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I Earn £40k A Year, Can't Afford My Own Home ?

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I have just bagged a £40k a year home in london, looking at different statistics and measures this puts me in the top 25% of earners, so why is it that even on 3 X £40k I cant afford to buy anything ?

More importantly how is everyone else able to buy ?

I've read somewhere that 75% of homes in britain are owner occupied, so who are these people ?

where do the tube drivers, teachers, nurses, shop workers, postmen, etc live.

do they all rent, like me ?

if so, who are the 75% who own their homes ? what jobs do they do ?

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People who:

  • bought before the bubble
  • fabricated their income on their mortgage application
  • have convinced relatives (usually parents) to buy them somewhere

If you cannot buy a decent starter home on £40k I would conclude that the market is very over-valued and heading for a crash, as withouht FTBs being able to enter it there is no new money coming in to sustain it.

It's difficult but the answer is - rent and wait.

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I have just bagged a £40k a year home in london, looking at different statistics and measures this puts me in the top 25% of earners, so why is it that even on 3 X £40k I cant afford to buy anything ?

More importantly how is everyone else able to buy ?

I've read somewhere that 75% of homes in britain are owner occupied, so who are these people ?

where do the tube drivers, teachers, nurses, shop workers, postmen, etc live.

do they all rent, like me ?

if so, who are the 75% who own their homes ? what jobs do they do ?

40k as a single person household puts you near the middle of all UK household incomes, about 45% of households take home more than you and 55% less.

In london you are probably at the 30% level, ie 70% of london households probably earn more than you.

Also if you dont already own a home with equity that will lower what you can afford.

And if you dont have parents who give you or raise a large deposit for you that puts you at another disadvantage compared to others.

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Playing devils advocate, but you could afford this House in Manor Park

It is not the nicest area. I used to live in the house 2 doors to the left of this one. The third room is really really small, but the main room is quite large. I would not park a car to the right of the tree (as that end of the road is pretty nasty and cars often get vandalised) but this end of the road is ok. Not bad transport links either. Garden is quite large.

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70% of london households probably earn more than you.

I was just about to post that 40k wasn't as much as it sounds in London, but what you've posted is complete tripe

Link please, because I think we both know that's complete rubbish

I earn 50k, clear around 3k per month and could probably get a decent flat or small terrace at a push, but would consider my salary to be far higher than average even in London

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I have just bagged a £40k a year home in london, looking at different statistics and measures this puts me in the top 25% of earners, so why is it that even on 3 X £40k I cant afford to buy anything ?

More importantly how is everyone else able to buy ?

I've read somewhere that 75% of homes in britain are owner occupied, so who are these people ?

where do the tube drivers, teachers, nurses, shop workers, postmen, etc live.

do they all rent, like me ?

if so, who are the 75% who own their homes ? what jobs do they do ?

People earning 40k in London should be eligible for working tax credits!

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I was just about to post that 40k wasn't as much as it sounds in London, but what you've posted is complete tripe

Link please, because I think we both know that's complete rubbish

I earn 50k, clear around 3k per month and could probably get a decent flat or small terrace at a push, but would consider my salary to be far higher than average even in London

Yeah, but he was talking about household income, not individual income.

Sounded about right to me.

Wee

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I have just bagged a £40k a year home in london, looking at different statistics and measures this puts me in the top 25% of earners, so why is it that even on 3 X £40k I cant afford to buy anything ?

You sort of can, but you need about 2xsalary deposit and 5xsalary mortgage for a smallish flat in a low-crime area. At 2x salary you can have this; it's a little boarded up but affordable: http://www.rightmove.co.uk/property-for-sa...se%26index%3D40

More importantly how is everyone else able to buy ?

I fear you will find that 40k pa is not much compared to what people who can afford to buy property in London earn. If you don't have a large deposit, it is almost certainly cheaper to rent.

where do the tube drivers, teachers, nurses, shop workers, postmen, etc live.

You may find tube drivers earn about the same as you. The link is unreliable, but is consistent with what others have mentioned on this site http://www.mysalary.co.uk/average-salary/Tube_Driver_3207

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It's a joke, you're a professional high flyer earning what appears to be a lot of money, but you've got to live in an area with people who do not earn not even half as much as you do, because they were born in the right years.

Edited by Pseudo Lord Sandwich

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Playing devils advocate, but you could afford this House in Manor Park

It is not the nicest area. I used to live in the house 2 doors to the left of this one. The third room is really really small, but the main room is quite large. I would not park a car to the right of the tree (as that end of the road is pretty nasty and cars often get vandalised) but this end of the road is ok. Not bad transport links either. Garden is quite large.

I used to live near Plashet Park and that looks like a pretty good deal compared to peak prices (probably more than double that for a terrace not requiring severe attention). Looks like a refurb gone massively wrong.

The council tax will likely make your eyes water too.

Edited by greencat

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I used to live near Plashet Park and that looks like a pretty good deal compared to peak prices (probably more than double that for a terrace not requiring severe attention). Looks like a refurb gone massively wrong.

