Where have all the 20 something’s gone?

Jaywood89

One thing I will say cakeguts is that I haven’t mentioned how much I earn. I’m not low paid. And I do own a house.
This isn’t a personal gripe I have it’s more about understanding where my peers are in life and why

Jaywood89

Planet switzerland, thanks for the reply.

Those are the examples I!!!8217;m looking for. Thanks!

I really don!!!8217;t think a supermarket worker could buy a house today on just their full time wage. Which proves that things have changed despite what a lot of people have voiced.

itchyfeet123

Cakeguts wrote: »

...The average manual workers wage was £2805. I think a manual worker's wage is a good comparison...
The average wage now is £27, 600....

Try again. Average manual workers (sic) wage=/=average wage.

itchyfeet123

Cakeguts wrote: »

The 1970s one is easier. Nationwide's house price index says that the average house price in 1970 was £4378 to £4582 with the variation over the year. The average manual workers wage was £2805. I think a manual worker's wage is a good comparison. I assume that the £9,000 salary as half the value of the house was both their earnings combined not one salary? They both earned nearly twice as much as the average manual workers wage. On one salary they would have had to borrow 4 times their annual salary as a mortgage to buy that house. £19k in the early 70s was an expensive house are you sure this is the correct value?

The average wage now is £27, 600 so based on your figures and my dreadful arithmatic I make the value of the 1970s house today around £185,000 as 6 times the average wage which is what the 19k was. That doesn't include any improvements that might have been made which might have increased the value.

itchyfeet123 wrote: »

Try again. Average manual workers (sic) wage=/=average wage.

Oh wait, I remember now: Cakeguts is the poster who has started at least two threads on how housing is now more affordable than in the past using statistics in a way I could give my undergrads as an example of torturing statistics.

Let's assume that Cakeguts is right that today's average income is £27, 600. Let's even use a source that gives a much lower average wage in 1970 than (s)he does, £1,204. The same source says £1,204 is worth £17,224 today, so Cakeguts should be feeling confident here: the average salary today is worth more than 50% more than the average 1970 salary!

So now let's look at house prices, using the same (I'm assuming) Nationwide data. As Cakeguts said, it's about £4,500 in 1970. 4,500/1,204=3.73. And today? £210,000ish for a house, from the same data source. So, 210,000/27,600=7.64.

So taking averages, the income to house price ratio is now twice what it was in the 70s. It would be interesting, and potentially more informative, to look at medians, because I suspect the distributions of both housing and income will have changed. If someone has that data, please do share.

Cakeguts

Jaywood89 wrote: »

Ecomonic, please don’t call me or my posts silly, it demeans us both when I’m trying to engage in open and meaningful discussion. And I’m sure you are an intelligent person who can bring something meaningful to the discussion but name calling isn’t it. I’m trying to give examples of lives of people I know and compare them to their eqivelant today and see if there’s a difference. I didn’t say the poorest should be able to buy, where did I say that?, I’m saying unskilled working families have less options than they did in previous generations. Personally I believe selling off the council houses was the worst decision made in a long time, I don’t think people should have the option today of buying their council house, frankly if you can afford to buy it you don’t need it, it’s social housing for a reason.

Cake guts.

Like I’ve said before I can only compare in my own area which is Birmingham. To answer your questions the 19k house was in 1986 and was my inlaws first home. My FIL was a line worker for jag and still is. Unskilled and from a very poor background. So it’s just one example I know, they were low working class and had 6 children, one wage household. Do you think comparable people today have the same options? Maybe it’s different depending where you go?

The situated tenant explanation you gave surely proves the point? Options aren’t available like that for people today. Or maybe they are I don’t know.

