Debate House Prices


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  • newsgroupmonkey_newsgroupmonkey_ Forumite
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    Wow! There are some generalisations and entitled boomers in this thread.
    This is exactly why we are at the stage we are at.
    Fact is, the average wage in 1980 was £6,000. That's around £26,000 in today's money
    A house cost around £19,000 or just over £82,000 today. So just over 3x salary.
    Average wage today is £29,000. Average house is £234,000. So around 8x salary.

    I wonder how many people are like me? Very few, hence the entitlement.

    I bought my first house in 1997 for around £60k. ex-social 3 bed semi.

    Unfortunately for me, a messy divorce lost me the house (traded it in to keep my pension) and some huge life changes meant that until recently, I've not been able to get back on the ladder.
    I've just bought the identical house 30 miles further away from London for £300k. Zoopla estimate for my original house is £347k.
    Please don't try and tell me that there's anything particularly outstanding that's happened in the last 23 years that means I would in any way be in a better place today than in 1997. Even if my wage has increased by 3x since (which btw is a decent wage), the house is now up nearly 6x. It's been unbelievably hard to get back on the ladder.
  • spadooshspadoosh Forumite
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    Don't forget that interest rate has a lot to do with affordability!  Late 80s 14% and more was what we had to pay.  But we didn't spend on what todays first time buyers seem to class as essential.
    Plus there are still plenty of really nice affordable houses in this area including new 2 and 3 bed houses for £155k to £200k  older houses, 2 bed semi in reasonable condition, for example start at under £60k.

    In this context it is a non argument. Wage inflation outstripped interest rates for the majority of high interest periods. Not to mention the windfall in property value at the end of it. So yeh you paid high interest but your salary increases more than accommodated for that whilst simultaneously seeing massive growth in value. And also benefitting of not having to contribute much in the way of tax/pensions in terms of the returns expected. Of course it’s purely circumstance so I’m not apportioning blame at individuals, most people just try and get as much as they can when they can. 

    I’m 32 and desperate for 20% interest rates. If interest rates are 20% and that’s being paid it’s a sign of abundance in an economy. Like they quite literally couldn’t charge 20% now because everyone (read as a large proportion) would default. So it would be pointless no point charging prices that people can’t pay. 

    It’s really just a case of some areas being more affordable than others. I’d be amazed if any full trine working couple in the north west couldn’t buy a reasonable house roughly where they want to, even on min wage (previous credit issues aside). In other areas of the country you could have what’s considered a decent wage (doctors etc) and struggle to afford very basic housing. 

    If we’re thinking old school economics, supply and demand, the solution is relatively simple, build more houses where they’re needed. Issue with that is we’re not really. 2 new ‘villages’ with a few thousand homes each have been built within 10 miles of me. Ok they’re nice houses and everything but houses are affordable here, it’s further stagnating prices round here and the solution to that seems to be suggesting to southerners to move north. It doesn’t appear to be working, and I don’t really blame them either, it’s pretty wet up here! 
  • Getting_greyerGetting_greyer Forumite
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    spadoosh said:

    I’m 32 and desperate for 20% interest rates. If interest rates are 20% and that’s being paid it’s a sign of abundance in an economy. 

    True but it's also a sign of spiraling inflation.  Which would be a killer for people saving a deposit. But yeah good for asset holders.

  • [Deleted User][Deleted User]
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    Don't forget that interest rate has a lot to do with affordability!  Late 80s 14% and more was what we had to pay.  But we didn't spend on what todays first time buyers seem to class as essential.
    Plus there are still plenty of really nice affordable houses in this area including new 2 and 3 bed houses for £155k to £200k  older houses, 2 bed semi in reasonable condition, for example start at under £60k.

    Didn't borrowers get Mortgage Interest Relief at Source giving them tax relief on mortgage interest payments during the 80s? 
  • silvercarsilvercar Forumite, Board Guide
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    Moved to the 'debate house prices' board.
    Usually found at a vaccine centre 💉
    I'm a Board Guide on the Debate House Prices & the Economy, House Buying, Renting & Selling, Mortgages and Endowments, In My Home incl DIY, Overseas Holidays & Student boards.
    I volunteer to help get your forum questions answered and keep the forum running smoothly.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to [email protected]. Any views are mine and not the official line of moneysavingexpert.com.
  • spadooshspadoosh Forumite
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    Cakeguts said:
    What I will say is this. I am seeing an awful lot of entitlement from the younger members in the case of entitlement. They seem to have this idea that they can live exactly where they want to and that housing that they can afford should be provided for them there.  Not only that but they also seem to think that they are entitled to all the other things in life in their 20s and 30s that they see older people who have worked for 40 years have.  They don't seem to want to start at the bottom and they all seem to want "careers" rather than a job.

