Houses are affordable!

Pixie5740

OP, if I remember correctly you graduated as an engineer in 1975 where you were earning £200 a month which assuming was gross equates to £2,400 a year. You then went on to buy your first house, a 2-bedroom terrace, for £6k so 2.5 times your annual income.

I graduated with an engineering degree in 2008 starting on a salary of £26,800 (quite respectable graduate salary) and purchased my first flat, note that's flat because there's no way I could afford a house, for £98,000 in January 2009 so right after the credit crunch, which was over 3.5 times my annual income. I was just incredibly lucky with the timing. If I'd bought a year earlier I could easily have been plunged into negative equity.

I can hand on heart say that I have never paid anything like £50 a month for a mobile phone. Fun fact for you my mobile phone was really cheap because I worked in a mobile phone operators call centre during university because by the time I went the generous grants that you would have received in the 1970's were long gone.

I didn't have Netflix/Amazon Prime or Sky, in fact for a while I didn't have a television until I got given a second hand one for free.

I'm a runner, and back then a member of a rowing club, so never needed a gym membership.

I'm a tea jenny so I didn't, and still don't, spend money buying coffee. Enjoy cooking so don't really do takeaways and I owned my wee Ford Ka outright. When it eventually went to the big scrapyard in the sky I got the bus to work even though it took ages.

If you are going to spout your ill-informed pish could you at least do it over on the "Debating House Prices and Economy" part of the forum. You are to house buying what CrashyTimes is to house price crashes.

gycraig_2

The payments aren’t the problems it’s the deposits, looking at cost - salary ratio isn’t the issue.

I had to place a 13k deposit on my house to get a reasonable rate (10%) living in a small flat with partner we calculated this at 2 years of living like monks,

My dad on the other hand knocked my mum up picked a house he wanted to buy went into a bank and got given a mortgage with no deposit. On a mechanics wage, the thought of it is hilarious now.

People who “can’t afford to buy” are often paying more than they would a mortgage as they are paying a landlords mortgage plus profit.

I could afford the 450 a month mortgage easily and since buying I have been in easy street buying nice furniture and treating my selves, vast majority of uncles etc would never of afforded a 10 percent deposit when they bought

Red-Squirrel_2

satchef1 wrote: »

The average UK house costs £243,520.
The average UK salary is £27,271

That's 8.93 times salary, significantly higher than 5 times.

Not to mention that the average salary is rather skewed by high earners in London. In a lot of areas outside London £27,000 would be considered quite a high salary and one that lots will never get anywhere near.

Pixie5740

Let's not forget that a sizeable number of people from the 50's to 90's acquired their homes through Right to Buy. A very real alternative to buying your own home back then was social housing whereas successive governments have pushed renting into the private sector where the rents are higher and tenancies less secure.

kinger101

I suspect this is a second account set up by someone who frequently posts such nonsense on the house price board. Ignore the troll.

SG27

5 times salary for an average house?? Wow what a dream!! The deposit my wife and I saved over 8 years was alone more than 5 times my salary.

IAmWales

kinger101 wrote: »

I suspect this is a second account set up by someone who frequently posts such nonsense on the house price board. Ignore the troll.

Yes, I'd guessed who the thread starter was before I even opened it. Predictable.

The spending they claim is the norm for young people is not what I see. They have a Kodi box for entertainment, if they have Prime then they share the subscription between several mates, and they have a laugh at those that insist on buying the latest mobiles. This idea that younger people are not financially savvy is not true, of course there will be people living outside their means, but the ones with excessive debt tend to be 35+. The debt board on here is testament to that.

There are limited cheaper properties in my area, but they need work and are bought up by landlords that have the cash and contacts to do them up.

I did buy my first home when I was young, but there's no way I could have done so now. The cost of living overall is so much higher, comparing wages to the odd sub £100K property does not take into account all the other expenses people have (not least, travelling from the low cost area to somewhere with decent wages).

itchyfeet123

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)

Not comparing apples with apples. 1) Presumably your £2,000 average includes London. 2) A targeted search on Rightmove isn't the same as the average.

In 2017, the average for Great Britain excluding London is £263k for rural areas and £218k for urban areas. So, 2000/390=5.12. 218,000/20,000=10.9.

