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BBB, you said a 2 bed, not a 1 bed. You said a decent property in a reasonable area. Providence Wharf is in E14-Poplar. Even the police don't go there without body armour. Brentwood isn't in London. I suspect that last property in Islington isn't a 2-bed. Keep trying.

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RJG:

I have enormous respect for your posts - and your grasp of economics is clearly superior to mine - but I disagree with one aspect of your recent post.

Logically I agree that if one is in the top 10% of earners you 'should' be able to afford a top 10% house. But not in your mid-twenties! Most people who live in expensive houses have an awful lot of equity/capital in them, built up over a number of years.

As an example, in 1987 along with my then husband, we bought our first property. The only thing we could afford was a very small flat. My husband was 23 and earning £19000 a year - a huge amount for a 23 year old then. I wasn't earning at the time. Within a year his salary had gone up to £90,000 a year (he turned out to be rather brilliant at making money for an investment bank in the City.) :D However, despite this fabulous salary - probably putting him in the top 1% of earners - it was a long time before we had built up enough capital to buy the house most people would deem relevant to his earnings.

My point is that maybe we do live in a society that expects to have everything right now. And therefore we leave ourselves open to inevitable disappointment, envy etc.

I do think house prices now are way too high. But even when they come down I don't think even a high earning FTB should realistically expect to live in the house of their dreams right away. What then to aim for?

By the way - we then got divorced in 1994 - unfortunately (for me!) before my ex-husband then went on to earn several million pound bonuses :(

As he seems rather good at collecting divorces though, he still doesn't live in a multimillion pound property. Moral - make money and don't get married ;)

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Perhaps he likes his privacy. I'd like to know more about the mystery that is zzg113, but I also respect a persons right to privacy. Being a member of these forums shouldn't 'require' participation in this or any other survey, if he doesn't want to give out personal details on a forum then thats his right, I had second thoughts myself so its not hard for me to accept someone else might not want to give out personal information.

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But that's the point.  Many of the HPC regulars are '20-something' to '30-somethings', earning top 5-10% incomes, have well paid professional jobs and are highly qualified, many with desirable post-grad qualifications. 

We're the only people left pretty much who could keep this Greater-fool bubble going a little bit longer.  I.e., my £50-60k income will, in this area, allow me to buy an ex-council flat or terrace house, and at a bit of a stretch.  Which would push the price of these least desirable properties up a little further for a little while longer.

But we choose not to.  I believe that a top 10% income should give you purchasing power to buy a top 10% property, so I want a 4-5 bedroom house, with a big garden and probably a swimming pool.  Does it not strike you as odd that only the highest paid people can afford the lowest quality housing, and the rest of the population (the majority) will have to do without.  We're just as priced out as someone earning £15,000 a year.

If I was to panic and buy an ex-council flat, what then?  I would have to live there for the rest of my life.  There would be no property ladder, my income won't rise much above current levels in real terms at any time in the future, inflation won't erode my debt in any meaningful way?  What then, I wait for the next level of greater fool to buy my little council flat for even more than I paid for it, for someone who is in the top 0.1% income bracket earning £1m+ a year to come along and buy my little council flat because now they are the only income bracket who can afford it, and they had better buy before THEY get priced-out too.  Nope, it's all going to correct, and oil prices and interest rates can't really effect it, only tilt the timing slightly. 

The only economically sustainable way this market will end up, is to correct to a point where the wealthiest people can afford the best houses, average people can buy an average house, and the poorest people will be able to afford the lowest tier of housing.  A situation where only the richest people can afford the absolute poorest housing is obviously unsustainable.

I'll be taking possession of my 5 bedroom house with swimming pool in 3 years or so, thanks.

RJG - The question we need to ask is whether our views are shared by our friends? In my case they are definitely NOT. My friends are all convinced that prices will go up.

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Perhaps he likes his privacy. I'd like to know more about the mystery that is zzg113, but I also respect a persons right to privacy.

These are pretty anonymous forums, I don't really want to know too much about him, maybe just age and housing status. For me, it goes to the credability of his posts - or lack of.

