Average house price now 8.7 times average income
Discussion
I can't help but feel it's another problem we manage to kick down the road a bit using more and more external stimulus like Help to Buy, 40 year mortgages and the like.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
P-Jay said:
I can't help but feel it's another problem we manage to kick down the road a bit using more and more external stimulus like Help to Buy, 40 year mortgages and the like.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
Depends on the area, I’m in my 20’s. From the southwest, 75% of people in my friends group have their own homes. Even the ones working minimum wage jobs. The ones that don’t are the ones who went off to London or expect to move into houses the same as the one they grew up in as their first house.It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
P-Jay said:
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
This is what might push things into total brokenness. If a house buying market is stacked against a person of modest means, there really has to be a functioning rental market to make life tolerable.
In many ways it sounds like it's becoming worse than buying.
ChocolateFrog said:
borcy said:
If there's no issue now, at what point would there be an issue? 10, 12 20x av incomes?
40 year, 50 year, lifetime mortgages?We might get another 10, even 20 years of housing prices rising 3x the rate of inflation if we do that, and it would still be a better bet than renting.
Tigerj said:
P-Jay said:
I can't help but feel it's another problem we manage to kick down the road a bit using more and more external stimulus like Help to Buy, 40 year mortgages and the like.
It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
Depends on the area, I’m in my 20’s. From the southwest, 75% of people in my friends group have their own homes. Even the ones working minimum wage jobs. The ones that don’t are the ones who went off to London or expect to move into houses the same as the one they grew up in as their first house.It can't last forever though, the generation in their 20s now, seem to have given up even the idea of home ownership. I'm sure some will make it, with a combination of help from parents, another government deal or other financial trickery, but most don't think they'll ever manage it.
The rental market seems equally grim, they move in, make a house their home, start to feel comfortable and suddenly their BTL Landlord wants an extra 20% every year because "that's the market".
I'd love to know what the answer is, I haven't a clue, other than it will have to mean we break the most sacred unwritten rule in the UK. Homeowners are going to have to 'lose' for once. They might not be able to make tens of thousands of pounds every year by doing nothing, at the cost of those without. They might even lose a bit.
x5tuu said:
LimaDelta said:
borcy said:
If there's no issue now, at what point would there be an issue? 10, 12 20x av incomes?
When the houses stop selling at (or above) the asking prices?LimaDelta said:
borcy said:
If there's no issue now, at what point would there be an issue? 10, 12 20x av incomes?
When the houses stop selling at (or above) the asking prices?borcy said:
Should we wait that long? I'm not sure leave it all to supply and demand is a good idea. The gov is heavily involved with the housing market and will carry on doing so.
Exactly. We know that given the freedom to do so the house builders would be converting every office block and flood plain into homes. But government (all levels) regulation and economic limitations (workforce, materials) prevents that freedom. As well as other factors like insurance industry (I.e. non standard builds).GroundEffect said:
That's a presumption that houses are being bought as primary residences. They are also being bought by the rich as assets (either as rental income, pure asset inflation or both), and that portion is accelerating away.
Indeed. My prediction for the next few decades is a further stratification of society, into a landlord property owning class, and a serf rental class, With the latter increasingly renting rooms in HMOs, at what used to be full house rental money. And for the lucky few (just) able to buy without family help, 40/50 year mortgages on smaller properties propped up by more crackpot government incentives.GroundEffect said:
That's a presumption that houses are being bought as primary residences. They are also being bought by the rich as assets (either as rental income, pure asset inflation or both), and that portion is accelerating away.
Hardly surprising when interest rates were paying 0.25% on savings. The average UK person doesn't have the confidence to invest in the stock exchange or the trust is paying someone to do it for them, so property is a safe bet.
Now interest rates have risen, landlords and second home owners might start selling.
The continuous increase of house prices is absolutely by design.
It makes all home owners feel wealthy, so they borrow and spend equity on extensions, bathrooms, kitchens, cars and holidays.
The price of a 1 bed flat makes a £50k car appear inexpensive. Heck there's many a 3 bed semi with a range rover outside it these days.
House price growth and associated borrowing has fuelled the UK economy for many years.
It makes all home owners feel wealthy, so they borrow and spend equity on extensions, bathrooms, kitchens, cars and holidays.
The price of a 1 bed flat makes a £50k car appear inexpensive. Heck there's many a 3 bed semi with a range rover outside it these days.
House price growth and associated borrowing has fuelled the UK economy for many years.
Tigerj said:
I’m one of these “young” people, under 30. Tbh it was quite simple and easy to buy a house. Have a 2 bed semi detached garden driveway etc. in a small country town.
A couple of years of no holidays and meerkat movie date nights . I sold my car for a 500 quid banger. That was the deposit sorted.
