House price increases. Is everyone absolutely loaded?

Getting_greyer

MobileSaver said:

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.

LUXURY!!!

https://m.youtube.com/watch?v=VKHFZBUTA4k

RelievedSheff

getmore4less said:

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

Why let facts get in the way of an argument 🤣🤣🤣

getmore4less

RelievedSheff said:

getmore4less said:

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

Why let facts get in the way of an argument 🤣🤣🤣

Should have seen what I deleted......not as sensitive.

Interesting was 50% of owner occupiers live in underoccupied property (at least 2 spare bedrooms).

Ok some need them for boomerang kids  and visitors but there is a lot of property underutilized in the UK and a lot of cheap property in the wrong places.

doingitanyway

Maybe occupation should be based on new criteria. I have always needed an office room as I WFH. Now the country is moving towards WFH perhaps a room to work from will be as essential as a bedroom in future considerations?

MovingForwards

@MobileSaver it's 5 years ago this winter I first lived in a place with DG and (not working) GCH, about 4 years ago I lived in a place with DG and working GCH.

I wasn't bothered about having either for my own purchase, just happened to be fitted in my flat. I've some original fittings, everything else is 1960-90s. Kitchen is horrible, but functions, nothing a spot of paint won't make it look better and some nicer handles, same as I've done throughout.

eidand

FinallyFTB2021 said:

MobileSaver said:

Why don't you and @BikingBud start up a crowdfunding campaign to help "shop workers, bus drivers, catering staff" all get a "four bed house with big garden in that nice area"? How much will you personally donate to this worthy cause?

No-one should be entitled to buy any house, let alone a nice house in a nice area.

Is there anything else you think those stacking shelves should also be entitled to? What about a half-decent car? Surely we can't have them travelling around in an old rusty banger that might let them down one day? How much will you personally donate towards them buying a new BMW or would this be something else you want taxpayers to subsidise rather than you personally? 

 Wow, what a nasty piece of work you are!! Everyone who works hard should be entitled to buy a house. 

That's not how things work in real life. Buying a house clearly is not for everyone  and no one, I repeat no, one is entitled to anything.

Can anyone buy a house? Yes, it's simply a question of saving over a long enough period of time and not being in debt, that's it.

So, for whoever wants to buy a house, go and do what needs done. No one starts with the best house in the best location, some of us worked for decades to get to this point. 

I always find it amusing when I see the complaints. I used to stack shelves, I used to have 2 jobs at the same time. My first property was in one of the worst areas where I was living as this was the only thing I could afford. Took a while, but while others were going on holiday and going to the pub every night, I was working 2 jobs and also studying so I can get in a better profession.

Entitlement? Don't make me laugh, put in the work, it really isn't rocket science.

Grumpy_chap

Lavendyr said:

My parents did indeed make sacrifices. They also bought houses in the 1990s which were priced at 2x their salaries. Not 4.5x, as we are often faced with today. 

Well, isn't this the problem - the supply of money facilitating an increase in house price to salary ratio?

I am not sure that a house at 2 x salary was typical in the 1990's, but it was certainly nowhere near the current salary multiples.

When I purchased my first house, the typical salary multiple that could be borrowed was 3x salary over 25-year term.  At a push, it was sometimes possible to get 3.25x or even 3.5x salary, but it was not a given and the higher multiples depended on some level of assessment - for example a newly trained medical Dr could get a higher multiple based upon the expectation of steeply rising earnings whereas an individual in a career with a flatter salary profile was not so able to do so.

Today, first time buyer salary multiples of 4x - 4.5x salary seem to be fairly standard and 5x, or even 6x, can be possible.  There are also schemes such as HTB that add supply of money to the system.  This increased supply of money forces house prices to increase faster than salaries.

To make repayments affordable at these higher salary multiples, the term is sometimes longer than the conventional standard of 25 years, 30 or 35 years can be possible.

The other factor that permits higher salary multiples to be viable is the low interest rates to which we have become accustomed.

If the financial services industry simply applied a maximum salary multiple of 3x salary, the result would be a sharp step-correction in the housing market, but we would all be more secure in the long term and more resilient to collective financial shocks.  This would, of course, mean that those with property experience a drop in the fictional paper worth of their asset but that is probably a cost that can be tolerated in the interest of the wider financial good.  Whether my house is worth 10x or 5x what I paid for it, or the same, is of no consequence unless I wish to sell or I am moved to negative equity.

Lavendyr

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.

Perhaps you should have worded it better then. You may have intended not to make a generalised statement but you did. Thank you for clarifying.

I'm not implying anything. Nor did I. I simply made the point regarding the salary multiple then vs now. I could also observe that my parents were able to own their own homes in their early 20s and contrast that with today. 

Why do you think it is "so easy" for young people to get onto the property ladder now? And why easier now than today? Are you a young person in this position? What qualifies you to make that assessment? What do you even consider a "young person" to be?  I'm genuinely curious. 

Lavendyr

MobileSaver said:

hippocrates1 said:

MobileSaver said:

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...

my dad bought his first house at 22. He left school at fifteen. Worked an entry level job and managed to buy a four bed detached with large front and back garden with double garage. Now paid off the mortgage.

I on the other hand am a doctor. Qualified as soon as possible who only now at 26 managed to get on the property ladder. I’ve bought a 3 bed semi with a tiny garden and allocated parking in the North. And I had to get money from my parents to buy it.

But yeah we’re so self entitled. 

So your dad had been working and earning money for seven years before he bought his first house...

You on the other hand went to Uni instead and trained to be a doctor which takes, what, at least five years? So at 26 you have possibly been working full-time for three years tops, probably less and you're complaining only now can you buy a house?

Yeah, you're right, I'd call that self-entitled.

Working an entry-level job for seven years. Let's say that started at minimum wage. Try that now and see what you could afford. A four bed detached with double garage? Get real. That is not self-entitled. That is simply recognising the difference between what was then and what is now. 

As I said earlier on this thread, I have nothing but respect for what my parents have achieved. However, even they can see how hard the house market is for new entrants right now. They are super proud of us for having saved and saved and used what we have sensibly. But they themselves acknowledge that things are tougher now than when they were our age in terms of house buying. 

Lavendyr

MovingForwards said:

...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 think a lot of that is down to the age at which FTBs are now, compared to previous decades. Many FTBs are now in their 30s, either with or starting a family and therefore in need of something more than a 1 or even 2 bed. It's just a sign of the times.