Average house price now 8.7 times average income

[okgo]

Earthdweller said:

Of course it is .. life is way more expensive now than it was 30 years ago

Which all compounds the problem

Thee were no congestion charges, virtually no traffic cameras, parking on yellow lines was allowed after 6.30pm, the tube station car park was free, there was no internet, mobile phones were a very new thing and only made calls, I was renting so didn’t pay rates although council tax was just coming in, when I did have to pay it it wasn’t much at all

A mobile phone costs a peanuts if you want it to. Can buy a second hand iphone SE for 50 quid even. Does everything.

TV's are peanuts vs what they were. I paid 700 quid nearly 20 years ago for a plasma, you can buy a 37 inch tv for nothing these days and it'll last years.

Nobody drives in London these days, no need to anyway, not a cost most people have (and not sure where these other congestion zones are, assume same for those places)

Many things will cost more, but the housing is the biggest and by far most important one. Hence the avo toast and iphone schtick is so boring and tired.

[Mr Penguin]

Evanivitch said:

Hi, kind reminder, it's 2024.

Yes, in the age where people stay in full time education for longer than ever before which pushes earning and therefore house buying age back to mid to late 20s. This is the world we live in, and the policies people want sometimes have downsides. This is one of them.

Apprentices make £13k a year so if they live with their parents can easily save the £5k they need to buy a house in two years and buy at 18.

[Evanivitch]

Mr Penguin said:

Yes, in the age where people stay in full time education for longer than ever before which pushes earning and therefore house buying age back to mid to late 20s. This is the world we live in, and the policies people want sometimes have downsides. This is one of them.

Apprentices make £13k a year so if they live with their parents can easily save the £5k they need to buy a house in two years and buy at 18.

So if apprenticeships are subsidised to £6k a year housing costs. Hmm, the maths...

[Mr Penguin]

Evanivitch said:

So if apprenticeships are subsidised to £6k a year housing costs. Hmm, the maths...

You'll have to explain this point to me.

[bennno]

Evanivitch said:

Finish school at 16 and 4 year apprenticeship or 6 year A-levels through to Masters. 20 versus 22.

The numbers aren't app that different. People need to stop pretending that Apprentices are on mega bucks.

Simple measurement aged 22

Person 1 - Apprentice route delivers 4 x £13k and 2x£35k = £122k

Person 2 - Degree + £45k of debt.

For some the right degree will see them earn considerably more over their career, perhaps lower loans for graduates so they work on weekends or on the 3 weekdays there are no lectures to reduce debt would be sensible and narrow the gap - but ignore all that for now now.

This is purely to make a point that its about choices, which do create 'different numbers', assume both get some support from their parents whether through A levels or an apprenticeship, then person 1 can probably buy a house aged 23, person 2 needs to find a job and when they do will be asked to repay debt.

All about choices as I posted below. Lot of individuals being dismissive of apprenticeships, but they can get you off to a good start.

[Downward]

havoc said:

bennno said:

It's all about not having many choices.

EFA.

There are a LOT of people out there who in the 60s could have gone to university (by virtue of their intellectual ability and career interests), but were dissuaded as they were from the wrong social lot.
By the 80s (possibly 70s, but I'm not old enough to comment) this problem had gone away, and university was quite a bit more egalitarian / people from all walks of life could try their chances.
In the 00s Universities became so 'successful' that the government decided they couldn't afford to pay for everyone to go (after telling everyone they should), so introduced fees. Which were then ramped up by the next government to £9k a year. Once again disenfranchising an entire swathe of society who feared racking up that much debt. A generation of bright, determined people who could have been doctors, scientists, barristers, engineers, who could have contributed massively to UK society and economy (OK, not the barristers! )...if only they could afford the education.


Similar story with housing. A big swathe of egalitarianism washed through the country, offering everyone the chance to buy their own home. This was abused by lenders and government into creating a housing boom (supply/demand - age old story), and now we're back where we were, with the young and the poor essentially disenfranchised again, and couples forced to choose between having kids at a sensible age or getting housing security.


It does feel rather depressing...that all the social advances of the 60s and 70s, which felt like they were becoming embedded in the 80s and 90s, are now reversing back into an increasingly feudal model.