    I am a "boomer" and i will tell you what boomer children had.  They had black and white television with a maximum of 3 channels.  There were no computers, cars at 18, no mobile phones, no central heating in houses and you walked or got the bus to school.  There were no expensive birthday and Christmas presents or 3 holidays abroad a year.  You were lucky if you got one holiday a year anywhere never mind abroad. I had never flown until I was in my middle 20s because air travel was too expensive.  Fridges, washing machines, cars and televisions were much more expensive compared to earnings than they are now. Many people did not have a washing machine they used the local launderette.   I can still remember the local swimming baths having public baths for people who didn't have a bathroom indoors and who still had outside toilets.  

    Even in the 60s London was too expensive for ordinary people to work in because they couldn't afford the housing so they just didn't take jobs there.  Without the aid of the internet people back then could work out that even with a London salary that was higher than the one they had they would actually be worse off.  I just cannot understand how so many young graduates finish up in London these days on salaries that make them worse off than they would have been staying in their local area when they can much more easily get the information that they need to work this out before they arrive in London.  The only conclusion that I have come to over this is that "real" graduates not the ones from the large number of technical colleges that now call themselves universities can still work out these salary differences and don't go to London if it doesn't add up but the "pretend" graduates those who should never have gone to one of these scam universities are not intelligent enough to work out the different costs and just see their entitlement as a "graduate" to a higher wage and so they move to the most expensive part of the country.  The solution is to stop giving people this sense of entitlement.  It doesn't do them any favours.  Personally I would close all the dud universities and turn them back into technical colleges so that people can see better what their earning level is likely to be and then be more realistic about it.  We have 11 universities in London that serve no useful purpose at all other than to pay the wages of the staff and to churn out "graduates" who are of no use to the employment market because they aren't well enough educated in anything that is of any use.  This is repeated all over the country.  Unfortunately telling people that they are a "graduate" when their level of education is what used to be an old O level doesn't give them a realistic view of what they can expect to earn or what kind of job they will be working in but it does create a sense of entitlement.

    I dont understand this argument. Its like you expect the world to stay still over a 40-60 year period? Im kind of thinking my kid will have loads of things that i never had, its kind of how progress works.  

    I keep hearing that boomers have done without and had it tough, but then im just sat here looking at the national dbt and thinking ive not made that (im 32). I was born in 87, the first time i could be expected to make rational decisions would be 2005 at which point national debt was half a billion quid. Massively increased since then, economic querks but when i look at national debt levels.

    You talk of entitlement like its a bad thing so im guessing you voted no to the triple lock on pensions? You vote accordingly for society and not according to your personal benefit? Youre voluntarily contributing more tax to make up the shortfall in tax generation from the boomer generation for all the benefits they have bene promised. Benefits which look increasingly unlikely the younger generation will be entitled to. 

    Im fortunate, my paretns want me to have a better life than them. They do what thy can to help me. They dont compare their lives and mine as well theyre very different. My parents didnt buy a house until mid 30s, i bought mine at 24. They sold their first house before they where 40 and it doubled its value. Ive still got my first house, ive had it 9 years, its increased in value by about 15%, and i bought at a perfect time economically, at the bottom of the curve. 

    Whilst i agree with your london sentiments. London is essentially the national lottery. If you win, youll win very big. I know quite a few of the graduates you point out. My best friend graduated, moved to london, worked hard competed and by the time he was leaving had practically paid off a £500k mortgage, hes my age 32, his pension is already in the millions (given time). Another friend is a barrister, hes done pretty well for himself. A friends brother has done the same, whilst he hasnt bough a house, he easily could with his 6 figure salary. As someone who went to uni, the majority of those who i know moved to london arent doing too badly. Well none of them are working in pret, but then the people i know did 'proper' degree at 'proper' universities.

