Hopeful FTB Posted June 14, 2006 Share Posted June 14, 2006 Did anyone hear this? They have this slot where you have to try and bamboozel their business expert- a nurse asked the question 'could anyone on an average wage afford an average house?' answer, based on apparent government stats- womes av wage 19k, men 25k. Average house price also based government averages- the woman buying on her own would have to borrow 9.7 times her income & jointly 4.5 times and he even said that you would be lucky finding a lender that would lend 4.5 times a joint income. A resounding no to the questio. Chris Evans then said that it was like living in dickensian times! he also made a comment earlier on in the show about no one being able to afford a deposit for a 2 up 2 down! Interesting times we live in! Quote Link to comment Share on other sites More sharing options...
StrapInThisIsGoingToHurt Posted June 14, 2006 Share Posted June 14, 2006 If even Chris Evans understands there will be a crash, then it isn't exactly complicated! How I do love those Google Ads. Please give us more! Quote Link to comment Share on other sites More sharing options...
drhewitt Posted June 14, 2006 Share Posted June 14, 2006 If even Chris Evans understands there will be a crash, then it isn't exactly complicated! How I do love those Google Ads. Please give us more! Good quote from Evans on the Dickensian times - I think we are headed for a new "Victorian era" People in my generation, 29 and under, have little or no chance of getting a decent place to live and raise a family, unless the HPC happens first. Plenty of people make less than 25,000 a year. Gawd. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 14, 2006 Share Posted June 14, 2006 Good quote from Evans on the Dickensian times - I think we are headed for a new "Victorian era" People in my generation, 29 and under, have little or no chance of getting a decent place to live and raise a family, unless the HPC happens first. Plenty of people make less than 25,000 a year. Gawd. I think the problem is partly due to more singletons buying. In my generation most people married at an earlier age, and were living with parents before they did i.e. they used 2 incomes to buy their first property. I think the lending rules were 2.5 times 1 salary plus 1 times the second or, alternatively, 3 times the combined. Also, FTBs didn't buy average properties, they bought at the very bottom of the ladder e.g. small house or maisonnette in a not so desirable part of town. Based on this, a 25k earner buying with a 20k partner (not atypical in the SE??) could raise 135k. Add in a deposit of say 20k and the situation looks tough, but not quite so insurmountable, at £155k. IRs were 11% then, so initial repayments were more onerous, however wage inflation dealt with this after a few years Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted June 14, 2006 Share Posted June 14, 2006 TTRTR will be diversifying into gruel next. He already has a nice sideline in tripe. Quote Link to comment Share on other sites More sharing options...
Unexpected Posted June 14, 2006 Share Posted June 14, 2006 I think the problem is partly due to more singletons buying. In my generation most people married at an earlier age, and were living with parents before they did i.e. they used 2 incomes to buy their first property. I think the lending rules were 2.5 times 1 salary plus 1 times the second or, alternatively, 3 times the combined. Also, FTBs didn't buy average properties, they bought at the very bottom of the ladder e.g. small house or maisonnette in a not so desirable part of town. Based on this, a 25k earner buying with a 20k partner (not atypical in the SE??) could raise 135k. Add in a deposit of say 20k and the situation looks tough, but not quite so insurmountable, at £155k. IRs were 11% then, so initial repayments were more onerous, however wage inflation dealt with this after a few years I dont think we are necessarily talking about FTB's here. The question was whether the average wage could buy the average house. And the answer of course is no. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 14, 2006 Share Posted June 14, 2006 I dont think we are necessarily talking about FTB's here. The question was whether the average wage could buy the average house. And the answer of course is no. A non FTB would have equity in his property, and Chris Evans' calculation didn't take that into account. Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted June 14, 2006 Share Posted June 14, 2006 A non FTB would have equity in his property, and Chris Evans' calculation didn't take that into account. This is why there won't be a soft landing. Todays FTBs can't move up as they won't have equity in their property. Chris Evans' calculation didn't take student loans or credit card debts into consideration, by the way. So no FTBs either. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 14, 2006 Share Posted June 14, 2006 This is why there won't be a soft landing. Todays FTBs can't move up as they won't have equity in their property. I agree that it will be a long time before today's FTBs have any or much equity, however since they are such a small percentage of total owners, this in itself won't have an effect on the market Quote Link to comment Share on other sites More sharing options...
Guest Posted June 14, 2006 Share Posted June 14, 2006 And don't forget that just as many people are getting divorced every year as has been the case since 1981. (According to the Office Of National Statistics). Quote Link to comment Share on other sites More sharing options...