As someone in their late 40’s looking back at what our parents gave to us compared to what we do for our kids now.
We set up ISA’s thinking it would help but really it’s a drop in the ocean to what money they will need for a house now.
My lads going to Uni. Absolutely doesn’t want to move away incurring even more debt that what he needs but we will be paying for him still. He did say he will get a job but i’d rather him pass the course and if he does work put that money towards a house.
Even travel we will be paying.

[bennno]

Downward said:

As someone in their late 40’s looking back at what our parents gave to us compared to what we do for our kids now.
We set up ISA’s thinking it would help but really it’s a drop in the ocean to what money they will need for a house now.
My lads going to Uni. Absolutely doesn’t want to move away incurring even more debt that what he needs but we will be paying for him still. He did say he will get a job but i’d rather him pass the course and if he does work put that money towards a house.
Even travel we will be paying.

I hire graduates in to development roles, 9 times from 10 those who worked to support themselves, over those who didn't, come across as better prepared, more astute and get hired.

Encourage him to find work, save what you would have given him, help support him buying a house later.

[okgo]

On the help part, even saving a pittance into a global tracker over a kids lifetime will be a fairly significant amount at the end of their education.

No idea why more people don’t do it.

[Evanivitch]

bennno said:

Simple measurement aged 22

Person 1 - Apprentice route delivers 4 x £13k and 2x£35k = £122k

Person 2 - Degree + £45k of debt.

You aren't comparing like with like. The apprenticeship you consider zero cost of living. The undergraduate student debt is partly made of maintenance loan.

You don't understand your numbers.

[Evanivitch]

Mr Penguin said:

Evanivitch said:

So if apprenticeships are subsidised to £6k a year housing costs. Hmm, the maths...

You'll have to explain this point to me.

You said an apprentice could save 6k a year, but that's based on them having thousands in housing costs avoided by living rent free with parents...

[kingston12]

Earthdweller said:

The problem is house prices can’t just be taken in isolation.. everything is more expensive now and lots of it is unavoidable

Mobile phones are an essential nowadays and handsets can easily be £1k plus monthly subscriptions

TV’s used to have 3 channels and cost £4 a month from radio rentals, now it’s £2k TV’s and £100 per month sky

Cars were ford’s and Vauxhalls and bought dirt cheap out of the back of the local paper or auto trader, BMWs and Mercs were a rare sight

Council tax is insane amounts

Parking used to be free or cost next to nothing

You can spend a lot of money on all of those things, but most seem fairly easy to avoid if you need to.

A fairly reasonable Android smartphone could cost less than £150 and last a few years on an £8 pay as you go contract with plenty of data allowance. Better ones or iPhones would be even cheaper second hand.

A 40" off-brand TV from Argos costs less in cash terms than I paid for a 14" portable in the 90's and will do a reasonable proportion of what an expensive TV would do.

Council tax has gone up far too much with above inflation increase most years, but I still don't think it has gone up nearly as far as house prices have over time.

Cars and associated costs are far more expensive, but the extremes can be avoided. I'd rather have a 20 year old Ford or Vauxhall in 2024 than in 1994!


I always see housing as the main problem because it's such a big (and fixed) proportion of someone's monthly budget. In addition, those who want or need to rent whilst they are saving up for a deposit are worse affected because rental prices are so high now as well (I appreciate that can be avoided in a lot of cases as well.

[Mr Penguin]

Evanivitch said:

You aren't comparing like with like. The apprenticeship you consider zero cost of living. The undergraduate student debt is partly made of maintenance loan.

You don't understand your numbers.

You're right - I assumed that most parents will not charge their 16 or 17 year olds market rent for a two bed flat plus charge them for the equivalent heating and food. They could always get a flat share if this is a big problem and they will have less chance to save.

However, they make £26k over two years until they are 18 so only need to save 20% of that to get a mortgage at 18, when their former classmates are still doing A levels and have another 3-4 years to go before they even start saving. Other options are available with saving faster or for a bit longer but in any case, they are far ahead of the people who didn't earn anything for all that time.

