Si1 Posted January 10, 2016 Share Posted January 10, 2016 Isn't living rent-free at home to save a deposit just the same as having a gifted deposit from the BOMD? Yes, completely Quote Link to comment Share on other sites More sharing options...
Will! Posted January 10, 2016 Share Posted January 10, 2016 Stockwell is a total crap hole, or at least it was the last time I was there. You obviously don't know Stockwell. There are some very nice/streets properties, you just need to look a bit further than outside the tube station. Police crime map knows all. Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted January 10, 2016 Share Posted January 10, 2016 To be fair to the lass, she's fitting into type and showcasing her privileged position in life. Owning that half a million quid mortgage is the next level up from the iPhone 6 plus in gold. If her career takes off one day she'll make 100k and be able to own a million pound mortgage and still have the same disposable income as when she was 22. Forget about logic. It's all about social recognition. Taken in isolation, buying a house in London on UK wages is totally nonsensical. But people act in social context all the time, regardless of good/bad/stupid. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted January 10, 2016 Share Posted January 10, 2016 In the mid 1990s the average London property price was £68k (source: Land Registry) and the average London full time wage was what - maybe £25k? Fast forward 20 years and those numbers are £500k and £35k. No amount of Boomer mythologising about "young people expect too much these days, you have to start at the bottom and work hard to rise up the ladder" can change those numbers. Quote Link to comment Share on other sites More sharing options...
wish I could afford one Posted January 10, 2016 Share Posted January 10, 2016 In the mid 1990s the average London property price was £68k (source: Land Registry) and the average London full time wage was what - maybe £25k? Fast forward 20 years and those numbers are £500k and £35k. No amount of Boomer mythologising about "young people expect too much these days, you have to start at the bottom and work hard to rise up the ladder" can change those numbers. Maybe useful: Taken from my thoughts this week. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted January 10, 2016 Share Posted January 10, 2016 Maybe useful: Thanks, yes since 2012 London has really found a new level of crazy unaffordability for workers that few of us predicted could possibly exist. It would be interesting to find out what the London age 18-40 homeownership rate was in 1995 versus now but as far as I know homeownership by age is not reported regionally by the English Housing Survey. Quote Link to comment Share on other sites More sharing options...
MrPin Posted January 10, 2016 Share Posted January 10, 2016 London is fit to pop! Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted January 10, 2016 Share Posted January 10, 2016 Isn't living rent-free at home to save a deposit just the same as having a gifted deposit from the BOMD? Not really. House sharing is certainly mutual family support. But unless the saved wonga gets used as a deposit it's building family security not property leverage. Quote Link to comment Share on other sites More sharing options...
Guest Posted January 10, 2016 Share Posted January 10, 2016 People who can stay with their parents and work are incredibly lucky and have an advantage I can only dream of. It's easy to turn a couple of years of (mostly) rent-free living into a deposit, and I certainly regard it as a form of early inheritance. Even the cheapest rental you can find is going to take a big chunk out of your saving potential. You just can't compete with those who have well-located and generous parents. Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted January 10, 2016 Share Posted January 10, 2016 You still seem to overlook the point that even though someone may be prepared to pay an ever higher price it is the lenders willingness to lend at those ever higher prices that is driving the increase. In this case she can't get the mortgage she requires so she cannot drive the price higher. It may well turn out that this is an indicator that prices will not be able to keep increasing. On another issue, I've never been to Chadwell Heath, I've driven through Stockwell, and it didn't seem to be a very appealing part of London. I would think Chadwell Heath would be a more pleasant place to live. There is an important hole in this argument. One of the continuing aspects of the UK property bubble has been people paying more for less. In my assessment by focussing only on what is paid you implicitly posit the idea that over time people pay more and more for the same type of property, (e.g. a 3 bed semi-detached house in Wimbledon). However, as all London property prices are linked you can also inflate prices with essentially fixed lending. You'll see ever decreasing sales volumes for things you might want to buy (hence the market price is established on a smaller and smaller number of transactions in a given pocket of the market, as marked out by geography and property type) but you'll also see people paying more and more for what you are prepared to buy whilst holding your nose and hoping for a miracle, (hence the ludicrous idea of young people stumping up a king's ransom for tiny flats). More for less. This is basically, absent the contribution of the buy-to-let brigade and foreign money, the London market today, as best I understand it. Your attempt to hang the blame on the banks founders on the hole in your argument. Even if lending is restricted, those who do borrow can still push up prices by paying more for less. Quote Link to comment Share on other sites More sharing options...
