The Boomer Perspective on HPC

[Mikhail Liebenstein]

 

But the very institutions, as Keen points out in the podcast, are still driven by that Boomer Economic class which do not allow any challenge to the Boomer economic and socio-political consensus. This again doesn't absolve millennials from their rather hilarious culture wars seeped in another manifestation of the century of the self - All that matters is my subjective view of who I am.

CEOs, to Senior Civil Servants but crucially Economic Orthodoxy stems from that Boomer mentality of leaders.

TINA - There is no Alternative to the Economic Boomer consensus of anarchic capital de-regulated neo-liberalism.

Indeed, GenX are not really at the controls yet. But looking forward to pushing the last boomers out the door. 

We then need to address those final salary pensions in the public sector. 

Edited December 21, 2020 by Mikhail Liebenstein

[Freki]

 

In a recent podcast in another thread, Keen mentions rightly, perhaps the most selfish generation of leaders we have ever had. All good 50+ ppl forgiven but my days, your comrades have a lot to answer for.

 

I'm always looking for new economic podcasts mostly the one with debates, care to share the name please?

[kzb]

When you  look at average incomes and mortgage repayments, housing outside London is just as "affordable" now as it was to the boomers in their heyday.

When I say you can get a nice house in Blackpool for £100k you lot roll your eyes and reply I'm not living in a dump.  But the boomers did.

[Si1]

 

When you  look at average incomes and mortgage repayments, housing outside London is just as "affordable" now as it was to the boomers in their heyday.

When I say you can get a nice house in Blackpool for £100k you lot roll your eyes and reply I'm not living in a dump.  But the boomers did.

Considering the low levels of home ownership in post boomer cohorts then that's nonsense. Have you seen the trajectory of salaries in the regions over the last 20 years?

[GregBowman]

 

When you  look at average incomes and mortgage repayments, housing outside London is just as "affordable" now as it was to the boomers in their heyday.

When I say you can get a nice house in Blackpool for £100k you lot roll your eyes and reply I'm not living in a dump.  But the boomers did.

Its not I am a boomer and worked in the North West for a few years in the 80's  - loved it - disposable income of everyone was massive so Manchester boomed, Cheadle, Knutsford, Alderley Edge etc

But in common with the rest of the UK salaries are appalling relatively nearly 40 years on - people were earning 20/30/40k in good jobs but nothing special in the eighties all over the UK  - now people think £60k is a fortune - compared to house prices it is no where near as affordable now as it was then tragically so

You sound like a car dealer with your mortgage payment quote - what about the deposit and paying off the capital ?

My deposit was £5k on a credit card on a flat in Surrey Quays that cost £63k in the late 80's 

If you weren't there you have no idea sorry 

[Mikhail Liebenstein]

 

Its not I am a boomer and worked in the North West for a few years in the 80's  - loved it - disposable income of everyone was massive so Manchester boomed, Cheadle, Knutsford, Alderley Edge etc

But in common with the rest of the UK salaries are appalling relatively nearly 40 years on - people were earning 20/30/40k in good jobs but nothing special in the eighties all over the UK  - now people think £60k is a fortune - compared to house prices it is no where near as affordable now as it was then tragically so

You sound like a car dealer with your mortgage payment quote - what about the deposit and paying off the capital ?

My deposit was £5k on a credit card on a flat in Surrey Quays that cost £63k in the late 80's 

If you weren't there you have no idea sorry 

So right, I knew a sales guy in a job a few years back who had worked for Xerox selling industrial photocopiers in the 1980s; he had a £100k year one time - that was great money back then. 

You are right about there being a £60k threshold. A lot of people never cross that and can only dream.  I did cross that line fairly early on in my career, mid 20s, and being able to show that does give you access to a rung of higher paying jobs. That said, working for an international business in a senior local/European role does seem to cap out at about £200-300k. I think to make more in the UK you really need equity or to set something up yourself. 

[markyh]

 

Indeed, GenX are not really at the controls yet. But looking forward to pushing the last boomers out the door. 

We then need to address those final salary pensions in the public sector. 

