Boomer Conversation

[Guest]

Looking at the rightmove listing for 250k house... My father in law saw the mtg repayment box at the bottom... £1200pm. "That's good value" he said.

I replied "have you ever paid 50% of your take home on housing?"

The reply... "No of course not!"

He tried to explain things are different now but didn't admit prices are too high in relation to salary.

[canbuywontbuy]

It's simple - if boomers were magically made to be 27 years old and renting in today's economy, ONLY then would they get out hard it is.

[Greg Bowman]

It's simple - if boomers were magically made to be 27 years old and renting in today's economy, ONLY then would they get out hard it is.

Before this degenerates into a boomer bashing thread, on behalf of the silent majority of boomers who worry most days about their kids including housing , actively plan to help them if they can often at their cost and want a reducing of house prices..

All boomers are not the same and the fact your father in law is a twunt says more about the family you married into than boomers.

[Guest]

Actually he's very sound in many ways, and not entirely a twunt when it comes to housing .... I guess this was just an example of how all the pieces of the jigsaw are laid out, but they just can't or won't join them up.

[winkie]

Old people over time will lose their sense of value......easy to check, ask them what the going rate per hour is for a gardener is at the moment?.....very few would know, seriously.

[nome]

You might as well be trying to converse with an alien from the planet Zog... the vast majority of boomers have simply no comprehension at all of the realities of today, the life they've led is pretty much the polar opposite of everything that now exists.

[spunko2010]

Before this degenerates into a boomer bashing thread

Looks like you posted just in time.

[ThePiltdownMan]

There probably have been boomers paying 50% when interest rates were far higher than what they are now.

[Blod]

There probably have been boomers paying 50% when interest rates were far higher than what they are now.

Asking how he managed when rates were up fifteen percent might give a little perspective.

[Bruce Banner]

Asking how he managed when rates were up fifteen percent might give a little perspective.

We had high inflation and rising interest rates but also high wage inflation so it was manageable.

At one point, I used to send updated price lists to my customers every month.

With regard to mortgage, my bank would send a letter almost every month to ask me to adjust my standing order payment, if it was up I would comply and if it was down I would ignore it. The result was my mortgage paid off early.

Edit: Not a good time to be retired on a fixed income though.

Edited August 12, 2016 by Bruce Banner

[Greg Bowman]

Looks like you posted just in time.

Just although Nome is sending round the lynching squad....might find out why we are sometimes called nasty boomers though...

[Confusion of VIs]

Looking at the rightmove listing for 250k house... My father in law saw the mtg repayment box at the bottom... £1200pm. "That's good value" he said.

I replied "have you ever paid 50% of your take home on housing?"

The reply... "No of course not!"

He tried to explain things are different now but didn't admit prices are too high in relation to salary.

Probably depends as much on where you live as what age you are.

I bought my first house in 1980s London the mortgage was 13.75% on 3.25 times my earnings add in the endowment policy, compulsory high loan value insurance, council tax and utilities and you were at around 80% of net income going on the house. Meanwhile friends who stayed in Blackpool were probably paying less than half this for their houses.

And yes it was different, in that over the next 10 years inflation and wage growth massively eroded the debt but the first few years were beyond hard.

[spunko2010]

Just although Nome is sending round the lynching squad....might find out why we are sometimes called nasty boomers though...

I don't know many boomers but of the few that I do - parents, neighbours, etc - I've only ever met a handful of ramping "you need to work harder like we did" sorts. My parents certainly didn't benefit from HPI.

[Mrs Bear]

Old people over time will lose their sense of value......easy to check, ask them what the going rate per hour is for a gardener is at the moment?.....very few would know, seriously.

What do you call 'old'?

I would only associate this sort of thing with the really old, most especially an old aunt of Mr B's who thought any more than five shillings was a lot. But she would have been well over 80 and died at over 90 some years ago.

I certainly wouldn't associate it with anyone in their 60s or 70s, not unless they had dementia and were living in 'way back'. Some of the residents at my mother's care home were having their nails done one day, and I remarked to one of them that her nail polish was a pretty colour.

'Yes!' she said, 'and do you know, it was only one and six!' lol

[TheCountOfNowhere]

Looking at the rightmove listing for 250k house... My father in law saw the mtg repayment box at the bottom... £1200pm. "That's good value" he said.

I replied "have you ever paid 50% of your take home on housing?"

The reply... "No of course not!"

He tried to explain things are different now but didn't admit prices are too high in relation to salary.

Shoulda mentioned that was with IRs at 0.25%....what happens if mortgage rates are pushed up and double...thats 100% of your take home

Fec that

[Bruce Banner]

Shoulda mentioned that was with IRs at 0.25%....what happens if mortgage rates are pushed up and double...thats 100% of your take home

Fec that

And with very low wage inflation....... ouch!

[durhamborn]

Shoulda mentioned that was with IRs at 0.25%....what happens if mortgage rates are pushed up and double...thats 100% of your take home

Fec that

Thats the problem isnt it.All the risk is on interest rates going up.My daughter pays the same each month as % of take home pay (16% joint earnings) as i did when i bought in 1990 and she went straight to a family home,not a terrace like me.However she is fixed at 2.2%,mine was fixed at 8.8% mortgage.

Iv got them hammering the capital down as quick as possible while interest rates are where they are.For people down south,or even many new buyers in areas of the north who already are unable to over pay at todays rates are in serious trouble.

Boomers mainly look at the interest rates and repayments ignoring the outstanding debt level.

A good example is in the 80s early 90s,people getting made redundant tended to pay the mortgage off with the redundancy and have a bit left.Circa £15k was about the average.Younger people are lucky to get a weeks notice these days.