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I've met lots of ppl on forums who don't want to give out personal details. I've chewed the digital fat via boards with ppl for years and who still refuse to give me their e-mail address because they value their privacy. I know some ppl who don't like forums where they are forced to accept cookies in order to sign-up as they feel its an intrusion of their privacy.

Whether you agree with them or not or whether you think they are being to an*l about it is not important, they are entitled to put up their fence at a certain line in the sand.

When ppl make very specific comments on a subject or give very fixed opinions that clearly would require them to be of a certain background/age/religion or whatever....then you have a right to ask them to provide credability to what they say. AFAIK zzg has never done this so basically you have no right to pressure him into supplying personal information.

Just my opinion anyway.

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The previous survey showed many to be professionals/qualified. This one indicates decent salaries too, although a relationship to location would be good - 50K London does not stretch as far as 50K north wales.

It also demonstrates the disparity between house prices and earnings - you would expect professionals to be able to afford a nice house. BUT, is the country too top heavy with professionals/educated masses? Is this the new paradigm?

QUESTIONS:

(all question are GROSS, before any tax deductions)

1. Basic Salary currently over 100K but could drop to zero any time

2. Non-regular/other annual income (Bonuses, Commission,etc) 0<60K

3. Income from Dividends

4. Annual Rental Income (if landlord)

5. Income from other investments

6. Capital currently in property 0

7. Capital currently in shares 150K +48K US$

8. Capital currently in commodities

9. Capital currently in other investments

10. Cash in bank, savings, ISA, etc 65K

11. Annual gross interest earned on savings (if significant, e.g. STR's) <10K

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1. Basic Salary - 35K (ish)

3. Income from Dividends - £500

7. Capital currently in shares - £16k

10. Cash in bank, savings, ISA, etc - £36k

11. Annual gross interest earned on savings (if significant, e.g. STR's) - £1200

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1. Basic Salary - 20K

2. Non-regular/other annual income (Bonuses, Commission,etc) - 1500

3. Income from Dividends - 0

4. Annual Rental Income (if landlord) - 0

5. Income from other investments - 0

6. Capital currently in property -0

7. Capital currently in shares - 10K

8. Capital currently in commodities - 0

9. Capital currently in other investments - 0

10. Cash in bank, savings, ISA, etc - 23K

11.But only paying 250pcm rent

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RJG - The question we need to ask is whether our views are shared by our friends?  In my case they are definitely NOT.  My friends are all convinced that prices will go up.

A few people have picked up on my rather crude "I wanna feve bedroom house + pool" part of my post. This was knowingly a little tounge-in-cheek, and was not the main emphasis of my last post. This is the bit I find interesting:

"If I was to panic and buy an ex-council flat, what then? I would have to live there for the rest of my life. There would be no property ladder, my income won't rise much above current levels in real terms at any time in the future, inflation won't erode my debt in any meaningful way? What then, I wait for the next level of greater fool to buy my little council flat for even more than I paid for it, for someone who is in the top 0.1% income bracket earning £1m+ a year to come along and buy my little council flat because now they are the only income bracket who can afford it, and they had better buy before THEY get priced-out too."

Can anyone offer an argument AGAINST this? Why would overstretching myself to buy and over-priced bottom of the heap property be a "first rung on the ladder"? Where's the ladder!? How would I ever move up? My income wouldn't go up much, inflation won't erode my debt. I'd be relying on some even greater fool, earning millions, to come and buy the crummy little property for more than I paid. Why, or How, is that going to happen?

£250,000 for a 1 bedroom flar in London. Anywhere in London. It's probably sustainably worth about £60,000. The smallest 1 bedroom flats in the nastiest areas will need to cater for the lowest income, lowest career level people, whether they buy them or rent them. If these people at the bottom of the employment pile earn maybe £10k-£18k then they can't afford much more than about £60,000 for the type of properties we're talking about.

When the nastiest properties are only affordable to the wealthiest people, there is no-one left to buy them off them... and then no-one can move up the "ladder" at all.

