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Young Unable To Buy As Rent Outstrips Mortgage Payments

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This morning Kate Palmer was told to write something on the housing market. the office was quite, little news to be found so she looked through old Telegraph articles and found one from Feburary based on a report by the government.

The last full report was published by the Government in February, showing that homeownership in 2012-13 had fallen to its lowest level in 25 years.

Since she recently bought a damp pokey flat for £300k in London, purchase justification kicked in. Conviently ignoring the £30k daddy had 'lent' her buy buy the shitty flas she proceeded to crunch some numbers.

The numbers she managed to produce on the back of the Benson and Hedges packet proved to her that homeowners earn more therefore their mortgage is a lower proportion of salary than renters rent. Conviently ignoring equity positions and renters return on savings, repairs, lease fees and insurance she pushed the published button at 4:57PM, just in time to catch the bus back to her pokey damp flat in zone 5.

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Must be some mistake?

english_pensioner • in 6 minutes

Going back to the days when I wanted my first mortgage, you had to get onto a building society's list and then demonstrate that you'd be able to afford a mortgage by paying an equivalent amount into a savings account for about a year. Not very easy when one was also paying rent. And from memory the interest rate was about 6% although for one period it went up to over 15%.

Things have always been hard for the young, although I'm tempted to say that with the present low interest rates, things are certainly no worse than they were 40 or so years ago

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Ah the other stock answer from almost all boomers and pensioners. "it was hard in our day, therefore it was just as hard as today so stop whining"

Yeah the interest rate may have been 6% and briefly 15% but house prices were a fraction of what they are today and compared to wages they were affordable.

I can believe the saving for a year for a deposit. What a hardship a whole freaking year! Notice he does not say how old he was buying his first pad (probably not mid 30's) nor his wages or how much he could borrow. Must have been real hard times back in the day, saving for a whole year on average wages, only able to borrow 3.5 times salary.

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I bought my first house in the very early 1980's. It was three bedroomed terraced house in a decent part of Sheffield, it cost about £10,500 and my pay was about £5,750.

After a couple of years my job took me to London, in price terms I virtually swapped my Sheffield house for a one bedroom flat with an SW1 post code, Sloane Square was less than a five minute walk away and the nearest "off licence" was Berry Brothers & Rudd.

A couple of years after that I paid about £22,000 for a two bedroom flat in Fulham, I think at the time my wages had topped £10,000. Property costs can't have been too much of a burden because soon after I bought a Porsche.

Incidentally, I had no student debts and a rock solid final salary pension that subsequently allowed me to retire at 55.

Absolutely none of this is available to my children. They're fortunate in that I can afford to match for them the benefits that I was lucky enough to enjoy, but anyone from my generation who thinks their own hard work and industry were the keys to their good fortune is just taking nonsense. We were the most privileged generation that has ever lived.

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I bought my first house in the very early 1980's. It was three bedroomed terraced house in a decent part of Sheffield, it cost about £10,500 and my pay was about £5,750.

After a couple of years my job took me to London, in price terms I virtually swapped my Sheffield house for a one bedroom flat with an SW1 post code, Sloane Square was less than a five minute walk away and the nearest "off licence" was Berry Brothers & Rudd.

A couple of years after that I paid about £22,000 for a two bedroom flat in Fulham, I think at the time my wages had topped £10,000. Property costs can't have been too much of a burden because soon after I bought a Porsche.

Incidentally, I had no student debts and a rock solid final salary pension that subsequently allowed me to retire at 55.

Absolutely none of this is available to my children. They're fortunate in that I can afford to match for them the benefits that I was lucky enough to enjoy, but anyone from my generation who thinks their own hard work and industry were the keys to their good fortune is just taking nonsense. We were the most privileged generation that has ever lived.

The first place I bought in 1988 in South West Scotland was a half price council flat £8500. Two years later the flat was sold for £28000. Then I bought a cottage with ex husband in a village by the sea for £36000. The mortgage I required was £24000 and my own salary was about 11k pa then. I lived there for 15 years and when it was sold it went for £186,000. By then I knew house prices were crazy and the reason I sold was to buy a cheaper place.