You miss the masterplan. Gen X (me) own more Bitcoin and Crypto than Millenials and younger. They are coming in after transfering their little wealth to Gen X.  When Gen X start cashing out of Crypto they will buy up the boomers property (50% off due to a ***) with Crypto gainz,  and rent it to millenials and younger. 

And so the circle is complete. 

Gen X FTW. 

[kzb]

 

Considering the low levels of home ownership in post boomer cohorts then that's nonsense. Have you seen the trajectory of salaries in the regions over the last 20 years?

Look up the Nationwide affordability index. 

That takes into account disposable income and what your mortgage payment would be.  The mortgage payment these days is very close to what it was in the 1980's.  In fact it is better in many cases.

The above statement does not apply to the London area obviously.  Also, the affordable mortgage payment is predicated on interest rates being low of course.

[kzb]

 

Its not I am a boomer and worked in the North West for a few years in the 80's  - loved it - disposable income of everyone was massive so Manchester boomed, Cheadle, Knutsford, Alderley Edge etc

But in common with the rest of the UK salaries are appalling relatively nearly 40 years on - people were earning 20/30/40k in good jobs but nothing special in the eighties all over the UK  - now people think £60k is a fortune - compared to house prices it is no where near as affordable now as it was then tragically so

You sound like a car dealer with your mortgage payment quote - what about the deposit and paying off the capital ?

My deposit was £5k on a credit card on a flat in Surrey Quays that cost £63k in the late 80's 

If you weren't there you have no idea sorry 

The 1980's  were catastrophic for the working class in the regions.  I note you mention the well-off areas in Cheshire.  It certainly was not like that in most other areas in the north.

I've got quite a few nephews, nieces and offspring of my own.  All of them that have got into their 20's have managed to buy much better houses than mine and in more fashionable areas.  But not in the south-east.

[monkeyman1974]

 

When you  look at average incomes and mortgage repayments, housing outside London is just as "affordable" now as it was to the boomers in their heyday.

When I say you can get a nice house in Blackpool for £100k you lot roll your eyes and reply I'm not living in a dump.  But the boomers did.

This is a very good point, plenty of housing in UK is below replacement cost (say £150 psf for a new build), including Blackpool; and indeed where I grew up on the east coast. 

[kzb]

Right what do you think of this.

I have taken the Nationwide affordability index and contracted the data for pasting on here.  The original data has 4 quarters in each year (except 2020, which has two).  I have found the average index for each year to make the list much shorter.

The index is based on 1985 average =100.

They have found the mortgage payment needed to buy as a 1st time buyer in that year (obviously dependent on interest rate).  They have found the average disposable income in that year and ratio'd the mortgage payment to the disposable income.

I've provided both North-West region and London.

Year	NW	London
1983	85	66
1984	91	80
1985	100	100
1986	86	101
1987	84	117
1988	84	120
1989	125	137
1990	144	117
1991	114	81
1992	92	57
1993	71	42
1994	67	39
1995	63	39
1996	60	38
1997	68	49
1998	71	55
1999	67	56
2000	71	65
2001	71	64
2002	73	66
2003	85	71
2004	116	84
2005	126	87
2006	129	90
2007	137	105
2008	124	96
2009	98	79
2010	95	81
2011	92	80
2012	88	82
2013	84	84
2014	86	100
2015	82	105
2016	79	105
2017	77	99
2018	77	95
2019	76	90
2020	76	87

The first thing I notice is that recent years are a lot better than some previous eras, e.g 2004-2008 and 1989-1991.

But also not as affordable as 1994-1999.

Recent years are notably better than the 1980's.

Comments please.

[dugsbody]

 

Right what do you think of this.

I have taken the Nationwide affordability index and contracted the data for pasting on here.  The original data has 4 quarters in each year (except 2020, which has two).  I have found the average index for each year to make the list much shorter.

The index is based on 1985 average =100.

They have found the mortgage payment needed to buy as a 1st time buyer in that year (obviously dependent on interest rate).  They have found the average disposable income in that year and ratio'd the mortgage payment to the disposable income.

I've provided both North-West region and London.

