Casual Observer Posted July 22, 2006 Share Posted July 22, 2006 True but a couple earning £56k could afford an average house. Must be couples who are preventing the crash FTBs should not expect to afford average priced houses. They should expect to buy FTB type houses (less expensive ones, at the lower end of the market). Average priced houses are for people who have traded up 1 or 2 times from a FTB type property (lower end of the market) Quote Link to comment Share on other sites More sharing options...
MarkG Posted July 22, 2006 Share Posted July 22, 2006 FTBs should not expect to afford average priced houses. Yawn. The average FTB is in their mid-30s. They're never likely to be able to buy a better house than the one they buy first... if prices crash they're screwed, if prices rise then the next 'rung' only gets further away. Average priced houses are for people who have traded up 1 or 2 times from a FTB type property (lower end of the market) But, as I've mentioned before, no-one I know has ever 'traded up'. They bought their first house or flat, usually in their 20s, and have lived there ever since... often a four-bed house in a decent area. This is the first generation since home-owning became common where a 35-year-old on twice the national average wage is expected to settle for a crappy flat over a crack den. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 22, 2006 Share Posted July 22, 2006 Yawn. The average FTB is in their mid-30s. . Maybe that's because they held out for average houses, rather than starting off in something more modest. But, as I've mentioned before, no-one I know has ever 'traded up'. They bought their first house or flat, usually in their 20s, and have lived there ever since... often a four-bed house in a decent area. Who on earth bought the flats then, if FTBs in their 20s "bought a four-bed house in a decent area"? 12 year olds? This is the first generation since home-owning became common where a 35-year-old on twice the national average wage is expected to settle for a crappy flat over a crack den. That's a gross exageration! My 25 year old son's on twice national average pay and has bought a nice 3 bed semi in an expensive area. All of his friends have also bought something reasonable. Quote Link to comment Share on other sites More sharing options...
MongerOfDoom Posted July 22, 2006 Share Posted July 22, 2006 FTBs should not expect to afford average priced houses. Housing is a lot less affordable now than it once was. So either it used to be too easy to afford a house, or it is too hard now. They should expect to buy FTB type houses (less expensive ones, at the lower end of the market). That is only a sensible strategy if housing far outperforms other investments. Otherwise renting somewhere cheap and saving for a large deposit would be much more effective. Either way, the definition of a FTB type house seems to be changing rapidly. In the SE it is probably not much more than a studio, and even that might require a silly earnings multiple for an FTB on 'just' 25k. Average priced houses are for people who have traded up 1 or 2 times from a FTB type property (lower end of the market) Maybe if there is huge inflation, as there used to be. Otherwise frequent trading up is just a daft way of wasting money on transaction costs. Can you please explain why a (say) 33 year old FTB who has been saving for a deposit for as long as he has had a job should not be able to afford the same property as someone else who bought in their early twenties and traded up a couple of times? It may help you to know that the average FTB is now over 30. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 22, 2006 Share Posted July 22, 2006 Maybe if there is huge inflation, as there used to be. Otherwise frequent trading up is just a daft way of wasting money on transaction costs. Well, that's an argument for not buying at all. But expecting to jump a few rungs of the ladder because prices are too high just doesn't work! Quote Link to comment Share on other sites More sharing options...
iLegallyBlonde Posted July 22, 2006 Share Posted July 22, 2006 (edited) That's a gross exageration! My 25 year old son's on twice national average pay and has bought a nice 3 bed semi in an expensive area. All of his friends have also bought something reasonable. When did your 25 year old son buy ? Edited July 22, 2006 by terrified Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 22, 2006 Share Posted July 22, 2006 That's a gross exageration! My 25 year old son's on twice national average pay and has bought a nice 3 bed semi in an expensive area. All of his friends have also bought something reasonable. When did your 25 year old son buy ? 2 months ago Quote Link to comment Share on other sites More sharing options...
iLegallyBlonde Posted July 22, 2006 Share Posted July 22, 2006 Well we've been looking for a 4 bed semi under £300k in a not fantastic but would be ok area for 2 years now and have given up completely. There's tat around here that has been on the market for 2 years, sold and back on the market around £250k and then there are lovely properties that tick all the boxes and are £400k+ all of which were bought for £150k or less 4 years ago Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 22, 2006 Share Posted July 22, 2006 Well we've been looking for a 4 bed semi under £300k in a not fantastic but would be ok area for 2 years now and have given up completely. There's tat around here that has been on the market for 2 years, sold and back on the market around £250k and then there are lovely properties that tick all the boxes and are £400k+ all of which were bought for £150k or less 4 years ago I do sympathise, and hope you find somewhere suitable. However my post was in response to someone suggesting that twice average salary gets you a flat over a crack den, which is misleading. It's tough at the moment, and there are many times in history when it has also been tough, but it's sensible not to exagerate the problem Quote Link to comment Share on other sites More sharing options...
