Houses are affordable!

Pixie5740

Thrugelmir wrote: »

Unfortunately it's the younger generations that are up to their eyeballs in insecured debt in relation to their incomes. That's not to say that high debt levels aren't an issue across the population as a whole.

Do you have some statistics to back this up? How does the unsecured debt level of millennial compare with other age brackets and how much of that unsecured debt are student loans. Given that it costs £9k+ a year just in tuition fees to attend university in England or Wales (thankfully it's not like that in Scotland....yet) I'm not surprised that younger people have lots of unsecured debt.

Gwendo40

GothicStirling wrote: »

When you consider as a kid in the 80s, my Dad was able to go to work and pay a mortgage, look after 3 kids, have a holiday every summer - and my Mam stopped working in 1978 to look after us. What family could do that now on one salary?

Just described my exact situation... just to further add my dad was an unskilled, unqualified, blue collar worker, retired at 55 with a mortgage free 3 bed detached in a nice area, £28k a year pension, six figure sum in savings and all without any help or inheritances from his parents or in laws.

LdnFtB

capital0ne wrote: »

I've just had a quick look on Rightmove in the area I bought in back in the 1970's, North London to Cambridge max price £110,000 was my only criteria, and many 2 bed properties came up that would have suited me at that time and just as affordable on a £20k salary.

A quick check on the Halifax mortgage page said with a £6,000 deposit, my mortgage would be about £500/month - about 1/3 take home pay when earning £20k - far more affordable then the 2 bed terrace I bought back in 1975 on a salary of £2.4k and 15% interest.

Oh please, now you're just making things up. You clearly don't understand how mortgage underwriting works these days.

Firstly, using your own figures (again) of a 20k salary and 6k deposit, this brings your budget to about 86k, not 110k.

Secondly, banks take into account travel costs, student loans and service charges when lending. If I put in honest figures for these costs into the nationwide affordability calculator, they tell me that on a 20k salary and with a 5k commute I'd be able to borrow 32k.
On your flat of 110k this results in the need for an 80k deposit or 400% of salary.

moneyistooshorttomention

Cakeguts wrote: »

This implies that older generations didn't give up on the things mentioned in order to get a house when in fact they did.

Not forgetting those of us who had a very low standard of living (give up on things - what giving up when one doesnt have them in the first place to give up?!) and still couldnt afford a house - try as we might. Some of us were single and on a "womans wage" (not even a teachers wage).

Some of us Boomers had to struggle. Others of us (puts hand up here) couldnt manage to get one at all ever - even with a struggle (if they don't get "a stroke of luck" to help them in the form of being handed a large lump sum of money from somewhere-or-other).

Davesnave

moneyistooshorttomention wrote: »

Not forgetting those of us who had a very low standard of living (give up on things - what giving up when one doesnt have them in the first place to give up?!) and still couldnt afford a house - try as we might. Some of us were single and on a "womans wage" (not even a teachers wage).

Some of us Boomers had to struggle. Others of us (puts hand up here) couldnt manage to get one at all ever - even with a struggle (if they don't get "a stroke of luck" to help them in the form of being handed a large lump sum of money from somewhere-or-other).

The argument is not whether some people were too poor to buy 45 years ago, but that buying was easier then than now.

I would agree that it was easier to buy then in the south of England, but being easier doesn't mean it was easy!

Having been that teacher, I was conscious that I'd already lost 4 years of earning by studying. The demand for qualifications then was lower, so by the time I finished uni, some of my friends who'd left school at 16 and started jobs with banks, local government etc had already been paying a mortgage for a few years. Like students now, I had some debt, which had to be cleared before I could begin saving for a deposit.

My answer was to return to live with my parents; not something I found easy after 6 years of freedom. The next step was to take an unpopular job and do 10 - 12 hour shifts on a killing 3 shift system, because that paid a hell of a lot more than teaching.

So, just like young people I know now, who have two or even three jobs, I put myself out to earn as much as I could to kick start the rest of my life. It wasn't easy, but it was do-able.