Year	NW	London
1983	85	66
1984	91	80
1985	100	100
1986	86	101
1987	84	117
1988	84	120
1989	125	137
1990	144	117
1991	114	81
1992	92	57
1993	71	42
1994	67	39
1995	63	39
1996	60	38
1997	68	49
1998	71	55
1999	67	56
2000	71	65
2001	71	64
2002	73	66
2003	85	71
2004	116	84
2005	126	87
2006	129	90
2007	137	105
2008	124	96
2009	98	79
2010	95	81
2011	92	80
2012	88	82
2013	84	84
2014	86	100
2015	82	105
2016	79	105
2017	77	99
2018	77	95
2019	76	90
2020	76	87

The first thing I notice is that recent years are a lot better than some previous eras, e.g 2004-2008 and 1989-1991.

But also not as affordable as 1994-1999.

Recent years are notably better than the 1980's.

Comments please.

Maybe you should rephrase the question to everyone:

- When would you rather buy your house? During the 1980s or now?

I know for certain what my answer is: 1980s. Like most people I would have had some hard years but I'd be living in a house that I could never afford now.

(I can only speak for my location which is London / SE)

Edited December 22, 2020 by dugsbody

[kzb]

 

Maybe you should rephrase the question to everyone:

- When would you rather buy your house? During the 1980s or now?

I know for certain what my answer is: 1980s. Like most people I would have had some hard years but I'd be living in a house that I could never afford now.

(I can only speak for my location which is London / SE)

But the late 1980's were less affordable than the current era.  The early 1980's were no better than now.

The golden era was 1993-2002.

Since about 2010 or so there's been a long period of stability in this index.  There seems little prospect of interest rate increases in the foreseeable future.  So, 2010 was probably the time to buy.

[dugsbody]

 

But the late 1980's were less affordable than the current era.  The early 1980's were no better than now.

The golden era was 1993-2002.

Since about 2010 or so there's been a long period of stability in this index.  There seems little prospect of interest rate increases in the foreseeable future.  So, 2010 was probably the time to buy.

You're missing the true picture, which is why I said you should ask a rephrased question, which I answered.

Buying a house now, with interest rates where they are and deposit requirements where they are, you will be paying it off for the full term, which is now usually 30 or 35 years. Back then the full term was 25 years, interest rates shot down over the years, your equity increased enormously, as did your wages, and you ended up living in a house that none of us today will be able to afford in our lives.

 

[kzb]

 

You're missing the true picture, which is why I said you should ask a rephrased question, which I answered.

Buying a house now, with interest rates where they are and deposit requirements where they are, you will be paying it off for the full term, which is now usually 30 or 35 years. Back then the full term was 25 years, interest rates shot down over the years, your equity increased enormously, as did your wages, and you ended up living in a house that none of us today will be able to afford in our lives.

 

We did not know what was going to happen when we bought !  This is all hindsight.

You are wrong about the last bit.  My young relatives, at least the ones who have hit the mid-20's, have all bought houses better than mine.  My neighbours, in a pretty much identical house to me, are early 30's, moved in about 4 years back when they were late 20's.

[Notting Hell]

 

Right what do you think of this.

I have taken the Nationwide affordability index and contracted the data for pasting on here.  The original data has 4 quarters in each year (except 2020, which has two).  I have found the average index for each year to make the list much shorter.

The index is based on 1985 average =100.

They have found the mortgage payment needed to buy as a 1st time buyer in that year (obviously dependent on interest rate).  They have found the average disposable income in that year and ratio'd the mortgage payment to the disposable income.

I've provided both North-West region and London.

Year	NW	London
1983	85	66
1984	91	80
1985	100	100
1986	86	101
1987	84	117
1988	84	120
1989	125	137
1990	144	117
1991	114	81
1992	92	57
1993	71	42
1994	67	39
1995	63	39
1996	60	38
1997	68	49
1998	71	55
1999	67	56
2000	71	65
2001	71	64
2002	73	66
2003	85	71
2004	116	84
2005	126	87
2006	129	90
2007	137	105
2008	124	96
2009	98	79
2010	95	81
2011	92	80
2012	88	82
2013	84	84
2014	86	100
2015	82	105
2016	79	105
2017	77	99
2018	77	95
2019	76	90
2020	76	87

The first thing I notice is that recent years are a lot better than some previous eras, e.g 2004-2008 and 1989-1991.

