Young people feel robbed of a better life but they don't know what to do about it

FoxEye said:
It's agreed across the board that housing demand currently exceeds supply. The govt themselves admit it. Forecasts are that the gap between the two will widen in future years.

So, perhaps you guys would like to answer a simple question.

Let's assume that the people currently unable to buy a house were able to increase their income. Worked more overtime, got better jobs, etc (assuming that would even be possible for 100% of these people). Let's now assume that everybody could afford to buy a house.

Now let's remember that there aren't enough houses to go around.

Question: what happens to house prices, and indeed rents, in this case?

Who here is going to be brave enough to say "House prices and rents would not increase".

So there you have it. Even should everyone currently priced out of the market manage to double/triple/quadruple their income, still people would be unable to live in their own home. Landlords would make a killing, however.
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Still waiting for an answer to this also.

If n% more people are competing for the same amount of houses, why wouldn't house prices rise n% until the same amount can afford as can today?
 
Glaucus said:
Oh noes, oh wait that's not an issue. As 4.5x is pretty standard as well as that's one persons salary rather than a couple.
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The thing is, it is an issue.
According to the latest Land Registry figures (here) then only 4.6% of sales in London were under £150K

If you're quoting those figures as being what should be affordable then for 95% of cases it isn't.
 
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Energize said:
It's not high enough with even the cheaper houses being more many times the average salary, and when the interest rates rise again monthly payments will become an issue as well.

You say there are flats in London under £150k, that is over 5x the average London salary!



Yes and then when the interest rates rise again as they inevitably do, no one can afford the payments any more and we have another financial crisis like the last one. That's why high house prices and low interest rates make a very dangerous combination, rent prices will increase just as much when that happens, which is why house prices desperately need to come down in the next couple of years.
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The thing is house ownership has basically always been impossible for a single person unless they have a very highly paid job.

Home ownership really requires 2 salaried adults. You need 2 people's savings to get the down-payment, 2 salaries to afford the monthly payments and get a reasonable loan amount, and 2 salaries to reduce the risks.

150K might be 5 x the London average salary but that means it is only 2.5x the average couples salary.
 
I just think people expect a good life when the world owes them nothing.
Many young people need a firework ramming up their back door as they are very much useless wet farts.

At 24 (25 when I got keys) I had an offer accepted on a house. I have 2 cars, various games consoles and have a gym membership. I earn <£30,000 and everything I have I paid for.

Life is about priorities. I could have a new BMW sat on the driveway, 2 weeks abroad each year, designer clothes, a few kids to pay on maintenance, a good night on the booze and a 20-a-day smoking habit. Then I could complain the world is tough and say it is unfair I still live with mummy at 38.

I chose to buy a house. It is a sacrifice.
It annoys me when people say they cannot afford a house around Stoke. I chose to spend my money on my property. Others choose to spend it on alcohol and cigarettes.
 
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Haircut said:
The thing is, it is an issue.
According to the latest Land Registry figures (here) then only 4.6% of sales in London were under £150K

If you're quoting those figures as being what should be affordable then for 95% of cases it isn't.
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Lol. 95% of people aren't first time buyers or on their own and on or below average wage.
 
D.P. said:
The thing is house ownership has basically always been impossible for a single person unless they have a very highly paid job.
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Completely untrue, my parents house had a value of £26k, the average wage, before the bubble. If you look at house prices in the 90's you'll see it was easily doable.
 
kcon1 said:
Many can't afford either.
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Move to Stoke On Trent then :p.
Many need a kick up the arse.

If you work a minimum wage job you can't expect to have nice things.
Life is simple. If you earn X, then on average you must spend <X.

I did it on my own. I'd be loving life if I had a partner on similar wage!

I am tight with lots of things and always shop around for deals. I just like my hard earned money to go as far as possible.
 
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OpenToSuggestions said:
Move to Stoke On Trent then :p.
Many need a kick up the arse.

If you work a minimum wage job you can't expect to have nice things.
Life is simple. If you earn X, then on average you must spend <X.
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Or you can leave the UK and have a much higher quality of life at much less cost.

Hmmm.
 
