It is significantly harder for people to get on the property ladder now compared to 20/30/40 years ago.
Is it though, really? My parents were, when they bought their first house considered high earners, they still had to go through a lot of pain to get there. When I bought my first house there wasn't really any pain or consideration.
Oh come on! Of course it’s different. The deposit is much larger, the mortgage many more times income, the mortgage term 30, even 40 years instead of 20 or 25
Not necessarily - we have shown real examples in this post of people able to buy houses for less than a price of a car, a £60k house with a £12k deposit & mortgage of less than £500 a month. Yes, if you want a nice, big house, in a nice area, then yes - a big deposit & a bigger mortgage over a longer term is more likely. My parents first house was a dump, in a area I wouldn't want to live.
You need two incomes now FFS. Good luck trying to sort childcare.
You don't NEED, you may want.
Add the other obstacles thrown at them e.g uni debt
Again, need & want. Going to the uni for the sake of it & expecting others to pick up the bill? I'm not sure other than a small % of people I know who went to Uni put their degree to any use whatsoever. Maybe the thought of getting into a silly amount of debt for it will encourage people to look at other options which they may be better suited to.
I've been on both sides - happily rented & happily bought. I am totally ambivalent to actually 'owning' a house. I would be just as happy renting again. Home ownership is not the god given right/utopia that some people make it out to be.
Is it though, really? My parents were, when they bought their first house considered high earners, they still had to go through a lot of pain to get there. When I bought my first house there wasn’t really any pain or consideration.
So you just ignore the fact about the house price to income ratio then? It's empirically harder for people nowadays regardless of how many times you say "is it though?"
@hob nob but why are your aspirations so low?
Why should a family with two incomes have to struggle so much to afford a house. We had two kids in our bedroom for 2 years to help save, this is completely unnecessary as we could afford the mortgage payments on a much bigger house.
Why should we pay so much more to get better educated when this was never the case before? Uni debt is now charged at 6% interest, what's your mortgage rate?
So you just ignore the fact about the house price to income ratio then? It’s empirically harder for people nowadays regardless of how many times you say “is it though?”
Google tells me the average UK salary in 1980 was £6000 & the average house price was £39,500. A ratio of 15%.
In 2019 the average salary was £36,311. The average house value - £234k. A ratio of 15%.
When you have a perfect track record of paying more monthly rent than the 20 year mortgage monthly repayments you are likely to have for a mortgage that will be approved, yet have slowly struggled to save a ~20% deposit during that time, you are left with no doubt the south east housing market (although this applies to many areass in the UK to some degree) is absolutely screwed.
@hob nob but why are your aspirations so low?
Who says they are? We are very fortunate that we could, if we wanted to, mortgage ourselves up to £1m+, personally I can't think of anything worse than a noose like that around my neck. Therefore we have a mortgage that's a fraction of it. To do so, we moved from the South East to the English/Welsh border.
Maybe, if having high aspirations is owning a £1.5m house in Winchester & all the trappings of that 'lifestyle', they are low.
So you just ignore the fact about the house price to income ratio then? It’s empirically harder for people nowadays regardless of how many times you say “is it though?”
THis wasn't aimed at me, but while I accept that fact; remember how everything else has got better and cheaper.
My first proper job out of uni, I spent 1 months gross pay on a car. Over 5 years, about the same again on maintainence & repairs. Never left me stranded.
Recounted this to someone 15 years older than me, their first job, loan of 6 months salary to buy their first car. Broke constantly, total money pit.
Food is cheap and plentiful, with a number of supermarkets within easy reach of most people's homes.
Inflation adjusted, what my grandparents paid for their landline phone would get you a new iphone on an unlimited contract these days.
Utilities in general are a much lower fraction of living costs.
Working hours are shorter, everything is designed for convenience, people have much more free time and disposable income compared to someone in the same situation a few decades ago.
IF you gave me the chance to go back in time to the 80's, with no knowledge of the future, except about the housing market, would I do it? hell no.
