Houses are affordable!

aneary

It's quite simple if houses were affordable 11 million wouldn't be renting.

GreatApe

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.

But what you describe is normal

People need to save for a few years (unless they have family help) and then you need to buy a starter home

If the young were buying nice big homes who do we put in the small tiny not so nice homes?


The fact is that Ownership for brits is very high its a lot higher than it was in the 1950s, the 1960s, the 1970s and the 1980s. While true house prices were cheaper everything else was a lot more expensive things like food cloths and households goods cost 3-5x as much as they do now. Your £1 loaf of bread or half dozen eggs is so cheap now but it was in real terms £5 in the 1950s. This is why home ownership was so low 50 years ago people could just about afford to cloth and feed themselves and their families. The saying 'they ate me out of house and home' originates form the fact that food was very expensive.

We are very lucky in the UK we live in a very rich country with high wages and lots of opportunity. The best time to be born in the UK is today. The problem is we like to look back at the past with nostalgic confirmation bias and assume things were great when in fact they were not.

aneary

I've just looked up my parents first house which they brought in 1979, now my parents did a lot of work on the house and I know that adds value but they brought for around £17K in 1979 put that money in an inflation calculator and that comes to £61k in today's money, my parents house last sold in 2011 for 250k.

GreatApe

aneary wrote: »

It's quite simple if houses were affordable 11 million wouldn't be renting.

That is just silly it shows a lack of understanding on how housing works.

The majority of private renters are temporary private renters. We need the private rental stock to allow for mobility in the nation.

For instance I rented between the ages of 18-27 which is 9 years and I am likely to live to about age 82. That means I was a private renter for 9 out of 64 years of my adult life = 14% of my life. I needed to rent privately as a student for obvious reasons and then for a few years after graduating I had to move around for work in different cities in England.

Hence looking at all private renters as a problem is very very silly. I would say about 14% of the private rental stock are people who need and or want to rent. They are temporary renters like I was a temporary renter for 14% of my life.

I think we currently have 18% of homes privately rented. That is 4% above the 14% noted so 4% of homes or 1.12 million homes with about 2.7 million renters are possibly excess to requirement.

That is to say there are about 2.7 million 'true' renters the other 9.4 million or so are students and people moving around for work like I did between ages 18-27

And what is more is that a lot of those 2.7 million 'true' renters are recent migrants. The stats show they almost all rent privately. 75% of recent migrants rent privately. They do so becuase often they come here with little to nothing.

Overall there is no great problem in the UK.
We have a logical functional system

The problem is, people like your good self really dont understand housing and how it works and you are not alone nor does the media understand these simple truths

The biggest reason housing ownership peaked in 2004 and has gradually fallen is becuase we have had mass migration since 2004. Import 5 million migrants and the housing tenure needs to shift about 2.5 million properties from ownership to rentals to accommodate them and thats roughly what has happen.

Just to note I am migration neural I dont mind if lots of migrants come but we need to understand that the migrants have pushed down ownership and probably will continue to do so for a while simply because they have to rent privately for a number of years before they become more like the locals who buy more often than they rent

ukcarper

aneary wrote: »

It's quite simple if houses were affordable 11 million wouldn't be renting.

Not that simple.

ukcarper

aneary wrote: »

I've just looked up my parents first house which they brought in 1979, now my parents did a lot of work on the house and I know that adds value but they brought for around £17K in 1979 put that money in an inflation calculator and that comes to £61k in today's money, my parents house last sold in 2011 for 250k.

Bought my first house in 1972 for £8k now they go for £300k, I was earning £1.5k similar job now pays about £36k. So 5.3x compared to 8.3x of course you can borrow more now but still not as affordable. This is in south east.

Planet_Switzerland

I'm in my 30s and am a property owner. As long as I can keep my job I can afford my mortgage, I've never struggled to pay it and have actually made an overpayment every month since I bought it and it doesn't cost me any more than it would to rent it.


I've never had an iPhone, all my phones have come free with a contract since I was 19. Never had Netflix/Amazon Prime. Not been to the Gym since uni. I can count the number of coffees I've bought from Costa in my life on one hand. I very occasionally have Takeaways, but have always been reluctant to eat out when it's cheaper to cook at home. I still drive the same car I paid £3k for 12 years ago.


However, it truly winds me up when people say people in their 20s waste their money on these things and that's why they don't own a property.


To be honest aside from eating out more, I don't really care about having the above. I did even more things to save a bit of money in my 20s such as:

• At uni, when my mates went for lunch I'd walk home and cook cheap hotdogs. At work, when I didn't have the luxury of going home for lunch I'd have the same boring sandwiches every day even though I much prefer a cooked lunch.
• Walk 2 miles home after a night out to save money on a taxi which would have only cost a couple of quid when sharing with mates, leave the night out early to save paying to get into the club, or to get last train home to save paying for a hotel, or even not meeting up with mates I hadn't seen in a long time to save money
• Avoid many other leisure activities I'd have really enjoyed to save money, I didn't take an overseas holiday as an adult until I was 28

Then suddenly I was 28 I realised how much I'd been wasting my 20s. I did have a few thousand saved, but nowhere near enough for a deposit and I didn't earn enough to get a mortgage anyway.


Over the next few years though, my wages went up so I was able to save the money I never had previously, I believe in my last year alone of saving before buying I managed to save more than I did my whole life prior to when I was 28. The deposit plus my new salary meant I could get a mortgage.


So I managed to get on the property ladder which is obviously a good thing but I can't help but think I wasted my 20s, yes the extra few grand was useful but it was my higher salary that got me my deposit and mortgage in reality.


The one thing I couldn't save money on though was rent, which I'm sure I spent a six figure sum on over the years, that would have made a really nice deposit.

moneyistooshorttomention

aneary wrote: »

I've just looked up my parents first house which they brought in 1979, now my parents did a lot of work on the house and I know that adds value but they brought for around £17K in 1979 put that money in an inflation calculator and that comes to £61k in today's money, my parents house last sold in 2011 for 250k.

That just had me doing a quick google re my parents first house - I don't recall which one it was in the road (I was too young). Think it must have been one of the 2-bedroomed ones there. Most recently sold (passably modernised standard) was £135,000. My mother wasnt earning much at all - my father, I think, would be on around £40,000pa if he wasnt long-retired. So I don't know the position in relation to them being on equivalent income to what they had when they bought it - but they could afford it now if he were still working (and in a mortgageable agegroup).

My first house I do know is around £210,000 now - and, if I were still working etc I would be on somewhere between £18,000 and £20,000 income I guesstimate. I'd be nowhere near being able to afford it.

EDIT; Just calculated - I'd have to have a mortgage for £145,000 to buy my first house again now with same percentage deposit as I put down. In other words "That's a no then".

EDIT; Second edit was spotting poster saying mass immigration started 2004. Would be interesting to see figures on that. So I did quick google re when Tony Blair came to power - 1997 (that would make the start of this 7 years after he came to power). It feels like about the beginning of this century that "things started changing far too fast etc".

Ozzuk

If only we had somewhere that we could debate house prices...oh wait...

NineDeuce

ukcarper wrote: »

So you don’t see that a graph showing full time male earnings to house price over time indicates how prices have changed over time, just because it doesn’t confirm your ideas it doesn’t mean it isn’t correct. Prices have increased and fallen over time you can see that on the real house price graphs.

No. It doesnt confirm what you were talking about. Even look at what you wrote on the graph, saying it was showing earnings against house prices, which is exactly what was the whole conversation was about.

It is just that you dont like the response, not that it doesnt confirm my ideas. You cant even vouch for it to be accurate...