[borcy]

Mr Penguin said:

You're right - I assumed that most parents will not charge their 16 or 17 year olds market rent for a two bed flat plus charge them for the equivalent heating and food. They could always get a flat share if this is a big problem and they will have less chance to save.

Just from personal experience most apprentices had to/wanted to pay to help out. I can't think of one that lived at home for free. That's out of maybe 15-20 apprentices that i knew.

[Mr Penguin]

borcy said:

Just from personal experience most apprentices had to/wanted to pay to help out. I can't think of one that lived at home for free. That's out of maybe 15-20 apprentices that i knew.

Even if it isn't free, I don't think many would be paying hundreds of pounds a month like they would if they lived alone. Even if they paid half their income to their parents (£6500 a year), they can still spend 50% on bills, 30% (£3900) on fun, and save the 20% (£2600).

[Mr Penguin]

Earthdweller said:

The problem is house prices can’t just be taken in isolation.. everything is more expensive now and lots of it is unavoidable

Mobile phones are an essential nowadays and handsets can easily be £1k plus monthly subscriptions

TV’s used to have 3 channels and cost £4 a month from radio rentals, now it’s £2k TV’s and £100 per month sky

Cars were ford’s and Vauxhalls and bought dirt cheap out of the back of the local paper or auto trader, BMWs and Mercs were a rare sight

Council tax is insane amounts

Parking used to be free or cost next to nothing

Etc etc etc

It’s very hard to live frugally now as everything costs and it’s seems businesses/government/councils are trying harder and harder to come up with ways of fleecing more and more money out of people

I don’t want the above to seem like a rant but just pointing out that it isn’t just house prices that have gone mad

I’m in my 50’s now but looking back to my 20’s life just seemed so much simpler and easier

I was living in east London, I could just jump in my car and drive anywhere I wanted, I could drive it up to Muswell Hill, even went to Selsey Bill, I drove along the A45, even had her up to fifty-eight, park most places for free after 6.30pm as an example, now it’s so I have the right permit, I have paid the congestion charge, ULEZ charge, have I avoided the thousands of cameras trying to fine me etc etc

Anyway as you were

Very little of this is unavoidable

Mobile phones can cost £1000, they can also cost £60 - should last for 2-3 years https://www.argos.co.uk/product/9417687?clickPR=pl...
Add on a pay as you go SIM for £5 a month https://talkhome.co.uk/sim-only-deals/12-month-pla...

TVs can cost £2k and Sky can cost £100/month, they are also available for £179 and come with 30+ channels https://www.argos.co.uk/product/3032350?clickPR=pl...
TVs have never been cheaper if you take into account inflation.

Cars can cost thousands, but you still buy them for less than a grand https://www.pistonheads.com/buy/search?price=500&a...

Council tax is high, I'll give you that one.

[GroundEffect]

bennno said:

Evanivitch said:

Finish school at 16 and 4 year apprenticeship or 6 year A-levels through to Masters. 20 versus 22.

The numbers aren't app that different. People need to stop pretending that Apprentices are on mega bucks.

Simple measurement aged 22

Person 1 - Apprentice route delivers 4 x £13k and 2x£35k = £122k

Person 2 - Degree + £45k of debt.

For some the right degree will see them earn considerably more over their career, perhaps lower loans for graduates so they work on weekends or on the 3 weekdays there are no lectures to reduce debt would be sensible and narrow the gap - but ignore all that for now now.

This is purely to make a point that its about choices, which do create 'different numbers', assume both get some support from their parents whether through A levels or an apprenticeship, then person 1 can probably buy a house aged 23, person 2 needs to find a job and when they do will be asked to repay debt.

All about choices as I posted below. Lot of individuals being dismissive of apprenticeships, but they can get you off to a good start.

I went to uni. Twice. Stayed at home for both. My debt is already gone. You're not comparing apples with apples.

Just a reminder, to get the following we need people to go to uni:

- Doctors
- Dentists
- Nurses
- Engineers
- Scientists
- Architects
- Lawyers
- Teachers

[Nomme de Plum]

okgo said:

Nomme de Plum said:

First house purchased in 78 was a tiny 1830s run down cottage in a hamlet in West Wales miles from anywhere, bought for £7,500 completely renovated and extended sold for about £17K in 83. We could have gone for a cheap apartment in town but opted for the challenge.

