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JonoP

Maybe I Have Got It Wrong?

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I am a bear. I truly, desperately and passionately want house prices to drop.

BUT, I was going through my old files last night and looking through old payslips.

In 1999 I was earning less than £20K.

My salary has increased 400% in six years.

At the same time, interest rates have decreased by 1/3 to 1/2

House prices have increased 300%

This means that house prices are as affordable for me now as they were in 1999 in terms of a percentage of my salary.

Bugger! Thoughts?

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all i can say is if your pay has risen 400% from £20k and you're now on £100k your situation is not typical..and that you're not doing the same job as before.........

HPs are determined by what the average person gets..........and their pay has only gone up about 35% in the past 7 or 8 years...............you have to compare like with like .....a 1999 job with the same job now..NOT what an individual climbing the greasy pole gets now compared to then

Edited by Michael

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Guest Bart of Darkness

Yes, we've all seen 400% increases in our incomes in the past 6 years.

Crash cancelled!

Edited by Bart of Darkness

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I am a bear. I truly, desperately and passionately want house prices to drop.

BUT, I was going through my old files last night and looking through old payslips.

In 1999 I was earning less than £20K.

My salary has increased 400% in six years.

At the same time, interest rates have decreased by 1/3 to 1/2

House prices have increased 300%

This means that house prices are as affordable for me now as they were in 1999 in terms of a percentage of my salary.

Bugger! Thoughts?

In 1995 I was earning about £45k a year and the banks were still worried about lending me £110k for a house. If you think you can sustain your earning potential then go buy a property. You'll have plenty time to worry once you're strapped in tight into negative equity. If you're such a high-flyer I'd travel a bit and enjoy the world. House prices are not going anywhere quick.

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Yeah, but remember - the higher you fly the harder you fall - buy a house today and you've got to sustain that kind of income for 20-25 years...

Edited by dnd

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My pay is actually exactly the same as it was 7 years ago. I costed it out recently in terms of an hourly rate that would cover a company delivering all the things that are covered through PAYE, and it came to 25 p/h which is what I was earning as a company 7 years ago. I am not wondering whether to buy.

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Nah,he's just thinking aloud.

Come on,Pond.Tell us why you haven't bought.

Oi - no 'awooga' ing please.

Reason I have not bought is:

a) I work in software sales. If I ever change career I will be unlikely to be able to maintain my earnings

B) The amount of money (I do not earn 100K - that would be 500%) I could borrow will buy a slightly dodgy 3 bed. I can rent a nice flat for less

c) I think house prices will go down and I do not want to see my hard earned deposit evaporated

Even so, I could buy and it would be nice to own my own house. But a bummer if its value fell by 20% after I bought it. I remember thinking .COM stocks were overvalued in 1998......Do NOT get me started on Google today......

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(I do not earn 100K - that would be 500%)

No it wouldn't, that would be 400% increase.

20K plus

100% = 40K

200% = 60K

300% = 80K

400% = 100K

A 400% increase means the new amount minus the old amount = 400% of the old amount.

100K-20K = 80K. 80K is 400% of 20K.

So I guess what you mean is you earn 80K, which is a 300% increase, or 400% OF YOUR OLD SALARY.

If I were paying somebody 80K a year for sales, I'd want them to be able to do percentages. :lol:

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Oi - no 'awooga' ing please.

Reason I have not bought is:

a) I work in software sales. If I ever change career I will be unlikely to be able to maintain my earnings

B) The amount of money (I do not earn 100K - that would be 500%) I could borrow will buy a slightly dodgy 3 bed. I can rent a nice flat for less

c) I think house prices will go down and I do not want to see my hard earned deposit evaporated

Even so, I could buy and it would be nice to own my own house. But a bummer if its value fell by 20% after I bought it. I remember thinking .COM stocks were overvalued in 1998......Do NOT get me started on Google today......

look mate,if you are earning 100k pa then you are way past the poverty break-point.....the only thing stopping you from buying is the fact you'll look bad amongst your peers with a 2 bed flat instead of a mansion...don't fall prey to the peer-pressure.

.....if you earnt the typical average wage then an extra £60 per month on bills makes a lot of difference.

I don't earn a bad whack(self employed), but many of the employees where I work at the moment don't earn much over 20k,and don't get the benefits of expenses either....if petrol went to £3 a litre it's not my problem,it's the governments.

Edited by oracle

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No it wouldn't, that would be 400% increase.

20K plus

100% = 40K

200% = 60K

300% = 80K

400% = 100K

A 400% increase means the new amount minus the old amount = 400% of the old amount.

100K-20K = 80K. 80K is 400% of 20K.

So I guess what you mean is you earn 80K, which is a 300% increase, or 400% OF YOUR OLD SALARY.

