House price increases. Is everyone absolutely loaded?

MovingForwards

Not everyone is loaded, not everyone can afford to buy where they rent, live with family or work. If someone does want to buy then compromises have to be made somewhere, whether it's location or property. The government schemes are a back up plan.

I can't say about "London" and its surrounding areas as it has never appealled.

Gone are the days of a FTB buying a starter home, moving up as time goes on and wages increase. A lot seem to want that 3 bed house straight off now.
- I've only personally known 2 families who've moved up the property ladder, both are now long retired. Everyone else has stayed in their original property.

I couldn't afford to buy where I lived and was priced out a few months after relocating, less than a year later was totally priced out of the county.
I couldn't increase my earning capacity due to health reasons and instead I expanded my search, ruled some out due to winter weather (great to look at, wouldn't get to work for a while), ruled some out due to commute costs and set about viewing areas. Got priced out of some again, but could still afford others, this went on all the time I was saving my deposit.
I couldn't save the extra £100k+, together with the deposit, to buy closer to my friends and work, even though I was saving every penny possible. 

What I could do is look for a property to suit my needs, set a budget at 3.3x my income as being the amount I wanted to borrow and could clear within 10 years of the mortgage starting, even though I've taken the maximum term for my age. I then found properties within that price range.
I went on to buy what I could realistically afford within my budget, have a lovely FTB property which ticked everything on my want list for a property and what I wanted in a location.
If / when I feel like changing jobs, my location opens up a lot of areas to work.

However there's only a few of us on this forum who think like this and we are all older first time buyers.

getmore4less

I have covered this before, the wealthy stayed wealthy for generations because they recycled their wealth down the generations.

It takes 3-4 generations to become self sufficient in housing if you reuse/recycle  back into housing, from then any extra investment is improving the level of housing.

A major issue is that the generation that inherit often just absorbed the value rather than recycling down the generations to kick start the youngsters with housing.




 

Davesnave

I'm too old to care now, but if I was young right now I'd prefer to be renting so I could respond most easily to the curve balls coming our way following recent history.

I believe anyone who thinks 'things will go back to normal' is in for a rude awakening. Naturally, I could be wrong, but even if I am, being free to seize opportunities quickly strikes me as the better option at present.

jimbog

zagfles said:

boxer234 said:

MobileSaver said:

boxer234 said:

It is a fact house prices have gone up so much they are out of reach for many. 

It is a fact that house prices have always been out of reach for many...

And you wonder why so many people refer to the younger generation as "snowflakes" that they have an inflated sense of uniqueness!

boxer234 said:

Maybe I am idealistic but I believe a secure home is an entitlement for everyone. 

You are being idealistic and completely unrealistic if by "secure home" you mean a home they own rather than a home they rent.

As pointed out to another poster, on what basis do you think it is right that someone who spends every penny they earn on drink, drugs and women should be entitled to buy a home?

boxer234 said:

I got my degree through the OU and worked 3 jobs whilst doing it. 

If that is true then why do you believe a lazy waster who works the absolute minimum possible should get special treatment and essentially be given a free home?

MobileSaver said:

boxer234 said:

It is a fact house prices have gone up so much they are out of reach for many. 

It is a fact that house prices have always been out of reach for many...

And you wonder why so many people refer to the younger generation as "snowflakes" that they have an inflated sense of uniqueness!

boxer234 said:

Maybe I am idealistic but I believe a secure home is an entitlement for everyone. 

You are being idealistic and completely unrealistic if by "secure home" you mean a home they own rather than a home they rent.

As pointed out to another poster, on what basis do you think it is right that someone who spends every penny they earn on drink, drugs and women should be entitled to buy a home?

boxer234 said:

I got my degree through the OU and worked 3 jobs whilst doing it. 

If that is true then why do you believe a lazy waster who works the absolute minimum possible should get special treatment and essentially be given a free home?

