How far will house prices fall [volume 5]

[OzzyR1]

In response to the OP, I've just had an offer accepted on a house so fully expect prices to drop by 20% over the next 12 months.

My apologies in advance to all the folks who will be affected.

[brickwall]

kiethton said:

NickCQ said:

matrignano said:

IB Grads back then would have been on 40k ish, today they start at 50-55 (first year). That's fixed comp only.
And to be honest these days the big bucks are made with Tech companies, stories of Grads starting on 100k fixed!

Also I don't think you can rent a 2 bed flat anywhere in Zone 1/2 for £1500pcm these days!

I was an IB grad back then and IIRC it was mid 40s base, maybe 45? Maybe the bulge brackets are in the 50s today?
You should check out that area of SW9, there are several 2 beds listed at £1500 pcm and I think with COVID there is scope for negotiation.

Our grads are £50k plus £5k bonus atm (IB)

Back in 2010 the post-internship offer I got was £45k+£10k bonus for a 2011 start, so indeed looks like IB grad wages have hardly moved in 10 years.

[Pit Pony]

MX-6 said:

I've often thought that there generally seems to be quite a limited number of family houses to rent. I just had a look at Rightmove, there are sixteen 3 bed properties available in my town, which given the 100k+ population doesn't seem like that many. Though when I look at what the rent is I can start to understand why, I really wouldn't want to be putting £1k+ a month into someone else pocket.

I reckon my house would be around 50% extra per month to rent compared to my current mortgage payment. I would prefer to rent a flat and save for a deposit on a house than pay rent, seems a no-brainer, but I accept it's not that much of a straight forward situation if you have children for example.

We charge £675 for a house that cost £130k and is work £160k.

The choice for renters seems to be £550 in Beruit about a mile away, or £800 to 900 1 mile in the other direction in the other direction. We think that an letting agent would want to charge £725 for ours.
If the current family leave the rent will go up.to £700 (or I'll sell it) , ,and if they stay beyond November, I'll put the rent up to £685.

[kingston12]

brickwall said:

Back in 2010 the post-internship offer I got was £45k+£10k bonus for a 2011 start, so indeed looks like IB grad wages have hardly moved in 10 years.

I can’t think of many areas of the economy where wages have gone up significantly in that time.

[Shnozz]

kingston12 said:

brickwall said:

Back in 2010 the post-internship offer I got was £45k+£10k bonus for a 2011 start, so indeed looks like IB grad wages have hardly moved in 10 years.

I can’t think of many areas of the economy where wages have gone up significantly in that time.

Me neither. Which on this topic is interesting given how House prices have gone. Really shows how interest rates are perpetually stuck at rock bottom or else the market will be in free fall.

[98elise]

kingston12 said:

brickwall said:

Back in 2010 the post-internship offer I got was £45k+£10k bonus for a 2011 start, so indeed looks like IB grad wages have hardly moved in 10 years.

I can’t think of many areas of the economy where wages have gone up significantly in that time.

Was going to say the same, possibly even longer than 10 years.

[Previous]

Pit Pony said:

We charge £675 for a house that cost £130k and is work £160k.

The choice for renters seems to be £550 in Beruit about a mile away, or £800 to 900 1 mile in the other direction in the other direction. We think that an letting agent would want to charge £725 for ours.
If the current family leave the rent will go up.to £700 (or I'll sell it) , ,and if they stay beyond November, I'll put the rent up to £685.

If they're good tenants, is it worth putting it up by only £10?

[dmahon]

kingston12 said:

I can’t think of many areas of the economy where wages have gone up significantly in that time.

I got the same offer from an ibank in 2003!

[vonuber]

NickCQ said:

Got it in one. Since you were there we acquired a vegan cafe in the church but sadly the flower shop on Brixton Rd is gone. To be honest we wanted to live in Kennington when we moved in but couldn't afford something more than about 500 sqft, which just didn't work.

There's another vegan cafe opened a bit further down past the Tesco, near the co-op. Always seemed to be rammed pre-lockdown.

[NickCQ]

Interesting demographic reveal of how many people on this thread were investment bank grads at some point in the last two decades!
Confirms all the complaints from those outside London

[NickCQ]

kiethton said:

Our grads are £50k plus £5k bonus atm (IB)

Interesting, is that £5k sign-on with stub later or is that all-in comp for the first year? I think top bucket was more than that when I was doing it in 2013 (second tier boutique).

