Average house price now 8.7 times average income

[okgo]

Mr Penguin said:

You don't pick the cards you are dealt, only what to do with them.

Agree.

So when older folk harp on about Netflix, and iPhones and avocado toast etc - don’t you see why folk become irritated?

[Nomme de Plum]

okgo said:

kingston12 said:

It is down to attitude in as much as it takes a much higher salary now to work their way up the property ladder so would require a better attitude to work to get to that level in the first place.

It still doesn't change the fact that a person earning the average salary now can afford less of a house than those earning the equivalent amount 20 years ago.

It is funny how this gets missed repeatedly.

The old 16% interest rate thing as usual. It’s been debunked many times as being harder than it is today. But it doesn’t land with a certain crowd.

It was 17% and cannot be debunked as we lived through it. It was over 40 years ago btw when fixed rate mortgages were not a thing back then.

I didn't maintain and service my car for the fun of it or learn to do building stuff, plumbing and electrics. It was not typical for wives to work in the 70s especially after a child as nurseries simply did not exist. One £2.5K salary to buy and modernise our first house along with that nice high interest rate which for the first 14 years of my mortgage averaged over 10%. Relatively speaking food was more expensive in the 70s and 80s than now.

We came from parents and grandparents who had fought in WWII so there was no bank of Mum and Dad. We started with nothing except what we provided for ourselves.

Was it harder. We had and accepted less with no social media on which to post our woes. We didn't even have a house phone for the first year and a bit of marriage then it was a party line one. Small CRT B&W TV. with 3 channels. No meals out and no holidays, just day trips and using time to renovate the house.

I see my friends' children late 20s through 30s with one to three children all having bought their own homes. Houses not flats but not central London obviously so it's clearly doable.

[Mr Penguin]

okgo said:

Agree.

So when older folk harp on about Netflix, and iPhones and avocado toast etc - don’t you see why folk become irritated?

Not really. Either you
Save money and it doesn't apply to you
Don't save money and don't expect to buy a house and it doesn't apply to you
Don't save money but do expect to buy a house and it does apply you

Netflix isn't a big expense on its own but if it is one of many things then it will make a big collective dent.

[Olivera]

okgo said:

The old 16% interest rate thing as usual. It’s been debunked many times as being harder than it is today. But it doesn’t land with a certain crowd.

High interest rates certainly were a hardship for a brief period in the late 80s. What's conveniently forgotten is that house prices then went on a huge upward trajectory over the next 10-15 years, when prices starting booming under Labour in the 00s. The hardship of briefly high interest rates in the late 80s falls into complete insignificance compared to the huge windfall thereafter.

[Mr Penguin]

Olivera said:

High interest rates certainly were a hardship for a brief period in the late 80s. What's conveniently forgotten is that house prices then went on a huge upward trajectory over the next 10-15 years, when prices starting booming under Labour in the 00s. The hardship of briefly high interest rates in the late 80s falls into complete insignificance compared to the huge windfall thereafter.

It wasn't brief but there was no way of knowing that things would get easier, just like people saying it is hard now do not know what the next 30 years will hold.

[kingston12]

Nomme de Plum said:

I see my friends' children late 20s through 30s with one to three children all having bought their own homes. Houses not flats but not central London obviously so it's clearly doable.

I don't think that anyone is arguing that it's not doable, just that it's harder to do it on the equivalent salary/financial position than it was for the previous generation.

[Nomme de Plum]

Olivera said:

okgo said:

The old 16% interest rate thing as usual. It’s been debunked many times as being harder than it is today. But it doesn’t land with a certain crowd.

High interest rates certainly were a hardship for a brief period in the late 80s. What's conveniently forgotten is that house prices then went on a huge upward trajectory over the next 10-15 years, when prices starting booming under Labour in the 00s. The hardship of briefly high interest rates in the late 80s falls into complete insignificance compared to the huge windfall thereafter.

It was 14 years of over 10% interest rates with no fixed rate mortgages. In 2009 house prices took a substantial dive for a few years. London rebounded quickly.

It depends entirely when and where a person gets on the housing ladder.

[Nomme de Plum]

kingston12 said:

Nomme de Plum said:

I see my friends' children late 20s through 30s with one to three children all having bought their own homes. Houses not flats but not central London obviously so it's clearly doable.

I don't think that anyone is arguing that it's not doable, just that it's harder to do it on the equivalent salary/financial position than it was for the previous generation.

With a very few exceptions I'm not seeing the youngsters of today moving into semi derelict places that need massive upgrading. So it is hard to reconcile that with how we started 50 years ago.

Of course every town is different so not is difficult to generalise.

[borcy]

I wonder what would happen for those on one side to think it was really hard now?

