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Young spend three times more on housing than grandparents

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1 hour ago, Grab_Some_Popcorn said:

This is why the boomers who suggest I pay £1000+ a month on a mortgage do my nut. They paid 17% of salary on housing costs yet tell my generation to pay double that. They have completely lost touch with incomes and cost of living.

- http://www.bbc.co.uk/news/business-41323442

Both figures (Boomers and Millennials) sound much too low. I know I paid over 50% of may salary on my mortgage when I was in my 20s (3.25 x salary at 13.5% interest) and I recon any Millennial paying only 23% is doing very well.

Figures for Grandparents are pretty irrelevant without knowing what other costs they were paying, e.g. back then families spent around a third of their income on food.

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47 minutes ago, Confusion of VIs said:

Both figures (Boomers and Millennials) sound much too low. I know I paid over 50% of may salary on my mortgage when I was in my 20s (3.25 x salary at 13.5% interest) and I recon any Millennial paying only 23% is doing very well.

Figures for Grandparents are pretty irrelevant without knowing what other costs they were paying, e.g. back then families spent around a third of their income on food.

Using two equal incomes, a mortgage of 50% of one income leaves 150% of both as disposable income. A mortgage of 23% of joint incomes leaves only 77% of both disposable.

The young are paying more because it's gone from 3x main income to 4.5x joint income. Even at historically low rates, they are JIMJAMs Joint Income Mortages Just About Managing.

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10 minutes ago, Democorruptcy said:

Using two equal incomes, a mortgage of 50% of one income leaves 150% of both as disposable income. A mortgage of 23% of joint incomes leaves only 77% of both disposable.

The young are paying more because it's gone from 3x main income to 4.5x joint income. Even at historically low rates, they are JIMJAMs Joint Income Mortages Just About Managing.

JIMJAM NIGHTY

Joint Income Mortages Just About Managing, No Income Generated (to) Have Tomorrows Young

(I admit I just made that up)

Edited by honkydonkey

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One need to wonder why the MSM publishing news related to affordability, housing and young people debt everyday. Is the TPTB is preping the Joe public for a crash? It is unlikely they can pull some more props out of the hat.

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The BBC is not very good at maths - normally baby boomers are people born post 1945 up to 1965 - so they could be 72 now

Quote

The baby-boom generation - now in its 50s and 60s - spent 17% of income at the same age

Saying that a great article - shame it was not published 17 years ago when this problem started

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Here's the Resolution Foundation report itself:

http://www.resolutionfoundation.org/app/uploads/2017/09/Home-Affront.pdf

They're using housing costs to net income to calculate that 23% figure (see page 29).

I know lots of 30something Millennials who have zero housing costs because they are stuck living with their parents due to the high cost of even renting in London/SE. Where are they on these graphs? Nowhere, because these things are always done on households rather than individuals.

Edited by Dorkins

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53 minutes ago, Sugarlips said:

Dont let me past be your future: Harry Smith, aside from all the anti-tory messages there are important facts in this latest Guardian article..

 

https://www.theguardian.com/society/2017/sep/19/britain-housing-catastrophe-harry-leslie-smith-childhood

Times were bad then 1920s in the slums of London, Glasgow, New York also.....more people lived in London then than now.....it was those born 10 years later and after the war that reaped the benefits of house building, peace, investment in infastructure, health,job security,......the children in that picture not the parents they had it hard..... today's children are split, some will become worse off than their parents..... a few will not want for anything, anything materialistically anyway... doesn't mean they will be happy or healthier of course.;)

londonpopulationgrowth.jpg

Edited by winkie

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1 hour ago, Confusion of VIs said:

Figures for Grandparents are pretty irrelevant without knowing what other costs they were paying, e.g. back then families spent around a third of their income on food.

That's partially true, insofar as food cost a fortune 100 years ago, and 50 years ago things like TVs and cars cost a fortune.  Now it's houses that cost a fortune.

The issue is that we could live in a world in which food AND TVs AND houses are affordable.  Food cost a lot 100 years ago because it really did cost a lot to produce.  Whereas house prices today are inflated ARTIFICIALLY. 

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3 hours ago, honkydonkey said:

JIMJAM NIGHTY

Joint Income Mortages Just About Managing, No Income Generated (to) Have Tomorrows Young

(I admit I just made that up)

My maths were sadly lacking in that post.

Using two equal incomes a mortgage of 50% of one income is 25% of the total household income so leaves 75% disposable. A mortgage of 23% of joint incomes leaves 77% of both disposable. I suppose the main difference is childcare costs when both parents are working.

