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

Zero_Sum

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.

High rates were down to high inflation.
To say the economy was booming is a joke. There was 3m unemployed in the 80's

Splatfoot

Cakeguts wrote: »

You have to factor in the change in areas. If you are saying that there is nowhere that you could now buy a flat on the equivalent salary while working in Brighton in the local area then that is one argument but if the area where you bought in 1997 has for some reason become more popular and so has then become more expensive than it used to be because property is more in demand there then that is a different reason for you not being able to afford to buy there now.



There is this. If your salary then with interest rates the way they are now would have paid for this now https://www.rightmove.co.uk/property-for-sale/property-85637450.html The problem is that areas alter too. Some areas go up and some go down in relation to the prices in a particular area. There has been a shift towards town and city living so in some areas properties in more rural areas have become relatively cheaper than they were and properties in the centre of towns and cities have become more expensive.



https://www.rightmove.co.uk/property-for-sale/property-62898171.html This is Wembley Park. This is also Wembley Park. https://www.rightmove.co.uk/property-for-sale/property-67134969.html. These flats are really quite close to each other a short walk but look at the difference in price. I could understand if someone said that they couldn't afford the first one but could they also not afford the second one? London has never been cheap. It wasn't affordable in the 1960s.

I bought in a normal area. The whole town has gone through the roof. There is pretty much nowhere affordable in Brighton and Hove for single people on an average salary. Even on the dodgy council estate I grew up in, houses go for £350,000.

chucknorris

Cakeguts wrote: »

Many young people do not want to put in any effort to buy a house. They want to have the holidays, new cars and be able to buy lots of things.

Fast fashion, new cars and new gadgets advertising is aimed at people under the age of 35. This is because they are the main consumers of the latest gadgets, high priced mobile phones, and cars. People who respond to the advertising and buy all these consumer goods are the ones who then complain that they can't afford to buy a house. Most of what they buy is on credit so they can't get a mortgage.

I remember when I went to visit a new girlfriend near Salisbury when she was having a BBQ. A group of guys started really taking the Mick out of my car (I always buy nearly new, and then run them into the ground, at the time my car was near the end of its life). But it's water off a duck's back to me, I actually find it quite amusing that some people think of cars as a status symbol.

But they shut up when I said I don't spend much money on cars, I spend (invest) my money on property. When they (more than one) asked if I had a nice house, I said yes it's OK, plus I have 4 other properties in London.

I have mellowed a bit now, but I (now we) still wouldn't spend that much on a car, I can't see the day that I would buy a car for more than about £25k. The most that I have ever spent is £10k, and our current car we bought for £18k (that is easily the most expensive, in fact more than twice the cost of the previous car). To put that in context we are both multi-millionaires. But a car to me is just to get me (us) from A to B, and in any case my dog will turn a pristine car into a mess in a matter of weeks (but that's OK, he is much more important than the car).

If you drive around some council estates, you will see some quite expensive cars parked there, that just tells me that some people have got their priorities wrong (IMO).

bertiewhite

chucknorris wrote: »

If you drive around some council estates, you will see some quite expensive cars parked there, that just tells me that some people have got their priorities wrong (IMO).

I remember when I was about 12, asking my Dad "why we didn't have a nice car like they have in Long Field Road" to which he answered "because I'm sure you'd rather live in a nice house".

Dineen33

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.

I bought our three bed in 1985 for £31.500, I took home £8500 that year, our mortgage was £3000 pa.
By 1990 I was taking home £12500pa and the mortgage peaked at £3700 pa


Fast forward to last year, my son (three years younger than I was) bought his first house, a four bed detached for almost a quarter of a million, he takes home £25000 ish p.a. and his mortgage is £6000pa.


He eats better than we did, has more cars and plenty of disposable income. I cant check his figures at the moment as he is skiing in Europe as I type (I've never been skiing).


Its much cheaper to buy here than to rent, and I bet thats true in most areas.


I did give him a lump of a deposit, mainly because he needs it now not when I snuff it in, hopefully, a couple of decades. And of course we got nothing, substantial, from our parents.




As for the "return" on our property, we live rent free, I believe thats true for anyone who pays down their mortgage ? The place might be valued around £250k but thats of little use as we still live in it.

Splatfoot

The South East, for all it's positives (I'm struggling to think of any), is ridiculously overpriced. I looked through the rightmove ads for 1 bed flats and the cheapest is £165000/£170000. Couldn't do that on an average £25,000 wage. Brighton doesn't have high wages.

The-Joker

Splatfoot wrote: »

The South East, for all it's positives (I'm struggling to think of any), is ridiculously overpriced. I looked through the rightmove ads for 1 bed flats and the cheapest is £165000/£170000. Couldn't do that on an average £25,000 wage. Brighton doesn't have high wages.

Yes but isn’t £25k a bit low?

Dineen33

The-Joker wrote: »

Yes but isn’t £25k a bit low?

£25k is "a bit low" almost anywhere for total full time earnings, but especially in SE.
And, its only one wage.

triathlon

This thread really should be changed to have young adults become way to soft in the last 20 years and want everything handed on a plate with zero struggling or pain.

No sympathy at all from me

Zero_Sum

Dineen33 wrote: »

£25k is "a bit low" almost anywhere for total full time earnings, but especially in SE.
And, its only one wage.

Anywhere? Its only a few grand below national average. And probably pretty close to UK excl London average.