backtoparents Posted July 22, 2006 Share Posted July 22, 2006 I do sympathise, and hope you find somewhere suitable. However my post was in response to someone suggesting that twice average salary gets you a flat over a crack den, which is misleading. It's tough at the moment, and there are many times in history when it has also been tough, but it's sensible not to exagerate the problem What is "twice the average salary"? btp Quote Link to comment Share on other sites More sharing options...
MongerOfDoom Posted July 22, 2006 Share Posted July 22, 2006 Well, that's an argument for not buying at all. No, it is an argument for buing somewhere suitable for the long term. Even 2-bed flats can now incur 7.5k+ in stamp duty, so I cannot see how it might be sensible to buy a place like that with a view to selling it just a few years later. But expecting to jump a few rungs of the ladder because prices are too high just doesn't work! ??? It is not possible only when housing outperforms other investments. That cannot go on forever, so it will stop. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 23, 2006 Share Posted July 23, 2006 What is "twice the average salary"? btp Different for different areas. For example, about 50k in my area (Brentwood, Essex) Quote Link to comment Share on other sites More sharing options...
Mags Posted July 23, 2006 Share Posted July 23, 2006 However my post was in response to someone suggesting that twice average salary gets you a flat over a crack den, which is misleading. It's tough at the moment, and there are many times in history when it has also been tough, but it's sensible not to exagerate the problem It's sensible to acknowledge the reality. There may have been times in the past when it has been tough. As tough as it is now? No. Do you really think that people are deliberately not buying houses when they could easily afford them? There really is nothing casual about your observations... Well, that's an argument for not buying at all. But expecting to jump a few rungs of the ladder because prices are too high just doesn't work! Most FTBs need to jump a few rungs. They aren't 21 - they're in their 30s or 40s and usually need home office space and bedrooms for children. Things have changed CO! Move with the times! Quote Link to comment Share on other sites More sharing options...
backtoparents Posted July 23, 2006 Share Posted July 23, 2006 Different for different areas. For example, about 50k in my area (Brentwood, Essex) 50K seems a very good salary for a 25 year old - though I'm sure he is very good at what he does. btp Quote Link to comment Share on other sites More sharing options...
Mags Posted July 23, 2006 Share Posted July 23, 2006 50K seems a very good salary for a 25 year old - though I'm sure he is very good at what he does. btp I hope he can cling onto it in the coming years - he's young to be that expensive for a company. Unless he's freelance. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 23, 2006 Share Posted July 23, 2006 (edited) There really is nothing casual about your observations... Thanks I hope he can cling onto it in the coming years - he's young to be that expensive for a company. Unless he's freelance. So do I. He's put a lot of effort into his career so far, including investing in his degree which many people just carp about here, and has been promoted accordingly. Full time employee, and he contributes to a pension scheme. Works for a very well known company and has plenty of headroom yet. Security's not guaranteed for anyone, but he only borrowed 3.5 times his salary. Most FTBs need to jump a few rungs. They aren't 21 - they're in their 30s or 40s and usually need home office space and bedrooms for children. Things have changed CO! Move with the times! What a ridiculous thing to say! Think about it for a minute - "they can't afford to buy a FTB house in their 20s so they have to buy a much nicer house in their 30/40s" How do you expect that could ever work?? I know loads of people in their 20's who have bought in the last 2 years, in the SE. It's just attitudes, I'm afraid. Edited July 23, 2006 by Casual Observer Quote Link to comment Share on other sites More sharing options...
Mags Posted July 23, 2006 Share Posted July 23, 2006 What a ridiculous thing to say! Think about it for a minute - "they can't afford to buy a FTB house in their 20s so they have to buy a much nicer house in their 30/40s" How do you expect that could ever work?? Not ridiculous at all. People's needs change with time. Are you really expecting people who can't afford a property in their twenties to put their lives on hold completely? Are you really saying that if you can't afford a house you shouldn't have children? Think about it! People need appropriate properties to live in. That's more likely to be a second or third rung property when in your 30s or 40s regardless of whether you bought in your 20s. This is one of the problems of allowing bubbles to grow so large - whole decades can pass. Like it or not CO (what are you, an EA?) this is a bubble. I know loads of people in their 20's who have bought in the last 2 years, in the SE. It's just attitudes, I'm afraid. Attitudes to irresponsible debt maybe. Quote Link to comment Share on other sites More sharing options...
