Buying Property - is it worth bothering?

surfer9

My parents......

Bought a large 3 bed house in 1984: £65,000
£5,000 deposit.
Joint annual salary of £10,000 in 1984. (Both teachers).
Joint annual salary of £60,000 at the end of their careers. (The value of they paid for the house).
Current house value: £450,000


Say a couple of teachers purchased that house today....

-£450,000 house.
-Lets say they have a combined teachers salary of £60,000
-You can borrow 4.5x your salary these days....so a £270,000 loan is offered from a bank.
-£180,000 deposit needed!!! Holy Jesus of Jongoland!!!!
-Let's assume they have that £180,000 deposit......Who the hell has that kind of deposit!!!.....

-Is this couple's earnings going to go up the many multiples that my parents earnings went up during their careers......ie. Is a teachers salary going to be £180,000 in 30 years time?

If no, and if definitely no......is there any point in buying a house? I think we'll be lucky to see teachers on £60,000 salaries in 30 years time at this rate.



£180,000 deposit needed!!!!!!

Wages unlikely to go up 6x like they did for our parents.

Might as well live in a camper van!!

sevenhills

surfer9 wrote: »

Might as well live in a camper van!!

Affordable housing for key workers: The schemes available to nurses, police officers, teachers, paramedics and firefighter.

So they might get social housing quicker, but what about the ones earning less?
Teachers, on average earn about £34k

Cakeguts

surfer9 wrote: »

My parents......

Bought a large 3 bed house in 1984: £65,000
£5,000 deposit.
Joint annual salary of £10,000 in 1984. (Both teachers).
Joint annual salary of £60,000 at the end of their careers. (The value of they paid for the house).
Current house value: £450,000


Say a couple of teachers purchased that house today....

-£450,000 house.
-Lets say they have a combined teachers salary of £60,000
-You can borrow 4.5x your salary these days....so a £270,000 loan is offered from a bank.
-£180,000 deposit needed!!! Holy Jesus of Jongoland!!!!
-Let's assume they have that £180,000 deposit......Who the hell has that kind of deposit!!!.....

-Is this couple's earnings going to go up the many multiples that my parents earnings went up during their careers......ie. Is a teachers salary going to be £180,000 in 30 years time?

If no, and if definitely no......is there any point in buying a house? I think we'll be lucky to see teachers on £60,000 salaries in 30 years time at this rate.



£180,000 deposit needed!!!!!!

Wages unlikely to go up 6x like they did for our parents.

Might as well live in a camper van!!

What was in the house when they bought it? Central heating, fitted kitchen, integrated appliances, shower, carpets, curtains, double glazing? What is in it now in comparison.

I think new houses in the UK should be able to be sold in the same kind of state as a rented flat in Germany would be to a new renter. So without the fitted kitchen and all the extras to keep the price down. Then people can save up and add them as they go. If you had a sink in the kitchen you could put in some cupboards when you could afford them. This is what people used to buy and they managed alright.

economic

the normal way to raise the deposit is to SAVE the money before purchase. its not rocket science.

surfer9

economic wrote: »

the normal way to raise the deposit is to SAVE the money before purchase. its not rocket science.

Yes, almost got that £180,000 together to get this family home for me my wife and our kids.....

getting there.......not!

ukcarper

surfer9 wrote: »

Yes, almost got that £180,000 together to get this family home for me my wife and our kids.....

getting there.......not!

It’s not that people can’t save deposit it’s that they don’t earn enough to get mortgage, it’s one thing saving 10%, it’s another saving 10% plus £135k.

Thrugelmir

surfer9 wrote: »

My parents......

Bought a large 3 bed house in 1984: £65,000
£5,000 deposit.
Joint annual salary of £10,000 in 1984. (Both teachers).

Six times salary for a mortgage?

They would have been paying around 10% interest on the mortgage. Therefore sounds improbable.

Hopefully not maths teachers.

westernpromise

Also in 1984 the wife's earnings were taxed more heavily than the husband's, because she was a line item on his tax return, not an actual person. She had no personal allowance, he just had a married man's allowance, and her salary was added to his for tax purposes and taxed at his marginal rate.

For this reason the usual mortgage was 3x main salary or 2.5x plus 1x the wife's, reflecting the fact that she lost so much more in tax that her salary would support less borrowing than his. 6x wasn't possible. Perhaps the OP means they earned 10k each?

Crashtrolls regard that as a golden age, for obvious reasons.

ViolaLass

Maybe a "large 3 bed house" isn't a starter home.

Carl31

You cant compare the economy in 1984 to now, its moved on, youre not comparing like for like

Cost of living was higher then, the house may have been more affordable, but other things were not so much. The UK has changed a lot too, more people, different tax regimes, minimum wage etc etc...

GreatApe

surfer9 wrote: »

Yes, almost got that £180,000 together to get this family home for me my wife and our kids.....

getting there.......not!

Homes are allocated by price. Most the country is cheap London is expensive but expensive is not the same as unaffordable

Clearly even in London people can and have been affording high prices.
While you or I might scratch our heads at who it is that is buying there are clearly buyers

People on higher incomes than us
People who have large gifts from parents/family
People who have sold businesses
People who got lucky/skilled in the stock market (eg £50k in amazon shares 10 years ago = £1 million today)
Rich second/multiple home owners like footballers singers actors