I'm now mortgage free but haven't had much luck jobwise so can't help my children much financially.

I know they have little chance to end up mortgage free by age 53. My 20 year old son is working at a fishery which he loves but it's low pay. Daughter, 19, is at university in Edinburgh racking up student loans.

I fear for their, and many people's, futures.

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Ah the other stock answer from almost all boomers and pensioners. "it was hard in our day, therefore it was just as hard as today so stop whining"

Yeah the interest rate may have been 6% and briefly 15% but house prices were a fraction of what they are today and compared to wages they were affordable.

I can believe the saving for a year for a deposit. What a hardship a whole freaking year! Notice he does not say how old he was buying his first pad (probably not mid 30's) nor his wages or how much he could borrow. Must have been real hard times back in the day, saving for a whole year on average wages, only able to borrow 3.5 times salary.

The other halfs boomer parents were over this week. They did the usual blah about how hard it was in their day (aged 22) to pay the mortgage on a 3 bed house (Mum staying at home naturally). I just replied with "It's not a struggle for us to pay the mortgage on a 3 bed house round here, because we're about 200k short on what we'd need to borrow. We can't even get the mortgage to have the struggle!"

On the rent payments, here in London I don't have a single mate that is paying market rate rent, letting through an agent or using a landlord. Everyone I know is cutting corners, renting off mates, flat or house sitting (in my case), If we had to pay market rate we'd clear off.

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The other halfs boomer parents were over this week. They did the usual blah about how hard it was in their day (aged 22) to pay the mortgage on a 3 bed house (Mum staying at home naturally). I just replied with "It's not a struggle for us to pay the mortgage on a 3 bed house round here, because we're about 200k short on what we'd need to borrow. We can't even get the mortgage to have the struggle!"

On the rent payments, here in London I don't have a single mate that is paying market rate rent, letting through an agent or using a landlord. Everyone I know is cutting corners, renting off mates, flat or house sitting (in my case), If we had to pay market rate we'd clear off.

I'm expecting some similar chat tomorrow. Hopefully my answer will be as rational as yours!

Edited by Joan of The Tower

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The other halfs boomer parents were over this week. They did the usual blah about how hard it was in their day (aged 22) to pay the mortgage on a 3 bed house (Mum staying at home naturally). I just replied with "It's not a struggle for us to pay the mortgage on a 3 bed house round here, because we're about 200k short on what we'd need to borrow. We can't even get the mortgage to have the struggle!"

On the rent payments, here in London I don't have a single mate that is paying market rate rent, letting through an agent or using a landlord. Everyone I know is cutting corners, renting off mates, flat or house sitting (in my case), If we had to pay market rate we'd clear off.

Most people are susceptible to confirmation bias. At least we have economic exile and silver surfer to enlighten us.

I've had the same conversation with my in-laws several times, good times. :D

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I saw the bbc free view text mentioed this and finished with....its costing young people more to rent.

What total unqualified rubbish.

There was also an article saying business leaders say its time to raise rates...

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It's London SE where all the big money has been made. And in other places it's been about timing. I think a lot of people in London have made as much money this year as I have made in 25 years of home owning.

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I've lost count of the number of times in the past seven or eight years that I've read, "once x or y happens things will really get interesting"

Why will you be right when they were all wrong?

Silver Surfer; houses at realistic prices, selfbuild houses along the way, porsches.... at least you do recognise so many of the advantages the system gave you.

However I won't surrender, and expect a correction from one of many triggers - and don't accept your findings that even worse inequality is on the way.

Other market participants who do choose to take on epic debt for HPI continuation are not my responsibility. They make their own decisions. (They're outbidding me, so why who I give them victim status and want them protected, as others excused them for years and seen them bailed out... which was more to protect house values of your own age group.)

What a great article. And he's absolutely right, ultimately there is only one solution...build more houses.

But as that's not going to happen any time soon the only rational conclusion is that any meaningful fall in house prices is probably a generation away.

Now isn't a good time to buy. But tomorrow won't be much better.

