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So What Was A Ftb Place In Years Gone By


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HOLA441
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HOLA442
So there is no point in ranting about the unfairness of it all.

It’s just a game learn the rules and play it.

I don't expect the ranting to get CGT on PPR's reintroduced I just think it is useful to look at the distortions that have been put in place which have meant that the baby boomer generation (and those a few years younger than them) have had an exceptionally easy ride into affluence which the country has effectively borrowed against my future earnings to purchase for them.

Hopefully a couple of them will read the post and think twice before lecturing me on how I should count myself lucky that I could afford to buy a bedsit (if I mortgaged myself to the hilt) while they sit in their houses that they could not afford to buy today even if they their salary was twice what it is at the moment.

To use your metaphor I do understand the rules of the game and they are currently stacked against me (to some extent) and my generation (or at least those without any family money) generally to a much greater extent.

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HOLA443
lecturing me on how I should count myself lucky that I could afford to buy a bedsit (if I mortgaged myself to the hilt) while they sit in their houses that they could not afford to buy today even if they their salary was twice what it is at the moment.

Have you actually had someone say this to you???????????? :blink:

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HOLA444

Housing is a special asset class as you cannot choose to not ''consume'' it as either a renter or owner.....making it different to shares ,gold etc .

So why don't governments address this!........It's the same the world over

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HOLA445
Have you actually had someone say this to you???????????? :blink:

Perhaps an over statement, but I have had relatives saying that I should buy whatever I can afford now because that was what they did (although what they could afford was a lot more pleasant!) and they now have huge equity in their house, and yes they do say that I should count myself lucky to be able to do so (I think they are effectively saying that despite my gross stupidity (in their eyes) in not having bought a property two years ago my high salary still gives me the chance to save myself by getting on the ladder. In particular they trot out the old line about "its hard for the first few years but then it gets cheaper" - NOT ANY MORE IT BL**DY DOESN'T.

Someone else on this board quoted I think a relative of theirs as saying "if you are so clever why am I so much richer than you". The answer is usually because they are older and so got the benefit of the structural distortions the baby boomers put in place. Of course it is the same baby boomers who have totally failed to save for their pensions (that good old inflation is not so clever now is it!) who will come crying to my generation to look after them when they retire. I wonder how my generation will respond.

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HOLA446
"its hard for the first few years but then it gets cheaper"

In a low-inflation environment, it's hard for the first few years, and the years after that, and..............etc.

Someone else on this board quoted I think a relative of theirs as saying "if you are so clever why am I so much richer than you". The answer is usually because they are older and so got the benefit of the structural distortions the baby boomers put in place.

Eerily accurate. The person who says this IS a baby-boomer (about 60 years old).

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HOLA447
Eerily accurate. The person who says this IS a baby-boomer (about 60 years old).

They usually are...

Anyway returning to the topic. My parents first house was a three bed house with a biggish garden purchased for £12K in the mid-eighties. It was completely run down (no inside toilet even) but because it was in a poor area and they were far from rich (although both worked full time) they got a council grant to cover 80% of the costs renovating the house oh, yeah, and they got given a council house on a reduced rent to live in while the work was being carried out!

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HOLA448

As much better informed people than me have pointed out property prices are cyclical there are good times to buy property and times when you would frankly have to be mad to buy.

I bought first at a not a very clever time in 1987 just in time for to see interest rates at 15% and a 30% fall in values by 1992. When I bought I was convinced that if I didn’t buy then I would get the chance and paid too much for a one-bed-roomed converted flat.

The real problem I think is that investment decisions are mixed up with life decisions nobody thinks their life is on hold because they can’t buy steel shares at a good price but because many people are so hung up on the “rent money is a waste mortgage money is an investment†mantra they expect property to be affordable when they want to buy.

The answer is to rent until buying makes economic sense.

Enjoy renting! In most of the country at the moment you can rent a much better place than you could afford to buy. You can even have the pleasure of working out each month how much your landlord has lost.

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HOLA449

My parents are a tragic tale of property mis-timing...

Bought first house for £XXX pounds in 1979 ish, then in about 1988 decided to split it (4 bed victorian house) into 2 flats and sell it for a fat profit.

Didn't sell for a fat profit, actually took ages to sell, eventually selling at a loss when taking into account costs of conversion. And all the while paying a hefty bridging loan which almost wiped them out.

On the subject of affordability, they we're able to buy a 4 bed victorian house (not up north) on very average wages, but I'm not quite sure how much it cost....

Interesting that their advice is still "get on the property ladder" despite the effects of mistiming on their finances :ph34r:

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HOLA4410
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HOLA4411

It's way more complicated than people make out.

