For those who think we had it easy...

chedburgh

I am simply amazed at the arrogant, aloof and insular attitudes shown by some of the older generation on this thread. I'm not exactly old or young at 33 but I remember the 80's, 90's and 00's well enough.

What many seem to fail to understand is we live in an advance capitalist economy, so standards do raise. White goods improve. Expectations rise. But as has been noted, we all face different problems. The DVD player of today is the 90's VHS video recorder, and Blue Ray players will be tomorrows DVD players. Its not that young people rush out and buy posh tv's, its more like most modern tv's will look posh if you were bought up on black and white CRT's. You go out and try buy a black and white tv, not as easy as you think.

The matter of Posh and Becks, every generation idolises some pop group or some celebrity, to the disdain of their elders, i'm sure the likes of Sapphire had some idol when they were 16, then grew up and forgot it. I don't have any interest Posh, Jordan et all or any celebrity (I agree, empty vessels), but I will defend the right of folk to worship them, this is not a dictatorship yet.

All this talk of living frugally. Do you think your the first generation to hit your 40's or 50's and look down at the young as wasteful or frivolous? Your not, i'm sure your parents generation had the same opinions as you do now (yes, I have grandparents, and they tell me all about my parents). The young will have there fun, grow up and the cycle will continue.

The debt comments. Well, I think this burden is shared by all the population. For every plasma screen wielding 20 something, you'll find some 50 plus who's just re-mortaged to by a porche , BMW or BTL. Would be interesting to pop over to the Debt Free forums and run a poll on age maybe?

This is all purely perception. Luckily the world is not a static places, its changing, and as it changes so do the needs and requirements for us to live in it. Hell, even I can wonder how a 20 something today would survive without a mobile phone (as I did when I was younger, why cant they?). Times change, as do needs, dont rage against it, embrace it.

House prices seems to be a separate issue, in my opinion its perfectly clear its more difficult now. The older folk say it was hard on 3x your salary, then dont scoff and people who are buying at 9x their salary with crappy wage inflation, they deserve applause for being brave enough to strike out into such a hostile FTB market!

Apologies for the waffle, but I am somewhat incensed by some of the posts in this thread! I am usually a content lurker.
C

Edit: Oops, spelling mistake!

carolt

Absolutely, chedburgh.

Of course noone is arguing that life hasn't always been hard for those starting out on a lowish salary, without family able to give leg-ups. But that's not what this thread is about. It's about housing - this being the housing board and all that - and , with the exception of those like fc123, who bought at exactly the wrong time last time, just at the peak before the last crash, no previous generation in recent times has faced equivalent hardship on the housing front.

The nonsense about plasma TV's etc is neither here nor there - whilst I personally haven't bothered to buy one, as I don't see the need, if I wanted to, it would set me back only about a couple of hundred pounds - or probably about half of one average weekly take-home pay. A standard TV in the 80's cost far more than that - a couple of weeks pay for the average worker, if I remember correctly - yet I doubt any of those who critique those who buy plasma tv's now went without any TV at all in the 80's. One of the pleasing consequences of globalisation has been the huge fall in the price of manufactured goods, particularly electronic items - eg look at how the cost of an entry level computer has fallen over the last 20 years.

But at the end of the day, you can't live in a plasma tv or a computer - housing is an essential need and the fact that non-essential luxuries are vastly cheaper does not recompense for the fact that one of life's main essentials, a roof over one's head, is vastly more expensive.

Pobby

Ummm,I think it was 1977 when we bought a color tv.£230 approx. including staff .So how did we buy a house in 1975?Joint income was pre tax around £3k a year,house was £9,999.I played in a band at the weekend,not hard,fun!
The money from that raised £500 for the deposit.It was pretty fifficult to get a mortgage then so you had to put your name down and wait until funds were available.
Secondhand hand-me-downs and a mattress on the floor but we didn`t care.Then the magic kicked in.Promotion connected to high wage inflation.
Within 6 years £3k a year was now around £18k a year.Debt wise,job done.
Btw our parents were in no position to give us a leg up and that thought would never have passed our minds.

Turnbull2000

Pobby wrote: »

Then the magic kicked in.Promotion connected to high wage inflation.Within 6 years £3k a year was now around £18k a year.Debt wise,job done. Btw our parents were in no position to give us a leg up and that thought would never have passed our minds.

The above is a real anecdotal of how 'easy' previous generations had it with housing. House prices were not only much lower, but mortgage debt was wiped out very quickly thanks to salary inflation.

Fast forward to 2007, and not only are house prices far beyond any other period in real terms, salary inflation is actually below real inflation - and this will continue to be thanks to the global economy.

But as usual, people will fail to grasp this glaring difference.