But also not as affordable as 1994-1999.

Recent years are notably better than the 1980's.

Comments please.

I have done a similar analysis of mortgage affordability. I agree with your analysis that once mortgage repayments have commenced they are more-or-less as affordable as they ever have been as a percentage of take home pay. The problem lies in raising the deposit for the mortgage in the first place: raising the deposit is the barrier to entry, not the ongoing repayments.

[dugsbody]

 

We did not know what was going to happen when we bought !  This is all hindsight.

That's not the point. You're trying to prove that we have it better today. We have hindsight. We can see we don't. 

Again, you can pick parts of the North to suit your narrative, I can't speak for those, only my experience in the SE.

[dugsbody]

 

I have done a similar analysis of mortgage affordability. I agree with your analysis that once mortgage repayments have commenced they are more-or-less as affordable as they ever have been as a percentage of take home pay. The problem lies in raising the deposit for the mortgage in the first place: raising the deposit is the barrier to entry, not the ongoing repayments.

There is that but there is also the measurable impact in the longer term. With interest rates this low and low inflation and low wage inflation, you're going to be paying that house off for the full 35 year term. People who bought in the 1980s would have been able to pay their house off much, much faster due to lowering interest rates and rising wages.

That has a measurable impact on your long term wealth.

[Notting Hell]

 

There is that but there is also the measurable impact in the longer term. With interest rates this low and low inflation and low wage inflation, you're going to be paying that house off for the full 35 year term. People who bought in the 1980s would have been able to pay their house off much, much faster due to lowering interest rates and rising wages.

That has a measurable impact on your long term wealth.

Completely agree: these factors are a direct consequence of low interest rates.

[steve99]

 

Considering the low levels of home ownership in post boomer cohorts then that's nonsense. Have you seen the trajectory of salaries in the regions over the last 20 years?

I think you will find genX is fully subscribed to the housing market and in fact had one of the best runs ever when they came of buying age during the 90's.  All my and my wifes siblings of that age group bought then and at good prices compared to the 80s with the mega interest rates. 90's was the era of low house prices with ever declining interest rates.  As I said in other posts, its not a generational war as many think but a structural change imposed somewhere at the top to fill the pockets of the already very rich. If you think a younger generation of governance is going to make a difference you have your head up your bum. Nothing short of a social revolution will change it and as we can see, a pandemic has just entrenched it.   Just look at who is in charge now, what age they are and what class they represent. 

[steve99]

 

There is that but there is also the measurable impact in the longer term. With interest rates this low and low inflation and low wage inflation, you're going to be paying that house off for the full 35 year term. People who bought in the 1980s would have been able to pay their house off much, much faster due to lowering interest rates and rising wages.

That has a measurable impact on your long term wealth.

Those who bought any time up to the early 2000s have benefited for low prices and declining interest rates. 

[steve99]

 

Maybe you should rephrase the question to everyone:

- When would you rather buy your house? During the 1980s or now?

I know for certain what my answer is: 1980s. Like most people I would have had some hard years but I'd be living in a house that I could never afford now.

(I can only speak for my location which is London / SE)

20:20 Hind sight is wonderful magic.  Of course using that super power you would make that decision.  No one back then had any inkling as to what the future changes to the economic system were going to be.

[Social Justice League]

I feel a bit hard done buy as I was born in 1975 so during the golden years of low house prices I was at uni.

Came out of the other side in 1997 age 22 and we all know the story from then on...................and I voted for Blair.

A life wasted you could say.  I now say a life debt free or maybe even a lucky escape.

[Tapori]

 

I feel a bit hard done buy as I was born in 1975 so during the golden years of low house prices I was at uni.

Came out of the other side in 1997 age 22 and we all know the story from then on...................and I voted for Blair.

A life wasted you could say.  I now say a life debt free or maybe even a lucky escape.

THINGS CAN ONLY GET BETTER

[MonsieurCopperCrutch]

 

I'm always looking for new economic podcasts mostly the one with debates, care to share the name please?

If your looking for interesting podcasts here is one: 

 

https://www.whatbitcoindid.com