Sunday, Nov 19, 2006

Aah, the good old days...

Scotland on Sunday: Comparing the generations

Two articles by the Scotsman basically saying the older generation had it good, while we young 'uns are screwed.

Geoff and Denise, buying in 1978, faced discrimination, high interest rates, low multiples, and high deposit requirements before they could get a mortgage. However, house prices were much lower. The average house price was 15,470, three times Geoff's income. After a 10% deposit this would have cost 145 monthly. Mortgage rates were 12.5%, but tax relief brought this down to nearer 8%. Utility bills and council tax were also much lower. They bought as high up the property ladder as they could afford, and their house has now increased in value 12x. Geoff is looking forward to a fat pension with no mortgage to pay.

Geoff's son Gordon emerges from college with 20,000 debt. His salary is huge compared to what his dad earned in the 70s, but although things like food and electronics have come down in price, the overall cost of living is higher. If Gordon can rustle up enough of a deposit, he can look forward to 50 year mortgage chewing up over half his salary each month. The younger generations have lost their fear of debt and easy availability of credit means he will also rack up unsecured debts in loans and credit cards. Gordon will struggle to find a good final-value pension scheme like his dad, and has to wait till 68 before he can reaches the state pension age.

Posted by little professor @ 05:50 PM (2655 views)
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1 Comment

1. little professor said...

The articles:
Geoff and Denise

Gordon Blairson

Sunday, November 19, 2006 05:52PM Report Comment

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