 Renting is not secure this is why people want to own.   There are people who can’t work due to illness or childcare (would’t call them wasters myself) are more likely to get long term social housing.  Those earning low wages in expensive areas should have the right to secure long term tenancy or be able to buy.  

What if all the low workers took the advice on here and moved out of London/ expensive areas and up north.  Who would pour your coffee ? Stack your shelves ? Nurse you when your sick? 

I’m not talking about drug dealers I’m talking about hard working people who can’t get a leg up because mummy and daddy don’t have a trust fund.  I think someone working 40/50 hours a week as a nurse should be able to afford a home in their area without having to get involved in some stupid government scheme.  

Gets down off soap box. 

Maybe the govt should just leave it to market forces. If nurses, teachers, binmen etc can't afford to live in a particular area, those in their £1.5 million houses might start complaining if they can't get their bins emptied, if there is no local A&E, if local schools can't get teachers. 

Evidence from cities around the world indicate otherwise. Shanty towns spring up on the fringes of cities where residents bus themselves in to work 

zagfles

jimbog said:

zagfles said:

boxer234 said:

MobileSaver said:

boxer234 said:

It is a fact house prices have gone up so much they are out of reach for many. 

It is a fact that house prices have always been out of reach for many...

And you wonder why so many people refer to the younger generation as "snowflakes" that they have an inflated sense of uniqueness!

boxer234 said:

Maybe I am idealistic but I believe a secure home is an entitlement for everyone. 

You are being idealistic and completely unrealistic if by "secure home" you mean a home they own rather than a home they rent.

As pointed out to another poster, on what basis do you think it is right that someone who spends every penny they earn on drink, drugs and women should be entitled to buy a home?

boxer234 said:

I got my degree through the OU and worked 3 jobs whilst doing it. 

If that is true then why do you believe a lazy waster who works the absolute minimum possible should get special treatment and essentially be given a free home?

MobileSaver said:

boxer234 said:

It is a fact house prices have gone up so much they are out of reach for many. 

It is a fact that house prices have always been out of reach for many...

And you wonder why so many people refer to the younger generation as "snowflakes" that they have an inflated sense of uniqueness!

boxer234 said:

Maybe I am idealistic but I believe a secure home is an entitlement for everyone. 

You are being idealistic and completely unrealistic if by "secure home" you mean a home they own rather than a home they rent.

As pointed out to another poster, on what basis do you think it is right that someone who spends every penny they earn on drink, drugs and women should be entitled to buy a home?

boxer234 said:

I got my degree through the OU and worked 3 jobs whilst doing it. 

If that is true then why do you believe a lazy waster who works the absolute minimum possible should get special treatment and essentially be given a free home?

 Renting is not secure this is why people want to own.   There are people who can’t work due to illness or childcare (would’t call them wasters myself) are more likely to get long term social housing.  Those earning low wages in expensive areas should have the right to secure long term tenancy or be able to buy.  

What if all the low workers took the advice on here and moved out of London/ expensive areas and up north.  Who would pour your coffee ? Stack your shelves ? Nurse you when your sick? 

I’m not talking about drug dealers I’m talking about hard working people who can’t get a leg up because mummy and daddy don’t have a trust fund.  I think someone working 40/50 hours a week as a nurse should be able to afford a home in their area without having to get involved in some stupid government scheme.  

Gets down off soap box. 

Maybe the govt should just leave it to market forces. If nurses, teachers, binmen etc can't afford to live in a particular area, those in their £1.5 million houses might start complaining if they can't get their bins emptied, if there is no local A&E, if local schools can't get teachers. 

Evidence from cities around the world indicate otherwise. Shanty towns spring up on the fringes of cities where residents bus themselves in to work 

Yeah, but it's not going to happen in a country with an excellent social security safety net - why do you think London's unemployment rate is much higher than the national average? Or in a country where you can get good decent housing if you just move to a different part of the country.