In my peer group I seem to see the ones who grew up working class know how to save the deposit and live within means. It’s the ones who grew up middle class or in London that seem to think everything is owed to them.
My boy's like you - two bed starter home that he and his girlfriend bought about 16 months ago. Didn't get any handouts other than one or two thousand from us and her mum, everything else they saved hard for. For reference this is in Exeter, house just under £300k, he's a butcher, she works in a cake shop. Both have cars, both have holidays, both still save, both still have enough put buy 'just in case'. He's 25, she's 23. Despite the seemingly endless tales of woe (including on here) it can be done.A couple of years of no holidays and meerkat movie date nights . I sold my car for a 500 quid banger. That was the deposit sorted.
In my peer group I seem to see the ones who grew up working class know how to save the deposit and live within means. It’s the ones who grew up middle class or in London that seem to think everything is owed to them.
Edited by Tigerj on Sunday 17th March 15:20
I wonder how my kids will manage to buy houses (they are 10 & 8) but then again I also wondered how I would do it but still managed it.
I'm 41 and have owned 2 houses. I didn't bother with flats and picked areas in the south east (Hertfordshire) where I could get 3 bed houses with parking.
My first house was £280k in 2009, a 3 bed 1930s Semi needing work in Potters Bar. I was 26 and studying accountancy, my wife was a band 6 nurse, I guess we earned about 55-60k combined. Obvs if we were not a couple I would have bought a flat for half the cost of a house so still pretty comparable for singles vs couples at this stage.
We rented privately in (s)Hatfield for 2 years (£800 per month rent) prior saving a deposit which was about 20k + the legal fees. No support or handouts. I remember we both had about £1800 per month take home pay and after rent and bills had £2300 left. We didn't go out, go on holiday, no fancy car, no subsciptions and saved at least £1200 a month. If we were not a couple this level of savings would have been much more difficult to achieve. It was a dull existence and one my work peers mocked me for. I remember being jealous inside as the guy i sat next to had a brand new Golf GTI on tick and I had a 15 year old basic Golf (even though I was heavily into cars). However fast foward to today I am in a better house than they are so horses for courses.
My advice to my kids will be to get on the housing market as soon as possible, before kids and other committments come along. Live to the 50/30/20 needs/wants/saving budgeting technique when with house/mortgage but before that point save every penny and go without to build up a deposit. Pick an area that they can afford and if they plan on a family realise their basic £25-30k salaries today will achieve far more than a £60-80k salary later on life with all the family committements in tow if they were to delay saving and buying. Don't delay, do compromise, don't compare to others and keep eyes on the prize, don't take out mega length mortgages and don't re-mortgage to buy stupid things like Cars (I have heard of people doing that).
I'm 41 and have owned 2 houses. I didn't bother with flats and picked areas in the south east (Hertfordshire) where I could get 3 bed houses with parking.
My first house was £280k in 2009, a 3 bed 1930s Semi needing work in Potters Bar. I was 26 and studying accountancy, my wife was a band 6 nurse, I guess we earned about 55-60k combined. Obvs if we were not a couple I would have bought a flat for half the cost of a house so still pretty comparable for singles vs couples at this stage.
We rented privately in (s)Hatfield for 2 years (£800 per month rent) prior saving a deposit which was about 20k + the legal fees. No support or handouts. I remember we both had about £1800 per month take home pay and after rent and bills had £2300 left. We didn't go out, go on holiday, no fancy car, no subsciptions and saved at least £1200 a month. If we were not a couple this level of savings would have been much more difficult to achieve. It was a dull existence and one my work peers mocked me for. I remember being jealous inside as the guy i sat next to had a brand new Golf GTI on tick and I had a 15 year old basic Golf (even though I was heavily into cars). However fast foward to today I am in a better house than they are so horses for courses.
My advice to my kids will be to get on the housing market as soon as possible, before kids and other committments come along. Live to the 50/30/20 needs/wants/saving budgeting technique when with house/mortgage but before that point save every penny and go without to build up a deposit. Pick an area that they can afford and if they plan on a family realise their basic £25-30k salaries today will achieve far more than a £60-80k salary later on life with all the family committements in tow if they were to delay saving and buying. Don't delay, do compromise, don't compare to others and keep eyes on the prize, don't take out mega length mortgages and don't re-mortgage to buy stupid things like Cars (I have heard of people doing that).
Edited by VeeReihenmotor6 on Monday 18th March 14:32
bennno said:
House price growth and associated borrowing has fuelled the UK economy for many years.
Totally. And no government is going to kill the fatted cow.I would like to see economic growth using GDP per capita and adjusted for inflation. Those figures (if you can find them) tell a totally different story.
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