Rachel Posted June 14, 2006 Share Posted June 14, 2006 I think the problem is partly due to more singletons buying. In my generation most people married at an earlier age, and were living with parents before they did i.e. they used 2 incomes to buy their first property. but back then, not that many women worked. My parents bought just on my Dads lorry driving salary, whilst she was a stay at home Mum. Quote Link to comment Share on other sites More sharing options...
snowman Posted June 14, 2006 Share Posted June 14, 2006 Also, FTBs didn't buy average properties, they bought at the very bottom of the ladder e.g. small house or maisonnette in a not so desirable part of town. This sort of comment annoys it. The implication is that present-day would-be FTBs are somehow more demanding than FTBs in your generation. This is nonsense. I expect that the price of a maisonnette when your generation were FTBs was significantly less than 3 x average salary. The bottom of the ladder where I live is a mobile home, and this is 3x my salary. Do you think I am being greedy by holding out for a maisonnette? Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 14, 2006 Share Posted June 14, 2006 (edited) but back then, not that many women worked. My parents bought just on my Dads lorry driving salary, whilst she was a stay at home Mum. Most did initially, and then gave up work wghen the first child came along. (I was talking about the 70's and in the London area) This sort of comment annoys it. The implication is that present-day would-be FTBs are somehow more demanding than FTBs in your generation. This is nonsense. I expect that the price of a maisonnette when your generation were FTBs was significantly less than 3 x average salary. The bottom of the ladder where I live is a mobile home, and this is 3x my salary. Do you think I am being greedy by holding out for a maisonnette? No I don't. It's just that the average priced house isn't a maisonette, it's a medium sized house. Chris Evans' calculation appeared to be based on an average priced property. Multiples of salary are irrelevant to market price. Affordability is the real link, and that's affected by IRs. If we all knew that mortgage IRs were always going to be 4% for the rest of time, then lenders would probably lend about 7 times salary! But we all know they won't and therein lies the problem. Doesn't stop house prices rising during periods of low IRs though. Edited June 14, 2006 by Casual Observer Quote Link to comment Share on other sites More sharing options...
mustrum_ridcully Posted June 14, 2006 Share Posted June 14, 2006 I think the problem is partly due to more singletons buying. In my generation most people married at an earlier age, and were living with parents before they did i.e. they used 2 incomes to buy their first property. I think the lending rules were 2.5 times 1 salary plus 1 times the second or, alternatively, 3 times the combined. Also, FTBs didn't buy average properties, they bought at the very bottom of the ladder e.g. small house or maisonnette in a not so desirable part of town. My dad bought his first house (3 bed detached) when he was my age on a factory workers salary (average salary at best) and the mortgage was paid off in 10ish years (if I remember correctly). My parents still live in the same house, the last house that sold on their street went for £250k, my above average salary would need to double (i.e. a combined salary) and I'd still only be able to afford it if I had a >10% deposit. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 14, 2006 Share Posted June 14, 2006 (edited) My dad bought his first house (3 bed detached) when he was my age on a factory workers salary (average salary at best) and the mortgage was paid off in 10ish years (if I remember correctly). Those were the days. I wonder why they bothered with council houses and slum landlords.... Why bother building flats and semis when factory workers bought detached houses with such ease? He should have bought 2 of them, over 20 years. He could have given 1 to you then. Edited June 14, 2006 by Casual Observer Quote Link to comment Share on other sites More sharing options...
