House Price Crash Discussion Thread

neverdespairgirl

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.

Why on earth not? You don't need a car in London, and the above figures I discussed show over £1k spare for savings, holidays, gym, clothes etc. That is well off in my opinion.

fc123

From people I know;
Average semi in SE suburb have a v. modest lifestyle on £60k.

A standard of living that was common 25 yrs back would need around £100k if family in SE London with 2 kids.
Years back, many mums didn't need to work either.

For a good ammount of living space in a half decent St (and you may want to pay for schools) it is not unusual for a family to need to pull in £120k pa gross.

London families of my acquaintance that had lovely houses (not mansions though just good ammount of living space ) in good areas such as Blackheath, were earning around £200k pa per household. They had 2 hols pa and paid for schools.
They didn't feel well off though.

We grew up in London and raised our family there until 3 yrs ago.....the sheer ammount one needed to pull in every month was just "normal".

fc123

neverdespairgirl wrote: »

Why on earth not? You don't need a car in London, and the above figures I discussed show over £1k spare for savings, holidays, gym, clothes etc. That is well off in my opinion.

If you inhabit a suburb, have kids + school runs, no good local food shops only supermarkets and a bus service that meanders all around the houses (estates) before it arrives at any destination, a car is "essential".

Childfree people, living near a tube or stn don't need a car........but everyone I knew ran 2 (one each)

I now live in Brighton, walk along the beach to work, have no school run (no little kids now) and can pick up food on a day to basis in fab indie shops.........in fact, I live an eco life worthy of a clap:T *tongue in cheek*
but only because I have diff circumstances now.


In London, our local council had an idiot in charge of parking controls who benchmarked EVERYONE by his own life. So, mums, dropping off kids to school, transporting stock to work and not having the luxury to sit on a bus for 2 hours, were deemed the devil.........not everyone can hop on a pushbike with a backpack to go to their job.

Generali

Ok so what is a 'well off' wage in for a family in London?

Let's say 50% LTV repayment mortgage on a decent family home in a nice area. Running a small newish car. Shop at Waitrose/nice local stores. Sunday lunch out. Family holiday plus a couple of short breaks. 2 lots of school fees. Savings (10% of net income) and pension (10% of net income).

Home = £500k = £1630pm 25yr £250k mortgage @ 6% = £19500pa (conservative)
Home maintenance = £5k pa (1% of value is rule of thumb I think)
Car = £2k pa all in
Utilities+council tax = £3000pa
Groceries = £150pw = £7800pa
Sunday lunch out = £100 = £5200pa
School fees = £25,000 pa (conservative)
Holidays = £4,000 (conservative)
Savings = £8000
Pension = £8000

Total = £87,500 net = £135k pa gross.

In middle class London that would not be considered an extravagant lifestyle by any means. There's no gym, health cover (ever been to a central London hospital? not pleasant), dentist, clothes (it gets chilly in the winter I understand), hair/beauty etc included.

Paying for it takes some doing.

Mr._H_2

I love it! Let's try and ignore the fact that £39K is a huge salary (80% of the UK population earns less than £33,374, and 90% earn less than £42,902. Let's not compare it to worldwide salaries (even adjusted for individual countries' GDPs) because then it'll just get embarrassing), and attempt to show that it is in fact a pittance by demonstrating the enormous salaries required to live extravagantly luxurious lifestyles in one of the most expensive cities on earth.

Seriously, the Londoners earning 200K per year and not "feeling" well-off don't even know they're born! They're living a lifestyle enjoyed by something in the order of 0.1% of the world's population, but they don't "feel" well-off? Poor them!

But anyway, back to the topic at hand: looking at the stats for earnings, it does make you wonder how did we get to the point where the average cost of a home is 8 times average earnings, and 10 times median earnings. Clearly not sustainable. Is it possible for a market like that to have a soft landing? I don't know. I think "maybe".

Generali

Mr._H wrote: »

I love it! Let's try and ignore the fact that £39K is a huge salary (80% of the UK population earns less than £33,374, and 90% earn less than £42,902. Let's not compare it to worldwide salaries (even adjusted for individual countries' GDPs) because then it'll just get embarrassing), and attempt to show that it is in fact a pittance by demonstrating the enormous salaries required to live extravagantly luxurious lifestyles in one of the most expensive cities on earth.

Seriously, the Londoners earning 200K per year and not "feeling" well-off don't even know they're born! They're living a lifestyle enjoyed by something in the order of 0.1% of the world's population, but they don't "feel" well-off? Poor them!

