House Price Crash Discussion Thread

nobblyned

Castleman wrote: »

Living in London til Christmas, your figures seem very high.



2-bed for 1000 in a reasonably nice part of London.

and as for:

Pension/savings £300 thats pretty good savings per month
Council tax will be £90 ok
Commuting will be £100 get on your bike...I did 15miles each way 2/3 a week and saved £60 a month and got fit in the meantime. Combine that with running outdoors and swimming at local pool, + cheap set of weights, means you don't need to spend gym money either!
Gym £70 not needed

Utilities will be £100 ish
Insurances will be £30 ours was about £10 a month
Furniture £60 already discussed above
Mobile phone £50 £20 a month tops...otherwise you obviously have money to burn!
Food will be £130 ok
Clothes £100 maybe up to 100 every 6months
Eating and drinking out £250 it is london but just learn to cook better and encourage friends to do the same!

Gifts £30 ok
Days out £30 ok
Dry cleaning/laundry £10 luxury!
Hobbies £50 ok, but that would normally include cinema, swimming, etc

39k could support 2 people easily enough.

The debate was about 39k making you rich or not, I don't think there is any argument that two people could exist in London on that salary, but that's not the point. It was about whether 39k in London makes you rich, it doesn't.

Looking at your list for example, a rich person wouldn't need to save £100 pcm on tube costs by risking death cycling to work.

neverdespairgirl

wolvoman wrote: »

I did think your thanks was a bit bizarre!
£39K in some parts of the country would be ok. If you live in London it isn't so great.

£39K equates to about £2,300 per month take home.

Rent on a reasonable 1-bed flat in a reasonable part of London will cost £900 a month - not true, you can easily get a nice 1 bed for £700 a month, often quite a bit less.
Pension/savings £300
Council tax will be £90
Commuting will be £100
Utilities will be £100
Insurances will be £30 - £30 for what type of insurance? Our content insurace is £12 a month for a 3 bed flat.
Furniture £60 - eh? Extraordinary amount to spend on furniture, on average, per month. £20 is a generous amount.
Mobile phone £50 - highly unnecessary. I spend £50 a month on my mobile, but a huge % of that is work-related (and therefore tax-deductable). A reasonable spend in £25
Food will be £130
Clothes £100 - that's a lot to spend on clothes, you can be very well dressed for £75 a month
Eating and drinking out £250 - that's a high and entirely discretionary spending, you can have a lot of fun for half that.
Gym £70 - blimey, what gym is that? Mine is £45 per month, and it's not exactly a compulsary purchase anyway.
Gifts £30
Days out £30
Dry cleaning/laundry £10
Hobbies £50

So according to your theory someone who rents a 1 bedroom flat and cannot afford any holidays or a car is rich? Hmmmm

Don't get me wrong, I know how many people struggle to make ends meet on a LOT less than £39K (I am a member on a money saving website after all), but let's not pretend that earning £39K a year makes you rich.

I don't think £39k makes you rich, but it makes you pretty well off. After all, your list above does include savings of £300 a month, and luxuary spending of nearly £500 a month.

Cutting the things I suggested in red off, you'd have an extra £433 a month to spend on very nice holidays (or expensive clothes, eating out a lot, hobbies, whatever) which looks pretty well off to me.

WTF?_2

van_persie wrote: »

Absolutely right.
And the reason why, IMHO, we can't have stagnation. It's contraction or expansion. Boom or bust. A cyclical market. Why do so many people have difficulty in accepting this? When they do, of course, it's often too late and they've already over-borrowed for a rabbit hutch. And for those who believe this is a small dip before HPI resumes its upward course, aside from the obvious financial implications, consider sentiment; the biggest factor of all. "Why buy now when it'll be cheaper tomorrow?"

Yes, the power of sentiment is formidable. It has kept people borrowing unaffordable sums for houses and getting into BTL even after the sums no longer make sense. But as you note, sentiment can turn in the other direction too. It'll result in some very good housing bargains indeed at the trough as the market over-corrects. That might not be for a couple of years unfortunately.

Right now the house market is like Wile E Coyote running off the edge of the cliff. He's just reached the point where he looks down and realises that there is a long, long way to fall.......

JonnyBravo

Mr._H wrote: »

wolvoman, you should get your facts straight before you start making ludicrous suggestions.

The higher-rate tax bracket actually starts at £34,600, and the median salary (i.e., 50% earn less, 50% earn more) in London in 2007 was £30,212, whilst at least 10% of people in this country working full time earn less than £13,104 per year.