brassfarthing Posted June 14, 2006 Share Posted June 14, 2006 People hardly ever specify what part of the country they're talking about when they discuss how things have changed. This is a very important bit of info. London and the SE has been expensive for many many decades. There is no way that a factory worker on average wages could ever have bought a detached house in the London area (not for a very long time, anyway). When I was a first time buyer in the mid 80s, the two of us together were (just) able to buy a 1 bed flat in London for £40K. Sounds great perhaps, but remember I was earning £9K at the time. There's no way we could have bought an 'average' home in London at that time. The rest of the country is a quite different story. I lived in Yorkshire for many years. Until really quite recently you could buy a terraced house in places like Dewsbury , Halifax, Huddersfield, for £20-25K. Even in Leeds which has been a 'happening place' for the best part of 10 years, you could get a decent mid-terrace for £25K as recently as the late 90s. When I was a student in the early 80s, I remember seeing properties on sale in Manchester for £1,500. (Not £15,000 but £1,500.) For some reason, the target of most people's anger on this site is 'old people' but in fact, for the great majority of people, the last golden period that they missed out on wasn't the 50s or 60s but the late 90s. If you lived in most places outside London, yes, a factory worker could have bought a decent property until pretty recently. It's their older brothers and sisters they should be envious about, not elderly relatives. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 14, 2006 Share Posted June 14, 2006 People hardly ever specify what part of the country they're talking about when they discuss how things have changed. This is a very important bit of info. London and the SE has been expensive for many many decades. There is no way that a factory worker on average wages could ever have bought a detached house in the London area (not for a very long time, anyway). When I was a first time buyer in the mid 80s, the two of us together were (just) able to buy a 1 bed flat in London for £40K. Sounds great perhaps, but remember I was earning £9K at the time. There's no way we could have bought an 'average' home in London at that time. The rest of the country is a quite different story. I lived in Yorkshire for many years. Until really quite recently you could buy a terraced house in places like Dewsbury , Halifax, Huddersfield, for £20-25K. Even in Leeds which has been a 'happening place' for the best part of 10 years, you could get a decent mid-terrace for £25K as recently as the late 90s. When I was a student in the early 80s, I remember seeing properties on sale in Manchester for £1,500. (Not £15,000 but £1,500.) For some reason, the target of most people's anger on this site is 'old people' but in fact, for the great majority of people, the last golden period that they missed out on wasn't the 50s or 60s but the late 90s. If you lived in most places outside London, yes, a factory worker could have bought a decent property until pretty recently. It's their older brothers and sisters they should be envious about, not elderly relatives. I know twins, 30 years old. One bought a house in 2001, the other in early 2004. They both work together (self-employed builders) so earn literally the same wages. The first is much better off than the second, due to having a smaller mortgage on similar type properties. Quote Link to comment Share on other sites More sharing options...
Robbrent Posted June 14, 2006 Share Posted June 14, 2006 People hardly ever specify what part of the country they're talking about when they discuss how things have changed. This is a very important bit of info. London and the SE has been expensive for many many decades. There is no way that a factory worker on average wages could ever have bought a detached house in the London area (not for a very long time, anyway). When I was a first time buyer in the mid 80s, the two of us together were (just) able to buy a 1 bed flat in London for £40K. Sounds great perhaps, but remember I was earning £9K at the time. There's no way we could have bought an 'average' home in London at that time. The rest of the country is a quite different story. I lived in Yorkshire for many years. Until really quite recently you could buy a terraced house in places like Dewsbury , Halifax, Huddersfield, for £20-25K. Even in Leeds which has been a 'happening place' for the best part of 10 years, you could get a decent mid-terrace for £25K as recently as the late 90s. When I was a student in the early 80s, I remember seeing properties on sale in Manchester for £1,500. (Not £15,000 but £1,500.) For some reason, the target of most people's anger on this site is 'old people' but in fact, for the great majority of people, the last golden period that they missed out on wasn't the 50s or 60s but the late 90s. If you lived in most places outside London, yes, a factory worker could have bought a decent property until pretty recently. It's their older brothers and sisters they should be envious about, not elderly relatives. I agree with you on most points BF, the thing I can not understand is areas like mine (The Fylde Coast) which has very weak fundamentals yet prices have gone through the roof, on the whole it is a pretty low wage economy around here yet the prices are very similar to the big cities, one of the big problems is the amount of BTL wannbe millionaires who have distorted the market and generally screwed it for everyone else of late, until the last couple of months any have decent property (FTB type) was being grabbed by the greedy bar stewards. My biggest fear for the north in general is that prices are so out of kilter with reality that the correction/crash call it what you will, will be a hell of a lot more severe up here than down south, of course it is easy to blame BTL but the banks etc bear some responsibility for all this, I hope they get their fingers burnt it may teach them a lesson. I can see no other option around here, sooner or later the market will crash no two ways about it, to be honest the economic fundamentals around here support 40 to 50k average house prices Quote Link to comment Share on other sites More sharing options...