Si1 Posted January 10, 2016 Share Posted January 10, 2016 People who can stay with their parents and work are incredibly lucky and have an advantage I can only dream of. It's easy to turn a couple of years of (mostly) rent-free living into a deposit, and I certainly regard it as a form of early inheritance. Even the cheapest rental you can find is going to take a big chunk out of your saving potential. You just can't compete with those who have well-located and generous parents. +1 million Quote Link to comment Share on other sites More sharing options...
Si1 Posted January 10, 2016 Share Posted January 10, 2016 To be fair to the lass, she's fitting into type and showcasing her privileged position in life. Owning that half a million quid mortgage is the next level up from the iPhone 6 plus in gold. If her career takes off one day she'll make 100k and be able to own a million pound mortgage and still have the same disposable income as when she was 22. Forget about logic. It's all about social recognition. Taken in isolation, buying a house in London on UK wages is totally nonsensical. But people act in social context all the time, regardless of good/bad/stupid. Recognition in her job may depend on it to. This is a very good post. Quote Link to comment Share on other sites More sharing options...
Venger Posted January 10, 2016 Share Posted January 10, 2016 Recognition in her job may depend on it to. This is a very good post. Being a home-owner? There are people way more senior and older than she is who rent. Can hear the bottom of a barrel being scraped with the excuses for others wanting to pay high prices, to BTL, and for greed. There are too many hpcers who have a big problem in accepting that other market participants see the market in a very different way than they do. (I know you're senior on hpc Si1 and not against you.) Even on this thread you have excuses for buyers backed by parents 'Can't they see it's an awful time to buy - dragging parents into it?' No they mostly can not see that. Forever HPI. You've even got older BTLers who thriving on population growth, 'always goes up with inflation', 'not building enough properties' = forever hpi. '16 years paid off with some dumb renter'. Buyers, owners, renter-savers, all need to take ownership of their own decisions. Quote Link to comment Share on other sites More sharing options...
Si1 Posted January 10, 2016 Share Posted January 10, 2016 (edited) Being a home-owner? There are people way more senior and older than she is who rent. Can hear the bottom of a barrel being scraped with the excuses for others wanting to pay high prices, to BTL, and for greed. There are too many hpcers who have a big problem in accepting that other market participants see the market in a very different way than they do. (I know you're senior on hpc Si1 and not against you.) Even on this thread you have excuses for buyers backed by parents 'Can't they see it's an awful time to buy - dragging parents into it?' No they mostly can not see that. Forever HPI. You've even got older BTLers who thriving on population growth, 'always goes up with inflation', 'not building enough properties' = forever hpi. '16 years paid off with some dumb renter'. Buyers, owners, renter-savers, all need to take ownership of their own decisions. Depends on her field and her office politics.I've seen obvious approval and career progression given to mortgage holders, I believe it's simply because they know they've got the individual over a barrel. Usually in corporate jobs with highish status and little real skill. (Not an excuse BTW) Edited January 10, 2016 by Si1 Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted January 10, 2016 Share Posted January 10, 2016 Depends on her field and her office politics. I've seen obvious approval and career progression given to mortgage holders, I believe it's simply because they know they've got the individual over a barrel. Usually in corporate jobs with highish status and little real skill. (Not an excuse BTW) Agreed. This happens. Large financial commitments (car loans too) are welcome as they are an incentive to stay loyal and not rock the boat too much. Also, they are a social common denominator: young lady with mortgage talks about housing to potential young lady customer with mortgage and they are aligned to talk about business. Quote Link to comment Share on other sites More sharing options...