The thing that made continued saving possible when I started my real career, was affordable rents. The properties were not very wonderful by today's standards (no heating provided, no furnishings, no fitted kitchen - just a sink unit) but they did the job. By not going out, not having a TV, not spending on any trivia etc etc I was able to focus on furthering my career and saving. It sounds deadly boring, and it was, but the process of achieving a 10% deposit took just 2 years.

If rents had been at current levels. that period of privation and tediousness would have lasted far longer.....

Oh, hang-on....it lasted longer than that, because when I got the house, it had no heating, no kitchen, a condemned geyser in the bathroom and about 30 years of other updating to do, including rewiring, which I could do myself in those days.

So, not exactly a picnic in the park, but possible. It all depends how one defines 'struggle,' I think.

rtho782

capital0ne wrote: »

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

2 bed dwelling £100,000 Salary £20,000 = 5 times salary for a property - nothing has changed, just a few fluctations in the middle.

And don't forget the interest rate in 1976 was between 10-15% - just imagine what size house you could have afforded at 1%!

You're still quoting these manipulated statistics.

£2000 was the AVERAGE house price in 1957, not the price of a small 2 bed.


From here

alankearn
14-04-2011, 10:33
Bought 1957, 2 up 2 down terrace, toilet outside, off Staniforth road S9 cost £650 morgage £450 from Sheffield Corporation, monthly repayments £3/2/7p ( I still have the first repayment book)

This guy paid just £650 for his first house in 1957. Based on your figures, that's less than 2x average salary. Various places put your estimate of weekly earnings low, This has it at £488 a year, this place has it at £10 a week. This resource has it just over £12 a week.

On £12 a week, or £624 a week, that puts the price of a 2 up 2 down terrace in 1957 at just over 1x annual earnings.

Meanwhile, you've found a 2 up 2 down today for 4x average earnings, while average house prices are more like 8.5x.

ManofLeisure_2

Every family will have members who are 'baby boomers'. My question would therefore be, 'why aren't they helping those of you who clearly need help'? This is what I have done and many of my friends too - because we can afford to. The truth is that although some people in this 'elite' group have made a tidy sum, the majority have not.

Pixie5740

ManofLeisure wrote: »

Every family will have members who are 'baby boomers'. My question would therefore be, 'why aren't they helping those of you who clearly need help'? This is what I have done and many of my friends too - because we can afford to. The truth is that although some people in this 'elite' group have made a tidy sum, the majority have not.

My parents could have helped make my life much easier but don't. I suspect the reason is two-fold, my parents are very financially cautious and my father, with his final salary civil service pension, keeps describing them as poor pensioners when they are anything but poor pensioners. Their annual pension income exceeds the national average salary and they don't have any mortgage to pay. Most of their wealth is tied up in their house, bought for £24k in 1984 and now worth over £250k. My father also inherited a lot of money when his father passed away in the 90s. The bulk of this money was in stocks and shares but being so cautions my father cashed the s&s in and the money has been sat in a savings account earning buttons. He won't spend these savings which are actually costing him money because he wants to leave the house to my brother when he dies and to make things slightly "fairer" me the savings. That money would probably be more use to me now, or more likely my younger self, than when he dies. I'd rather he and my mother just spent it enjoying their retirement even to the extent of using some kind of equity release product but you can't tell him anything he knows it all.

There are boomers who can afford to help but just choose not to...well not until they die anyway.

Mr_Costcutter

Like ManOFLeisure, I've also helped my children and grandchildren. I would rather they had the money now, so that I can see them enjoy it! There's also the question of inheritance tax - wouldn't want to be going down that road

sulphate

ManofLeisure wrote: »

Every family will have members who are 'baby boomers'. My question would therefore be, 'why aren't they helping those of you who clearly need help'? This is what I have done and many of my friends too - because we can afford to. The truth is that although some people in this 'elite' group have made a tidy sum, the majority have not.

Also some people have made a tidy sum but don't see why they should help their adult children. My in laws didn't help us - that's up to them.

Each to their own but I expect my children to find it even more difficult than we did to buy a property. I work part time at the moment but when both my kids are in school full time I intend to increase my hours. I want to build up our savings to help them when they need it. Even if we were only able to save £100 a month for their futures, over 20 years that would add up to £24k (plus any minuscule interest) so £12k each - not a huge amount but it's something.