brassfarthing Posted June 14, 2006 Share Posted June 14, 2006 I agree with you on most points BF, the thing I can not understand is areas like mine (The Fylde Coast) which has very weak fundamentals yet prices have gone through the roof, on the whole it is a pretty low wage economy around here yet the prices are very similar to the big cities, one of the big problems is the amount of BTL wannbe millionaires who have distorted the market and generally screwed it for everyone else of late, until the last couple of months any have decent property (FTB type) was being grabbed by the greedy bar stewards. My biggest fear for the north in general is that prices are so out of kilter with reality that the correction/crash call it what you will, will be a hell of a lot more severe up here than down south, of course it is easy to blame BTL but the banks etc bear some responsibility for all this, I hope they get their fingers burnt it may teach them a lesson. I can see no other option around here, sooner or later the market will crash no two ways about it, to be honest the economic fundamentals around here support 40 to 50k average house prices And I agree with you too, RR. I share your incredulity. To some extent you can understand why property prices were historically high in London -- salaries were a lot higher too. But when house prices in some parts of Leeds quadruple in about 6 years, you wonder what's happening. Salaries certainly haven't increased at the same rate. Most of the purchasers seem to be landlords aiming to let to students. I also agree that the crash, if it happens, could decimate the north and Wales. London and the SE will be much more resilient, not just because salaries are higher, but because property prices just haven't risen as much as elsewhere. I know that some people think of me as a bull but I've not fared that well in property. We left the north just as prices were rising up there, and arrived back in the (expensive) south just as prices started to plateau about 5 years ago! Our mortgage is pretty big, but so be it. It's getting paid off. Fylde coast? Nice part of the country. Quote Link to comment Share on other sites More sharing options...
dubsie Posted June 15, 2006 Share Posted June 15, 2006 Yes I certainly think the good times are over and a lot of this stems from the previous tory and the current labour government for ignoring the housing crisis. Politicians are just so out of touch with the average voter. Its supply and demand and at the moment theres not enough housing for first time buyers. To be honest David Cameron won't be any good either as he's likely to strengthen rural planning laws to keep rural voters. Quote Link to comment Share on other sites More sharing options...
brassfarthing Posted June 15, 2006 Share Posted June 15, 2006 Yes I certainly think the good times are over and a lot of this stems from the previous tory and the current labour government for ignoring the housing crisis. Politicians are just so out of touch with the average voter. Its supply and demand and at the moment theres not enough housing for first time buyers. To be honest David Cameron won't be any good either as he's likely to strengthen rural planning laws to keep rural voters. The Tories didn't "ignore the housing crisis". They created it by selling off council houses. Quote Link to comment Share on other sites More sharing options...
Robbrent Posted June 15, 2006 Share Posted June 15, 2006 Fylde coast? Nice part of the country It's where Blackpool is BF, it's not bad but the fundamentals do not support the house prices it would take many years for average wages to catch up to anything near affordability. In fact the whole of the North West is mad, Quote Link to comment Share on other sites More sharing options...
onrollover Posted June 15, 2006 Share Posted June 15, 2006 This sort of comment annoys it. The implication is that present-day would-be FTBs are somehow more demanding than FTBs in your generation. This is nonsense. I expect that the price of a maisonnette when your generation were FTBs was significantly less than 3 x average salary. The bottom of the ladder where I live is a mobile home, and this is 3x my salary. Do you think I am being greedy by holding out for a maisonnette? The bottom of the ladder and even part way up has got worse, the bad areas now are cheaply made ex council houses. A new small flat now has the kitchen in the living room in the bedroom and on a very small floor space. Bedrooms in new 2 bedroom and 3 bedroom houses are tiny. A new 2 bed house I looked at recently actually had a floor area on the 1st floor (2 bedrooms, bathroom, cupboards, boiler) two-thirds of the size of my bedroom in my parents house and that was close to £200,000! miles out of my price range. Houses and flats have got smaller and are crammed in with ever increasing density. Quote Link to comment Share on other sites More sharing options...
Turnbull2000 Posted June 15, 2006 Share Posted June 15, 2006 The bottom of the ladder and even part way up has got worse, the bad areas now are cheaply made ex council houses. A new small flat now has the kitchen in the living room in the bedroom and on a very small floor space. Bedrooms in new 2 bedroom and 3 bedroom houses are tiny. A new 2 bed house I looked at recently actually had a floor area on the 1st floor (2 bedrooms, bathroom, cupboards, boiler) two-thirds of the size of my bedroom in my parents house and that was close to £200,000! miles out of my price range. Houses and flats have got smaller and are crammed in with ever increasing density. With prices being so far out of reach, I'm looking at 1 bedroom flats to rent. The one I viewed going for 400pcm (seems the average) was absoloutely tiny - the bathroom without a shower was only accessible through the bedroom, and the combined kitchen/living room didn't have enough space to accomodate both my TV stand and computer desk. Being new build, the walls were also like rice paper, with the acoustic qualities to match. Apparently the BTL landlord paid £115k for it Quote Link to comment Share on other sites More sharing options...
goldmercury Posted June 15, 2006 Share Posted June 15, 2006 remove the google ads Quote Link to comment Share on other sites More sharing options...
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