Young people CAN afford to get on the housing ladder if they give up the easyJet, coffee, gym, Netflix lifestyle

[satch]

I was thinking about the renting masses many of which are young people and how they have fared over the last ten years. We bought back in 2014 after renting for five years. We previously owned but sold and then rented (not STR, sold to rent just in case Bruno P is reading) due to a family requirement at the time and we could not find a suitable property to buy. The rent for the period we rented was covered by the interest on our capital. Then interest rates, not the base rate, but interest rates paid to savers basically went to zero. Rents remained the same at three or four percent of capital value of the property and I assume BTL mortgages remained at similar rates as before. It seemed that the banks decided that they no longer needed to pay savers any interest anymore so didn’t. As the rent was no longer covered by interest on capital and the family requirement to be where we were had ceased we bought.

So looking back over the last ten or so years the homeowner has paid their mortgage interest which has essentially the same value as the increase in capital value of the property, so more like enforced savings. Meanwhile the renter has worked and paid the mortgage interest for the landlord and in many cases I am sure the rent paid being more than the cost of the landlord’s mortgage even if they bought relatively recently.

So the big winners have been the landlords who have had their BTL mortgage interest paid for by the renter and have pocketed between five and ten percent capital gain per year. Then in second place, homeowners who paid their mortgage payments but these are enforced savings and have gone towards the increase in value of their property, typically by five or ten percent per year and they are therefore living rent free. The big losers are renters who are paying large amounts of cash in rent so find it difficult to save and they see the bottom rung of the property ladder disappearing off into the stratosphere. Not having a Costa coffee or the occasional treat is not really going to make any difference to young people being able to buy a home.

[HousePriceMania]

2 hours ago, Frank Hovis said:

Her main solution is to move to where houses are cheaper and buy there.

 

Now we know what the tories "leveling up" actually means.

Does she not think the young londoners moving to Norwich would then price out the young there ?

These people are sick, in the head.

[Frank Hovis]

1 minute ago, HousePriceMania said:

Now we know what the tories "leveling up" actually means.

Does she not think the young londoners moving to Norwich would then price out the young there ?

These people are sick, in the head.

 

I started working in London a few months before the big late eighties crash.

Everyone, including myself, wanted to buy but, on our salaries, mostly couldn't do so.

Exceptions were those with parental loans or those banding together their £30k MIRAS limits.

There seemed to be no prospect of anything changes as house prices were just going up.

You would get whispers of the next "hot" place where you could buy before the houses "soared" and everyone would look to buy there.

The one that stuck in my mind was Telford being passed by word of mouth in the City wine bars as being the place to buy; at that point I resigned myself to renting indefinitely as there was no way that I was going to start commuting into the City from Telford!

As we all know it then all crashed.

I did wonder if anyone had been able to buy in Telford with the thought of making their fortune prior to that huge crash.

And whether they are still there.

 

[Boon]

I think there are parallels with the last financial crisis, some commuter areas were bid to stupid levels and then bombed, they still might not have gotten back that price. Thinking of places like Maidstone.

Allsopp is pretty much a poster girl for much of the country though, a fat fuck who knows deep down what the truth is, but because they are enriched they'll say nothing and keep on the gravy train.  

[AWW]

Let's actually pull this apart, because I don't think there's any such thing as an "easyJet/coffee/gym/Netflix lifestyle" and because, even if there was, living it isn't what's stopping the young (which now seems to mean anyone younger than 45) getting on the housing ladder.

easyJet - it's a low-cost airline where you'd struggle to pay more than a hundred quid for a return flight unless you're booking to go away during school holidays. Let's say they do 4 trips a year.

coffee - if it's a significant portion of your outgoings, you're either a coffee snob (guilty) making your own using over-expensive beans and a worktop of expensive machinery (like wot I do), or you've got a Pret sub costing £25 a month.

gym - if they use the same company for the gym as they do for their flights, that's £30 a month.

Netflix - £10 a month if you're paying for a UK sub.

That's less than £100 a month. You might as well say that the "paying your council tax lifestyle" is holding them back.

Awful woman.

[JoeDavola]

43 minutes ago, Frank Hovis said:

There seemed to be no prospect of anything changes as house prices were just going up.

For some reason this reminded me that I know two first time buyers who bought in NI about 7 years apart; both earning similar money as senior software folk. Both single childless.