You keep referring to my parents as well paid but we didn’t live in an affluent area and both came from poor backgrounds and were unskilled workers at the time. From what I’ve been told their wages were pretty standard for the late 80’s early 90’s. But as always I’m glad you can say in with something that we can debate like adults

The 1986 thing make it much easier for me because in around 1985 I bought a new 2 bed semi in Oldham on my own on one salary. It was in a road that was an extension of a council estate but it wasn't a council house. I paid £18,950 for it so you can see that the price is very similar. I bought it on my own. If I wanted to buy it now on my own I could still afford to because the pay for same job now would still cover the cost of buying it now in 2018 for the same mortgage multiples and the same deposit. I think I was earning about £6000 at the time. I certainly was not earning as much as £9000. The £6000 salary has now increased to around £30,000 for someone in the same job. So that £9000 then is the equivalent of around £45,000 now. I think that is well paid.

There have been lots of discussions on here with people who think that buying a house is going to automatically be cheaper than renting because the mortgage repayments are lower. It doesn't work like that. When interests rates go up you pay more interest on the loan. You don't get anything back for that money it is dead money but your monthly payments go up to cover the interest.

As an owner you are responsible for all repairs to the house and you also pay the buildings insurance. Being responsible for all repairs means that you have got to have savings because if you don't and the boiler breaks and you need to spend £1000 for a new one where is the money going to come from? If the fence blows down you pay to repair it. The biggest problem though is that you need to have enough money in savings to pay the mortgage if you lose your job because there are no benefits that will pay your mortgage for you and if you get into serious arrears the bank will repossess the house and you will be homeless. The only time when buying is likely to be cheaper than renting is when the mortgage is paid off often after 25 years.

https://en.wikipedia.org/wiki/History_of_rent_control_in_England_and_Wales Basically what it did was to reduce dramatically the number of houses available to rent so people had to either get a council house or buy a house. There were hardly any private rentals available. I used to know someone who bought a 3 bed terraced house where there was an old lady rent act tenant who lived in one of the rooms upstairs. The owner, her husband and son lived in the rest of the house. The son had to have his bedroom in the dining room. People lived in bits of houses. They bought the houses cheaper but they couldn't evict the tenant who lived in part of their house. Landlords disappeared because they couldn't afford the repairs to their rental houses. People and companies didn't buy houses to let because they couldn't get enough rent to cover repairs so if a house became vacant they sold it. A lot of them were in bad repair. People left houses vacant because they were frightened to let them in case they couldn't get them back. There was nowhere of quality to rent. You can't get a mortgage on a house in bad repair so the houses sold didn't increase the housing available for 1st time buyers.

http://ww2.gazette.net/stories/04212010/montlet175712_32553.php This is from the US and it is exactly what happened to rented property in the UK. Rent controls reduced the quality and quantity of rented accommodation.

Now you can move to London to get a job and rent a flat. You couldn't do this without extreme difficulty during rent control times because there was huge shortage of places to rent.

http://www.rightmove.co.uk/property-for-sale/property-64549096.html This is here to show how much it might cost to buy this house monthly. I can tell you that the rent would be around 600pcm because that is what they cost to rent around there.

Cakeguts

itchyfeet123 wrote: »

Try again. Average manual workers (sic) wage=/=average wage.

I used that because when I thought of the people who did manual labour it included all the IT people who type stuff into computers or mend computers. It also includes aircraft mechanics, baggage handlers, cabin crew, who I think are all probably better paid than the average manual worker of the early 70s.

itchyfeet123

Cakeguts wrote: »

I used that because when I thought of the people who did manual labour it included all the IT people who type stuff into computers or mend computers. It also includes aircraft mechanics, baggage handlers, cabin crew, who I think are all probably better paid than the average manual worker of the early 70s.

IT people are definitely not manual workers. As for the rest, it is certainly difficult to compare jobs/status many decades apart. That's why looking at a subsection (manual workers) makes the kinds of comparisons in this thread harder. But it can be done, something like the NS-SEC would work, although I'm not aware of any source that has historical earnings data by NS-SEC category.

