Any point in not just taking out a large mortgage?

[Neil H]

jonah35 said:

CoolHands said:

not many couples earn 200k so I hardly think your examples are typical.

I think more do than you think.

Just some examples off the top of my head:

Mate works in Dubai as a pilot, not particularly clever but I know he gets about £10k per month after tax. Not a big airline etc.
Another mate is a gas man/boiler fitter and he prob takes home £5k per month after tax so nearly £100kpa.
Solicitors if you just go to uni and do what you're told are on over £100k at 30
Dentists the same with private practice income
Oil and gas contractors
IT contractors etc

Anyway, that wasn't my point.

My point was that all these well educated people just do not even consider the possibility that property could ever fall or that rates could go up significantly, I genuinely mean this. They think it is a one way street.

To be fair,right to buy, help to buy, help to buy ISA, low rates, im beginning to think they're right!!

I think you’re plucking these salary numbers out of thin air, or believing more pub talk than you should be.

Anyway, yes property is a good investment in the SE and I can understand people leveraging themselves up in the current market. We have a BTL and we're looking to get another one ASAP. With a good deposit you can borrow at 2% (bit higher for BTL), so you’re silly not to if you have the cash. Prices will not continue to rise as they have been, but they will trend upwards over the next few years. Even during the last 'crash' all that happened in my area is prices stayed the same for a few years. There are just too many people desperate to buy for prices to go down.

I don’t think interest rate risk is particularly high, it’s not as if they will jump several percent overnight. People have been saying rates will go up since 2010... However if Labour get in that £1.5m property could become much more difficult to sell if they go ahead with the mansion tax, this is probably the biggest uncertainty at that end of the market. Personally I would be waiting until after the election before committing to a large mortgage.

[GG89]

Rosscow said:

jonah35 said:

I think more do than you think.

Just some examples off the top of my head:

Mate works in Dubai as a pilot, not particularly clever but I know he gets about £10k per month after tax. Not a big airline etc.
Another mate is a gas man/boiler fitter and he prob takes home £5k per month after tax so nearly £100kpa.
Solicitors if you just go to uni and do what you're told are on over £100k at 30
Dentists the same with private practice income
Oil and gas contractors
IT contractors etc

Anyway, that wasn't my point.

My point was that all these well educated people just do not even consider the possibility that property could ever fall or that rates could go up significantly, I genuinely mean this. They think it is a one way street.

To be fair,right to buy, help to buy, help to buy ISA, low rates, im beginning to think they're right!!

You know a gas man who is clearing £5k a month???? I think he's over-egging the pudding when talking to his mates

Doesn't seem unbelievable to me, self employed gas fitter mate of mine consistently clears a grand a week. He's in Glasgow so you take your London prices and 5K is easily achievable.

[0000]

Neil H said:

I think you’re plucking these salary numbers out of thin air, or believing more pub talk than you should be.

I'm not so sure. IT contractors leaving money in the company / ploughing it into pensions / other. Pilots only paying tax on income earned as a proportion of flying time over the UK as long as they're not here more than x days a year. There's probably a fair few people I can think of who effectively have a £100k+ bracket income/lifestyle who won't be reflected in the statistics. In fact, I probably know many more people who wouldn't be reflected as having a £100k income but effectively do than I know who would.

Let's face it - Centre Parcs is always heaving and who can afford to spend that much on a rainy weekend in the UK otherwise!

[Rosscow]

GG89 said:

Doesn't seem unbelievable to me, self employed gas fitter mate of mine consistently clears a grand a week. He's in Glasgow so you take your London prices and 5K is easily achievable.

So a plumber in Glasgow is on £80,000 a year? These numbers seem highly unlikely to me and I know a fair few people in the building trades.

[GG89]

Rosscow said:

GG89 said:

Doesn't seem unbelievable to me, self employed gas fitter mate of mine consistently clears a grand a week. He's in Glasgow so you take your London prices and 5K is easily achievable.

So a plumber in Glasgow is on £80,000 a year? These numbers seem highly unlikely to me and I know a fair few people in the building trades.