We then bought a 3 bed end of terrace for £27.5K in Hemel Hempstead. Spent a couple of years putting in new kitchen, ripping out warm air heating and installing wet radiator system. New carpets and sold for just over £80K about 3 years later. Not a tradesperson of any sort or good at DIY but needs must.

Moved loads of times and repeated in nearly every subsequent house including one demolish and build new whilst living in caravans with two boys and one convert chalet house to upside down place with big square box as first floor located on the beach south coast. Now about to do another a the age of 69 albeit smaller scale. It will be the last.

I've got a good mate in his mid 30s, carpenter. Already owns 2 buy to lets, mortgaged obviously and is about to buy a house for £530K. He's done similar buying tatty houses and tidying them up and then moving on.

There are plenty of opportunities if a person is willing to get the hands dirty and move regularly.

Doesn't work as well in the SE as stamp etc starts eating profits. Fine for some of the UK though I agree.

My point around my parents wasn't about anything other than how easy it was for them vs me on the same property. My house sold for £310k in 1999 - it was also about 15x the average wage then, and is now well overr 30x the average way.

I've lived in the SE since 1983 so know for a fact it works. HH is in the SE btw just next to St Albans and Harpenden. Moved to Ashford ~Middlesex then Woking. The house we built there is now circa £2.4M. It's just being willing to do a full time job and then manage the house renovating/building together with having a family and fitting in hobbies and stuff.

I just may be a similar age to your parents, a so called boomer.

[bennno]

GroundEffect said:

bennno said:

Evanivitch said:

Finish school at 16 and 4 year apprenticeship or 6 year A-levels through to Masters. 20 versus 22.

The numbers aren't app that different. People need to stop pretending that Apprentices are on mega bucks.

Simple measurement aged 22

Person 1 - Apprentice route delivers 4 x £13k and 2x£35k = £122k

Person 2 - Degree + £45k of debt.

For some the right degree will see them earn considerably more over their career, perhaps lower loans for graduates so they work on weekends or on the 3 weekdays there are no lectures to reduce debt would be sensible and narrow the gap - but ignore all that for now now.

This is purely to make a point that its about choices, which do create 'different numbers', assume both get some support from their parents whether through A levels or an apprenticeship, then person 1 can probably buy a house aged 23, person 2 needs to find a job and when they do will be asked to repay debt.

All about choices as I posted below. Lot of individuals being dismissive of apprenticeships, but they can get you off to a good start.

I went to uni. Twice. Stayed at home for both. My debt is already gone. You're not comparing apples with apples.

Just a reminder, to get the following we need people to go to uni:

- Doctors
- Dentists
- Nurses
- Engineers
- Scientists
- Architects
- Lawyers
- Teachers

100%. I went to University to train as one of the professions on that list.

At the same time you can become an engineer, a mechanic, technician, plumber, joiner etc etc via an apprenticeship.

I'm not knocking neither approach, simply i've pointed out when theres an overarching rhetoric that 25 year olds cant afford a mortgage that it all depends.

For sure if you are a recent graduate with large student debts, needing to live in a rental property in London, on a grad training scheme then it'd be near impossible at that point.

[Nomme de Plum]

Evanivitch said:

Nomme de Plum said:

The birth rate in the UK was falling well before any economic issues. It is typical as economies become wealthier and health care reduces infant mortality hence women choose to have less children.

In developing economies it is their increased wealth not poverty which drives the reducing fertility rates.

The economic impact is a newish impact in the UK.

There is loads of research and data if you're interested. Prof Hans Rosling is a good starting point.

The research I've read is specific to the rate change due to the gap between wages and house prices. You'd do well to read it.

At which point in these statistics did the negative economy thing kick in? 2015 maybe. Small beer in statistical terms. 1820 5.56 to 1935 1.79. 2005 1.66.

https://www.statista.com/statistics/1033074/fertil...

BTW you will see very similar falls in fertility in many countries where house pricing have little or no impact at all.

[Olivera]

Great advice from both Benno and Nomme de Plum, nothing is more relevant to struggling FTBers than advice from wealthy PHers that own holiday homes and/or BTLs.