Anyone remember, in the 80s and 90s, married couples who bought their first houses AFTER having their wives leave full-time work to bring up their children?

For instance, I know a couple who bought a new 2 bedroom starter home - the wife worked in a bank's call centre and the husband in a stationery firm. Both of them were on fairly average salaries for their respective industries.

Her money went straight into investments, his paid the mortgage. About five years later she left work, and THEN they moved into a 4 bedroom house, in the same street and built at the same time, to raise a family.

They used her accumulated savings to almost completely cover the cost differential between the 2 bedroomed house and the 4 bedroom house, which at the time was about £20,000.

Ten years on, the mortgage on the 4-bedroom house was paid off in full.

Could people afford to do that now? I doubt it.

1. At the moment, the cost difference between 2 and 4 bedroom properties even on the same development is a good £50,000 if not more. If your partner can save £50,000 over 5 years (or £830 per month!), then there's no way on earth that he or she is earning an average salary.

2. If you're on an average income and being tapped £100 on council tax, £750 a month in mortgage payments every month for your 2 bedroom flat, £75 a month just on petrol, and £150 on H/P on your car, and having 30% of your gross salary whisked away by Gordon Brown before you get near it, your partner's salary isn't "spare" cash.

3. Once your kids come along, your wife can go back out and work - if you can afford to pay childcare.

Just to give you an idea - with my wife in full time education we've just been informed that on my salary alone (£17k) we should be able to afford to pay almost all the childcare for our 9 month old toddler and our 3 year old son to attend full time.

And, to be helpful, they've offered to give us just over £600 for the year.

Which would be great if that money even covered a month of fees... which it doesn't.

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HOLA4412
3. Once your kids come along, your wife can go back out and work - if you can afford to pay childcare.

Which most people can't. For most couples, the extra revenue generated by both partners working is negligible, if not negative, when the costs of childcare, commuting, transport, tax, NI are taken into consideration.

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HOLA4413
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HOLA4414

28 (Mature student at university, not a 6th former!).

Household earnings amount to £17k (my wages) . entitlements such as tax credits, family allowance take that to something like £21k.

On the basis that we have more than £21k gross income, they've calculated that we should be paying almost all of the £260 per week it costs to keep the two youngest kids in the university nursery while my wife attends lectures, trips and group study in the library.

I used to work at York College. Even with a massive staff discount, it would've cost me more than £75 per child per week to use the creche there.

At the time, my take-home pay was a fairly static £920pcm.

After deducting £450 for rent, £100 on council tax, and £300 on food, utility and petrol bills, I reluctantly concluded that I couldn't afford it.

As a complete aside, my immediate manager there was on a higher basic salary than me. In addition to that he was a union rep, and he taught in the evenings.

Buying a property in York, with his partner working full time and having no kids, I thought he'd have no problems.

Turns out he was pulling 60 hour weeks doing the union and teaching work because that was the only way he could get their combined income high enough to secure a mortgage ON A FLAT.

Needless to say, kids weren't on the agenda.

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HOLA4415

tstaddon is right. With lower housing cost people have much more freedom to make choices and saving counts for something.

With high housing costs all choice is limited and there's no point saving as it's wiped out by huge rises - many conclude they are better off taking out dodgy mortgage scams to borrow 8 times their income.

I remember one chap I met who was selling his small house. Girlfried was looking after a toddler while attending a college. He was basically a white van man. He must have bought the place in 1999 for around 55k and was now selling it for 165k to move to a bigger place in a cheaper area.

Five years on and couples in high-stress reasonably well-paid jobs could not have that flexibility - two incomes maxed out every month. No part-time college courses, no toddlers.

Five years difference. A completely different world.

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HOLA4416

It is all about timing and circumstances. Always remember walking past an agents office and in the window was a 1 bed flat for £50k in Kilburn just by the DECCA studios. This was about 8 years ago and I could just about afford it on my salary. It would be priced at about £160k now - way out of my reach. I'm still renting :blink:

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HOLA4417
It is all about timing and circumstances. Always remember walking past an agents office and in the window was a 1 bed flat for £50k in Kilburn just by the DECCA studios. This was about 8 years ago and I could just about afford it on my salary. It would be priced at about £160k now - way out of my reach. I'm still renting

Hindsight is always 20/20. You could not have known at the time that prices would rise the way they have.

Five years difference. A completely different world.

Absolutely. If you bought pre-boom: Life of Reilly.

If you bought post-boom: the life of a wage slave.

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HOLA4418

My parents first house was a 2-bed mid-terraced bought in 1979 for 11k.