It does of course happen in the "shadow economy" with illegal immigrants doing dodgy cash in hand in work and living in a shed in someone's back garden, but it's not going to happen with proper public sector jobs like binmen, teachers and nurses.

Phil4432

Very few are loaded, even fewer actually own their property debt free.  The vast majority are in massive amounts of debt, which they payback over the course of their lives.  Mortgages basically.  This will not change anytime soon. 

Gycraig

MobileSaver said:

Lavendyr said:

MobileSaver said:

There's loads of affordable properties available!

The problem is that they're not good enough for the self-entitled "young people" of today who seem to want nice houses in nice areas just like their parents, conveniently forgetting that in most cases their parents had to work hard and make sacrifices for decades to get where they are today...

This quote was what shocked me about you, @MobileSaver. You are making incredibly generalised statements which are guaranteed to offend.

Perhaps I could have worded it better but you've mis-interpreted my comment, I was deliberately trying not to make a generalised statement. The phrase "self-entitled young people" was intended to mean "those young people who are self-entitled", it was not suggesting "all young people are self-entitled".

Lavendyr said:

MobileSaver said:

conveniently forgetting that in most cases their parents had to work hard and make sacrifices for decades to get where they are today...

My parents did indeed make sacrifices. ... were priced at 2x their salaries. Not 4.5x, as we are often faced with today. The fact remains that the housing market is a completely different place.

The problem with that viewpoint is that you are taking just one negative aspect of life between now and the 1990s (that houses were available for a lower salary multiple) and implying that therefore our parents had it so much easier.

You are ignoring numerous technological, financial, lifestyle and physical improvements to life generally and the housing market in particular over the last thirty years which all add up to the fact that in many respects it has never been so easy for young people to get on the property ladder as it is today.

The year I was born my dad walked into a bank and took a 100 percent loan out on his own wages as a mechanic and moved in two years later. If he had to buy that same house with that same job now he would be looking at years to save the deposit alone, plus would be struggling for affordability as the house is nearly 4x the price now and mechanics wages haven’t massively improved. 

It’s a simple fact that people who bought a house in the 90s probably couldn’t buy that same house doing the same job in 2021.

 

MobileSaver

Phil4432 said:

The vast majority are in massive amounts of debt, which they payback over the course of their lives.  Mortgages basically.

I think you are exaggerating the debt angle somewhat. Around a third of all homes are bought for cash with no mortgage at all so your "vast majority" claim falls at the first hurdle. Similarly, the average mortgage term is around 25 years and most people expect to live rather longer than that so "payback over the course of their lives" is a bit of an exaggeration too.

Of course, if you don't buy but rent instead then you will indeed literally be paying for your home over the course of your entire life...

MobileSaver

Gycraig said:

The year I was born my dad walked into a bank and took a 100 percent loan out on his own wages

Do you think it's a good thing or a bad thing that 100% mortgages and similar "liar loan" mortgages are no longer available to today's house buyers?

Gycraig said:

people who bought a house in the 90s probably couldn’t buy that same house doing the same job in 2021.

That's not comparing like with like though is it. Even ignoring all the other aspects of life and house buying that have changed since the 1990s, if your dad's experience was anything like mine then my first house simply doesn't exist any more.

My first house had no central heating, no double glazing and no kitchen to speak of, all of those things have now been addressed and all those improvements came at a not-insignificant cost. Of course, those costs are somewhat less than the increase in the house price but even so it highlights that you cannot just compare house prices thirty years apart and come to a legitimate conclusion.

getmore4less

Phil4432 said:

Very few are loaded, even fewer actually own their property debt free.  The vast majority are in massive amounts of debt, which they payback over the course of their lives.  Mortgages basically.  This will not change anytime soon. 

Since 2014 more than 50% of owner occupiers(65% of households) own outright.


https://www.gov.uk/government/statistics/english-housing-survey-2019-to-2020-headline-report