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Have the last 20yrs been more difficult to buy a property?

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Have the last 20yrs been more difficult to buy a property?

edited 17 December 2019 at 1:46PM in Debate House Prices & the Economy
44 replies 1.4K views
The-JokerThe-Joker Forumite
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edited 17 December 2019 at 1:46PM in Debate House Prices & the Economy
Have the last 20yrs been more difficult to buy a property?
All things considered have the last 20yrs been more difficult for average people to buy a home than the 20yrs before?

I would say yes, even though we have emergency low interest rates which have not yet ended because the emergency or crisis is still ongoing, it was easier in the 1980s nd 1990s for average people to buy a home?
The thing about chaos is, it's fair.
«1345

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  • The-JokerThe-Joker Forumite
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    Take an average tradesmen like a plumber, electrician or builder, with a wife who is not working and 2.4kids.

    In the 80s and 90s he could get a mortgage with a small deposit no problem and buy an average starter home with no real difficulty m

    Nowadays he needs HTB and he needs his wife to be working full time because it’s so much more difficult or another way to say it property is overvalued at the moment.
    The thing about chaos is, it's fair.
  • MaxiRobriguezMaxiRobriguez Forumite
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    Home ownership is falling and average age to buy first property is increasing.

    There will be plenty of opinions here based on house prices, interest rates etc but the reality is that home ownership remains a priority for most but the ability to achieve that is decreasing.

    The answer is therefore categorically yes.
  • spadooshspadoosh Forumite
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    The-Joker wrote: »
    Take an average tradesmen like a plumber, electrician or builder, with a wife who is not working and 2.4kids.

    In the 80s and 90s he could get a mortgage with a small deposit no problem and buy an average starter home with no real difficulty m

    Nowadays he needs HTB and he needs his wife to be working full time because it’s so much more difficult or another way to say it property is overvalued at the moment.

    For me i reckon i had it easier than my parents (about 20 year gap). I bought my first house at 24 in 2011 having lived in their house for the 12 months prior rent free to allow us to save a deposit. Mine is for all intents and purposes a forever home. Its should be suitable for a family for their entire life. They bought in their early 30s and it was actuallya BTL as dad was in the army but it was a far inferior house to the one i bought.

    Ive never been close to not being able to pay my mortgage. Whilst i utilise debt to aid with cash flow and satisfy my exuberances its not essential for me, where as there where periods in my parents life where they appeared to be reliant on debt for what are basics/essentials. Im on close to min wage and the wife earns fairly well but below national average, our household income is above national average (we both work full time). So from my point of view housing is very affordable if you have two earners. Although im in a really affordable area of the country.

    Out of my peers most are home owners. Of those who are not theyre single or have had issues financially, typically surrounding car finance. Theres probably an element of confirmation bias from my view. I suspect everyone who has bought their house like for like are in much better houses than if they had bought 20 years earlier too. My first house was a 3 bed semi, best friends first house was a 2 bed flat in london next to the emirates stadium, quickjly followed by a 4 bed townhouse. Other close friend first house is detached 3 bed.
  • NivNiv Forumite
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    The-Joker wrote: »
    Have the last 20yrs been more difficult to buy a property?
    All things considered have the last 20yrs been more difficult for average people to buy a home than the 20yrs before?

    I would say yes, even though we have emergency low interest rates which have not yet ended because the emergency or crisis is still ongoing, it was easier in the 1980s nd 1990s for average people to buy a home?


    Maybe recently it has become harder but the early 2000's for me at least was super easy - I got a 110% mortgage, so no deposit required and extra money to spend. This was for a starter home too (a 1980's very small 2 bed terrace).


    I cant really compare to the 20 years previous as I was too young to know.
    YNWA

    Target: Mortgage free by 58.
  • triathlontriathlon Forumite
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    Just look in the bedroom of anyone under 35 and see the dross they have purchased over the years, check their passport stamps and all holidays and watch them feed themselves, usually through dial a dish/heartattack using the same money I could feed on for a week.

    A lot of this obviously coming from people that have no idea what it was like buying in the 1980's. High interest rates, everything we got was 2nd hand, few luxuries and our first holiday on moving in was after 4 years on a budget trip to Scotland.

    No discounts for FTB, No low interest rates, NHB, just grit your teeth and get on with it and don't dare miss a payment, those were the days when you really could be evicted for not keeping up payments. Don't make me laugh "harder today", if you want an example of what we were like back then, look at the Polish now, that was us, work hard and go without then hopefully one day you can get your own place
  • spadooshspadoosh Forumite
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    Home ownership is falling and average age to buy first property is increasing.

    There will be plenty of opinions here based on house prices, interest rates etc but the reality is that home ownership remains a priority for most but the ability to achieve that is decreasing.

    The answer is therefore categorically yes.

    I reckon you could explain a good portion of that away with increasing population and an increasing ageing population within that.

    Hard to get real LFL values due to the nature of change over the last 20 years. More people where buying houses in 2006 than any other year in uk history.

    If it was more restricted to post 2008 id be inclined to agree that it was a categoric yes, but the last 20 years goes back to 1999, with 99-06 being quite good years for home ownership and house sales.