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In the 1950s and 1960s it was seriously claimed by many that energy would be free (nuclear) and increases in productively would mean folks would scarcely have to work at all, we would all be living lives of leisure in shiny silver suits...how sour has that dream turned.  The young have hardly an inkling how desperate their situation is...only a handful are waking up to it.

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6 hours ago, Grab_Some_Popcorn said:

This is why the boomers who suggest I pay £1000+ a month on a mortgage do my nut. They paid 17% of salary on housing costs yet tell my generation to pay double that. They have completely lost touch with incomes and cost of living.

- http://www.bbc.co.uk/news/business-41323442

they spend 23% :lol:  more like 50%

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46 minutes ago, Wayward said:

In the 1950s and 1960s it was seriously claimed by many that energy would be free (nuclear) and increases in productively would mean folks would scarcely have to work at all, we would all be living lives of leisure in shiny silver suits...how sour has that dream turned.  The young have hardly an inkling how desperate their situation is...only a handful are waking up to it.

Absolutely true. the time of plenty is over due to the inability of those who are supposed to lead us to look beyond a consumption based economy where the existential structure is still work-earn-spend-die.

 

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56 minutes ago, Wayward said:

In the 1950s and 1960s it was seriously claimed by many that energy would be free (nuclear) and increases in productively would mean folks would scarcely have to work at all, we would all be living lives of leisure in shiny silver suits...how sour has that dream turned.  The young have hardly an inkling how desperate their situation is...only a handful are waking up to it.

I remember that feeling of the future even from the 70s and 80s.  

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4 hours ago, rantnrave said:

Presumably the %s quoted here are including income tax as an expense? Otherwise these figures are way, way too low.

Report is stating the bleeding obvious though.

We see %s like this very often but they always seem too low.

The mortgage rates average probably includes old mortgages too.

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5 hours ago, Confusion of VIs said:

Both figures (Boomers and Millennials) sound much too low. I know I paid over 50% of may salary on my mortgage when I was in my 20s (3.25 x salary at 13.5% interest) and I recon any Millennial paying only 23% is doing very well.

Figures for Grandparents are pretty irrelevant without knowing what other costs they were paying, e.g. back then families spent around a third of their income on food.

Same here. I bought in the early 1980s at the start of a period of slowly-rising interest rates, which went to about 15% for a short period. Seemed like every couple of months I would get a letter from the building society telling me to pay more.  I do remember the mortgage payment taking the majority of my (average-ish) salary meaning I had to scrimp on other stuff. 

 

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39 minutes ago, Funn3r said:

Same here. I bought in the early 1980s at the start of a period of slowly-rising interest rates, which went to about 15% for a short period. Seemed like every couple of months I would get a letter from the building society telling me to pay more.  I do remember the mortgage payment taking the majority of my (average-ish) salary meaning I had to scrimp on other stuff. 

 

I'm guessing  lifetime cost would be much higher for those starting out now. Capital values were tripling every decade until 2007 and eroding the feeling of being indebted.  Anybody taking on a mortgage since 2007 has had to pay a hefty whack and although mortgage rates are low, the mortgage probably feels like a lifetime commitment as opposed to something that inflation and hpi will sort. We've gone from house prices tripling every decade from 1967-2007, together with high retail and wage inflation to 14% hpi over the last decade  ( not annually but in total ( source Halifax house price index)) and low rpi and wage inflation. No escape from the capital value of the debt.

Edited by crashmonitor

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1 hour ago, Funn3r said:

Same here. I bought in the early 1980s at the start of a period of slowly-rising interest rates, which went to about 15% for a short period. Seemed like every couple of months I would get a letter from the building society telling me to pay more.  I do remember the mortgage payment taking the majority of my (average-ish) salary meaning I had to scrimp on other stuff. 

 

This is very true.....except ONE persons average full time wage then would get someone on the first rung WITHOUT HELP, (today an average wage would be ~ £27 approx) a working persons wage would purchase a comfortable home for a new family.....yes, had to watch 'the pennies' go without holiday, cook from scratch, keep utility bills low, hand-me-downs and jumble sales, watch the phone bill......today there are far more ways to spend money, far more temptations.....;)

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8 hours ago, iamnumerate said:

The BBC is not very good at maths - normally baby boomers are people born post 1945 up to 1965 - so they could be 72 now

To be fair to the BBC the second peak of the UK baby boom is quite broad:

Image result for uk baby boom graph

UK boomers born on the falling edge of the 1963 peak can be argued as going as late as 1970 so not totally unreasonable to propose that the youngest boomers are not yet fifty (I don't like to go too far with this line of argument or I may inadvertently turn myself into a boomer).

Edited by Beary McBearface

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  • 294 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% +
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