Now that everyone is renting their music and cars

[TooMany2cvs]

Oakey said:

Except nowadays he'll be competing with some BTL'er or speculator competing to buy the same house so they can rent it out / flip it

As far as BTL goes... One word. "Yield"

And as for speculators flipping - who's paying this increased price, and why isn't the vendor selling it for that now?

[monkfish1]

Oakey said:

Except nowadays he'll be competing with some BTL'er or speculator competing to buy the same house so they can rent it out / flip it

I think its fair to say, your statement and reality are a long way apart....................................

[OldGermanHeaps]

theguvernor15 said:

Of my group of friends there is a mix of renters/owners (however it's mainly the latter). Late 20/early 30s.

ALL of my close friends who have houses have done so by contributions from parents/inheritance towards deposits.

I was very fortunate to be given a small amount by my parents to help with the deposit, although i saved the majority of it myself, my girlfriend saved her share, although she was in a higher earning job, whilst living at home.

The main issue is that once you get to a certain age, you don't really want to live at home & you want freedom, so you move out, however it's very hard to rent & save a deposit at the same time.

I looked at what our mortgage would get us if we rented locally & it'd get you a knackered 2 bed terrace in the worst part of town.

I look at a lot of 'non-skilled' jobs local to me, say the average salary for something more than a receptionist, but not a CEO is £25,000 PA.

Bare with me on the fag packet maths below, based on 2 sharing p/month:

Take Home £1700
Rent: £350ea
Household bills: £200
Car: £150
Car Insurance: £50
Food: £200
Other bills (mobile etc): £100

Allow £200 P/Month for some socialising/clothing/holiday/un-forseen circumstances (repair bills, car etc).
The above figures don't allow for things like CSA either or any other debts/bills.

You're left with in the region of £400 towards saving for a deposit.

I've looked at Rightmove & something that looks 'okish' locally is going to set you back around £180k.

With both of you saving as above for a 10% deposit, it's going to take you the best part of 2 years to save the deposit, let alone the additional required to furnish, pay the solocitors fees etc.

I know a lot of people who don't even earn as much as the figures above as they're in un-skilled roles (secretarial/general office etc/delivery driver etc.)

The answer is to either get skilled rapidly or do as much overtime and second jobs as you can.
To many people are too fking lazy these days its no wonder the eastern european grafters love it here.
When I was saving to buy my first place I had a st job, i think £12k or so, and that was only 2002 so st money even for back then and I was doing open university at night, so I took all the overtime going and delivered chinese at the weekends. When the overtime there dried up I took an office cleaning job from 6-830 am then worked an 8 hour day at icl, and delivered takeaways fri-sunday, and made a few quid buying broken cars, fixing them and flipping them so I don't have much sympathy for people who whine about working a 40 hour week with a fking pension paid into for them, driving a leased new car with an £800 phone in their pocket and netflix and £100 trainers greeting they cant afford a house in a nice area. Get working harder. Or smarter or some fking thing. Nothing moves unless its shoved.

[HairyMaclary]

I don't get why netflix appears in so many posts? Its £5.99 ffs. Hardly going to make a serious dent in trying to save a deposit. Its very cheap entertainment!

Even gym membership and a phone contact?

Assume this is the 'flat screen telly' of now when people 15 years ago moaned about council chavs and their 32'' flatscreen with god forbid a sky contract..

For what its worth it took 10 years of saving and living with 4 of us in a 2 bed before we recently moved to our first family home. 2 of those years the youngest was in our room.

Ive probably come across somewhat to some as we dont do big holidays and drive relatively old cars. We do however own a lovely house in a lovely area. It was quite satisfying knowing that all those sacrifices and buying smart as a ftb opened the door to what we own now. Had I bought the flat we rented I would have lost money.

One thing I don't understand with the generation slightly younger than me is their obsession with wanting to live in new builds, but each to their own.

[Flibble]

OldGermanHeaps said:

The answer is to either get skilled rapidly or do as much overtime and second jobs as you can.
To many people are too fking lazy these days its no wonder the eastern european grafters love it here.
When I was saving to buy my first place I had a st job, i think £12k or so, and that was only 2002 so st money even for back then and I was doing open university at night, so I took all the overtime going and delivered chinese at the weekends. When the overtime there dried up I took an office cleaning job from 6-830 am then worked an 8 hour day at icl, and delivered takeaways fri-sunday, and made a few quid buying broken cars, fixing them and flipping them so I don't have much sympathy for people who whine about working a 40 hour week with a fking pension paid into for them, driving a leased new car with an £800 phone in their pocket and netflix and £100 trainers greeting they cant afford a house in a nice area. Get working harder. Or smarter or some fking thing. Nothing moves unless its shoved.