    Dont get me wrong, idve rather bought 20 years ago for the gains, actual difficulty in buying though, i just know i struggled a lot less than my parents.
  • spadooshspadoosh Forumite
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    triathlon wrote: »
    Just look in the bedroom of anyone under 35 and see the dross they have purchased over the years, check their passport stamps and all holidays and watch them feed themselves, usually through dial a dish/heartattack using the same money I could feed on for a week.

    A lot of this obviously coming from people that have no idea what it was like buying in the 1980's. High interest rates, everything we got was 2nd hand, few luxuries and our first holiday on moving in was after 4 years on a budget trip to Scotland.

    No discounts for FTB, No low interest rates, NHB, just grit your teeth and get on with it and don't dare miss a payment, those were the days when you really could be evicted for not keeping up payments. Don't make me laugh "harder today", if you want an example of what we were like back then, look at the Polish now, that was us, work hard and go without then hopefully one day you can get your own place

    High interest rates is a non argument when comparing.

    You had high interest rates because the economy was booming and you could afford to pay them. Ie your pay was increasing as quickly as any increases in interest rates.

    Now there is low interst rates, and whilst that is beneficial in terms of paying less interest the issue with it is that it drives wage stagflation.

    If you want to compare the two you need to take in to account other aspects of the economy beyond interest rates.

    Lets look at a random year..... 1985.

    Base rate: 11.375%
    Average salary: ~ £7813
    Pay increase in 1986: ~ 8%
    Property price increase in 1986: ~16%

    For all intents and purposes if you bought in the 80s and 90s you where paying a lot to return a lot. Now you pay a little and return a little.

    Id be more than happy to pay 20% interest rates. If i was, it would mean my income and the economy would be booming.

    Low interest rates helps affordability, it does not help generate wealth because no one is making any money.
  • ThrugelmirThrugelmir Forumite
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    triathlon wrote: »
    if you want an example of what we were like back then, look at the Polish now, that was us, work hard and go without then hopefully one day you can get your own place

    Early wave were indeed hardworking. Not all are of the same mindset.
    “An investor who has all the answers doesn’t even understand all the questions.” - John Templeton
  • triathlontriathlon Forumite
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    spadoosh wrote: »
    High interest rates is a non argument when comparing.

    You had high interest rates because the economy was booming and you could afford to pay them. Ie your pay was increasing as quickly as any increases in interest rates.

    Now there is low interst rates, and whilst that is beneficial in terms of paying less interest the issue with it is that it drives wage stagflation.

    If you want to compare the two you need to take in to account other aspects of the economy beyond interest rates.

    Lets look at a random year..... 1985.

    Base rate: 11.375%
    Average salary: ~ £7813
    Pay increase in 1986: ~ 8%
    Property price increase in 1986: ~16%

    For all intents and purposes if you bought in the 80s and 90s you where paying a lot to return a lot. Now you pay a little and return a little.

    Id be more than happy to pay 20% interest rates. If i was, it would mean my income and the economy would be booming.

    Low interest rates helps affordability, it does not help generate wealth because no one is making any money.

    "interest rates is a non argument"

    Yep, I have been reading that very argument on HPC for two decades now and it seems I am wrong still all these years later
  • edited 17 December 2019 at 4:47PM
    spadooshspadoosh Forumite
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    edited 17 December 2019 at 4:47PM
    triathlon wrote: »
    "interest rates is a non argument"

    Yep, I have been reading that very argument on HPC for two decades now and it seems I am wrong still all these years later

    Im not sure what argument theyre having over there, i do not frequent that forum.

    Are they saying that high interest rates at the time was a sign of a booming economy? Or anything about wage inflation during the 80's? Because they would be correct. Because when people talk of the 80's they only ever remember high interest rates, never mention that average wages in 1980 where £5069 and £11820 in 1990. Or average house price in 1980 being £22k and the same house averaging a value of £56k in 1990. So over a 10 year period wages increased by 133% and house values increased by 154%. Conversely average salary in 2008 was £25165 with 2018 being about £25428. So a 1% increase in salaries. House prices in 08 averaged £178k and in 2018 £226k or a 27% increase.

    Which would you rather have? 20% interest rates with your wage increasing by 133% over the next 10 years and your house increasing in value by 154% in that time. Or 2% interest rates with your wage increasing by 1% over the next decade and your property increasing by 27% in value?

    That just isnt a hard choice.


    And then you apply the high interest rates you where paying to other parts of the economy. Things like your pension provisions. Ill be impressed if the very best pension products available today match the very worst being offered in the late 80s/early 90s.


    Going back to the OP this is why its more difficult to answer thisquestion. The last 20 years includes pre GFC which where really quite good and easy times for buying. OK, i suspect a lot of the FTBs or maximum borrowers in that period before the GFC are either still fighting negative equity or just coming out of it but it wouldve been relatively easy for them to buy a house. Where as i bought after so technically more difficult (in the sense lending criteria was supposed to be tightened) but then my position has probably created more wealth.
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