SquatNow

I think the ultimate question is this:
My parents paid 25-30% of their salary to buy 100% of a nice 3 bedroomed house.

Why should I pay 50-75% of my salary to buy a 50% share of a rabbit hutch?

Pobby

Thank goodness we are getting some sanity into this thread.One observation I have is that some people have taken on very distorted views regarding housing,just as distorted as the housing market is today.

beingjdc

Hello, I've been away. I'm glad everyone liked the graph. Anyway;

1) Yes, it does take account of MIRAS, though it assumes single MIRAS at the basic rate, so it doesn't take into account double MIRAS.
2) Yes, it's Retail Inflation not Wage Inflation. Some years wage inflation will be higher. Other years (e.g. this one) it will be lower.

guppy

chedburgh wrote: »

What many seem to fail to understand is we live in an advance capitalist economy, so standards do raise. White goods improve. Expectations rise.

Very true, but there are no fixed rules...there's no rule that says the standard of living goes up indefinitely any more than there is that house prices can only increase.

If anything, I can see this country getting poorer as China and India etc. develop...

By the way, did anyone else see "The Housing Trap" on C4's despatches. One expert claimed if house price inflation matched general inflation over the last 200 years or so, an average house would be worth £75k and we'd all be richer.

Of course, wage inflation would probably been lower too...

Just a thought anyway

Running_Horse

carolt wrote: »

If I, and maybe others here, are more content than in the past to leave things to just take their course, it's probably because it's finally fairly clear that after years and years of prices getting ever more out of line with incomes, that position is about to be reversed. Which makes for jolly cheery reading in the papers for me.... (Unlike Running Horse, as I have not foolishly overstretched myself to buy a tiny 'property' at the peak of the market in some grotty area, I find headlines about rising interest rates and falling prices rather soothing, like a warm bath.....)

But shouldn't gloat...... Ooops, sorrry........ couldn't help it....

What makes you think I don't welcome a drop in prices? If prices were half their current level I could have borrowed half as much to move up to my new house. But they're not half the current price, they're the price they are today.

You might be happy to wait for a drop in prices, some have been waiting while prices doubled, but I needed to move this year and did whatever was needed to make that happen. Even stretching in 1988 was worth it, as once I was out of negative equity I had paid off 10 years of mortgage. Re-read my OP; I did not say it is easy now, I said the opposite. What I did say is that it has always been hard, and it has.

So gloat all you want carolt, if you are that kind of person. But as I sit here in my large modern house, in a nice village, with my loving wife, and beautiful baby, your gloating is water off a duck's back. It was hard work and sacrifice that got me here, a satisfaction that may never be shared by those too timid to borrow more than 3 times their income, or work their way up the ladder. But unlike you I don't gloat.

carolt

I fully agree gloating by anyone - in my position or yours - is in bad taste - hence my red face smiley! - though it can be hard not to feel a bit of schadenfreude after years of the nollags of this world spouting their cries of muppets etc. Despite the proximity of the gloat to your name, I was certainly not gloating at you, but rather at the coming falls in property - I wish you only well, and have found your comments here, on the whole measured and reasonable, although obviously we approach the housing market from slightly different angles.

Glad you're happy with your decision, and your life, as I am with mine - buying a house, with the struggle you had to do so, was right for you, clearly. Funnily enough, I am a recent convert to non-house-buying ie waiting for the market to fall - had it not been for a number of houses we were trying to buy falling through, I would be in exactly the same situation as you are now. In the greater scheme of things our positions are still not very different, TBH - we both enjoy our village houses and family life, except you own your house (with money paid monthly to the bank) and I rent mine (ditto to landlord) until such time as I believe it makes economic sense to buy again, as a FTB.

It has been accident rather than design that prevented me buying until now, but it is definitely design that prevents me buying now. Maybe that makes me 'timid' in your book, but I can live with that - I don't believe in taking widely-foreseen risks with my family's future financial security.

To go back to your original point, I still disagree with you that it has ALWAYS been hard to buy - I could quote so many examples where it was not remotely hard that it would make unutterably tedious reading (so I won't).... It was obviously hard for those who bought just before the last crash, like yourself - and again I could give other examples of this - but to me that is a clear argument against buying at the moment, rather than for, as you seem to imply.

I can remember the last crash and its aftermath quite clearly, unlike some of those posting here, and feel fairly confident in stating that it is generally an awful lot more pleasant to buy after prices have fallen than immediately before.

I am happy enough renting, and the amount I save monthly over what I would pay to buy and make mortgage payments on an equivalent place is so substantial (even without the spectre of negative equity) that I simply could not justify buying at the moment.

When house prices have fallen to more like long-term average levels then I will be happy to buy and 'struggle' with the best of them, and enjoy every minute of it, as I'm sure you did too.......