The one who bought 7 years previously got a detached house in a good area in Belfast that has since become even more sought after as all the money rushed into it. The one who bought last year ended up in an ex council house in a small NI town.

Same earnings, 7 years apart, completely different types of houses that they can afford. In fact the one who bought last year earns more I'd guess - certainly has a more senior and stressful job.

[HousePriceMania]

43 minutes ago, Frank Hovis said:

 

I started working in London a few months before the big late eighties crash.

Everyone, including myself, wanted to buy but, on our salaries, mostly couldn't do so.

Exceptions were those with parental loans or those banding together their £30k MIRAS limits.

There seemed to be no prospect of anything changes as house prices were just going up.

You would get whispers of the next "hot" place where you could buy before the houses "soared" and everyone would look to buy there.

The one that stuck in my mind was Telford being passed by word of mouth in the City wine bars as being the place to buy; at that point I resigned myself to renting indefinitely as there was no way that I was going to start commuting into the City from Telford!

As we all know it then all crashed.

I did wonder if anyone had been able to buy in Telford with the thought of making their fortune prior to that huge crash.

And whether they are still there.

 

I know 1 person in London who bought at the peak...Bankrupt.  I know 2 people who bought in Bath at the peak...they bought together as they couldn't afford to buy seperately.  1 of them lost a fortune and the other bought them out, will have done well out of it in the end.  You couldn't give flats away in Bath in the mid 90s in the end.

 

[Green Devil]

24 minutes ago, AWW said:

Let's actually pull this apart, because I don't think there's any such thing as an "easyJet/coffee/gym/Netflix lifestyle" and because, even if there was, living it isn't what's stopping the young (which now seems to mean anyone younger than 45) getting on the housing ladder.

easyJet - it's a low-cost airline where you'd struggle to pay more than a hundred quid for a return flight unless you're booking to go away during school holidays. Let's say they do 4 trips a year.

coffee - if it's a significant portion of your outgoings, you're either a coffee snob (guilty) making your own using over-expensive beans and a worktop of expensive machinery (like wot I do), or you've got a Pret sub costing £25 a month.

gym - if they use the same company for the gym as they do for their flights, that's £30 a month.

Netflix - £10 a month if you're paying for a UK sub.

That's less than £100 a month. You might as well say that the "paying your council tax lifestyle" is holding them back.

Awful woman.

£100 on month on CT? 🤣

Where are you! 

[HousePriceMania]

3 minutes ago, JoeDavola said:

For some reason this reminded me that I know two first time buyers who bought in NI about 7 years apart; both earning similar money as senior software folk. Both single childless.

The one who bought 7 years previously got a detached house in a good area in Belfast that has since become even more sought after as all the money rushed into it. The one who bought last year ended up in an ex council house in a small NI town.

Same earnings, 7 years apart, completely different types of houses that they can afford. In fact the one who bought last year earns more I'd guess - certainly has a more senior and stressful job.

Sounds like....a bubble.

[dev.null]

5 hours ago, HousePriceMania said:

 

Yep, I reckon not being on Twitter beats that?

[JoeDavola]

Just now, HousePriceMania said:

Sounds like....a bubble.

I think it sounds like the young being fucked over in terms of their quality of life, but unless there is a sharp rise in interest rates then I think this could keep trundling on for some time yet. The older generation have all the houses and don't want to let them go, housing is a key part of the national psyche/ego/identity so people will go into crippling lifelong debt to be able to say they own something, anything, and we have an expanding population with no affordable housing being built.

There may be sections of the market, older boomers who pass and leave big houses in bad states of repair, that very very few people can afford to buy/renovate/maintain - perhaps stuff like that might not sell as well but it looks to me like the plebs will have to compete harder and harder for less and less.

[spygirl]

50 minutes ago, Frank Hovis said:

 

I started working in London a few months before the big late eighties crash.

Everyone, including myself, wanted to buy but, on our salaries, mostly couldn't do so.

Exceptions were those with parental loans or those banding together their £30k MIRAS limits.

There seemed to be no prospect of anything changes as house prices were just going up.

You would get whispers of the next "hot" place where you could buy before the houses "soared" and everyone would look to buy there.

The one that stuck in my mind was Telford being passed by word of mouth in the City wine bars as being the place to buy; at that point I resigned myself to renting indefinitely as there was no way that I was going to start commuting into the City from Telford!

As we all know it then all crashed.