    To be a failure in the boomer generation, youdve had to have made a couple of massive screw ups. Most people have accidentally ended up being worth loads by pure good fortune, whilst were not in the future and its hard to compare, it really does feel like this generation has to be considerably more conservative in their thinking. I cant afford to go looking for a new job on monday because chances are the jobs dont exist, or the requirements are particularly picky. I cant afford to take a risk starting a new business as i have a family, a mortgage and stricter requirements on any borrowing i do. If i posted on this forum following the footsteps of the things boomers have suggested theyve done to make them successful, youd be calling me stupid. Ie if i said i walked out of my job today and plan on walking in to one, youd think i was daft. If i just paid my mortgage off and expected to be able to downsize and it fully paid for my retirement, youd call me daft. If i stated i wanted to quit work and start my own business, im fairly confident id have a load of boomers highlighting the pitfalls and risk of it. Its hard not to think boomers just want to watch the world burn. 

    Tell me what you actually want me to do? Im 32, me and wife work full time, got a 3 yo so spend several hundred quid a month on childcare. Dont have new cars, never bought one. I do have a few holidays, do have some meals etc, but as it stands now i should be mortgage free at 40, at which point ill be pumping what is currently a pitiful pension (on my income, its suggesting ill be entitled to about £3k a year, woop woop). My current pension planning consist of trying to squirrel away as much as i can whilst enjoying a few luxuries whilst i can and then just topping myself when the money dries up. Are your plans like this? Or are you expecting the government to give you what you probably think youre entitled to? Im going to go out on a limb and assume its the latter. 

    And where does the actual issue lie? It looks like your pointing to government policies? The first election i could vote in was 2005, are you suggesting ive had an opportunity to influence government policy that dictated education for this generation? Because from where im looking that looks like it falls squarely on the people that you voted for. 

    I just dont get how you think a massive undersupply of housing equals entitlement from the generation who are not being supplied with enough homes. Its basic economics, not entitlement, not avocados, not paying for boomers pensions. Its just plain old supply and demand. There are areas in this country, large populous areas, where there is a chronic undersupply of new homes. Theres only one way prices are going, and whilst a few will be able to buck the trend and buy when they can, in those areas house price increases outstrip wage inflation, people could save as much as they could and they would still be getting further away from home ownership. 
  • SailtheworldSailtheworld Forumite
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    Cakeguts said:
    I am a "boomer" and i will tell you what boomer children had.  They had black and white television with a maximum of 3 channels.  There were no computers, cars at 18, no mobile phones, no central heating in houses and you walked or got the bus to school.  There were no expensive birthday and Christmas presents or 3 holidays abroad a year.  You were lucky if you got one holiday a year anywhere never mind abroad. I had never flown until I was in my middle 20s because air travel was too expensive.  Fridges, washing machines, cars and televisions were much more expensive compared to earnings than they are now. Many people did not have a washing machine they used the local launderette.   I can still remember the local swimming baths having public baths for people who didn't have a bathroom indoors and who still had outside toilets.  

    You should just change your signature to 'we had nowt and, by the way, an old 'O' level is equivalent to one of today's fancy "degrees".
  • edited 25 February 2020 at 10:26AM
    spadooshspadoosh Forumite
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    edited 25 February 2020 at 10:26AM
    spadoosh said:

    I’m 32 and desperate for 20% interest rates. If interest rates are 20% and that’s being paid it’s a sign of abundance in an economy. 

    True but it's also a sign of spiraling inflation.  Which would be a killer for people saving a deposit. But yeah good for asset holders.

    True but it's also a sign of spiraling inflation.  Which would be a killer for people saving a deposit. But yeah good for asset holders.

     Not when wage inflation outstrips price inflation. Average RPI in the 80s was 7%, average wage inflation in the 80s was 9.6%. Suggest an abundance of money knocking around.

    Of course now it would be a different story, wage inflation from 2010-2019 sits around 2.1% with RPI inflation sitting at 2.67%.

    So in the 80s people got richer by 2.6% every year. And in the 10's people got poorer by 0.57% each year. 

    Im not overly trusting of the numbers ive gathered, but it does highlight what i suspect is the trend. 


  • edited 25 February 2020 at 1:39PM
    ukcarperukcarper Forumite
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    edited 25 February 2020 at 1:39PM
    Prices in relation to earning a little higher now, so prices definitely higher. With regard to affordability it's not as simple as just earnings to price as interest rates, the amount you can borrow come into it.  Bought my first house in early 70s had to make a lot of sacrifices to save deposit and move 20 miles from work.  If I was in same position now I don't think I would be able to buy same type of property and would have to settle for a 2 bed flats instead of 3 bed terrace I bought.
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