Houses are affordable!

ukcarper

GreatApe wrote: »

Even by that metric things are good roughly 1/3rd of properties go to FTBs 1/3rd go to 2nd-time-buyers and 1/6th go to landlords and 1/6th to other

What you should look at is the rate of growth the higher that is the easier it was to buy. Saying that other things come into play, ie right to buy, lack of available private rental property in 70s.

amateur_house

GreatApe wrote: »

Most UK born kids will have free housing handed down to them via their grandparents/parents or from their partners grandparents/parents or a combination of both.

With increasing life expectancy most people will be in their 50s or 60s before they inherit their parents house. Until then they are faced with moving out and paying ridiculous rents, or living with parents until they inherit.

GreatApe

amateur_house wrote: »

With increasing life expectancy most people will be in their 50s or 60s before they inherit their parents house. Until then they are faced with moving out and paying ridiculous rents, or living with parents until they inherit.

Well for a lot of people their grandparents own and so do their parents, if the grand parents live to 82 (average UK life expectancy) then the parents might inherit age 57 but since they already own their own home they could pass it directly down to their kids aged 27

So it can skip one generation and go from Grandparent to Grandson.

I have seen this happen a lot. People inherit wealth from their parents and they keep hold of it but when their kids get married in their late 20s or 30s they tend to pass some/all of that wealth down.

If you are UK born there is a good chance of getting a whole house (as most grand parents own) and a very good chance of at least getting a portion of a house. This is one of the way prices can go up yet affordability be maintained. For a lot of the population for every £1k house prices go up they more or less will inherit £1k more from the older generations.

GreatApe

ukcarper wrote: »

What you should look at is the rate of growth the higher that is the easier it was to buy. Saying that other things come into play, ie right to buy, lack of available private rental property in 70s.

Only 14% of UK born rent privately. Whats the problem?

As you know that figure cant and should not go to zero for obvious reasons. Maybe someone can argue it can and should go to 10% and that would be a reasonable argument to make. But that just leaves room for only a 4% swing.

So is all the fuss about 4% too many private renters and 4% not enough owners?

Cakeguts

Planet_Switzerland wrote: »

My parents bought their first property in their early 20s in the 70s for £11k. They have long forgot what their deposit was or what my dad earned at the time but they do remember roughly borrowing 3.5 x salary and my dads salary would have been average at best.


That same property is apparently now worth £198k which is roughly 3.5 x a salary of £56.5k. How many people in their early 20s earn that much?


Also, whilst £11k may have seemed a lot in the 70s, 25 years later a full time salary on the minimum wage wasn't much less than £11k. It's highly unlikely a full time salary on the minimum wage in 25 years time will be £198k.

I have just looked this up. It said that the average wage in the 1970 was £32 a week that comes out at £1164. So unless he had a massive deposit he was earning considerable more than the average wage because 3.5 times that salary comes to just over £4K and the house cost 11k so he would have been having to earn just under 3 times the average wage to get that mortgage.

The average wage now is about 27k so your father would have been earning about 60k in today's money to afford that house. So he would still have been able to afford it. You were saying that he needed to earn about £56k. So on that house nothing has changed.

You have to remember that things like cars, household goods and food have become cheaper in relation to salaries so looking back it may have seemed that he didn't have much money but in relation to other people he did.

ukcarper

Cakeguts wrote: »

I have just looked this up. It said that the average wage in the 1970 was £32 a week that comes out at £1164. So unless he had a massive deposit he was earning considerable more than the average wage because 3.5 times that salary comes to just over £4K and the house cost 11k so he would have been having to earn just under 3 times the average wage to get that mortgage.

The average wage now is about 27k so your father would have been earning about 60k in today's money to afford that house. So he would still have been able to afford it. You were saying that he needed to earn about £56k. So on that house nothing has changed.

You have to remember that things like cars, household goods and food have become cheaper in relation to salaries so looking back it may have seemed that he didn't have much money but in relation to other people he did.

That’s the problem, people come out with these story’s of what thier parents bought and how easy it was then, which are not accurate. While others say there is no problem and houses are affordable. From my own personal experience not hearsay, I know that it definitely wasn’t easy to buy in the 70s but it is more difficult now. I can only speak for the area I live in but figures back up my experience.

What I don’t understand is when prices in many areas are clearly unaffordable why people have bring up these inaccurate about the past.

Thrugelmir

ukcarper wrote: »

I know that it definitely wasn’t easy to buy in the 70s but it is more difficult now.

I left Surrey in that era. 2.75 joint income as a mortgage didn't buy you anything even on the first rung of the ladder. Nor was London affordable back then either.

ukcarper

Thrugelmir wrote: »

I left Surrey in that era. 2.75 joint income as a mortgage didn't buy you anything even on the first rung of the ladder. Nor was London affordable back then either.

I bought my first property in early 70s in what is the cheapest part of Surrey it was nearly 4x our joint income. I managed to get a mortgage of almost 3.5x our joint income which was very unusual for that time. Saying that you would need a mortgage of over 5x earnings to buy a similar house on comparable earnings.

Red-Squirrel_2

amateur_house wrote: »

With increasing life expectancy most people will be in their 50s or 60s before they inherit their parents house. Until then they are faced with moving out and paying ridiculous rents, or living with parents until they inherit.

With increasing life expectancy also comes a need for cash in older age that previous generations wouldn't have spent because they'd have already been dead. Leaving a smaller inheritance, if there was ever going to be one at all which is certainly not definite. Renters don't leave much of an estate behind generally, and not all older people own their homes.

GreatApe

Red-Squirrel wrote: »

With increasing life expectancy also comes a need for cash in older age that previous generations wouldn't have spent because they'd have already been dead. Leaving a smaller inheritance, if there was ever going to be one at all which is certainly not definite. Renters don't leave much of an estate behind generally, and not all older people own their homes.

The stats show inheritances have more or less continuously gone up except for a short period in 2008/2009 when asset values crashed