Houses are affordable!

lincroft1710

Planet_Switzerland wrote: »

My parents bought their first property in their early 20s in the 70s for £11k.

Exactly when in the 1970s? There was rampant inflation in that decade, a house bought for £3,000 in 1970 could have easily cost £15,000 or more by 1979.

The_Real_Cheddar_Bob

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

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

Your initial post is very misleading.

Average price £2000 in 1957 = 5 times salary.

You then compare a random house price of £100,000 and say its the same.

What about the house in 1957 for £500?

How about the average price of a house in the uk being 10 times the average salary?

you sir, talk b*llocks

ukcarper

rjwr wrote: »

Your initial post is very misleading.

Average price £2000 in 1957 = 5 times salary.

You then compare a random house price of £100,000 and say its the same.

What about the house in 1957 for £500?

How about the average price of a house in the uk being 10 times the average salary?

you sir, talk b*llocks

Problem is prices haven’t increased uniformly there have been booms and falls, so when exactly you bought can make a big difference for example you would have paid a lot more in relation to your earning in 1989 compared to 1996.

What I don’t think can be disputed is that in many parts of the country house are unaffordable to people who would have been able to buy in the past. Where I am a 2 bed house would cost £250k meaning if I was earning a comparable wage to what I was earning when I first bought I might just be able to buy. In the 70s I was able to buy a 3 bed house that was at a time when house prices in relation to earning were high although not the highest they were in 70s.

The_Real_Cheddar_Bob

i've yet to meet someone in their 50's who has stories of not being able to buy their own house unless its through self causes.

I ask anyone who believes different to stand in front of a room full of 20 year olds, who feel it they will NEVER be able to buy a house and tell them different.

At one point, my mother in law said she needed a £100 deposit for a mortgage. Whilst that maybe part of the cause of the problem with house prices rising, you still cannot deny that despite all the gloom stories of higher interest rates in the past, and oh you will never know what it was like, tell it to the people who CANNOT buy a house, but can afford to pay a mortgage.

ukcarper

rjwr wrote: »

i've yet to meet someone in their 50's who has stories of not being able to buy their own house unless its through self causes.

I ask anyone who believes different to stand in front of a room full of 20 year olds, who feel it they will NEVER be able to buy a house and tell them different.

At one point, my mother in law said she needed a £100 deposit for a mortgage. Whilst that maybe part of the cause of the problem with house prices rising, you still cannot deny that despite all the gloom stories of higher interest rates in the past, and oh you will never know what it was like, tell it to the people who CANNOT buy a house, but can afford to pay a mortgage.

Deposit requirements were high in 60s and 70s lowest I could get was 10% and that had to be on a post war house. I know plenty of people who couldn’t buy in 70s I had to move 20 miles away from work and if I hadn’t bought the house I did I would not have been able to buy. That is in south east, I’m not sure how many people lower deposits would help here as prices are so high they wouldnt be able to get a big enough mortgage.

Cakeguts

rjwr wrote: »

i've yet to meet someone in their 50's who has stories of not being able to buy their own house unless its through self causes.

I ask anyone who believes different to stand in front of a room full of 20 year olds, who feel it they will NEVER be able to buy a house and tell them different.

At one point, my mother in law said she needed a £100 deposit for a mortgage. Whilst that maybe part of the cause of the problem with house prices rising, you still cannot deny that despite all the gloom stories of higher interest rates in the past, and oh you will never know what it was like, tell it to the people who CANNOT buy a house, but can afford to pay a mortgage.

There is a problem with this is that it is only the 20 year olds who can't buy a house who will complain that they can't buy a house. The ones who can just get on and do it.

Also it is quite possible that you just don't know many 50 year olds who rent because they couldn't save for a deposit. It was more normal to get a council house then so probably just as many people couldn't buy but they didn't expect to. Expectations have changed. Many young people expect to be able to buy because communications have improved and they are constantly being told that they should aim to buy somewhere and that they will be failures if they don't manage too buy. When today's 50 year olds were young there was no social media so they were not constantly being told what they should expect to be able to get out of life. In the past the people who bought were the ones who had to because they coudn't get anywhere to live if they didn't. That is not true anymore.

The_Real_Cheddar_Bob

ukcarper wrote: »

Deposit requirements were high in 60s and 70s lowest I could get was 10% and that had to be on a post war house. I know plenty of people who couldn’t buy in 70s I had to move 20 miles away from work and if I hadn’t bought the house I did I would not have been able to buy. That is in south east, I’m not sure how many people lower deposits would help here as prices are so high they wouldnt be able to get a big enough mortgage.