Edited August 12, 2016 by durhamborn

[dgul]

Old people over time will lose their sense of value......easy to check, ask them what the going rate per hour is for a gardener is at the moment?.....very few would know, seriously.

There is a theory that our in-built sense of value is set sometime around our first pay-cheque. Then, as we age, we start to have to do value-adjustments in our head - at first these are minor, but for your typical octogenarian they are quite substantial. This isn't helped by the fact that, for people over about mid-fifties, there have been some significant episodes of inflation since that first pay.

[Sandwiches33]

boomer was lecturing me on why i hadn't bought a house saying 200k is not expensive for a house. Then the subject came up about the trees in his garden being out of control and encroaching all the other houses , I suggested a tree surgeon could probably sort that out in a day. He started lecturing me" did I know just how expensive a tree surgeon was? and how he cant afford that"

So a certain degree of cognitive dissonance is in play.

[TheCountOfNowhere]

boomer was lecturing me on why i hadn't bought a house saying 200k is not expensive for a house. Then the subject came up about the trees in his garden being out of control and encroaching all the other houses , I suggested a tree surgeon could probably sort that out in a day. He started lecturing me" did I know just how expensive a tree surgeon was? and how he cant afford that"

So a certain degree of cognitive dissonance is in play.

[TheCountOfNowhere]

Thats the problem isnt it.All the risk is on interest rates going up.My daughter pays the same each month as % of take home pay (16% joint earnings) as i did when i bought in 1990 and she went straight to a family home,not a terrace like me.However she is fixed at 2.2%,mine was fixed at 8.8% mortgage.

Iv got them hammering the capital down as quick as possible while interest rates are where they are.For people down south,or even many new buyers in areas of the north who already are unable to over pay at todays rates are in serious trouble.

Boomers mainly look at the interest rates and repayments ignoring the outstanding debt level.

A good example is in the 80s early 90s,people getting made redundant tended to pay the mortgage off with the redundancy and have a bit left.Circa £15k was about the average.Younger people are lucky to get a weeks notice these days.

Yip...risk...massive risk...we're pretty much at the point of most expensive housing possible...so there is massive risj in buying.

[Sandwiches33]

Yip...risk...massive risk...we're pretty much at the point of most expensive housing possible...so there is massive risj in buying.

Yup this is one of the main reasons I wont buy.

Job instability - I have a good job but that said over the past 15 years I have lost my job and had to move numerous times, the job losses were company insolvency too so I got bugger all redundancy and often had to move city at short notice.

Interest rates - at some point an event could shunt them up, if I am paying a grand a month now how the fook would I service it if it went up. Even at a grand a month it doesn't leave much room for repairs etc.

Stuck with it - loads of houses round by me have been on for years now and arent shifting.

Depreciation - If I had bought my house instead of renting it has already dropped 30k in 3 years! My house is depreciating faster than a luxury german car.

Peak- definately at peak now, starting to tip, the longer i leave it the cheaper they will get. I already theoretically saved 30k by renting. its mad "ungainz" for the renter.

I am giving it a couple of years now and lets see how hard it starts to bite. The north is very much in a downward spiral.

The new builds are getting desperate round me, lots not selling they keep mailing me offers with enticing low monthly costs/mortgages and free stuff. Simple business, if someone is doing that there position is weakened and they know it. I can see the panic in the mails.

[Rare Bear]

Probably depends as much on where you live as what age you are.

I bought my first house in 1980s London the mortgage was 13.75% on 3.25 times my earnings add in the endowment policy, compulsory high loan value insurance, council tax and utilities and you were at around 80% of net income going on the house. Meanwhile friends who stayed in Blackpool were probably paying less than half this for their houses.

And yes it was different, in that over the next 10 years inflation and wage growth massively eroded the debt but the first few years were beyond hard.

I was in the same boat.

[Frugal Git]

boomer was lecturing me on why i hadn't bought a house saying 200k is not expensive for a house. Then the subject came up about the trees in his garden being out of control and encroaching all the other houses , I suggested a tree surgeon could probably sort that out in a day. He started lecturing me" did I know just how expensive a tree surgeon was? and how he cant afford that"

So a certain degree of cognitive dissonance is in play.

Quite. Genuine recent example of boomer logic.

500k on a house - cheap. Spending £300 to replace an ancient PC, can't find the money.

400k on a house - bargain. £35 p/h for a mechanic, day light robbery.

String of buy to lets that he was telling anyone in earshot about - yes indeed. Then tried haggling over 20p at a car boot.

600k on a terraced house in Cambridge - great value. Waitrose changing the rules on free coffee in the cafe only if you buy at minimum a 25p banana - 'it's a bait and switch scam and I'll no longer go there on principle. I'll go to Costa and pay £3 to truly cut off my nose to spite my face'.

The last one was a personal fave.

Edited August 12, 2016 by Frugal Git

[bluegnu]

I think there are big fundamental differences between higher rate environments in the past and today, and what it means for the future.

Sure, I can imagine how hard and scary it was to see rates spike up to 15% in the 80's but we then had 20+ years of falling rates. As the years ticked by the montly payments fell and wage inflation eroded the capital lump of debt. Nice! Also, expanding credit through various means made property prices rise. So, a whole generation saw their monthly payments fall in real and probably in nominal terms whilst their property values rose - a double win!

Today, with interest rates at almost zero this cannot happen again. Monthly payments are going to stay roughly where they are today or rise. It's looks like wage inflation is going to stay low for some time so the debt erosion is going to be less, and with the larger lump of debt required for todays higher prices it'll have less effect anyway. Should credit tighten in the future property values will fall. So, the next generation of house buyers could see their monthly payments rise and the value of their property fall - a double lose!