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Quite right jude.
I work in IT and I am well paid. I'm a crap worker though. I don't work hard and I under-achieve. And yet, I still make good money. It's because I have good aptitude for work that pays well - and this is a purely random attribute; but also because my parents supported my will to learn and investigate as a kid, and made me think that I could achieve what I wanted - again pure luck.
My wife on the other hand also has good aptitude for technical things but is an incredibly dedicated worker, she works harder than anyone I've ever met. But she didn't have the same fortunate circumstances as me - she didn't have the opportunity to learn about computers growing up, and her expectations were set lower by her upbringing and where she grew up. She earns a third as much as me.
It’s why we need to tax success.
That is what income tax does to a certain extend (although only financial success).
@sandwich I'm a self employed guitar teacher/musician and have been since I was 18 (had a brief 12 months driving a supermarket delivery van during lockdown)....I'm 35 now. I've never quite earned the national average wage I dont think. Certainly don't earn what most on here would class as a good wage.
I'm in agreement that house prices are currently mental, but then when I was at uni/graduating during the mid noughties boom people were saying the exact same thing. Outside of the South East, which seems essentially like a principality then it still seems fairly doable to me to get on the property ladder. Back when I bought my first house was a similar time to when I really got into mountain biking. I rode a 4 or 5 year old Specialized Rockhopper hardtail that I paid £350 secondhand iirc. Loads of other folks were out on much blingier bikes.....I remember a lot of Orange 5's on the trails. I couldn't have even dreamed of dropping that amount of cash on one. I had cheap helmet/gloves/clothing etc and drove around in a knackered car.
Lots of figures being posted about averages/means/medians etc. Not got the inclination to sift through it, but how many first time buyers are buying a house that is 'the average'?
If you can't afford a decent house first time, then buy a little shit hole terraced and work your way up the property ladder.
Or moan about house prices whilst simultaneously owning more than one property 😂
Don't get carried away with the victim blaming though.
The problem with buying a 'shit hole terrace' is that you then have to live in it, perhaps for many years. Why should people have to live in shitholes? Why do we even have shitholes?
We already do tax success.
Along with Income tax, Capital gains more you make the more you pay, Stamp duty bigger the house more you pay, Vehicle excise duty bigger the engine more you pay, inheritance tax more you leave more you pay, VAT more you spend more you pay., etc etc
If you overtax, you run the risk of the 'successful people' not striving to be as successful. Laffer Curve all the way to full on Going Galt.
Then whos going to pay for everything?
I bought a cheap terrace at 22, had that 5yrs got 15k left to Me bought a ruined 3bed semi at 26. And I mean ruined
Had no finance or cars on a drip
Worked hard.
Compared to now in my office, 3 1st buyers have spunked 200k plus on brand new 3 bed builds. Not one wanted just a terrace.
All decorated white n grey or chrome
All have new cars. All on shit money. Just All tied up for ever in debt. All drinking Starbucks daily. God knows how they afford it. Though non of then have any hobbies.
God I sound old.
Tbf I have actually couch surfed at 20 as I was to all intends and purposes homeless.
That is what income tax does to a certain extend (although only financial success).
Indeed it is And that’s why we should always design tax systems with a veil of ignorance.
Well I lived in a shithole terraced for the larger part of my life @molgrips. Why should people have to live in them/why are they a shithole is a different thread I guess. But it's how I stayed on the property market when I got divorced, and how my current girlfriend got on the property market too. Took until she was 29 and I was 33 to be able to afford something decent.
Social mobility hasn’t just ground to a halt in the last 30 years, it’s gone into reverse.
Yup... All over this is the case, not just specific to the UK.
I grew up in a poor area in Stoke and went to one of the lowest performing schools in England. Zero financial help from parents with anything.
I’ve managed to buy a house in Cheshire in an area where prices are essentially bang on the national average. It was hard, but is definitely doable.
Of course it is doable. Winning the lottery is doable. Plus, it's statically easier to move up if you're already at the bottom.
Watched this a while back and it made for depressing viewing.
It really is no wonder that many Millennials are turning their backs on the lives that their parents led. Manly because they can't afford the life their parents had.
Good post about the nurse, molgrips. (fnarr fnarr)
Ususally when this topic comes up, there's the usual chorus of people (who, I suspect, are over 40 in both age and salary) who say that things were pretty much fine when they bought their house N years ago for 4x the average wage, and are still pretty much fine now that the same house is 11x the average wage, and perhaps Young People Today just don't want it enough.
So, yeah, maybe it is just about ok, and maybe let's agree that if young people on low wages got a 2nd job and skipped a few meals and didn't have a social life, then maybe they could own a flat too.