I'm not sure that the solution to house price inflation is to just work 100 hour weeks tbh.

[DonkeyApple]

Flibble said:

I'm not sure that the solution to house price inflation is to just work 100 hour weeks tbh.

It’s a recognition that the excessive house price inflation of the previous decade is now built in and will remain even if there is no further inflation and that with very stagnant wage inflation which is also likely to last for some time the only way to combat these two issues is to work more hours which also uses up leisure hours which typically involve spending. It is a very good way for an individual to not be victim to economic circumstances that they cannot control.

Most people of first time buyer age do have enormous spare labour capacity and utilising it is very sensible. And what many people have always done to move forward in life.

Edited by DonkeyApple on Saturday 24th February 12:56

[kingston12]

HairyMaclary said:

Had I bought the flat we rented I would have lost money.

What time period was that over? It must be quite unusual to lose money over the past twenty years or so. I suppose buying in 2014 and selling now in some areas might have resulted in a loss.

[Flibble]

I bought a flat in 2007, selling it now for less than I paid for it.
Prices are much less robust outside the south east.

[DoubleD]

Flibble said:

I bought a flat in 2007, selling it now for less than I paid for it.
Prices are much less robust outside the south east.

Wow where is that? Was it in the same condition as when you bought it?

[rufusgti]

DoubleD said:

Flibble said:

I bought a flat in 2007, selling it now for less than I paid for it.
Prices are much less robust outside the south east.

Wow where is that? Was it in the same condition as when you bought it?

Not uncommon. The first house i bought in 2007 is worth probably 10 or 15k less now. If i really ran the maths of yield, cost of finance and inflation Into It I bet It would make It a shockingly poor Investment.

[Flibble]

DoubleD said:

Wow where is that? Was it in the same condition as when you bought it?

Cheshire. Yes same condition (it's quite new).

[HairyMaclary]

kingston12 said:

What time period was that over? It must be quite unusual to lose money over the past twenty years or so. I suppose buying in 2014 and selling now in some areas might have resulted in a loss.

Maidstone

We rented a flat for 2 years. We were the first people to live in it and it was put on the market for £189k in 2007 which it sold for after we considered an offer from the landlord. We moved to a nearby village to a 2 bed house we paid £180k for.

Rightmove says the flat sold for £159,950 on 29 Aug 2014. Zoopla says it's worth 195k now.

The 180k house turned into 300k in 10 years. There is a massive amount of new build flats i the town but not so many large 2 bed houses it seems.

In those 10 years we paid the mortgage down and saved sensibily. We had netflix, gym memberships, phone contracts etc but because we weren't up to our eyes in new audi a3 lease deals managed to make a big jump in terms of house.

Happy days...

[Ahonen]

OldGermanHeaps said:

The answer is to either get skilled rapidly or do as much overtime and second jobs as you can.
To many people are too fking lazy these days its no wonder the eastern european grafters love it here.
When I was saving to buy my first place I had a st job, i think £12k or so, and that was only 2002 so st money even for back then and I was doing open university at night, so I took all the overtime going and delivered chinese at the weekends. When the overtime there dried up I took an office cleaning job from 6-830 am then worked an 8 hour day at icl, and delivered takeaways fri-sunday, and made a few quid buying broken cars, fixing them and flipping them so I don't have much sympathy for people who whine about working a 40 hour week with a fking pension paid into for them, driving a leased new car with an £800 phone in their pocket and netflix and £100 trainers greeting they cant afford a house in a nice area. Get working harder. Or smarter or some fking thing. Nothing moves unless its shoved.

Did you also work 26 hours a day at t'mill and pay mill owner to let you work there?

£12k is spectacularly poor. My first job in '98 was £18k and I lived a long way up north, so life was cheap.

The vast majority of more office based jobs don't pay overtime. My better half is a project manager and her company doesn't pay for any overtime - in fact none of the four companies that she has worked for in the years we've been together have paid for overtime. She works for 9-10 hours a day and quite often brings work home.

I've almost always worked in motorsport, where overtime is something you do a hell of a lot of but the idea of being paid for it would reduce most team owners to tears of laughter. Similarly, the wonderfully varied hours and locations of international motorsport mean that second jobs would be impossible to organise.

So I guess what I'm saying to you is don't generalise when you have no idea of other people's jobs or circumstances.

[OldGermanHeaps]

Not generalising, but people complaining they cant afford a house need to make some changes if they want a house. Quite straightforward really. I never worked 26 hours a day, but have done a good few 16 hour days when I have had goals to acheive. If your job doesn't pay for overtime or allow for a second job and doesn't pay enough to buy a house then its time to change job, or realign your housing expectations, the housing market isn't going to take pity on you.