Aye, self employed got a good reputation always busy and isn't scared of a bit of graft working late nights and most weekends. It's the exception rather than the rule but bullst it is not.

[selym]

Rosscow said:

You know a gas man who is clearing £5k a month???? I think he's over-egging the pudding when talking to his mates

I know a guy who is a gas fitter and tells me how much more than me he earns....hmm, he also thinks he is an engineer......
Fair play if they want to take the big risks for big reward, but it's not for me.

[Condi]

GG89 said:

Rosscow said:

jonah35 said:

I think more do than you think.

Just some examples off the top of my head:

Mate works in Dubai as a pilot, not particularly clever but I know he gets about £10k per month after tax. Not a big airline etc.
Another mate is a gas man/boiler fitter and he prob takes home £5k per month after tax so nearly £100kpa.
Solicitors if you just go to uni and do what you're told are on over £100k at 30
Dentists the same with private practice income
Oil and gas contractors
IT contractors etc

Anyway, that wasn't my point.

My point was that all these well educated people just do not even consider the possibility that property could ever fall or that rates could go up significantly, I genuinely mean this. They think it is a one way street.

To be fair,right to buy, help to buy, help to buy ISA, low rates, im beginning to think they're right!!

You know a gas man who is clearing £5k a month???? I think he's over-egging the pudding when talking to his mates

Doesn't seem unbelievable to me, self employed gas fitter mate of mine consistently clears a grand a week. He's in Glasgow so you take your London prices and 5K is easily achievable.

My self employed gas fitter mate 'clears' about a £800 a week. Out of that, he pays for the van, fuel, odds and sods, tax, pension, holidays etc. So by the end of the week, its about £500, hardly £1m property money...

Also oil and gas people dont earn £100k unless they're quite high up. About £50k for a specialist contractor, plus maybe a bit of extra cash for nights spent offshore.

[jonah35]

Neil H said:

jonah35 said:

CoolHands said:

not many couples earn 200k so I hardly think your examples are typical.

I think more do than you think.

Just some examples off the top of my head:

Mate works in Dubai as a pilot, not particularly clever but I know he gets about £10k per month after tax. Not a big airline etc.
Another mate is a gas man/boiler fitter and he prob takes home £5k per month after tax so nearly £100kpa.
Solicitors if you just go to uni and do what you're told are on over £100k at 30
Dentists the same with private practice income
Oil and gas contractors
IT contractors etc

Anyway, that wasn't my point.

My point was that all these well educated people just do not even consider the possibility that property could ever fall or that rates could go up significantly, I genuinely mean this. They think it is a one way street.

To be fair,right to buy, help to buy, help to buy ISA, low rates, im beginning to think they're right!!

I think you’re plucking these salary numbers out of thin air, or believing more pub talk than you should be.

Anyway, yes property is a good investment in the SE and I can understand people leveraging themselves up in the current market. We have a BTL and we're looking to get another one ASAP. With a good deposit you can borrow at 2% (bit higher for BTL), so you’re silly not to if you have the cash. Prices will not continue to rise as they have been, but they will trend upwards over the next few years. Even during the last 'crash' all that happened in my area is prices stayed the same for a few years. There are just too many people desperate to buy for prices to go down.

I don’t think interest rate risk is particularly high, it’s not as if they will jump several percent overnight. People have been saying rates will go up since 2010... However if Labour get in that £1.5m property could become much more difficult to sell if they go ahead with the mansion tax, this is probably the biggest uncertainty at that end of the market. Personally I would be waiting until after the election before committing to a large mortgage.

Which bit don't you believe?

Look on pilot jobs network for pilot pay in Dubai. They get basic plus flight pay plus pay for working days off.
Solicitors, Google the pay for magic circle law firms.
Dentists can be on easy £100k plus with final salary pension
Oil and gas mates get £600 per day
IT mates anything between £300 and £900 per day

They could be lying but I don't think so, they're all brutally honest and don't care and would tell me to the penny if I could be bothered asking.

Getting off topic though, your statement that they will 'trend upwards' kind of implies what I mean,mine you state it's a fact they will rise.