If I were paying somebody 80K a year for sales, I'd want them to be able to do percentages. :lol:

Ok Ok - a bad choice of words. Lets replace 'increased by 400%' with 4 X

heh heh - if you were in sales you would understand exaggerating percentages :-)

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1995 would have been an excellent time for you to have bought! I am guessing that at the time you could have just about done it too. It would have been difficult, but not impossible. No doubt that it would have been risky, as nobody could have told you with any certainty where interest rates were going back then.

But you didn't, and watched prices go up and up. What a bummer. No doubt that friends who did buy are now wealthier on paper than you, even though they earn a lot less. Housing tends to be a very binary investment, as houses are generally non-divisible. You are either in the market (long) or you are out of the market. Stocks are a bit different, some people have none, some have some, some have more. But with houses you are either on one side of the fence or the other. And for the time period in question, you have been on the wrong side. It sucks. I know what it feels like.

Advice going forward? Very tough. What is certain is that you can't turn back the clock. You have lost out on those profits that your friends made. No point crying over spilt milk. What is also true is that there won't be much more of those profits to be had. Waiting to see what happens in the next 12 months might be a good idea. Beyond that, who knows.

For my own part, I think the next rate move is likely to be down, unfortunately. Unemployment is drifting up, but does not seem in a hurry. I am just gearing up to sign my final 12 month rental contract. But if a crash/dip comes after I buy in 2007, I'll be looking for the nearest high building to chuck myself off of.

Edited by boroughboy

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I am a bear. I truly, desperately and passionately want house prices to drop.

BUT, I was going through my old files last night and looking through old payslips.

In 1999 I was earning less than £20K.

My salary has increased 400% in six years.

At the same time, interest rates have decreased by 1/3 to 1/2

House prices have increased 300%

This means that house prices are as affordable for me now as they were in 1999 in terms of a percentage of my salary.

Bugger! Thoughts?

Are you mad..

you earn £100,000 and you can't afford a house...?>

Why not...?

are you keeping 28 illegitimate children??

you are a bigamist.. you have several families..

its not that you earn £100,000 that is the issue..

trust me.. most don't...

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If I were paying somebody 80K a year for sales, I'd want them to be able to do percentages. :lol:

Reminds me of an old joke:

Guy walking down the street.

He sees an old school friend driving past in a new Merc.

The Merc pulls over to buy a newspaper.

Guy runs up to his old school pal and says:

" Hey Joe, I'm John from your class at school. Is that your car?"

" Sure is John"

" But how come? You were always bottom of the class. In everything."

" Hey, I'm as suprised as you. I run a small import business. I bring in goods from overseas, DOUBLE the price and sell on. And, you know what? That steady TEN-percent markup keeps me in a lifestyle I've become accustomed to." :D

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If you earn 80K per year, stick 40%, or whatever you can, of it away for 2 years - that will give you a nice hefty deposit!

That is the plan. But you have to put a small fortune in your pension as well (curently 17%)

My dads nice government funded final salary pension (that I think pays 70 odd % of his highest salary as a University Professor) cost him 6% of his salary.

We are getting shafted each way you look at it.....

Idea is save a goddam huge deposit and then can afford to do a more chilled job in a nicer area of the country and still be able to afford to pay the monthly mortgage...

Are you mad..

you earn £100,000 and you can't afford a house...?>

Why not...?

are you keeping 28 illegitimate children??

you are a bigamist.. you have several families..

its not that you earn £100,000 that is the issue..

trust me.. most don't...

Apom. I do not earn £100K. My initial maths was wrong. Also - a fair chunk of my salary (30%) is commission and banks do not like that. Plus, I get a car allowance each month and for some reason

I am not allowed to count that as income when applying for a mortgage. But, I digress.....

How old are you? I found my salary went up very fast between 25 and 32. I do not think this is very unusual - hence a lot of 32/33 year old FTBs. In 1995 to answer an earlier question I earned £3.50 per hour in the Granada TV Rentals Call Centre. I just think salaries go up fast in your late 20s - hence people can afford to purchase at inflated prices

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Google fell a nice 9% today - you should have seen that coming - no company is worth 100 times its value. Did you not learn in the dot com boom and bust???

That is what I mean!!!! Stupidly over valued. Hence the do not get me started remark. What did you think I meant?

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Hi Pond

There are many similarities between us - I was earning about £20k in 1994 and bought a flat then (paid about £60k, I think). In Jan 2004 (the top of the market, I think) I sold my house (having had one other house in between) for a tidy £200k profit - I was also in a software sales job by that time and earned £96k that year.

But then I got off the roundabout. I was convinced that the salesman lifestyle (commute Manchester to S. England most days - six to eight hours driving plus full day in office) would kill me. I've lived in Spain since, doing building work. Lost several stone in weight, despite a very pleasant lifestyle. However, wages now are very low and Spain is expensive - I may be forced to get back on the treadmill (if they'll have me!).

My point is, I don't think there's any standard, predictable path through life - you make your choices as seems best at the time and, hopefully, things go OK. Glad there's this forum, however - I don't think it can hurt to be informed of rational debate on either side of the argument.

Cheers

LL

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  • 302 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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