"the property which is in need of severe attention and must be reinstated to its original structor [sic] is a good investment opportunity. Viewings are recommended to understand the amount of work to be undertaken. Due to the amount of work and construction needed, we are unable to supply room measurements and sizes and would advise a thorough internal inspection of the property."

:huh::unsure::unsure::unsure::o

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I have just bagged a £40k a year home in london, looking at different statistics and measures this puts me in the top 25% of earners, so why is it that even on 3 X £40k I cant afford to buy anything ?

More importantly how is everyone else able to buy ?

I've read somewhere that 75% of homes in britain are owner occupied, so who are these people ?

where do the tube drivers, teachers, nurses, shop workers, postmen, etc live.

do they all rent, like me ?

if so, who are the 75% who own their homes ? what jobs do they do ?

I would ask you to send your question to the BBC London New Team on account of their astonishing property ramping session this evening.

The BBC - Property Ramping is what we do.

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Paid by whom?

Good point. Someone has to pick up the tab - doesn't seem to bother Labour though. The system is crumbling isn't it?

It's catch-22: a job with a decent salary is more often than not in an area with high houseprices. Move to a cheaper area and the jobs just aren't there. By decent salary it seems ok on average across the UK but it's often just not quite enough for the city in question. I think this problem is spreading out to many cities especially those with good universities who all seem to have high houseprices. I have had to pass on many job applications because of high houseprices for this reason. The employer loses out in getting good staff and the employee likewise who cannot take up the job as it is not financially viable.

Edited by crashologist

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40k as a single person household puts you near the middle of all UK household incomes, about 45% of households take home more than you and 55% less.

In london you are probably at the 30% level, ie 70% of london households probably earn more than you.

Also if you dont already own a home with equity that will lower what you can afford.

And if you dont have parents who give you or raise a large deposit for you that puts you at another disadvantage compared to others.

According to this, it's more like 90% of people are poorer than you with a household income of 40K and about the same for plain personal income.

http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom

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First of all congrats on bagging a 40k pa job in the current climate

Get some experiance save some money and wait for the crash if there is no crash take your cash and skills and contribute to another countries GDP and just before you leave photo copy the vees sign and post it to Gordo.

Basically like me your wages have accelerated well (and hopefully sustainably) and housing has accelerated faster (in my view unsustainably). Prices will come down relative to wages but its just a question of 1, 5, 15 or 25 years take your pick. Tough it out for 18 months and if there is no crash join the que to leave just behind me.

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Playing devils advocate, but you could afford this House in Manor Park
Due to the amount of work and construction needed, we are unable to supply room measurements and sizes and would advise a thorough internal inspection of the property.

He wants a house, not a shell :rolleyes:

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I read somewhere that 85% of FTBers had some sort of parental financial assistance and from what I hear from friends and work colleagues that sounds about right for singletons. Some also got lucky with inheritance. For a single person on £70k with no sizeable deposit even an overpriced pile of Scheiss seems unobtainable.

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He wants a house, not a shell :rolleyes:

Found another advert for it Here

Apparently it is two flats at the moment worth a look as you could possibly rent one out and start your own BTL career!

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Good point. Someone has to pick up the tab - doesn't seem to bother Labour though. The system is crumbling isn't it?

Yes, indeed. At 12% odd of GDP the deficit is massive, and financing it by printing a similar proportion of GDP is one of the least sustainable things labour have done to date. Still, the £175E9+ shortfall is easily sorted by eliminating all benefits and just slightly over a half of the NHS. Alternatively, some other 30% of government spending can be cut. I don't see anyone will mind as long as there are green shoots everywhere ...

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if so, who are the 75% who own their homes ? what jobs do they do ?

Patience young Luke!

1989 - bought a peak with guy from work. (int rates 12%)

1990 - House prices crashed

1992 - Made redundant - luckily transferred mortgage over to guy from work as he was getting married and soon to be wife wanted to move in.

1993 - Had job, put redundancy money down as deposit (int rate 10%) for maisonette. Total contents moved in, 2nd hand kitchen cutlery, tv and bed, clothes. Soon realised needed a friddge so bought one toot sweet. Drove a MK1 Fiesta.

1995 - Girlfriend moves in

1997 - Girlfriend announces she would like to move, I said "OK how much are you bringing to the party?" - silence - she starts saving

1999 - Move to present house (int rates 5%)

2000-2006 - Forsook necessities like overseas holidays, new cars etc to hammer down mortgage and finallly paid it off.

Unfortunately most people seem to think that when you get your first place it must kitted out straight away (on credit) with all must haves such as plasma tv's. Don't fall into that trap!

The moral of the tale is that it is all about timing. Wait another 18 months or so and Rightmove will begging you to buy their million or so unsold stock!

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I moved to London years ago and alwyas hoped that my rising salary would enable me to buy a decent home somewhere not too far from work. House prices were always ahead of me and I now find myself sitting on a massive cash pile and earning a good income but reluctant to pay an exorbitant price for a sh*thole .

Having always settled for living in rubbish areas to be able to work in London I'm seriously thinking of living somewhere beautiful and saying to hell with a job. My savings would buy a very nice detached home in scotland overlooking a loch somewhere.

Where is the incentive to keep working if by working I have to live somewhere I cannot afford a home?

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