Jaywood89

Cakeguts

A 20 something unskilled labourer today isn’t earning £45k even you can argue that.
They are earning 18 to 25k at best! And that’s assuming they went straight there after leaving school.

If I may I’d like to compare a government job for prove my point. My partners was an officer 1 as a prison officer. Meaning when he entered the prison service 10 years ago he was one of the last officer to receive the pay scale of officers who had been employed there for 30 years, which was a final wage of 31k after 10 years service. People entering the job now are on officer 2 contracts that start at 14k to 21k finishes at 23k after 5 years service.

Now my partner is no longer and officer as they began downgrading people to officer 2s using every loop hole possible. He left years ago!. Can you honestly say wages are really increasing to the level you have said? Using an example such as this.

Healthcare, social work and in fact all government jobs are being paid less today than their counterparts have been before. Benefits are cut, pensions are minimal and as ever the cost of housing and living is increasing.


Or better still my FIL is doing that same line worker job he was 30 years ago and earns over 40k doing the same job people half and a quarter of his age are doing for 18k. They aren’t on increasing wages such as his and he is one of the last on his wage range in the factory, once they all retire the work force (which is changing constantly due to no job security) will be on just above minimum wage to do what the generation before has done for more money

I don’t see how non of this has any affect on the housing market

Cakeguts

Jaywood89 wrote: »

One thing I will say cakeguts is that I haven’t mentioned how much I earn. I’m not low paid. And I do own a house.
This isn’t a personal gripe I have it’s more about understanding where my peers are in life and why

But you are not on here complaining about not being able to buy so what did you do that is different to the people who you know who can't buy?

The ones I know who can't buy all have expensive lifestyles. They go on expensive foreign holidays several times a year and/or buy expensive cars. These are not people who are poorly paid. They just spend everything that they earn. I think there were people like this when I was young but they seemed to accept more responsibility for their actions.

What I don't remember is people complaining all the time about not being able to buy in their chosen area. I worked in Southport and I couldn't buy a house there it was much too expensive. I don't remember anyone complaining about not being able to buy there we just accepted that if somewhere was too expensive you rented instead.

When I moved to Oldham the expensive areas were the little villages in Saddleworth. I couldn't afford to buy in any of those they were much too expensive so I bought in a not nearly so nice area of Oldham.

What I think I am hearing a lot of now is people who are complaining because they can't buy in the area that they want to and are not prepared to move. What has caused that attitude? I can remember when I first started looking for a house to buy you had to save for the deposit with the building society that you hoped to get the mortgage from. The borrowings were something like 2 and 1/2 times the main income. I managed to borrow slightly more than that. It was something like 2 and 1/2 times the main income and 1 times the second income. They wouldn't lend you anymore than that.

Now it seems to be more about affordability where the bank decides how much you can afford in monthly payments. So you may get more than 2 and 1/2 times your main income?

economic

Planet_Switzerland wrote: »

I'm in my 30s and own a flat in London. It wasn't easy to get to this position but I got there in the end.


My big frustration is the fact I could have got on the property ladder much more easily had I not decided to go to university or do the sensible thing of saving a deposit.


Just before I started uni a colleague at the supermarket I worked at bought a property for £35k, so presumably I could have done the same thing had I decided to go full time there. When I finished uni four years later the same type of property was more like £100k.


You could still get 100% mortgages but I calculated I would pay more in interest than I would in rent so decided to save for a deposit instead. Then 2008 happened and you now needed a sizeable deposit, plus I decided to move to London which meant even bigger deposit. Once I had a sizeable deposit help to buy came in a pushed up the prices and I had to save some more, then eventually I bought.


I've done the maths and basically had I gone full time at the supermarket and bought a £35k property and continued to make the same monthly payments once the interest rate dropped I'd most likely be mortgage free now.


Basically in my adult life the housing market has certainly changed for the worse.

Its even worse now with tuition fees high and students graduating with worthless degrees with 40-50k in debt.

There are few thing i get annoyed with but higher education really takes the p!ss.