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RJG18,

For what it's worth I see the point you are making and agree with you. Just because someone is a high earner (or has savings for that matter) doesn't mean they should go out and buy any old overpriced crap. OK, they do have more choices open to them but it shouldn't need justifying that they want to spend their dosh wisely and get good value for money same as anyone else.

Are you going to pull out any stats from the two surveys? If you don't have time (the other survey has about 100 answers now, pretty impressive), I don't mind having a crack at it.

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RJG - no-one is suggesting you go out and buy a house right now. It is clearly the wrong time in the housing cycle. But your point about the average salaried person being able to live in an average house etc is a valid point. Except that you seemed to imply that you should be able to do that as an FTB. I suggest it would be a more 'normal' market for the average person to be able to afford the average house in their mid to late thirties - after having lived in maybe two houses before. You have to take into account capital accumulation, and not just mortgageable ability. If you know what I mean!

Now I know what you're going to say - rampant inflation in the 70's, and high HPI in the late 80's and early naughties have helped people to move up the ladder in the past. But there are plenty of historical periods where neither have happened and people still moved up the ladder, by saving for a bigger deposit for the next house, plus over time, an ability to take on a higher mortgage. This was the traditional way to do it.

For the record, in 1988 my then husband and I bought a house for £250,000. Two years later we sold it for £190,000! But - we then moved up the ladder and bought a house reduced in price by £240,000. Hence, miraculously we had a house that was 'worth' £600k the year before, for £360k. It is therefore possible to move up the ladder even in a severely recessive period. In fact easier, because the margins are much narrower. I'm not recommending this though. :D

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1. Basic Salary 50K

2. Non-regular 2K

3. Income from Dividends 0.5K

4. Annual Rental Income (if landlord) 0

5. Income from other investments) 0.5K

6. Capital currently in property 180K and falling, but no mortgage so not too bothered, just need to manage the gap. Family issues prohibit STR

7. Capital currently in shares 15K

8. Capital currently in commodities

9. Capital currently in other investments 10K

10. Cash in bank, savings, ISA, 60K

11. Annual gross interest earned on savings (if significant, e.g. STR's) see above

The turn has happened, now its just a matter of judging the bottom - probably 18 months away in my opinion, the pain is only just starting. I'm nothing special, just patiently looking for value for money for me and my family. Those who are too highly geared, be afraid. Be very afraid. I am waiting for you and I can hear you starting to whimper, but I want to hear you squeal!

Luddite

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my fairly average salary seems too pathetically small to quote here alongside most peoples here. i live in the north-east though so it goes further.

this discussion does bring to mind the vastly different amounts needed to live on in different parts of the country.

people in scotland for example generally make less but generally have higher equity % in their homes.

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Seriously guys, why are you on here if you earn that much?  How can you really be worried about price crashes when it looks like your set up pretty nicely.

Think about us poor folk who really ARE stretched to buy anything.  I won't even lower myself to put on here how much I earn and how much I have in savings.  I really do need a price crash, but I don't think you guys really do.

Sorry.

:huh:

Hey joke don't worry. Prices will come back to the point where the average wage in your area will enable you to buy a house. I grew up in Crewe and have family there and I know how bad things are going for you there with horrific stories of HPI. It will follow on the heels of Manchester no doubt and will only crash all the harder IMO.

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1. Basic Salary: £20,000

2. Non-regular/other annual income: £3000 (tax free)

3. Income from Dividends: negligible

4. Annual Rental Income (if landlord): £0

5. Income from other investments: £0

6. Capital currently in property: £0

7. Capital currently in shares: £10,000

8. Capital currently in commodities: £0

9. Capital currently in other investments: £0

10. Cash in bank, savings, ISA, etc: £11,000

11. Annual gross interest earned on savings: £450

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1. Basic Salary: £33k

2. Non-regular/other annual income: about £3k

3. Income from Dividends: £0

4. Annual Rental Income (if landlord): £0

5. Income from other investments: £0

6. Capital currently in property: £0

7. Capital currently in shares: £5k

8. Capital currently in commodities: £0

9. Capital currently in other investments: £0

10. Cash in bank, savings, ISA, etc: £32k

11. Annual gross interest earned on savings: about £1k

My age: 29

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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