[Flooble]

98elise said:

kingston12 said:

brickwall said:

Back in 2010 the post-internship offer I got was £45k+£10k bonus for a 2011 start, so indeed looks like IB grad wages have hardly moved in 10 years.

I can’t think of many areas of the economy where wages have gone up significantly in that time.

Was going to say the same, possibly even longer than 10 years.

In several private sector places for which I know all the details from 1999-2002 graduate starting salaries increased by ~20%; since 2002 they have only increased by a further ~15% in total (using the 1999 figure as the baseline). Several years saw no rise at all.

In a public sector organisation I know of, they have doubled since 1999 - going up roughly 3% per year, every year (and hence are now paying roughly 25% more than the private sector places!)

Not entirely sure if that's helpful, but it's interesting.

[ooid]

I'm not sure if graduate salaries quite related to house buying for FTB? I think almost all professions, graduate salary starts low (relatively), after university -whatever- the technical skills, or academic success people might have without industry experience it is pretty hard. In my industry/field at least, many people would rent/share in the first 3-5 years after graduation, and than start thinking of buying a place. It's not about affordability but more about also, career progression and future, settling-down and etc..

[Flooble]

ooid said:

I'm not sure if graduate salaries quite related to house buying for FTB? I think almost all professions, graduate salary starts low (relatively), after university -whatever- the technical skills, or academic success people might have without industry experience it is pretty hard. In my industry/field at least, many people would rent/share in the first 3-5 years after graduation, and than start thinking of buying a place. It's not about affordability but more about also, career progression and future, settling-down and etc..

Good point, although the ramp-up very much depends on industry (e.g. accountancy/law grads get a serious jump when they qualify; creative industries you can end up stagnating if you are unlucky).

I mentioned the grad salaries as an easy benchmark on how pay has grown (or not) in the last decade or two. It's harder to talk about 3-5 year salaries as it's heavily dependent on the individual. Some make good choices, others don't and some just accept what they are given while others push their plate up. I know that one firm (which I left a long while ago) has been determined to keep a cap on salaries such that if you had averaged 2% per year over the last 15 years you would be doing really well and their pay bump on the early years' promotions - which used to be 25% or more without asking - is now 10% or less and you have to work for it. But those numbers are really variable - some people have managed to wangle big pay rises by playing off other job offers as essentially the money is there in certain situations but it has to be squeezed out these days.

I suspect that based on my experiences and the other posters there has been a distinct slowdown in salary growth as an average from 2010-2020 compared with say 1995-2005. What do you think?

[fido]

ooid said:

I'm not sure if graduate salaries quite related to house buying for FTB?

Also they get a good starting salary in exchange for 2 or 3 years of pulling 7-7's. You could get hired 'off the street' and get a bit less or a bit more - remember during my final interview for a non-officer position I asked for £XXk . The HR lady went away to ask her manager if this was possible - came back a while later with "we can't pay you that as it's lower than our graduate salary .. so we'll have to start you on that if that's okay?". Oops.

[vonuber]

Grad civ eng salaries have outstripped other salaries, to the point a new grad can be earning more than somone with 3 years experience - until they realise, that is.

[kiethton]

NickCQ said:

kiethton said:

Our grads are £50k plus £5k bonus atm (IB)

Interesting, is that £5k sign-on with stub later or is that all-in comp for the first year? I think top bucket was more than that when I was doing it in 2013 (second tier boutique).

Think that's base then end of year passing bonus - may have been increased to £10k however. ETA - looked it up and there is a £2.5k sign on.

We aren't bulge so salaries are a bit lower (unfortunately!)

Edited by kiethton on Saturday 20th February 21:53

[Pit Pony]

Previous said:

If they're good tenants, is it worth putting it up by only £10?

Probably not.

[brickwall]

NickCQ said:

Interesting demographic reveal of how many people on this thread were investment bank grads at some point in the last two decades!
Confirms all the complaints from those outside London

I didn’t say I took the offer!

[z4RRSchris]

NickCQ said:

Interesting demographic reveal of how many people on this thread were investment bank grads at some point in the last two decades!
Confirms all the complaints from those outside London

Im in PE, not IB,

analyst / associate wages haven't moved much at all, thus rents havent moved much at all. Just drives resi yeilds to the floor which is why they are 2-3% now in z1/2