Personally, I save more than double your suggested £5k a year, and have a salary of more than double your (made up) average of £20k. Living in London, the difference between the mortgage a bank would be prepared to give me and the cost of a tiny 1 bedroom flat more than hour from work is about 12 years of saving.

WibblyGirly

I'm 28, at uni doing an MA that will enable me to earn between £23K-£30K as I gain experience. I pay £30 for my phone, gym is £125 for the year though uni, yes I have Netflix and amazon prime however prime is free for 6 months as a student, I share the car with my partner, bought it outright. No takeaways, no coffees, I don't know anyone with an iPhone X.

Hardly anyone my ages lives like you seem to think they do. My problem has been up until uni I was earning a crap wage in retail but paying high rent that meant living month to month with nothing left to save. Landlords evicting us all the time as they wanted the houses back which meant more costs. Its impossible to save while rents are so high. I've moved to Wales for uni for a year, its cheaper here however I'm afraid I'm going to priced out of rentals in my previous city as they have increased so much.

phoebe1989seb

My parents married in 1952 when they were 22/23. My Dad was a Chief Petty Officer in the RN (aircraft engineer) and my Mum an office worker. After a couple of years where he was based on an aircraft carrier and she lived with her parents, they moved into married quarters - first in Malta, then Scotland - and she gave up work.

It was 1962, so ten years after they'd married that they had saved enough to buy their first house in Hampshire - a three-bed semi in suburbia - for about £3500. They took out a 'small' mortgage of about £1000.

They were considered the snobs of the family, because in 1956 they went to Germany to purchase a brand new Mercedes, but actually they saved long and hard for it and kept it till the late 1960s at which point my Mum was driving a second hand Triumph.

By the time I was born in 1967, they had sold the first house and bought a smaller house closer to my Mum's parents so she had help with childcare whilst my Dad was overseas - he didn't get to see me till I was six weeks old as he was serving in Hong Kong. Their second house was slightly cheaper - around £3000 - and they paid off their mortgage within a few years.

Both houses were 'fixer uppers' and both were gutted and renovated by my parents with help from family members/friends who were sparkies, carpenters etc.

Of course there were no gym memberships or mobiles back then. They had just a few pieces of furniture when they bought their first house and refused to get anything in credit, saving for everything. I recall them telling me they took the stair carpet from their first house to the second, where it never quite fitted properly.....but I understand people did take their carpets when miving back then

My parents never sold that second house, living there till 2012 when they both went into a nursing home. They were very careful with their money over the years, but still had high quality stuff and could afford good and plentiful holidays as my Dad later started a successful business.

When I graduated (fashion) they helped me and DH with the deposit for a home - iirc the flat cost about £35k - which we'd have struggled to afford at the time as DH was a poorly-paid designer and I was about to open a shop.

DH and I don't have the latest phones - DH has an iphone 4s and I'm currently without - we don't have cable etc. We do collect vintage/antiques, but that is our business, so it's kind of a perk of the job, lol! We drive a thirteen year old Shogun. We don't drink coffee, but bought a machine for DS's benefit. Since 2007 we've been mortgage-free but would struggle to buy now in our home area - south coast - as we moved to a cheaper area when we started the business ten years ago.

DS - now 28 - graduated with a degree in philosophy in 2010. He intented to do a law conversion and worked for a law firm in London for a while. His GF (an Oxford graduate) is an editor at a publishing firm. He later gave up the idea of law and now runs a web design business.

They have all the latest gadgets, gym memberships etc and have one car - a fourteen year old Defender - and any trip out with them is punctuated by frequent stops for take out coffees They are extremely fortunate as at age 21/22 they inherited enough money to buy a flat in SW London (Colliers Wood) jointly with the GF's two sisters. It cost £232k in 2011. They sold for £385k in 2014, split the proceeds and DS/GF bought a smaller flat in Brighton for £210k for cash, as by then DS had inherited some money from my parents. The sisters bought a BTL flat in Bournemouth.

They have been incredibly lucky, although I have to add that the majority of their friends of a similar age are also home owners in expensive areas (home counties) and those that are not either live in properties owned by family or are working overseas, in medical profession etc. A few are married, some are now having baby number one. None are still living at home.

I guess my experience is not typical.