Motor_Blade Posted January 10, 2016 Share Posted January 10, 2016 Depends on her field and her office politics. I've seen obvious approval and career progression given to mortgage holders, I believe it's simply because they know they've got the individual over a barrel. Usually in corporate jobs with highish status and little real skill. (Not an excuse BTW) + 1. Employers like you to be in debt, that way they have you over a barrel. Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted January 10, 2016 Share Posted January 10, 2016 (edited) Employers like you to be in debt, that way they have you over a barrel. It will be different after the glorious revolution when the hpc numbskull anarchists take over. Then office politics will be all about frugality and progress up the greasy pole will facilitated by anecdotes about achieving an incredible discount on tins of tuna by playing Aldi off against Lidl. Mark my words, the worm has turned! Edited January 10, 2016 by Bland Unsight Quote Link to comment Share on other sites More sharing options...
Si1 Posted January 10, 2016 Share Posted January 10, 2016 F#ck me I hit a few nerves! Quote Link to comment Share on other sites More sharing options...
Motor_Blade Posted January 10, 2016 Share Posted January 10, 2016 F#ck me I hit a few nerves! I don't think you realise how right you were. The Colson doctrine applies in many companies these days, once you have them by the balls their hearts & minds will follow - and if you're up to your **** in mortgage debt (or any other debt for that matter), your employer has you royally by the balls.......In my last job, one day in the office the discussion turned to how much money everyone had left the day before pay day, and out of circa 20 people all earning somewhere between 1-3 times the national average (the business is based up North - so living costs would be relatively low) I was the only one who had any money left in the bank, and it also turned out I was the only one with any savings, the only one with a pension plan & the only one who'd paid a sizeable chunk of the mortgage off. Within a year I'd been made redundant & the two most indebted had been promoted. A coincidence? No.....I don't think so.... Quote Link to comment Share on other sites More sharing options...
spacedin Posted January 10, 2016 Share Posted January 10, 2016 (edited) Sounds like a 22 year old nipper is about to learn an important lesson in life. Another great option is to share purchasing a property with someone else. Sounds like a bloody terrible idea to me. Edited January 10, 2016 by spacedin Quote Link to comment Share on other sites More sharing options...
Venger Posted January 10, 2016 Share Posted January 10, 2016 I don't think you realise how right you were. The Colson doctrine applies in many companies these days, once you have them by the balls their hearts & minds will follow - and if you're up to your **** in mortgage debt (or any other debt for that matter), your employer has you royally by the balls.......In my last job, one day in the office the discussion turned to how much money everyone had left the day before pay day, and out of circa 20 people all earning somewhere between 1-3 times the national average (the business is based up North - so living costs would be relatively low) I was the only one who had any money left in the bank, and it also turned out I was the only one with any savings, the only one with a pension plan & the only one who'd paid a sizeable chunk of the mortgage off. Within a year I'd been made redundant & the two most indebted had been promoted. A coincidence? No.....I don't think so.... Almost always has to be a sinister outside force for active buyers on hpc, in my experience. Year after year of rocketing HPI. Never stupidity or greed (even when they plain tell you they want a BTL) for those paying £500K for a terrace that a back in 2001 was £150K, with annual raging HPI until 2008, but soon picked up again later after the breakdown (of excuses and bailout). Even when you have examples right in front of you of BTLers saying forever HPI, and HPCers saying it's obvious about HPC therefore innocence. I guess it's all a warmup to for a repeat of the excuse in 2008 for the more recent buyer side (innocents / media / only wanted a home / they couldn't have seen market change / politicians and banks) to lobby protect the £Trillions in equity in their parents homes. Let the market find things out. If buyers buy they make their own decisions not matter what the 'peer pressure'. Most of us want a home to buy, in a competitive market for homes, but some of us are not prepared to pay 10x salary for a terrace. It's not all breakdown for the buyer who paid £450K for a terrace in 2014, and other buyer who paid £475K for a terrace in 2015, when rest of the other houses haven't transacted for decades and a few others are 'investment properties.' There are no innocents at these price levels. It's a market. Stuff your 'human rights (to incredible entitlement levels)' / desiring massive compensation for basic life events / bailouts for the owners. Email received from a pal last year. (I've edited out a bit of personal info... still renting, still saving, still putting money to pension, still expecting HPC.. not worrying for the owner side and wanting Human Right bailouts for them). We're in a market, not an excuse fest, anti-HPC party, forever HPI carriers. 