. Can't wait for 3 years time, so all these PCP cars get handed back and BMW's flood the auction market so I can buy on cheap. And OWN it.