In 2019 the average salary was £36,311.
Nope. You know the bit below the headline number? Might want to read that bit.
Must admit I thought the average wage figure of ~£28k was more ballpark in recent years, there's so many jobs that are now only offered part-time and have been for some time, such as posties.
Who says they are? We are very fortunate that we could, if we wanted to, mortgage ourselves up to £1m+, personally I can’t think of anything worse than a noose like that around my neck. Therefore we have a mortgage that’s a fraction of it. To do so, we moved from the South East to the English/Welsh border.
So the solution once again is to move hundreds of miles away.
Maybe, if having high aspirations is owning a £1.5m house in Winchester & all the trappings of that ‘lifestyle’, they are low.
Ha! as if that is the conundrum. How about the aspiration to own a 3 bed semi detached house that used to be owned by the local authority.
So the solution once again is to move hundreds of miles away.
No, that was my solution. Winchester & surrounding areas is not exactly hilly, or fun if you like mountains & the great outdoors.
And the point being, it's a choice. We could have chosen to spend half that on a nice house somewhere near to where we were, which would have been fine, if we didn't want to live next to a forest, literally on our doorstep.
How about the aspiration to own a 3 bed semi detached house that used to be owned by the local authority.
Why not move somewhere where you can afford to do that? Or have bigger aspirations (as you put it) to earn more money to be able to afford it in an area where you want to live?
Not necessarily – we have shown real examples in this post of people able to buy houses for less than a price of a car, a £60k house with a £12k deposit & mortgage of less than £500 a month. Yes, if you want a nice, big house, in a nice area, then yes – a big deposit & a bigger mortgage over a longer term is more likely. My parents first house was a dump, in a area I wouldn’t want to live.
As of just now, on Rightmove there are 34,000 properties for sale in England/Scotland/Wales under 100k and 181,723 under 250k. (out of 437000 total properties).
Hobnob, your numbers look a bit orf.
Average wage in 1980 was around £6000
Average house price in 1980 was around £21000
You've used the average house price for the decade against the 1980 wage
1985 average house price 30k
1985 average wage 9.5k
1990 average house price 60k
1990 average wage 15k
Interest rates in the 80s were hefty though so percentage of wage spent on mortgage should also apply.
Why not move somewhere where you can afford to do that? Or have bigger aspirations (as you put it) to earn more money to be able to afford it in an area where you want to live?
Pesky things like jobs and childcare.
When I talk about aspiration I am not talking about personal wealth acquisition. It's the (hardly lofty) aspiration to live and work in the same town. There is enough houses (hence you can rent) this is not the problem. Again, we could afford the mortgages payments - this is a choice being made with 5.5 million BTL landlords profiteering from a rigged market.
Quick search for 3 bed houses under 130k in my area shows 232 available - and not all shit-holes...
...not in the Highlands of Scotland but in the middle of the country within easy reach of Nottingham, Derby, Sheffield - trains, airports and loads industry around.
I think a lot of peoples problems now is they don't just want the house - they want the cars, the holidays, the tech, the nights out, the whole instagram lifestyle.
Fun game, I can get one boat:
It is a nice boat though - great views! 🙂
ha! yeah.. I actually wanted to do this a few years ago, girlfriend was not keen.
I think a lot of peoples problems now is they don’t just want the house – they want the cars, the holidays, the tech, the nights out, the whole instagram lifestyle.
That's ignorant and unfair.
People want at least some things, like a decent trip away - look at how many people on here are always on about T5s and trips to Morzine and £3k bikes. And is it fair that people have to sacrifice SO much just to get what others take for granted? When we're talking about an essential? Sure, rich people are always going to have it easy, but is it fair that people who aren't rich are in such a difficult position, forced to hand over most of their money to someone richer, when it's a basic human need? Is it right that people like gr5604 have to sacrifice their 20s when others are enjoying life? Why should the poor have to make this choice?