OpenToSuggestions said:
I chose to buy a house. It is a sacrifice.
It annoys me when people say they cannot afford a house around Stoke. I chose to spend my money on my property. Others choose to spend it on alcohol and cigarettes.
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Not forgetting football season tickets? I'm always amazed seeing the amount of fans that look as rough as old boots that can always make it to all these big stadiums.

FoxEye said:
Or you can leave the UK and have a much higher quality of life at much less cost.

Hmmm.
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Doesn't it depend where? You can't just jump ship to America... Visa's? Wait time? Years? Acceptance/Declined based on your history... Plus sometimes some companies have special programmes to take you on until your Visa clears. Can't remember the full details. I read about it back in 2008. Something about a sponsor?

Plus the last I heard not many places in Europe are all that better as some make out. Plus unless you have a lot of money to begin with to leave, you aren't going to get into the great parts. Not for a while at least.
 
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Glaucus said:
Lol. 95% of people aren't first time buyers or on their own and on or below average wage.
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And I never said they were, I was simply pointing out that £150K certainly isn't an average property in London.

Looking at the Land Registry data the median price for a London property is around £350K.
Assuming a 10% deposit and 4.5x multiple lending this equates to a household income of around £70K.
I'm pretty sure this is significantly more than the average in most parts of London (can't find figures at the moment)

The main thing for me though is, as I've pointed out before, that mortgage debt is more of a millstone for longer than in periods of high inflation.
When interest rates were high and wage increases were high then the large mortgage payments became much smaller in comparison to wages after a few years.
This isn't happening so much any more, so over the lifetime of the mortgage it costs much more of the total salary earned, even with lower interest rates.
 
It doesn't need to be the average price in London. FTB shouldn't be looking at anything even approaching average price unless they're loaded.
So that entire calculation is silly.

Also the median full time wage for uk is £29,300 (2013 figures) London ofc will be higher, so 70k is about right for a median couple, not that you should be buying any property anywhere near an average price.
 
Glaucus said:
Also the median full time wage for uk is £29,300 (2013 figures)
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It's £26,884.

http://www.ons.gov.uk/ons/rel/ashe/...sults/stb-ashe-statistical-bulletin-2013.html

The key point in all this is that things that were previously attainable to a number of demographics such as housing and jobs are no longer attainable despite far more effort and hard work on the individuals part. This is demonstrated by the fact that home ownership is decreasing and that house prices are such a high multiple of salary (>5x) that banks are not willing to lend the money to people, then there is also the high rate of un/underemployment (>10%).
 
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@VF

I was thinking Europe. I can't see any good reason to move to the US. Their divide between rich and poor is every bit as colossal as ours. And like you said, the US has mostly closed its borders these days. Just as hard to get into as Oz.
 
Energize said:
house prices are such a high multiple of salary (>5x) that banks are not willing to lend the money to people.
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This is balanced out by the extremely low interest rates.
In the 1990s the interest rates were so high, that the mortgage payments were very similar on a like-for-like comparison.

I bought my house on graduate starting salary. I don't intend to be on this when I am 30!
 
Energize said:
The key point in all this is that things that were previously attainable to a number of demographics such as housing and jobs are no longer attainable despite far more effort and hard work on the individuals part. This is demonstrated by the fact that home ownership is decreasing and that house prices are such a high multiple of salary (>5x) that banks are not willing to lend the money to people, then there is also the high rate of un/underemployment (>10%).
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Yeah but that doesn't matter to a lot here.

Those trends are obviously caused by younger generations having less drive than they did. We're all slackers, moping around doing nothing, when we could be working two jobs @ 100 hours a week.
 
Energize said:
The key point in all this is that things that were previously attainable to a number of demographics such as housing and jobs are no longer attainable despite far more effort and hard work on the individuals part. This is demonstrated by the fact that home ownership is decreasing and that house prices are such a high multiple of salary (>5x) that banks are not willing to lend the money to people, then there is also the high rate of un/underemployment (>10%).
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I remember somebody else talking about this as they mentioned Germany. Isn't Germany mostly rented houses? Thats the normal over there unlike UK which will no doubt become the normal here.

FoxEye said:
@VF

I was thinking Europe. I can't see any good reason to move to the US. Their divide between rich and poor is every bit as colossal as ours. And like you said, the US has mostly closed its borders these days. Just as hard to get into as Oz.
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A lot of the young Irish have been going out to both...
 
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