They may well do and you may be right but it's the certainty that people believe that gets me

[jonah35]

Condi said:

GG89 said:

Rosscow said:

jonah35 said:

I think more do than you think.

Just some examples off the top of my head:

Mate works in Dubai as a pilot, not particularly clever but I know he gets about £10k per month after tax. Not a big airline etc.
Another mate is a gas man/boiler fitter and he prob takes home £5k per month after tax so nearly £100kpa.
Solicitors if you just go to uni and do what you're told are on over £100k at 30
Dentists the same with private practice income
Oil and gas contractors
IT contractors etc

Anyway, that wasn't my point.

My point was that all these well educated people just do not even consider the possibility that property could ever fall or that rates could go up significantly, I genuinely mean this. They think it is a one way street.

To be fair,right to buy, help to buy, help to buy ISA, low rates, im beginning to think they're right!!

You know a gas man who is clearing £5k a month???? I think he's over-egging the pudding when talking to his mates

Doesn't seem unbelievable to me, self employed gas fitter mate of mine consistently clears a grand a week. He's in Glasgow so you take your London prices and 5K is easily achievable.

My self employed gas fitter mate 'clears' about a £800 a week. Out of that, he pays for the van, fuel, odds and sods, tax, pension, holidays etc. So by the end of the week, its about £500, hardly £1m property money...

Also oil and gas people dont earn £100k unless they're quite high up. About £50k for a specialist contractor, plus maybe a bit of extra cash for nights spent offshore.

Yeah but people can earn more than your mate, his isn't the earnings cap. You can work longer, have better contracts/clients, not have a pension etc.

It's getting more on earnings but the point of the thread is everyone seems to think property can only go up.

[Condi]

jonah35 said:

Yeah but people can earn more than your mate, his isn't the earnings cap. You can work longer, have better contracts/clients, not have a pension etc.

It's getting more on earnings but the point of the thread is everyone seems to think property can only go up.

Your examples are either exceptionally specific to one area of the country, or your mates are talking crap. It was your comment that £100k salaries in the early 30's was 'common' which I took exception to. Quite frankly, with a statement like that, you're talking out your arse. In 2013, the number of people in the UK on more than 100k was less than 1% of the working population, and the majority of those will live inside the M25. Outside of there I'd be amazed if its more than 0.1%

The majority of people haven't swapped a £1m house for a £1.4m house by the age of 30, and so all comments on here are fairly limited in their scope of applicability to your mates assertions.

But yes, the conceived wisdom is that prices do generally go up, as evidenced by the last 30 years of house prices. There may have been occasional dips along the way, but in general its a pretty simple supply/demand dynamic. Have you considered the fact they max out their mortgages might be just that they want the nicest house they can afford, and usually nice = expensive?

Edited by Condi on Monday 27th April 22:53

[Neil H]

jonah35 said:

Which bit don't you believe?

Look on pilot jobs network for pilot pay in Dubai. They get basic plus flight pay plus pay for working days off.
Solicitors, Google the pay for magic circle law firms.
Dentists can be on easy £100k plus with final salary pension
Oil and gas mates get £600 per day
IT mates anything between £300 and £900 per day

They could be lying but I don't think so, they're all brutally honest and don't care and would tell me to the penny if I could be bothered asking.

Getting off topic though, your statement that they will 'trend upwards' kind of implies what I mean,mine you state it's a fact they will rise.

They may well do and you may be right but it's the certainty that people believe that gets me

All your mates happen to be earning the top salaries in their professions, that just has a whiff of pub talk about it. I work in investment banking where apparently everyone earns six figure bonuses, except the reality is very different.

London property prices have always trended upwards over the long term, no reason to think anything is going to change. There aren't enough houses to go around and there are a whole generation of potential buyers looking to get on the ladder.

[0000]

Neil H said:

jonah35 said:

IT mates anything between £300 and £900 per day

All your mates happen to be earning the top salaries in their professions, that just has a whiff of pub talk about it. I work in investment banking where apparently everyone earns six figure bonuses, except the reality is very different.