I did wonder if anyone had been able to buy in Telford with the thought of making their fortune prior to that huge crash.

And whether they are still there.

 

I knew someone - actually worked with - who'd bought in Thames valley for ~80k in 1988.

Repo'd and resold in ~1993 for 20k.

The swings in prices in London are nothing compared to the swings in the not very nice places near London.

 

 

[Frank Hovis]

4 minutes ago, HousePriceMania said:

I know 1 person in London who bought at the peak...Bankrupt.  I know 2 people who bought in Bath at the peak...they bought together as they couldn't afford to buy seperately.  1 of them lost a fortune and the other bought them out, will have done well out of it in the end.  You couldn't give flats away in Bath in the mid 90s in the end.

 

 

I knew someone with a third share of a flat in Clapham.

Bought for £90k plus; his third share £30k.

Then it crashed down to £60k and eventually he was able to save £10k and have the other two buy out his share for £20k.

And £10k was a lot to save on a starter wage and paying a mortgage; it took years.

[spygirl]

8 minutes ago, HousePriceMania said:

I know 1 person in London who bought at the peak...Bankrupt.  I know 2 people who bought in Bath at the peak...they bought together as they couldn't afford to buy seperately.  1 of them lost a fortune and the other bought them out, will have done well out of it in the end.  You couldn't give flats away in Bath in the mid 90s in the end.

 

Yes. I have a vivid memories of looking round Bath in 92ish (with a log gone ex) and looking at flats around ~20k.

 

[dev.null]

3 minutes ago, JoeDavola said:

I think it sounds like the young being fucked over in terms of their quality of life, but unless there is a sharp rise in interest rates then I think this could keep trundling on for some time yet. The older generation have all the houses and don't want to let them go, housing is a key part of the national psyche/ego/identity so people will go into crippling lifelong debt to be able to say they own something, anything, and we have an expanding population with no affordable housing being built.

There may be sections of the market, older boomers who pass and leave big houses in bad states of repair, that very very few people can afford to buy/renovate/maintain - perhaps stuff like that might not sell as well but it looks to me like the plebs will have to compete harder and harder for less and less.

Anything to keep the debt bubble going, but it's ok, if you get repo'd the bank will rent your home back to you for one easy monthly payment.

[Frank Hovis]

2 minutes ago, spygirl said:

I knew someone - actually worked with - who'd bought in Thames valley for ~80k in 1988.

Repo'd and resold in ~1993 for 20k.

The swings in prices in London are nothing compared to the swings in the not very nice places near London.

 

 

Yes, whilst I didn't know their finances the colleague who was most miserable about their negative equity and most desperate to move owned a studio flat in Croydon.

People put the blinkers on when desperate to buy somewhere, anywhere, and neglect to think through what it will actually mean to be living there year in year out.

I wouldn't have rented it let alone bought it.

[spygirl]

1 minute ago, Frank Hovis said:

 

Yes, whilst I didn't know their finances the colleague who was most miserable about their negative equity and most desperate to move owned a studio flat in Croydon.

People put the blinkers on when desperate to buy somewhere, anywhere, and neglect to think through what it will actually mean to be living there year in year out.

I wouldn't have rented it let alone bought it.

In the ~3 years I knew him, his wife ran off someone else, his house was repod and sold for 20k then he was made redundant.

In the late 80s they were aspiring Yuppies - cars, houses, all that shit.

Went from upwardly mobile and bankrupt , single living in flop house in less than 5 years.

Its bot like he even leveraged up much.

As soon as the wife's income went, he just could not afford the mortgage and CC debt he was carrying - which really wasnt much.

The thing is, youve got to see house in terms of HPI ratios.

In the 80s it went to just under 6 x earnings. Then fell under 3 - in some places in the London/SE it was near 2x

Again ,the Bath example (not SE I know) I remember looking and thinking - I cant really lose here as that less than my salary.

At mo the UK as a whole is around ~8x.

London/Se is over 15x.

The long term average - putting aide 2008-2002 - is about 4 to 5.

 

[UmBongo]

I think most people don't do any of the shit in the thread title and still cannot afford to buy a house! 

I don't do any of that and I'm struggling to get back onto the property ladder. Or snake. 

That graph @HousePriceMania posted a few days ago house prices vs average salaries over the past 50 years paints an interesting picture. 

[Chewing Grass]

Not a problem if you live in. former industrial town and can be arsed commuting 20 miles to a job if required, go check out Stoke or Hartlepool.