Why is it that the top earners in the country should benefit from your proposed "stimulation" package and not the bottom ones?

Are you sure you're correct and not just annoyed as your salary isn't as high as you would like??? (who's is?)

2007-2008
Personal allowance £5435 (ie tax free)
10% rate 0 - 2230
22% rate 2231 - 34600
40% rate over 34600

Add your allowance to 34600 and hey presto.....

£40,035

(the figure for 06-07 is £38,525)


Do I agree with wolvoman's plan? No. But please check YOUR facts before you rant.... otherwise you'll end up being the one with "ludicrous suggestions"


p.s. I'm glad to see the ghetto is as bitter as ever!

wolvoman

neverdespairgirl wrote: »

I don't think £39k makes you rich, but it makes you pretty well off. After all, your list above does include savings of £300 a month, and luxuary spending of nearly £500 a month.

Cutting the things I suggested in red off, you'd have an extra £433 a month to spend on very nice holidays (or expensive clothes, eating out a lot, hobbies, whatever) which looks pretty well off to me.

But you're still missing the crux though.
Someone who lives in a 1 or 2 bed flat with no car cannot be well off. If that were the case then you'd say someone in a 3 bed semi was VERY well off or perhaps even rich.
Since a 3-bed semi in the UK is considered an average house then you're suggesting that the average person in Britain is rich (impossible since you can only be rich in comparison to others).

Well off in London would be a household income of around £80K upwards. Rich.... well maybe if you have a household income of £200K+

All my opinion of course (as someone who isn't rich!)

WTF?_2

wolvoman wrote: »

But you're still missing the crux though.
Someone who lives in a 1 or 2 bed flat with no car cannot be well off. If that were the case then you'd say someone in a 3 bed semi was VERY well off or perhaps even rich.

What a bizarre thing to say. I know plenty of high earners in London living in relatively modest apartments and with no car or only a small car.

Try buying or renting a full house in a good London area and see how far even a good salary gets you. Also, no point in running a car with the congestion of London when there's plenty of buses and trains/tube to get you around and most of the out-of-town travelling you do is via air.

wolvoman

!!!!!!? wrote: »

What a bizarre thing to say. I know plenty of high earners in London living in relatively modest apartments and with no car or only a small car.

Try buying or renting a full house in a good London area and see how far even a good salary gets you. Also, no point in running a car with the congestion of London when there's plenty of buses and trains/tube to get you around and most of the out-of-town travelling you do is via air.

It's true, and in fact always makes me wonder why people get jealous of the slaries on offer in London. Whilst salaries might be 30% higher than UK averages, the cost of living is at least 50% higher.

WTF?_2

wolvoman wrote: »

It's true, and in fact always makes me wonder why people get jealous of the slaries on offer in London. Whilst salaries might be 30% higher than UK averages, the cost of living is at least 50% higher.

Yes - but they are still 'well off' with decent bank balances and no shortage of money for luxuries. London is also a fabulous place to live if you like the city life and want good career prospects so there are people who are willing to pay the premium to live there.

Mr._H_2

JonnyBravo wrote: »

Are you sure you're correct and not just annoyed as your salary isn't as high as you would like??? (who's is?)

2007-2008
Personal allowance £5435 (ie tax free)
10% rate 0 - 2230
22% rate 2231 - 34600
40% rate over 34600

Add your allowance to 34600 and hey presto.....

£40,035

(the figure for 06-07 is £38,525)


Do I agree with wolvoman's plan? No. But please check YOUR facts before you rant.... otherwise you'll end up being the one with "ludicrous suggestions"

Oops, thanks for the heads-up. I thought I had checked my facts (hence the link to so demonstrate), I didn't notice the personal allowance had to be added to the quoted higher-rate tax band. So my apologies to Wolvoman on that point.

However, I stand by my original point. Perhaps I shouldn't have used the word "rich", indeed I later suggested "well-off" as a more appropriate term.

Given the fact that £39K is well over the median salary in the UK, I find it actually quite repugnant to try and argue that people earning at that level are not well-off.

Wolvoman is clearly oblivious to the fact that many of the "costs" he lists are luxuries, despite this being pointed out. In addition living in London is a choice. If you can afford to live in a nice part of London, one of the most expensive cities in the world, you are unarguably well-off.

Mr._H_2

Some more info to back up my ranting:

This is a table of the results from the Office Of National Statistics survey of salaries in 2007. It shows that the average salary was £24,908, the median (50% earn more, 50% less) was £19,943, and 90% of people working full-time earn less than £42,902.