At least in IT (by which I mean programmers, project managers, etc. rather than ISP call centre workers), £300/day is probably close to the bottom of the contracting market and you don't have to go far up from there to be looking at a c.£100k income.

[trooperiziz]

0000 said:

Neil H said:

jonah35 said:

IT mates anything between £300 and £900 per day

All your mates happen to be earning the top salaries in their professions, that just has a whiff of pub talk about it. I work in investment banking where apparently everyone earns six figure bonuses, except the reality is very different.

At least in IT (by which I mean programmers, project managers, etc. rather than ISP call centre workers), £300/day is probably close to the bottom of the contracting market and you don't have to go far up from there to be looking at a c.£100k income.

To get a basic equivalence of £100k, you need a day rate of £550ish (assuming you are in IR35). This is without taking into account sick pay, holiday pay, pension contributions or fallow times. To get a real equivalence you need to be looking at closer to £750 a day, I think.
The day rate is lower if you are not in IR35, but the chances of fallow times are greatly increased in that case, so it probably evens out to be the same.

[0000]

No one's in IR35!

And I've had about three weeks off in 5 years, apart from a 6 month period I chose to take off.

[trooperiziz]

0000 said:

No one's in IR35!

And I've had about three weeks off in 5 years, apart from a 6 month period I chose to take off.

Good luck if you get investigated then

And well done on having a constant contract period. The mortgage company won't care though, they'll treat you like the average contractor who has to plan for periods without work...

[0000]

The specialist contractor mortgage brokers make it easy - easier, even.

[trooperiziz]

The broker isn't the mortgage company though. The vast majority of contractor mortgages will work on a 48 week year, and assume you will have 4 weeks a year without an income.

[0000]

I can't see that that would be an issue for anyone. Take your figure of £550/day as being equivalent to a £100k salary - you can get a loan of near enough £600k on that. Who sensibly wants a loan beyond 6x income?

[Bluebarge]

jonah35 said:

Which bit don't you believe?

Look on pilot jobs network for pilot pay in Dubai. They get basic plus flight pay plus pay for working days off.
Solicitors, Google the pay for magic circle law firms.
Dentists can be on easy £100k plus with final salary pension
Oil and gas mates get £600 per day
IT mates anything between £300 and £900 per day

They could be lying but I don't think so, they're all brutally honest and don't care and would tell me to the penny if I could be bothered asking.

Getting off topic though, your statement that they will 'trend upwards' kind of implies what I mean,mine you state it's a fact they will rise.

They may well do and you may be right but it's the certainty that people believe that gets me

Magic Circle firms make up a very small proportion of the lawyers in this country, and you will need to do a lot more than "go to Uni and do as you're told" to be on those figures - try a first from Oxbridge and in your LPC and a lot of useful work experience before you are accepted for training in a Magic Circle firm, where, after 2 years training, IF they offer you a job, you can expect to be on about £60k in your 1st year post-training; 6 years post-training, you probably wouldn't be on more than £120k, and then would sit at that level unless you make partner. So, 8 years post-Uni you might just be about on the figures you mentioned, but, in the meantime, you would be expected to work minimum 12 hour days with many weekends as well, and sometimes work round the clock for 48 hours or more. It's not money for nothing, by any means.

In a commercial firm in the Midlands, you would probably get £32k on qualification, and then not get much more than £60k by 6 years post-training, unless you make partner.

In some High Street firms, partners with 20+ years experience are not making more than £40-50k.

So, in the field I know about, the figures you quote are miles away from the reality for most people.

[Timmy40]

trooperiziz said:

To get a basic equivalence of £100k, you need a day rate of £550ish (assuming you are in IR35). This is without taking into account sick pay, holiday pay, pension contributions or fallow times. To get a real equivalence you need to be looking at closer to £750 a day, I think.
The day rate is lower if you are not in IR35, but the chances of fallow times are greatly increased in that case, so it probably evens out to be the same.

Cobblers. A £100k salary gives you £65k take home annually. A day rate of £340 a day give you the same. £340 a day is by no means high. A relatively inexperienced monkey BA will get that.

Don't believe me? Go to Jobserve, type in Business Analyst.