House prices are way too high in most of the UK, but with ultra low interest rates set to continue for many more years there's no reason why prices won't stay high for many years to come.

The only exceptions are areas like the North East where some isolated pockets of sanity exist. Although there's a good argument that says even there prices may drift down further so you could still be better off waiting.

Unless you really want to own a property for non financial reasons, and can afford to buy outright, then the rational thing is to reconcile yourself to a lifetime of renting and structure your personal affairs accordingly.

I've just finished wading through the nearly 600 pages of Thomas Picketty's "Capital In The 21st Century"....

...In the UK inheritance tax is zero below £325,000, and is 40% above that amount. What that means is that the average house in Britain can be passed on, complete with all the capital gains it represents, tax free. The Conservative party (and I believe UKIP agrees) want to see the inheritance tax threshold raised to £1m. In the world of the post war baby boomers inherited wealth was only a small factor, they basically could save up a deposit and buy a property and they were competing on a level playing field against their own peers. When I was buying my first property in the early 1980's there was no one taking the process to sealed bids because they'd just come into an inherited windfall. But today nearly one pound in every seven is inherited rather than earned, and that will grow over the coming years to one pound in every five.

I'm sure some inheritances are squandered, or the recipient is a cat's charity as the deceased has no living relatives. But a very large percentage of those inheritances will surely flow straight into the UK property market. Especially as Picketty pointed out the tendency in the UK to pass on wealth via gifts rather than wait until bequests after death. It all suggests a more sinister interpretation of the Bank Of Mum And Dad, a future where if you're lucky enough to have the right parents you can expect a substantial helping hand into a property of your own. But if you're not that fortunate then you either have to rent for your entire life or accept a sharply lower standard of living as you're saddled with repaying a crushing mortgage debt.

Not good.

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We were the most privileged generation that has ever lived.

Couldn't agree more. Bought 3 bed terraced in 1978 for £6,500 in Leamington Spa. It needed doing up a bit. The 5K mortgage was about twice annual income in my modest job. The legendary 15% mortgage rate didn't last more than a few months. It slowly went down month by month (with few upticks) from there.

No one I knew who bought a house at that time found it a strain. Starter houses and doer-uppers were plentiful. They were dirt cheap, and mortgage payments (because the sums borrowed were derisory) easily manageable for all. Add in high levels of employment, free higher education, and rising wages.

Then add in lots of available overtime work (time-and-a-half and double time) in most manufacturing jobs and manual jobs to make raising a deposit in a year relatively easy. Interest on savings was good.

Sure, everyone furnished with secondhand stuff to start with. It was fun and creative, and 'status anxiety' and similar bull$hit didn't exist. Neither did 'the Wow Factor', Krustie, Beeny, 'kerb appeal', 'investment potential', addiction to credit, buy to let, and all the other risible and dangerous nonsense.

Our generation had it good. Very good indeed.

Today's young people have the worst deal of any generation I've seen.

Old people have a habit of viewing themselves as worthy victors of a life of struggle, 'going without' and financial perspicacity. They're not.

Their house - now valued at twenty times what they paid for it - they see as the just reward for a worthy life of self sacrifice and foresight. It isn't.

They just got lucky.

And there wasn't that much 'sacrifice' anyway. A family hand-me-down dining table for couples in their first home (incredibly) was just about bearable.

Tell those self-deluding boomer parents that.

Edited by juvenal

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My Dad bought his first house - 4-bed detached in NE Scotland - for 1/4 of his annual salary in the late '70s. This was in the early days of the oil boom, but while people had loads of money, the abundance of land and the lack of access to BTL funding and the culture of seeing property as an investment just meant that people's living standards increased.

Aberdeen's still one of the very few places in the UK where you can get a decent private sector salary without having to hand most of it over to a landlord, but the property investment culture has nevertheless pushed prices up massively in the last few years.

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I would be able to build a house £100k cheaper than I could buy one, but the government won't give me permission to. There are NO single building plots within a 10 mile radius of the town in which I work. 100,000s of acres of low grade agricultural land which could be built on with no loss o agricultural output or detriment to the surrounding countryside.