But what do we actually WANT? As a first world nation in the 21st C? Should we be aiming for a bit better than this? Fulltime care workers will plausibly face a lifetime of expensive and precarious housing. Is that fair? Do we want society to be fair?
Wasn't the idea that at some point, we'd all have more leisure time? The average age of First Time Buyers is now 34, and typical mortages are often 30 years now. That's usually two people working full time, right up until retirement to pay for their house. And they're the lucky ones, who won't have to worry about finding rent money in retirement.
I think we've ****ed it.
Point to remember tho' is that while you're being vituous and living in the shithole there's a price gap to something better/not a shithole, and that the difference in price, in the time you're living there , is increasing disproportionately , and getting ever further and further out of reach for a lot of people.
I went from a school where 3% of people went to university , and now sit comfortably in what would be the top 1% of earners in the UK. I'd like to tell you it's all down to hard work, and not going to Starbucks, but that's a lot of nonsense - most of that is luck , and being fortunate to be at the right time, and at the right time of demand. Luck probably determines where you'll end up more than anything else, and luck in this context includes rich parents ( and no, mine were dirt poor so more virtue points for me :-))
Compared to now in my office, 3 1st buyers have spunked 200k plus on brand new 3 bed builds. Not one wanted just a terrace.
200K is comfortably below the average first time buyer price in the UK, which, after this year's 11% rise, would be around £245K.
Mate that's in Warrington.
They earn 18-24k tops
My gaff I "made" 100k on paper. But that includes the fortune's I spent.
Sister in law was trying to get a mortgage but was penalised because she had taken a covid business grant (self employed). Madness.
I guess that will depend on what proportion of her taxable income was a grant (or indeed SEISS) compared to earned income. If her figures showed a modest income without the grant then it would make sense to see her as a risk.
wbo
Free MemberPoint to remember tho’ is that while you’re being vituous and living in the shithole there’s a price gap to something better/not a shithole, and that the difference in price, in the time you’re living there , is increasing disproportionately , and getting ever further and further out of reach for a lot of people.
This x100.
...Along with Income tax, Capital gains more you make the more you pay, Stamp duty bigger the house more you pay, ...
Oh that reminds me - when I become chancellor I'd abolish stamp duty - it's a back to front tax on buyers - why tax the acquirer rather than the seller. Scrap the exemption on CGT for your main residence (it only taxes profit) and you'd have a far fairer system. The only reason for taxing aquirer rather than seller is if the asset doesn't really grow - then you have a tax on wealth.
Why should people have to live in them/why are they a shithole is a different thread I guess.
Not really. The reason that places are shitholes is that noone cares about helping the people who live there, and they think it's their own fault for being ****less. That way, the government doesn't have to do anything. The same argument being hinted at here re house prices.
By the way, I am ****less and yet I still own a house. Hows that fair?
What makes a “shithole terrace” a shithole?
And if every property in the UK magically halved in price/mortgage payment/rent with the resultant change in neighbours and/or the behaviour and lifestyle of the current neighbours with newfound disposable income would that make it more of a shithole or less?
If you’re still a nurse but your Mum is rich
Thanks for the calculation. Very relatable, pretty much exactly this (numbers are close) has happened to me vs. a colleague. He's lived much better through that period yet still ends up with a much higher net worth than me.
Is this the right thread to point out that Council Tax doesn't have enough or high value banding?
You can have a house worth barely the UK average and only pay a few hundred pounds a year less than a £1m+ property.
You can have a house worth barely the UK average and only pay a few hundred pounds a year less than a £1m+ property.
here it is 3x as much, or £2000 per year more. Seems fair
That was a big wage in 1992!
£22k?
No it wasn’t, it was an average wage for a skilled employee.
It was decent money - but but a hard and responsible job. I felt well off.
here it is 3x as much, or £2000 per year more
Similar here in terms of the band differences, but as I'm sure with many areas the bands that houses are in are totally out of wack with house prices changes over the decades. Case in point, my house is apparently worth £650k, but is valued the same (C/tax wise) as a 2 bed terrace in a terrible area (selling for £130-150k) under the same council. Bonkers. I suspect that any government brave enough to undertake a revaluation/banding exercise will find that it will re-distribute the tax burden, rather than generate significantly more overall tax. (I'm sure there has been studies on this.) But in terms of re-distribution of wealth, that seems like a laudable aim anyway. Politically, it's a death knell for any party though.
Is this the right thread to point out that Council Tax doesn’t have enough or high value banding?
You can have a house worth barely the UK average and only pay a few hundred pounds a year less than a £1m+ property.
Because a Labour government spent a fortune revaluing and rebanding houses c2005/6, and then bottled implementing it as the Daily Mail got upset.
As I keep saying on all these threads, affordable social housing on brownfield sites, close to employment and transport links will take 20 years but see a huge amount of societal issues.