[okgo]

Nomme de Plum said:

With a very few exceptions I'm not seeing the youngsters of today moving into semi derelict places that need massive upgrading. So it is hard to reconcile that with how we started 50 years ago.

Of course every town is different so not is difficult to generalise.

Because most of them have been done up by the last generation/hoovered up with rampant property price increase trappings as BTL’s

I’m viewing a derelict house tomorrow, they aren’t priced as such, that I can tell you.

[Olivera]

Nomme de Plum said:

It was 14 years of over 10% interest rates with no fixed rate mortgages. In 2009 house prices took a substantial dive for a few years. London rebounded quickly.

It depends entirely when and where a person gets on the housing ladder.

Just when are you starting your '14 years' ? Someone buying a house aged 25 in 1985 (now aged 64) would only have paid over 10% for perhaps 4-5 years in total before there was a long march downward of interest rates from 92 onwards. And then a huge and vast march upwards of properties prices.

I would be absolutely ecstatic at the prospect of 5 years of 10% interest rates if it was followed by values multiplying by 3, 4 or 5 times, just like what happened in the decade or two after the aforementioned 92.

[kingston12]

Nomme de Plum said:

kingston12 said:

Nomme de Plum said:

I see my friends' children late 20s through 30s with one to three children all having bought their own homes. Houses not flats but not central London obviously so it's clearly doable.

I don't think that anyone is arguing that it's not doable, just that it's harder to do it on the equivalent salary/financial position than it was for the previous generation.

With a very few exceptions I'm not seeing the youngsters of today moving into semi derelict places that need massive upgrading. So it is hard to reconcile that with how we started 50 years ago.

Of course every town is different so not is difficult to generalise.

I don't think that the semi-derelict places are as popular now partly because the price differential between them and the fully renovated equivalent is often less than the cost of the work.

That's what I see in outer London, but as you say, that could be very different elsewhere.

I also don't doubt that there are a lot of the younger generation who follow the cliches like only being prepared to live in new build properties of a certain specification, lease new cars and have other expensive habits, but the basic house buying proposition is very difficult for those who don't.

It will be interesting to see what happens if interest rates stay at the current level in the longer term. Although rates are still low by historical standards, I don't think we've had this level of income/house price ratio with anything other than the sub-1% 'emergency' base rates.

[kingston12]

Mr Penguin said:

okgo said:

Agree.

So when older folk harp on about Netflix, and iPhones and avocado toast etc - don’t you see why folk become irritated?

Not really. Either you
Save money and it doesn't apply to you
Don't save money and don't expect to buy a house and it doesn't apply to you
Don't save money but do expect to buy a house and it does apply you

Netflix isn't a big expense on its own but if it is one of many things then it will make a big collective dent.

I imagine the ones that are the most irritated are those that cut out any luxuries, save £100 a month and find it makes very little difference to their ability to buy a house?

It's not quite so difficult now that house price growth is much slower, but a few years ago just the deposit required would have been going up more than that just based on the house value shooting up so fast. At least the extra saving meant that they weren't going backwards quite so fast.

There is only so much that can be saved by cutting costs (although I'm sure there are people out there who could cut enough to make a difference)

[Nomme de Plum]

Olivera said:

Nomme de Plum said:

It was 14 years of over 10% interest rates with no fixed rate mortgages. In 2009 house prices took a substantial dive for a few years. London rebounded quickly.

It depends entirely when and where a person gets on the housing ladder.

Just when are you starting your '14 years' ? Someone buying a house aged 25 in 1985 (now aged 64) would only have paid over 10% for perhaps 4-5 years in total before there was a long march downward of interest rates from 92 onwards. And then a huge and vast march upwards of properties prices.

I would be absolutely ecstatic at the prospect of 5 years of 10% interest rates if it was followed by values multiplying by 3, 4 or 5 times, just like what happened in the decade or two after the aforementioned 92.

You are talking nonsense I lived it. Why start in 1983? selective or what. Start mid 70s and you get a different picture.

Once again you are just making excuses. You buy what you can afford at a point in time . It doest matter what it is. Then you add value sell and move on.

I actually started twice, Once in 78 and again late 98 after i was technically bankrupt in 95 and had to work overseas to pay off debts. Effectively 4 years away from my family. Since late 98 moved house 6 times and 3 locations.

None of my houses miraculously doubled or tripled in value. It was pure graft to increase the value.


As i said my friends children are making it work with children. They all have a good life too. They work and play hard. I must be lucky my stepchildren and child have a different attitude than some of the posters here.

[Nomme de Plum]

kingston12 said:

I don't think that the semi-derelict places are as popular now partly because the price differential between them and the fully renovated equivalent is often less than the cost of the work.