[spunko]

6 minutes ago, UmBongo said:

I think most people don't do any of the shit in the thread title and still cannot afford to buy a house! 

I don't do any of that and I'm struggling to get back onto the property ladder. Or snake. 

That graph @HousePriceMania posted a few days ago house prices vs average salaries over the past 50 years paints an interesting picture. 

There was the "avocado index" website a few years ago - now sadly no longer online. It calculated how many avocados you would have to buy to put down a deposit on a house in various areas of the country, and how many you would have to eat every day. Brilliant stuff, shame it's gone.

Problem with people like Krustie is that she's completely atypical yet doesn't realise it. In my own situation I am acutely aware that I'm in a minority of young people who have been able to buy a house in the SE (simply because my business has been a success). I listen to the plight of my friends trying to buy a house (who work hard and don't waste money) and it pisses me off. Imagine if I told them just to stop buying avocadoes...  I hope I never become as self-absorbed as Krustie.

 

[spunko]

35 minutes ago, spygirl said:

In the ~3 years I knew him, his wife ran off someone else, his house was repod and sold for 20k then he was made redundant.

In the late 80s they were aspiring Yuppies - cars, houses, all that shit.

Went from upwardly mobile and bankrupt , single living in flop house in less than 5 years.

Its bot like he even leveraged up much.

As soon as the wife's income went, he just could not afford the mortgage and CC debt he was carrying - which really wasnt much.

The thing is, youve got to see house in terms of HPI ratios.

In the 80s it went to just under 6 x earnings. Then fell under 3 - in some places in the London/SE it was near 2x

Again ,the Bath example (not SE I know) I remember looking and thinking - I cant really lose here as that less than my salary.

At mo the UK as a whole is around ~8x.

London/Se is over 15x.

The long term average - putting aide 2008-2002 - is about 4 to 5.

 

Things would be different now. They would buy the house for £400k, she would demand a divorce and they would try to sell the house for £600k because "you can't buy anywhere for less than £300k each". I looked at a house a few years ago where this exact thing happened. They had bought it not even a year before and hadn't touched it, yet somehow thought others should fund their divorce. Truly bizarre.

[Hancock]

18 minutes ago, UmBongo said:

I think most people don't do any of the shit in the thread title and still cannot afford to buy a house! 

I don't do any of that and I'm struggling to get back onto the property ladder. Or snake. 

That graph @HousePriceMania posted a few days ago house prices vs average salaries over the past 50 years paints an interesting picture. 

Go to M&S and see whose spending £20 on a couple of coffees, and slices of cake.

Doubt you'll find many whining about the price of property.

[Hancock]

8 minutes ago, spunko said:

There was the "avocado index" website a few years ago - now sadly no longer online. It calculated how many avocados you would have to buy to put down a deposit on a house in various areas of the country, and how many you would have to eat every day. Brilliant stuff, shame it's gone.

Problem with people like Krustie is that she's completely atypical yet doesn't realise it. In my own situation I am acutely aware that I'm in a minority of young people who have been able to buy a house in the SE (simply because my business has been a success). I listen to the plight of my friends trying to buy a house (who work hard and don't waste money) and it pisses me off. Imagine if I told them just to stop buying avocadoes...  I hope I never become as self-absorbed as Krustie.

 

its the lack of self awareness that most the country who were born at the right time suffer from.

[sarahbell]

To be fair, she's sort of right. If the £10bn we spend on coffee was spent on other things ...

[King Penda]

2 hours ago, Frank Hovis said:

 

I started working in London a few months before the big late eighties crash.

Everyone, including myself, wanted to buy but, on our salaries, mostly couldn't do so.

Exceptions were those with parental loans or those banding together their £30k MIRAS limits.

There seemed to be no prospect of anything changes as house prices were just going up.

You would get whispers of the next "hot" place where you could buy before the houses "soared" and everyone would look to buy there.

The one that stuck in my mind was Telford being passed by word of mouth in the City wine bars as being the place to buy; at that point I resigned myself to renting indefinitely as there was no way that I was going to start commuting into the City from Telford!

As we all know it then all crashed.

I did wonder if anyone had been able to buy in Telford with the thought of making their fortune prior to that huge crash.

And whether they are still there.

 

My mates there he went to see dame Edna last night it’s all happening in Telford ps it’s a shit hole edit it was jasper carrot Edna’s in a few weeks