19 September 2014 [.....]tired of all the HPI trolls/EAs [........] I read posts on the main forum once/twice per week. [.......] My view on property is much the same. I have 3 members of my immediate family in the 19-26 year age bracket; they all live in the ----------- and 3 bed semi's are 10-15 times what they earn (and I mean --------/ -------------- houses - not -----------.) Here in London, literally everyone I speak to over 40 believes that their own children will never be able to buy a house. The small 3 bed semi's are hitting £650k/750k - it's utter madness. These same old piles of bricks were £115k in 1996/1997. I read the ONS figures for UK housing yesterday. Average UK house price is now 10 times average UK earnings. Cannot see how that can be sustained... I'm still renting [.......] Hope the eventual rate rises - plus normal people being priced out - will put an eventual end to this insanity. Fingers crossed. Regards, -------- ------------- Well, based on the loan value for standard SVR mortgage I've just looked at on my Banks website, you would actually be looking at £400k interest on a £400k loan over the next 25 years (that's if interest rates stay as low as they currently are - which I don't think anyone believes will happen.) Now, look at some of the daft £450k terraced houses. I can easily see those dropping by at least 10-20% in value over the next 5 years; maybe much more. But even at just over a 10% fall and no rises in interest rates, that's your £50k deposit gone (plus the loss of the interest it could have earned in an ISA/etc..) And in the first 5 years of mortgage payments, at £2.6-2.7k per month? Well, you've only paid off £26k of your house. But remember the interest on the loan? That's cost you another £121k in just the first 5 years. So, after 5 years, you are ~£180k down on a £450k house - if interest rates don't go up at all and your house only drops in value by about 12%. The reality is likely to be something much more severe, IMHO - a 30% fall in prices and interest rates at just 2% higher than today gives a loss of over £300k on a £450k house in just five years. And what have you got for that £180k-£300k of investment? Just £26k worth of equity in a house (and minus all your other costs for 5 years - moving costs, stamp duty, maintenance, etc., you don't even have that!) So that, to me at least, is what is so frightening about buying in the current market. Not a single young person under the age of 35 I speak to can afford to buy at current prices. And for those that do, the doubling and trebling of houses prices needed to wipe out the enormous amount of interest they'd paid in the first 5-10 years of ownership is just not going to happen. Scary stuff indeed. Hence why I rent cheaply and push cash onto the "buy-outright when prices fall-back" fund. James Ferguson:- interview of 2014 @ 17:40-ish: I think all bubbles should be sold. The reasons why bubbles persist is not because people don't appreciate they are bubbles - they all know they are bubbles - think back to the Dot Com, there's a good example. We all knew it was a bubble; we didn't care. The reason we didn't care is very rational, we didn't care because you could make more money in the near term - actually 2 reasons - you could make more money in the near term than you could make in a normal market over 5 years, and two, "It didn't matter because I would get out in time'. The point about a market is you can't. Mathematically you can't. Only a minority of people can get out in time. By definition. (To the assumption Gov would stop it with everything it can)... You have remarkable faith in the ability of governments. http://videos.bigpic....uk/debate.html Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted January 10, 2016 Share Posted January 10, 2016 I don't think you realise how right you were. The Colson doctrine applies in many companies these days, once you have them by the balls their hearts & minds will follow - and if you're up to your **** in mortgage debt (or any other debt for that matter), your employer has you royally by the balls....... I realise that this is quite a subjective matter and that my opinion here is just that and only that, but I don't really buy this. If office politics involves toadying to others by leveraging up, you're in the wrong office. Likewise people can find a million rationalisations to do something stupid, no matter how stupid, provided everybody else is doing it too. I'd figure that what's potent here is that the office is a social space where social norms are enforced. As we presently endure a great collective madness regarding houses and debt the associated social norms are enforced everywhere, (for now). I guess I'm arguing that first rate people and good second rate people go to work to work and will move onwards and upwards by applying for or pitching for work that moves them up the food chain. If the smart move for other reasons is to hold down a job where you need to toady to third rate people who care more about whether or not you are the person they want you to be and not so much about the work that you do, then you have to take the rough with the smooth and profess a desperation to buy and shackle yourself to the kind of debt that makes you a proper person, . I'm going to pass on that for now. Quote Link to comment Share on other sites More sharing options...