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I get frustrated hearing how Boomers scrimped, saved and made do for a year – not eating out at all so they could put a 10% deposit down on a three-bed semi. So what they’re saying is that if they’d carried on scrimping and saving, they could’ve bought that property for cash in ten years (with wage inflation matching HPI). Except interest rates, as they’ll happily point out, were much higher. So with the compound interest, they could have bought that property for cash in seven years. These days, it requires seven years of scrimping and saving for a couple just to pull the deposit together…


Boomers often confuse the words ‘easy’ and ‘easier’ when in a conversation about buying a property. While I agree that no generation has ever had an easy time of getting on the property ladder, they had it easier than everyone else IMO.

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This morning Kate Palmer was told to write something on the housing market. the office was quite, little news to be found so she looked through old Telegraph articles and found one from Feburary based on a report by the government.

Since she recently bought a damp pokey flat for £300k in London, purchase justification kicked in. Conviently ignoring the £30k daddy had 'lent' her buy buy the shitty flas she proceeded to crunch some numbers.

The numbers she managed to produce on the back of the Benson and Hedges packet proved to her that homeowners earn more therefore their mortgage is a lower proportion of salary than renters rent. Conviently ignoring equity positions and renters return on savings, repairs, lease fees and insurance she pushed the published button at 4:57PM, just in time to catch the bus back to her pokey damp flat in zone 5.

:lol: Headline should be - Old unable to sell as Young no longer interested in Buying - my rent is £50 more than it was in 1997, rent has gone NOWHERE in a decade and a half. If you have a house to sell and a couple of void riddled BTL`s there is a world of financial disappointment just around the corner.

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I would be able to build a house £100k cheaper than I could buy one, but the government won't give me permission to. There are NO single building plots within a 10 mile radius of the town in which I work. 100,000s of acres of low grade agricultural land which could be built on with no loss o agricultural output or detriment to the surrounding countryside.

Yup. I'm just back from Germany, and while there my girlfriend and I went round to see the progress on her younger sister's house build. She's about 30 and was working in hospital admin until she stopped work to have a baby a few weeks ago. Her husband is about the same age and I don't think he's on a massive wage but they're managing to get a big, custom house built on a green plot. You'd need to be a banker to manage that here.

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Yup sick of hearing it from the olds. THey bought there flat for 180 quid in the centre of edinburgh at the time they pulled in a wage of 5 quid per week so simpe maths 5x52 = £260 annual joint income so in modern terms it would be like someone on £24k buying a flat in the centre of edinburgh for £20k.

I also get lectured on my generation being violent due to video games until I pointed out there generation had ww2 and the holocuast. ( daily mail forms all there opinions)

I also get lectured on my generation being lazy despite many my age holding multiple jobs on low income and working some of the longest hours in europe with zero job security. While they could and by there own admission walk out of one job they didnt like and get another next door.

They especially didnt like when they insisted I should be buying a house for security until I pointed out i have yet to have a job in one place that lasted more than three years and I will no longer participate in the theft of my labour to prop up there lifestyle.

Talking of lifestyle the sit and rant about lazy dole cheaters having themsleves taken everybenefit they could for the past 30 years including rent free housing from the council. They get the same level of money as I get in wages while I work 14 hour days and get none of the benefits.

I am sick of it, they are a generation of self righteous ignorant racists. So even althoguh I earn enough now to buy a house I wont on principle and just save the money and let them deal with the mess.

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Yup sick of hearing it from the olds. THey bought there flat for 180 quid in the centre of edinburgh at the time they pulled in a wage of 5 quid per week so simpe maths 5x52 = £260 annual joint income so in modern terms it would be like someone on £24k buying a flat in the centre of edinburgh for £20k.

I also get lectured on my generation being violent due to video games until I pointed out there generation had ww2 and the holocuast. ( daily mail forms all there opinions)

I also get lectured on my generation being lazy despite many my age holding multiple jobs on low income and working some of the longest hours in europe with zero job security. While they could and by there own admission walk out of one job they didnt like and get another next door.