If you feel like filling in the detail:

year you bought the house and what price:
Average income for that year:
% of deposit to average income:

Again another example of a comparison that is not relative to todays market. 10% deposit of £240,000 is £24,000. Almost the annual salary of the average person today and thats assuming a 10% deposit is enough for the mortgage company.

I have a house, so this is no longer an issue for me, but for the generations of people who cannot and are likely to not be able to buy a house is one of the biggest disgraces of the United Kingdom.

ukcarper

rjwr wrote: »

If you feel like filling in the detail:

year you bought the house and what price:
Average income for that year:
% of deposit to average income:

Again another example of a comparison that is not relative to todays market. 10% deposit of £240,000 is £24,000. Almost the annual salary of the average person today and thats assuming a 10% deposit is enough for the mortgage company.

I have a house, so this is no longer an issue for me, but for the generations of people who cannot and are likely to not be able to buy a house is one of the biggest disgraces of the United Kingdom.

It’s no good using average salary as it includes part time workers. Median full time earnings for a man is £31k and £25k for a woman, I was earning the equivalent of about £35k and my wife about £15k.

Cakeguts

rjwr wrote: »

If you feel like filling in the detail:

year you bought the house and what price:
Average income for that year:
% of deposit to average income:

Again another example of a comparison that is not relative to todays market. 10% deposit of £240,000 is £24,000. Almost the annual salary of the average person today and thats assuming a 10% deposit is enough for the mortgage company.

I have a house, so this is no longer an issue for me, but for the generations of people who cannot and are likely to not be able to buy a house is one of the biggest disgraces of the United Kingdom.

Why is it a disgrace? You are never going to fix the market so that everyone can buy a house. There are always going to be people who can't afford to buy. I am fast coming to the conclusion that there aren't as many people who can't afford to buy anything as it seems. It is just that you hear more from them than the people who have bought. The only people I know who will not be able to afford a house are all disabled by some form of illness.

GreatApe

Lurkingtoposting17 wrote: »

Ok so my two cents worth. I am 31, I live at home with my parents and have done for the last four years to save to buy a house whilst being able to balance a moderate life style. I have previoulsy owned a flat which I sold to be able to save a substantial sum to buy a property.

I earn just under double the average UK salary between basic income, bonus and second business income. However, as I am single, even though I have had a property previously, I cannot get 5 x salary with a 10% deposit.

Lending criteria has tightened in the last 6 months and most lenders (having spoken to numerous mortgage advisors) will not lend more than 4.5x salary to me, unless I have a 20% deposit. Which means, effectively, I need to save a minimum of £20,000 more than I currently have in order to get the same value of house I had an AIP for in April.

I was only eligible as a single buyer for a 5 x salary mortgage as well, on a 10% deposit, as I had previously had a mortgage - which rules out most first time buyers. I also cannot get a help to buy ISA. By the time you save for stamp duty and solicitor fees too, this means I am looking at around another 1 year to 18 months of sacrifice to achieve home ownership unless I downgrade my property requirements.

I live with my parents, and pay their gas & electricity. I go out minimally - mostly on work funded socials and 2/3 times per month with friends. I don't drink. I have a car as I live in a rural village and require it to get around. I commute via train to work and it takes an hour. I save a minimum of 50% of my post tax income every month, sometimes as high as 70% depending on the month. I have no debts, no loans and no student debts. My only bill is my mobile phone and is £18 per month and the handset is two years old. I do admit to being partial to avocado (haha!) but I brew my own coffee at home with a v60 filter, and never do takeaway coffee.

The 5 x salary for mortgage is just not something many people are offered any more, and someone like me who has a well paying job and a large deposit - can still struggle (and yes, I am in the south east, but prices in the town I live are not "ridiculous" compared to other commuter belt areas!)

I now look like I will be moving overseas for work for a period, which means its a good thing my house purchase fell through and should enable me to save a lump sum to set myself up when I return. However, I am lucky to have my parents for support and a well paying job. The truth is, it would be far easier for me to get a mortgage if I wasn't single, but I don't feel like that life choice should hold me back. I don't want to be dependent on a man to own my own property!

Also - my parents purchased their first property with ease at 18, by selling my dads car to get a deposit. They admit with 18% interest rates, they STRUGGLED to make ends meet and my dad whilst wanting me to have a house, also admits he never wants me to struggle like they did to pay the bills and mortgage. He has only started enjoying his life again, since he paid off his mortgage in full 10 years. I think GETTING a home was easier for them, but it doesn't mean it was more affordable - as they didn't have such stringent lending criteria assessing affordability.

So your choices are

1: live with your mother and complain you are finding it hard to buy a whole property for yourself
2: Find someone decent and move on with your life

If I were a 31 year old woman it would not be a difficult choice