Sold it in 1993 for £40k.

I saw it for sale 2 years ago at £120k (it sold but I don't know how much for - that was at least 15k over-valued compared to similar properties at the time)

Similar houses are currently 'valued' at £135k.

---

I bought my first/current house in SEP-2002 for £116k (3 bed mid-terraced) with a large deposit and borrowed just under 3x my salary.

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HOLA4419
Hindsight is always 20/20. You could not have known at the time that prices would rise the way they have.

Absolutely. If you bought pre-boom: Life of Reilly.

                If you bought post-boom: the life of a wage slave.

Agreed I feel sorry for you lot, however when we bought our house in 1995 no one had a clue what was happening with prices, and we had a 30% deposit that we'd saved up too.

I feel lucky as the missus stays home after giving up work and good salary, turning her back on the rat race to look after the kids, I only earn an average wack, but we live well, some times feel peeved we can't / WONT join in the consumer boom, but we have a better quality of life (slippers warmed and pipe lit when I get home).

I can't imagine her having to go out to work, just to pay for going to work as many of her friends still do, they seem to feel lesser people if they've not got the latest clothes and mobile phone ....... weird Imho.

When we do eventually move we want somewhere in the sticks, where I can work from home, keep chickens and lead a relatively simple life away from all the jerks that look down their nose at you when they find out the wife has no 'career'.

We got the torches out the other night and played ghosts for ages, the kids loved it, especially when I put it in me gob and lit my face up :lol:

just try and live like the 'good old days' ........... but other people think we're odd, mind you people come round and think ewe have a very relaxed outlook, and a 'fun' house, just because most people havn't got time / inclination to enjoy the things that are precious in life, obsessed with getting on, and therefore spoiling it for everyone that doesn't want to spend their entire life thinking about trying to get rich!

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HOLA4420

It is about timing but it’s not rocket science.

If buying is cheaper than renting property is undervalued if it’s more expensive to buy property is overvalued and in due course will fall in value.

I think the more significant change is the low inflation/low interest rate market which means that the old mantra that “everybody struggles for a few years when they first buy†may turn into “if you will struggle to buy don’t buy because there will be no relief from inflation.

My mortgage went from about 20% of my net to 50% of my net with interest rate rises in 18 months but within 3 years was down to under 10% with a couple of inflationary pay rises and a promotion (1987-1990).

Like most people on this site I am expecting a severe correction of 40% plus in property values in the next three years but I think the resulting loss of confidence to last for 10 plus years.

So by my reasoning a good time to buy would be anytime after 2007 and before 2017.

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HOLA4421
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HOLA4422

Excellent points Mr Tickle,

The best things in life are free :):):)

I get fed up with everyone wanting the latest of everything and looking down their nose at you if you don't have it. I couldn't give a t0ss about the latest mobile phone or a shiny new car (I actually like older cars :blink: ).

What I find amazing is that many of these people don't actually own their cars, flashy new toys, plasma telly, house. They're just renting them from banks/BS/Credit card company/Loan Shark. And they're paying over the odds for them.

I can't wait to see the looks on some peoples faces when the penny finally drops and they have to start paying all of it back.

Me and the wife will be fine as we have lots of nice juicy savings and investments, no debts at all (I refuse to borrow for anything, if I can't afford it I can't have it, and even if I can afford it I only buy it if I need it - Novel idea eh!).

We're sitting pretty to cash in when it all goes t1ts up :lol::lol:

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HOLA4423
It's the Good Life!

That will be me!

Showing whats her face me turnips :lol::lol:

I watched a programme once about a bloke who gave it all up, due to stress, moved to a little cottage and got rid of every gadget he owned, including his car and tv, radio etc.

If he wanted to go anywhere he used to walk, to the phonebox and call a cab, ride his old butchers bike!

And he was real content, not knowing what was happening in the rest of the world and country at large, so long as his veggies came good, and pig was fat he was happy :blink:

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HOLA4424
Excellent points Mr Tickle,

 

The best things in life are free  :)  :)  :)

I get fed up with everyone wanting the latest of everything and looking down their nose at you if you don't have it. I couldn't give a t0ss about the latest mobile phone or a shiny new car (I actually like older cars  :blink: ).

What I find amazing is that many of these people don't actually own their cars, flashy new toys, plasma telly, house. They're just renting them from banks/BS/Credit card company/Loan Shark.

Agreed.

Many chavs round here spend hundreds per month just on the mobile bill (mines £20.00). Also, I know people who earn a good income and so feel / act rich. This is a real big mistake - if you rely only on income but have inadequate assets you will never become free.

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HOLA4425
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