They especially didnt like when they insisted I should be buying a house for security until I pointed out i have yet to have a job in one place that lasted more than three years and I will no longer participate in the theft of my labour to prop up there lifestyle.

Talking of lifestyle the sit and rant about lazy dole cheaters having themsleves taken everybenefit they could for the past 30 years including rent free housing from the council. They get the same level of money as I get in wages while I work 14 hour days and get none of the benefits.

I am sick of it, they are a generation of self righteous ignorant racists. So even althoguh I earn enough now to buy a house I wont on principle and just save the money and let them deal with the mess.

Justifiably sick of it I would say. As a hedge against a UK/GBP crisis, I have moved a chunk of my savings out of sterling (and Fiat in general). I'm going with Cryptocurrencies/Altcoins, but choose your own poison if you want to do likewise. :-)

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I've actually yet to meet a boomer who doesn't 'get it', or at least I've yet to hear a boomer first hand say that things were just as hard in their day, and that today's generation are just whingers. I suspect it's yet another example of the views of the editors of the press (not confined to right-wing press) being mistaken for the views of the general population.

My friends' parents recognise the unfairness of the situation, having seen their kids get good educations and good jobs but still being unable to afford the housing and financial security they had from the wage of a preceived 'lower status' job.

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I've heard it plenty of times. There are a few that get it, but for the most part the majority I've met and talked to see prices as nothing special " houses have always been expensive and it's always been hard"

The media does have a part to play, it forms opinions and that generation still read a lot of papers.

You must have read the online comments in a daily mail/telegraph property piece? The boomers stick out like a sore thumb now, but that is only a recent occurrence. A couple of years ago everyone was worshipping at the altar of HPI. Now only most do and certainly a large contingent are the boomers

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I have a couple of investments anyone can do and yield results.

I buy any food I can store in bulk and only top up my weekly shop with the fruit etc. By cycling through my food store I am essentially paying last years prices for most of my groceries which I bought at bulk discount anyway. Its also a good hedge should things go tits I have a months worth of food. IM not expecting the zombie apocolypse but if the banks had an emergency close down or crisis I would give the uk about 2 days before the whole place was hysterical and on fire. I do remember the fuel crisis and folk went bat shit crazy in a day and that was just so they didnt have to walk.

Another investment is in yourself. They can repo your merc or your big house and trinkets but they can never repo your month in the maldives or those computer skills you gianed nobody else knows you can contract out.

just some thoughts anyway but I have had enough of being told why I fail by old people.

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I've heard it plenty of times. There are a few that get it, but for the most part the majority I've met and talked to see prices as nothing special " houses have always been expensive and it's always been hard"

The media does have a part to play, it forms opinions and that generation still read a lot of papers.

You must have read the online comments in a daily mail/telegraph property piece? The boomers stick out like a sore thumb now, but that is only a recent occurrence. A couple of years ago everyone was worshipping at the altar of HPI. Now only most do and certainly a large contingent are the boomers

Slowly it is drip drip dripping into the awareness of that generation that if the young don`t want to "buy", then they are basically screwed? Should have diversified my little grey haired chums ^_^

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I have a couple of investments anyone can do and yield results.

I buy any food I can store in bulk and only top up my weekly shop with the fruit etc. By cycling through my food store I am essentially paying last years prices for most of my groceries which I bought at bulk discount anyway. Its also a good hedge should things go tits I have a months worth of food. IM not expecting the zombie apocolypse but if the banks had an emergency close down or crisis I would give the uk about 2 days before the whole place was hysterical and on fire. I do remember the fuel crisis and folk went bat shit crazy in a day and that was just so they didnt have to walk.

Another investment is in yourself. They can repo your merc or your big house and trinkets but they can never repo your month in the maldives or those computer skills you gianed nobody else knows you can contract out.

just some thoughts anyway but I have had enough of being told why I fail by old people.

You might be losing money, as food seems to get CHEAPER every month (and the inflationists are conspicuous by their absence on the boards recently)

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