That's what I see in outer London, but as you say, that could be very different elsewhere.

I also don't doubt that there are a lot of the younger generation who follow the cliches like only being prepared to live in new build properties of a certain specification, lease new cars and have other expensive habits, but the basic house buying proposition is very difficult for those who don't.

It will be interesting to see what happens if interest rates stay at the current level in the longer term. Although rates are still low by historical standards, I don't think we've had this level of income/house price ratio with anything other than the sub-1% 'emergency' base rates.

Of course they are.

Sorry but you are ill informed. Admittedly the last one started was 2016 finished late 18 and made a few hundred K but my 30 something mate is still doing it and making excellent profit every 2 to 3 years. The one I'm in now will get a £100K investment which will make £100K on top. I'm now nearly 70.

Interest rates will move down in 6 months or so but slowly for a couple of years.

We do have a problem in the UK in as much the Conservatives destroyed Council Housing. We need at least 2M of those on top of a similar number of Housing association houses.

[Olivera]

Nomme de Plum said:

You are talking nonsense I lived it. Why start in 1983? selective or what. Start mid 70s and you get a different picture.

The majority of people who bought a house in the mid 70s are dead by now, hence I don't see the purpose in going that far back.

You fail to address my main point which is - yes interests rates were high in the 80s, sometimes for an extended period, but the hardship/cost was *vastly* outweighed by the uplift in property values (of many, many multiples) that occurred from the 00s onwards.

[Mr Penguin]

kingston12 said:

I imagine the ones that are the most irritated are those that cut out any luxuries, save £100 a month and find it makes very little difference to their ability to buy a house?

It's not quite so difficult now that house price growth is much slower, but a few years ago just the deposit required would have been going up more than that just based on the house value shooting up so fast. At least the extra saving meant that they weren't going backwards quite so fast.

There is only so much that can be saved by cutting costs (although I'm sure there are people out there who could cut enough to make a difference)

£100 a month is nothing. Even in 1990 the average house price was £58k (similar to the terrible houses in Grimsby today) and a 10% deposit would have needed 5 years of saving at that rate.

[Mr Penguin]

Since covid increased demand for tradesmen, the semi derelict places are not worth touching unless you are prepared to do the vast majority of the work yourself. I think a lot that would go to first time buyers go up via auction which makes it a bit riskier as an FTB - no idea if that was the case back in the 70s. They are still available, if you have the inclination to do the work yourself.

[kingston12]

Mr Penguin said:

kingston12 said:

I imagine the ones that are the most irritated are those that cut out any luxuries, save £100 a month and find it makes very little difference to their ability to buy a house?

It's not quite so difficult now that house price growth is much slower, but a few years ago just the deposit required would have been going up more than that just based on the house value shooting up so fast. At least the extra saving meant that they weren't going backwards quite so fast.

There is only so much that can be saved by cutting costs (although I'm sure there are people out there who could cut enough to make a difference)

£100 a month is nothing. Even in 1990 the average house price was £58k (similar to the terrible houses in Grimsby today) and a 10% deposit would have needed 5 years of saving at that rate.

Quite. That is why people might be irritated at the suggestion that Netflix subscriptions and too many avocados is what is stopping them buying houses. I'm sure that there are some people who spend a fortune on things like that, but most of them probably don't have much more than £100 to cut out.

[Nomme de Plum]

Olivera said:

Nomme de Plum said:

You are talking nonsense I lived it. Why start in 1983? selective or what. Start mid 70s and you get a different picture.

The majority of people who bought a house in the mid 70s are dead by now, hence I don't see the purpose in going that far back.

You fail to address my main point which is - yes interests rates were high in the 80s, sometimes for an extended period, but the hardship/cost was *vastly* outweighed by the uplift in property values (of many, many multiples) that occurred from the 00s onwards.

You are talking absolute rubbish. Of course we are not dead. I'm 69 and will be 70 in a few months. Plenty of my friends are of similar age who bought their first house mid to late 70s.

The cost at a point in time is also related to affordability so the multiple may be less but if the interest rate is running constantly well over 10% and that food is relatively more expensive it balances out.

Our houses old houses did not miraculously increase in value overnight.

I'm not saying it is equal just that we were willing to live in a property that was very substandard and many miles from any centre of population. You really have no clue how little we had. Not a single new picee of furnitures. Self maintained old cars and the nearest shop many miles away with zero public transport for a mum and her young child. No nurseries or child care.

There was a couple of significant financial rebalances in the 80s and agin in the 90s. The latter bankrupted me and many of our generation. We started again. You have no knowledge how it was so it is hard to have a conversation with you.

Come back when you have arisen 0500 and in bed midnight or after every day for many decades to build the future for your family and yourself.