Exiled Canadian Posted January 10, 2016 Share Posted January 10, 2016 I realise that this is quite a subjective matter and that my opinion here is just that and only that, but I don't really buy this. If office politics involves toadying to others by leveraging up, you're in the wrong office. Likewise people can find a million rationalisations to do something stupid, no matter how stupid, provided everybody else is doing it too. I'd figure that what's potent here is that the office is a social space where social norms are enforced. As we presently endure a great collective madness regarding houses and debt the associated social norms are enforced everywhere, (for now). I guess I'm arguing that first rate people and good second rate people go to work to work and will move onwards and upwards by applying for or pitching for work that moves them up the food chain. If the smart move for other reasons is to hold down a job where you need to toady to third rate people who care more about whether or not you are the person they want you to be and not so much about the work that you do, then you have to take the rough with the smooth and profess a desperation to buy and shackle yourself to the kind of debt that makes you a proper person, . I'm going to pass on that for now. I don't think it's as much about fitting in to some social norm as about how motivated a particular person might be to hit targets and generally run through walls in a particular function. In certain sectors it might well be to the employers advantage to have some highly leveraged "one pay check away from disaster" type chasing that last couple of sales to hit that monthly bonus; rather than some financially sorted HPC type wander off at 5pm because they've already got 3 years salary salted away. The opposite is true of other functions (eg. any function that involves handling cash or where fraud is a possibility) where Mr "Leveraged to the Nuts" would be perceived as a real risk. Quote Link to comment Share on other sites More sharing options...
Venger Posted January 10, 2016 Share Posted January 10, 2016 Read a story on a US forum where the renter-saver turned up to work in an old car. It was a thread all about image, and most of the posts thought it very important to have a newer car. His manager all glowing up the wonderfulness of homeownership. Renter-saver went full in and explained the debt and explained how he had money set aside, to wait for better value. He must have snapped vs the HPI manager, because he set out something about his financial position which apparently was much healthier than the older manager expected. History has given us enough lessons about risks of debt. You only have to look back to 2008, although it quickly passed by with excuse bailout. Don't we all get it? Si1 was recounting family peer pressure just the other day, with another family member buying. I'm getting pressure (again) from in-laws. Another SIL is going to take the plunge, with substantial deposit, emphasising how cheap the mortgage will be. I couldn't be bothered raising the counter points (historically low interest rates, if they stay low it's because you won't have a job etc), the fact that house prices have fallen and are probably continuing to fall in the north where we are, and opportunity cost [used that on the MIL was greeted with'that's just a word, a house is a real thing that always goes up in price bla bla']Please please sentiment turn. Interest rates please go up. And or house prices please tank a bit more. Grrrrrrrr. Employers don't force you to buy. Either do other family. If you need to impress your employers by buying a house, with prices as they are, that's your own market decision. It's getting ridiculous. No innocence in this market against these prices. Most of us want to buy a home ('just wanted a home'). It's a real commitment to buy, in a competitive market. 'Give me bailout for £250K mortgage because I was just doing what society expected'. No. SMI going back up to 39 weeks in a few months. And soon to be a loan. Many friends and family my side are waiting for much better value. A jumbo mortgage on a house, or claims on BTL via BTL mortgage debt, doesn't make you a full homeowner in my view. Just a market participant. Quote Link to comment Share on other sites More sharing options...
Richmond Posted January 10, 2016 Share Posted January 10, 2016 + 1. Employers like you to be in debt, that way they have you over a barrel. I was on a 'how to get a job' course and we were basically told not to say we didn't need the job financially as the employer was likely to run away. Though some of this was a fear on the employer side that they spend loads training you etc and you then just up and leave. Quote Link to comment Share on other sites More sharing options...
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