But anyway, back to the topic at hand: looking at the stats for earnings, it does make you wonder how did we get to the point where the average cost of a home is 8 times average earnings, and 10 times median earnings. Clearly not sustainable. Is it possible for a market like that to have a soft landing? I don't know. I think "maybe".

The thing is, money in itself is no use. It's only good for what you can buy with it. If you 'need' to spend £20k pa (plus have £250k of equity) to keep a decent roof over your head then it's not much use to say that the mortgage is costing 350,000,000 New Kip (Laos) or 6,000,000,000 Dong (Vietnam) pa. It's a tough commute from Mai Lai to Morgate each morning!

fc123

Generali wrote: »

Ok so what is a 'well off' wage in for a family in London?

Let's say 50% LTV repayment mortgage on a decent family home in a nice area. Running a small newish car. Shop at Waitrose/nice local stores. Sunday lunch out. Family holiday plus a couple of short breaks. 2 lots of school fees. Savings (10% of net income) and pension (10% of net income).

Home = £500k = £1630pm 25yr £250k mortgage @ 6% = £19500pa (conservative)
Home maintenance = £5k pa (1% of value is rule of thumb I think)
Car = £2k pa all in
Utilities+council tax = £3000pa
Groceries = £150pw = £7800pa
Sunday lunch out = £100 = £5200pa
School fees = £25,000 pa (conservative)
Holidays = £4,000 (conservative)
Savings = £8000
Pension = £8000

Total = £87,500 net = £135k pa gross.

In middle class London that would not be considered an extravagant lifestyle by any means. There's no gym, health cover (ever been to a central London hospital? not pleasant), dentist, clothes (it gets chilly in the winter I understand), hair/beauty etc included.

Paying for it takes some doing.

and the total exhaustion of bringing home all this bacon affects ones looks.....so add on another.......ooooh say £15,000pa for gym, spa treatments, wrinkle remedies and stress relieving massages.

Working all hours means home life requires a little help too...add on £6000pa for cleaner / laundry service.......

The expenses of a surburban London life.............:eek:

Mr._H_2

Generali wrote: »

The thing is, money in itself is no use. It's only good for what you can buy with it. If you 'need' to spend £20k pa (plus have £250k of equity) to keep a decent roof over your head then it's not much use to say that the mortgage is costing 350,000,000 New Kip (Laos) or 6,000,000,000 Dong (Vietnam) pa. It's a tough commute from Mai Lai to Morgate each morning!

I'm not too sure why you find it so difficult to accept that being able to afford said "decent roof" makes you well-off.

There are plenty of "decent roofs" (and decent lifestyles, for that matter), in this country, which cost significantly less than the amounts you quoted.

Are you going to continue to ignore my favourite new statistic that 90% of people in the UK earn less than £42,374? Are you going to continue to try and convince anyone still reading that anything above that doesn't make you well-off, despite it placing you in the top 10% of this country's earners, itself one of the most well-off countries in the world? Not to mention that the income level you quoted was for a couple earning on average £67,500 each, so now we must be up into at least the top 5%, and probably top 1%.

neverdespairgirl

fc123 wrote: »

If you inhabit a suburb, have kids + school runs, no good local food shops only supermarkets and a bus service that meanders all around the houses (estates) before it arrives at any destination, a car is "essential".

Childfree people, living near a tube or stn don't need a car........but everyone I knew ran 2 (one each)

OH and I are not child free. We have a 2 year old son. We do have a car, but we choose to have it and could manage without - it's something we have decided we want enough to pay for.

I certainly can't see how a London family "needs" two cars. They just choose to have them, which is entirely different.

fc123

Mr._H wrote: »

I'm not too sure why you find it so difficult to accept that being able to afford said "decent roof" makes you well-off.

There are plenty of "decent roofs" (and decent lifestyles, for that matter), in this country, which cost significantly less than the amounts you quoted.

Are you going to continue to ignore my favourite new statistic that 90% of people in the UK earn less than £42,374? Are you going to continue to try and convince anyone still reading that anything above that doesn't make you well-off, despite it placing you in the top 10% of this country's earners, itself one of the most well-off countries in the world? Not to mention that the income level you quoted was for a couple earning on average £67,500 each, so now we must be up into at least the top 5%, and probably top 1%.

....so this could explain why there is so much household debt?
oh, I forgot the parking fines allowance in the budget....say £2000pa as each time one needed a tin of cat food or pint of milk (and no local shops left to walk to) one took the "running man" option of parking on a yellow line, feeling the adrenaline rise as one queued to pay...then , quickly went to car to find if ticketed or not..........mini endorphin rushes are bad for ones health BTW.