Qetesuesi Posted July 23, 2006 Share Posted July 23, 2006 Different for different areas. For example, about 50k in my area (Brentwood, Essex) Just a minute - the question was what was TWICE the average salary, yet subsequent posters have taken your reply as being the average salary itself. Seems high enough. Where can one find regional statistics online? Quote Link to comment Share on other sites More sharing options...
MongerOfDoom Posted July 23, 2006 Share Posted July 23, 2006 (edited) What a ridiculous thing to say! Think about it for a minute - "they can't afford to buy a FTB house in their 20s so they have to buy a much nicer house in their 30/40s" How do you expect that could ever work?? It is not ridiculous at all. Is is perfectly possible, and indeed likely, that a large proportion of the current aspiring FTBs in their early thirties would have been able to afford a better property five years ago than now. They might have decided that it would be better to save a larger deposit, which would obviously be easier while living in cheap rented accommodation than in a property bought with the intention of selling it in just a few years. The only flaw with that plan was that it assumed that a huge housing bubble would not happen in the meantime. However, that will be fine as long as it deflates again I know loads of people in their 20's who have bought in the last 2 years, in the SE. It's just attitudes, I'm afraid. Now *that* is ridiculous. The percentage of FTBs as a proportion of all buyers is faling rapidly. FTBs are now much older than they used to be, as well as wealthier. Are you seriously claiming that this is merely a consequence of their 'attitudes' ? Edited July 23, 2006 by MongerOfDoom Quote Link to comment Share on other sites More sharing options...
Dr Doom Posted July 23, 2006 Share Posted July 23, 2006 So do I. He's put a lot of effort into his career so far, including investing in his degree which many people just carp about here, and has been promoted accordingly. Full time employee, and he contributes to a pension scheme. Works for a very well known company and has plenty of headroom yet. Security's not guaranteed for anyone, but he only borrowed 3.5 times his salary. I'm curious. If you actually believe there is going to be a HPC, why didn't you warn your son that now might not be the best time to buy? Or do you just hang around this site to bait bears? Quote Link to comment Share on other sites More sharing options...
dnd Posted July 23, 2006 Share Posted July 23, 2006 50K seems a very good salary for a 25 year old - though I'm sure he is very good at what he does. btp I'd be terrified having that kind of salary at that age - lulls you into a false sense of security People are the biggest cost and usually the first to go in rougher times - esp where shareholders are involved Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted July 23, 2006 Share Posted July 23, 2006 (edited) I'm curious. If you actually believe there is going to be a HPC, why didn't you warn your son that now might not be the best time to buy? Or do you just hang around this site to bait bears? Simple. I no longer believe there will be a house price crash. I used to, but now I don't. Neither does he - and he can afford the repayments, so wants to get himself a house. I'd be terrified having that kind of salary at that age - lulls you into a false sense of security People are the biggest cost and usually the first to go in rougher times - esp where shareholders are involved Well then you'd be one of those people who would probably never buy anything. If you think it's the wrong time to buy things when you're doing well, you would never buy anything. You're what I'd call a glass-half empty person, always assuming disaster's about to strike, always gloomy! You would probably not have bought in 1999, for the exact same reason "I can easily afford a house on my salary, but what if things don't stay comfortable" And then feel you'd lost out, been left behind. Edited July 23, 2006 by Casual Observer Quote Link to comment Share on other sites More sharing options...
dnd Posted July 23, 2006 Share Posted July 23, 2006 You're what I'd call a glass-half empty person, always assuming disaster's about to strike, always gloomy! You would probably not have bought in 1999, for the exact same reason "I can easily afford a house on my salary, but what if things don't stay comfortable" And then feel you'd lost out, been left behind. ???? What planet are you on? - what if your son lost his job? Quote Link to comment Share on other sites More sharing options...
Mags Posted July 23, 2006 Share Posted July 23, 2006 ???? What planet are you on? - what if your son lost his job? It's unbelievable isn't it? Why not save as much as possible and buy at a lower point of the cycle? I'll never understand the 'gotta have it now' attitude. Quote Link to comment Share on other sites More sharing options...
Dr Doom Posted July 23, 2006 Share Posted July 23, 2006 Simple. I no longer believe there will be a house price crash. I used to, but now I don't. lmao Neither does he - and he can afford the repayments, so wants to get himself a house. roflmao Quote Link to comment Share on other sites More sharing options...
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