Housing is one of the most egregious examples (in this country) of the boot of the rich on the neck of the poor. And it would be pretty easy to work towards fixing it - it's a well known problem with lots of solutions.
For those quoting average salary vs average price - what we need is first time buyer prices vs salaries. Otherwise you're just factoring in wealthy people up-sizing.
Why should the poor have to make this choice?
It not just the poor, unless you are given a very large amount of money for a deposit, a couple can have above average incomes and still have next to no chance of owning a house.
More and more people will find themselves in this situation, especially as everyone taking out 30-40 year mortgages in their 30s will not have the equity to pass down to their children.
Now I am part of the home owner club I was able to remortgage for less money, despite my girlfriend losing her job, and myself having no provable income as I went self employed this year. Made me feel sick to be honest.
Averages are certainly skewed but give a general idea of historic shifts.
It's far from black and white with inflation and interest rates also having a considerable effect
Between 1997 and 2007 average house prices tripled, the big boom that never went bust.
especially as everyone taking out 30-40 year mortgages in their 30s will not have the equity to pass down to their children.
Well they will have equity - the mortgage will be paid off in their 60s or 70s and then they eventually die and (assuming they don't leave it all to a Cat Charity) the children get an inheritance.
sorry, yes but they won't have that crucial gap where they are still earning, but not paying the mortgage.
People want at least some things, like a decent trip away – look at how many people on here are always on about T5s and trips to Morzine and £3k bikes. And is it fair that people have to sacrifice SO much just to get what others take for granted?
That sounds like social Network influence, no one ever posts up the bad/**** days.
When we bought our first house we slept on camping matts for months and did not have a fridge for about 4 months (luckily it was winter). Holidays were a few nights away in a tent and we had two BSO's to commute to work and do the shopping with as fuel was a luxury item according to our budgeting.
Even now, 25 years later, "T5s and trips to Morzine and £3k bikes" is still way off the mark for us and I feel I earn a good salary, but have never had enough to move far up the property ladder.
sorry, yes but they won’t have that crucial gap where they are still earning, but not paying the mortgage.
Possibly, possibly not. My mortgage is due to be paid by the time I reach retirement age but I fully expect to be able to overpay in the final few years when our girls have grown up and left home and we have much more disposable income – I estimate that feeding, clothing and supporting their interests (music, dancing, horse riding etc) right now costs us >£1,000 a month.
Why should the poor have to make this choice?
So where do you draw the line? What house price makes it fair to the poor? Make all first time buyers houses £50k? Even at that level there would be hundreds of thousands who still couldn't afford a house.
Unfortunately the South East (and other hot-spots) are always going to be expensive.
Possibly, possibly not. My mortgage is due to be paid by the time I reach retirement age but I fully expect to be able to overpay in the final few years when our girls have grown up and left home and we have much more disposable income
Not going to help them onto the housing ladder then?
So where do you draw the line? What house price makes it fair to the poor?
The truly poor should be housed by the council, house prices should be roughly 3 x income - if you did this I would expect a huge surge in productivity and economic growth.
"Housing is one of the most egregious examples (in this country) of the boot of the rich on the neck of the poor. And it would be pretty easy to work towards fixing it – it’s a well known problem with lots of solutions."
This.
Only the most self-centered of people, the most vested or the most ignorant can look at this country and say there is not a problem with housing.
Anyway this thread is missing this!...
🙂
Is it right that people like gr5604 have to sacrifice their 20s when others are enjoying life?
When I was in my 20s I was shit poor. Everyone I knew was shit poor. Because we were trying to buy houses. I thought thats what being in your 20s was supposed to be like. At least its character building.
It IS much harder now. But complaining that it isn't fair that you can't have your nice house AND you foreign holiday AND your stable of 3k bikes AND your T5 just comes across as millennial whinging and doesn't really help matters.
house prices should be roughly 3 x income – if you did this I would expect a huge surge in productivity and economic growth.
Which they roughly were (+10%), before the 80s. How do we get back there?