I'm fast coming to the conclusion that a ban on private housing development may be needed. Which obviously won't happen
I just see the rise and rise of house prices as being linked to the advent of easy to get credit, there's a very large market that survives on people taking out, or having easy access to credit, and if wages aren't increasing fast enough, then there has to be value put somewhere else to fund that market. Unfortunately for us, it's houses.
It's the same with everything just now, look at Crypto, it went mad when the markets started getting involved, NFT's are the same now, it's just the market putting a value on something, mostly artificial, to allow the funds to be higher.
You'd think folk would learn after the crash back in 2007, but nope, and being able to buy a house now involves a lot of credit for youngsters who are now signing up for 30+ year mortgages, government initiatives, parents assistance, etc, the weird one is parents may take out some of their house equity, to get credit, which then feeds the market for house price increases!
When our parents bought houses in the not so distant past, they sacrificed everything to buy the house.
Yep, my parents bought their house in 1963 for £2,800. Dad lorry driver, mum typist. They struggled for years to be able to pay there and could only buy it because my dad did the work (Modernisation) that was required.
That was a relatively cheap house then and remains so today (~£220K) so it hasn't really changed that much.
It was decent money – but but a hard and responsible job. I felt well off.
TJ - like you I wasn't comparing 1992 to a graph, I was comparing it to what I was earning, and it was near enough the same as you.
TJ – like you I wasn’t comparing 1992 to a graph, I was comparing it to what I was earning, and it was near enough the same as you.
But the evidence shows (and TJ confirmed) that in 1992, £22k was a pretty decent wage. somewhere in the region of 35% higher than the national average. Whether you personally felt well-off or not is another matter.
It’s why we need to tax success.
??
In 1990 i was earning £10k, and got a £30k mortgage to buy my first house for £36k - three years of overtime, no holidays, no partying and a Mini Metro to raise the £6k deposit.
Sold it in 1996 for £30k, losing all my own money. Should have stayed living at home and bought the MR2 I'd had my eye on.
Did your (our) parents sacrifice everything or do they say they did?
My parents bought a 4 bed house in a sea side town in 1976. Dad was a 28 year old builder, my mum didn't work. The house needed work, which my dad did over a few years. We were there for about 8 years before my parents split up, but in that time we had a nice 2 or 3 week holiday every year and my parents social life was packed with parties, dinner out, weekends in the pub (plus most weekdays for my dad), etc. Their social circle was all very similar. All of this on the wages of a self employed builder. I know the trades are doing well at the moment, but I don't know any 28 year old builders who could afford that kind of life today.
My mum is in her 70s now and has only ever worked part time, my step dad is a mechanic and never really earned much. They live in a very nice 3 bed detached house with a nice big garden, they also own a flat in the town which is rented out and gives them a decent income, and they have a large pot of money in the bank from the sale of their parent's houses.
Don't get me wrong, I'm happy for them and very glad they are comfortable and enjoying their lives. However on the rare occasion I talk to my mum about this stuff she is of the opinion that she has worked hard all her life and earned everything she has. In my opinion she's deluded and it's all down to the luck of being born a boomer, but she cannot see that.
The only way my kids will get a decent start in life is by my wife and I downsizing to a smaller place and giving them money, and inheriting from my mum. Even then they'll probably have to get themselves into some serious debt.
Things are broken.
??
I meant financial success but kind of thought that was obvious.
Job security hasn't really been mentioned yet. I have survived enough redundancy rounds to know I can't drop my whole savings on a house. I don't know how that compares to the past but it means I need what, 35k+ to safely drop a 10% deposit on an average house? No mean feat. And don't talk this bollocks about "just buy a cheap house" the average is the average for a reason.
Also
Encougaing net emmigration would be a start.
Right so how about all the homeowners **** off and leave some space for the people grafting away beneath them then? Do you own a house by the way...? Have some compassion eh
However on the rare occasion I talk to my mum about this stuff she is of the opinion that she has worked hard all her life and earned everything she has. In my opinion she’s deluded and it’s all down to the luck of being born a boomer, but she cannot see that.
This echos my experience with my parents, and the conversations they have with my kids are some-times more than a little painful. I don't blame them, they have really no experience other than their own. My father's view on things like pensions for instance, is ridiculously skewed, they have no real understanding that their post war generation have lived lives that were (and continue to be) exceptional, and largely paid for by everyone else.
I can't link to the source, as its from an update email, but some food for thought from Savills (and apologies if its been posted already, but I CBA to read 5 pages):
<li style="list-style-type: none">
- the value of housing stock held by mortgage-free homeowners rose [in 2021] to £3.27 trillion – a figure that has risen by 93% in a decade. In comparison, the net housing wealth of mortgaged owner occupiers has risen by 66% over the same period to £2.89 trillion.