Edited by OldGermanHeaps on Sunday 25th February 00:22

[227bhp]

Ahonen said:

OldGermanHeaps said:

The answer is to either get skilled rapidly or do as much overtime and second jobs as you can.
To many people are too fking lazy these days its no wonder the eastern european grafters love it here.
When I was saving to buy my first place I had a st job, i think £12k or so, and that was only 2002 so st money even for back then and I was doing open university at night, so I took all the overtime going and delivered chinese at the weekends. When the overtime there dried up I took an office cleaning job from 6-830 am then worked an 8 hour day at icl, and delivered takeaways fri-sunday, and made a few quid buying broken cars, fixing them and flipping them so I don't have much sympathy for people who whine about working a 40 hour week with a fking pension paid into for them, driving a leased new car with an £800 phone in their pocket and netflix and £100 trainers greeting they cant afford a house in a nice area. Get working harder. Or smarter or some fking thing. Nothing moves unless its shoved.

Did you also work 26 hours a day at t'mill and pay mill owner to let you work there?

£12k is spectacularly poor. My first job in '98 was £18k and I lived a long way up north, so life was cheap.

The vast majority of more office based jobs don't pay overtime. My better half is a project manager and her company doesn't pay for any overtime - in fact none of the four companies that she has worked for in the years we've been together have paid for overtime. She works for 9-10 hours a day and quite often brings work home.

I've almost always worked in motorsport, where overtime is something you do a hell of a lot of but the idea of being paid for it would reduce most team owners to tears of laughter. Similarly, the wonderfully varied hours and locations of international motorsport mean that second jobs would be impossible to organise.

So I guess what I'm saying to you is don't generalise when you have no idea of other people's jobs or circumstances.

You either work a lesser hourly rate and make it up on overtime or get more on a salary and do unpaid overtime, either way for the same or similar job you get the same or similar outcome, there is no magic involved.

[kingston12]

HairyMaclary said:

kingston12 said:

What time period was that over? It must be quite unusual to lose money over the past twenty years or so. I suppose buying in 2014 and selling now in some areas might have resulted in a loss.

Maidstone

We rented a flat for 2 years. We were the first people to live in it and it was put on the market for £189k in 2007 which it sold for after we considered an offer from the landlord. We moved to a nearby village to a 2 bed house we paid £180k for.

Rightmove says the flat sold for £159,950 on 29 Aug 2014. Zoopla says it's worth 195k now.

Ah, the dreaded new build trap, that makes sense.

I think that Help to Buy will really exacerbate that problem. People will pay much more than these new builds are with compared to the rest of the market, and then struggle to sell st anything like that premium.

I remember going to look at a lovely new build flat in about 2000 that was about £650k. Hugely overpriced given that you could buy loverly Victorian double fronted detached houses a few roads away for the same price.

Fifteen years later and that flat had just about doubled in value whilst those houses have probably more like quadrupled, certainly more than tripled.

[DonkeyApple]

kingston12 said:

HairyMaclary said:

Had I bought the flat we rented I would have lost money.

What time period was that over? It must be quite unusual to lose money over the past twenty years or so. I suppose buying in 2014 and selling now in some areas might have resulted in a loss.

The thing is that if you strip London out of the U.K. data since the 2008 credit crunch there are a lot of regional areas which have not recovered. If you consider that we value U.K. property in GBP then we must also recognise that even if the nominal value of a property asset has risen, if the value of the currency it is quoted in has fallen then the real value of that asset may not have risen. And since 2008 we have been massively devaluing the GBP so that money is worth less so as to erode the negative power of all the debt that was built up. QE has hugely devalued the GBP and so a large chunk of any house price rises over that period is actually currency deflation not the asset becoming more valuable.

In the regions the new build sector was very badly impacted by the credit boom from 1997 to 2007. The nature of the product made it the prime target for structured products, rapid speculative investment, gambling fuelled by the ex building societies that were too weak to stand alone as banks after being carpet bagged and were hoovering up property loans at the wrong prices to try and build their business up favoured the simplicity of the new build. At the same time new builds supposedly offered lower risk as buyers didn’t need to bother with surveys etc although we all now realise that they represented higher risk as their prices we’re artificially inflated due to all the retail demand.

Long and short, the credit crunch removed that insanity premium and common sense returned to that segment. Combined with the fact that a decade on many of them are now out of their building guarantees and so the risk of them costing significantly more has appeared and needs to be discounted.

Meanwhile, London took part in a major and unexpected boom after the crunch because London property combined with U.K. law proved to be one of the safest places for overseas money heavily at risk from domestic bank default or tax raids to seek shelter.