No one is complaining about any of those things.
We want good quality rentals and a realistic route to owning a house.
It might be mainly a South east problem now, but it is coming your way soon.
We needed to restrict house value booms , its too late now , should have had taxes on property profit
sliding scale depending on how long the property was lived in , speculators could still work with houses that needed renovation as those costs could be factored into the tax, leaving it all to the market and
heating it up along with restricting social housing has made a mess.
The solution is to make BTL less appealing and ultimately introduce a universal basic income.
Is it right that people like gr5604 have to sacrifice their 20s when others are enjoying life?
We can't go back as a society I know - but the other thing back in the late 80s and early 90s when I first bought is people were doing things much sooner. Couples got married in their early 20s and a house was really the dream for which everything else was sacrificed.
House, kids, one car and a week in SkegVegas! 🙂
But going back further - my grandfather who was an Overman down t'pit was considered a fool for taking a mortgage and buying his own house in the 1950s.
We needed to restrict house value booms , its too late now , should have had taxes on property profit
sliding scale depending on how long the property was lived in
that already exists. You pay CGT on any property you own that is not your primary property, and if you live in a property then rent it, you pay CGT on a sliding scale based on how long you lived there.
FWIW, I was a BTL landlord for most of my 30s (38 now, sold last year) - nothing alturistic about it, it just seemed like the most efficient investment, which it was, partly due to the rental income (£250 mortgage, £1250 rent), but mostly due to the rise in prices over the period I rented it out (could have sold for £260k when we moved out, sold for £338k 5 years later). Together these turned £60k (deposit) into ~£180k. If you remove the growth from house prices, I think most BTLers would simply not be interested in buying them up
Those numbers are obscene for the amount of work you put in.
When I bought my first house I rented out three rooms and slept in a room too small even qualify as a box room.
It's the "hidden" costs of living that are doing for peoples savings/outgoings.
Granted it was the early 90s but my bills were low. Council tax was probably less than some folks sky bills now. The rush for cool new stuff is understandable but expensive and it's costing.
I should be mortgage free the year I retire. Yes a t6 yes expensive bikes yes a decent wage but no kids (we'd swap it all for kids but alas biology had other ideas).
The solution is to make BTL less appealing and ultimately introduce a universal basic income
BTL *is* significantly less appealing. I want out. Thousands of other landlords too. The returns are not what they were a few years ago.
I also agree with a universal basic income.
Not going to help them onto the housing ladder then?
If we are in a position to help and we feel they need/deserve it then why not? With lower outgoings each month when they leave home (of around £1k in today's money) as well as our mortgage being lower as a percentage of earnings (we don't intend on remortgaging but I do expect to earn more in 10+ years time) means I believe we would be in a position to help if we believed it was needed.
And we may also decide to downsize (this has been discussed already in our household) which would mean they would have access to further financial support.
We want good quality rentals
The solution is to make BTL less appealing
Would you care to elaborate on how you get "good" rentals whilst simultaneously discouraging people from becoming landlords? I'm obviously missing something but that doesn't make a lot of sense to me.
Would you care to elaborate on how you get “good” rentals whilst simultaneously discouraging people from becoming landlords? I’m obviously missing something but that doesn’t make a lot of sense to me.
Cut the private landlords out and let Councils take control of social housing again. Social housing should not be about returns.
Or how about the landlord takes a little less profit - outrageous I know. Look at @5lab numbers if you are unsure if this is possible.
you must be aware a 3 bed house at 130k is highly unusual. I could got not get studio flat within 50 miles of where I live. Sure I could pack up and move – but there are no jobs or family (childcare).
A three bed house for £130k where you live might well be highly unusual. I've just bought a 5-bed property for £162.
As our biscuity friend says, this is all about choice. You are choosing to live in one of the most affluent and expensive parts of the country. Having children is (generally supposed to be) a choice. Your career path is a choice. And it is of course well documented that everyone North of Dudley is unemployed.