- With more housing wealth concentrated in the hands of a growing band of older homeowners, we estimate that over 65s now hold more than 42% of all owner-occupiers net housing wealth
I meant financial success but kind of thought that was obvious.
Not really, hence the question. I don't agree. self made success is a different thing to being handed a leg up that you've done nothing to contribute towards.
It is possible to work and save hard AND be lucky enough to be a boomer. I think parents only see one side of the equation though.
They cannot see that I will not be able to retire at 58, that their grandkids may never own their own home. Or if they can see it, they can't see that choices they've made - economically and politically have influenced that.
However on the rare occasion I talk to my mum about this stuff she is of the opinion that she has worked hard all her life and earned everything she has. In my opinion she’s deluded and it’s all down to the luck of being born a boomer, but she cannot see that.
Pretty similar to what @tonyd has to say really
My own parents acknowledge their luck in this regard. The in-laws?
The M-i-L is a Daily Mail reading Tory voter who's never worked a day in her life because she was in the now unbelievable position where you could get married, then buy a nice 3 bedroom semi in a good area, then raise kids with a decent standard of living (nice holidays, decent car etc) with only one salary coming in.
They also have money sat in a bank account from the sale of a council house her parents bought under Thatchers taxpayer-subsidised Right to Buy scheme which was then sold for vast multiples more.
The disconnect from modern day reality is unreal
This echos my experience with my parents, and the conversations they have with my kids are some-times more than a little painful. I don’t blame them, they have really no experience other than their own. My father’s view on things like pensions for instance, is ridiculously skewed, they have no real understanding that their post war generation have lived lives that were (and continue to be) exceptional, and largely paid for by everyone else.
For balance my folks & a lot of their friends care very aware of their good fortune. Some are doubtably in denial but there are definitely those who are fully aware of their luck..
For balance my folks & a lot of their friends care very aware of their good fortune. Some are doubtably in denial but there are definitely those who are fully aware of their luck..
Not disputing that at all, thankfully I think that is probably the case with the vast majority of boomers. It's just frustrating when it's your own mum who appears stuck in a parallel universe.
Yep, my parents bought their house in 1963 for £2,800. Dad lorry driver, mum typist. They struggled for years to be able to pay there and could only buy it because my dad did the work (Modernisation) that was required.
My parents' experience would be similar a decade later. I think the purchase prices had increased a lot in that time (I think they paid about 15k? (or perhaps it was a £15k mortgage on a 20k house?)) they sold it 20 years ago for about £50k - but having put in central heating, double glazing etc, a quick look suggests similar properties in the same street sell for roughly £100k today. BUT I think what people miss is whilst property headline prices seem cheap back then interest rates in the 80s were huge. So mortgage payments on the same value of loan would be double what they are at today's rates.
That was a relatively cheap house then and remains so today (~£220K) so it hasn’t really changed that much.
did the income of a "newly married couple"*, working in a clerical role and as an HGV driver increase by 50x (allowing for the difference in interest rates etc) in those 60 years?
I don't think its quite as simple as that. Rates changed to council tax, utility costs have changed (in 1963 a landline would be a luxury for most new home buyers, realistically broadband is fairly essential in 2022), I do get the arguments about scrimping and saving - its exactly what I did. I also see some of my staff earning above UK median wages in their late 20's still living with parents with no (or virtually no) bills and complaining they can't afford a house, or save a deposit for one and shake my head. On the other hand my in-Laws were in a fair sized council house by the time they were that age, which they then bought cheap, sold for a nice profit and moved up the ladder. That sort of "leg up" is no longer a realistic prospect. I don't know if it should be - but certainly, the generation that got it, and their kids who benefit from inheriting it should be cautious about criticising those who no longer can.
*apologies for the stereotype - but that's most likely the earliest stage of their life that people were buying property in the 60s.
I'm aiming to save for a huge deposit to buy my 1st house in the next 5 years, or before I'm 45, buying on my own (unless a miracle occurs) and I live in Kent...
£50k deposit + £45k pa would give me £250k.
Even at today's prices that doesn't buy a lot down here. Good location + nice 2 bed non terrace, with parking? Hahaha jog on, no chance.
I just hope in 4-5 years that remote working is accepted/still normal enough that if I'm employed here in Kent I can choose to live somewhere cheaper and nicer, like Scotland. I'd be leaving behind friends and family but if I want to buy something decent that's what I'll have to do.
Not disputing that at all, thankfully I think that is probably the case with the vast majority of boomers. It’s just frustrating when it’s your own mum who appears stuck in a parallel universe.
I can imagine it is..
somewhere cheaper and nicer, like Scotland.
The nice bits aren't cheap.