What percentage of the house price do you have to put down in this day and age
- Thread starter DXP55
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Typical figures from an advisor I had was 4.5x salary and minimum 10% deposit unless going through a help to buy loan, but even shared ownership (where you buy along side a housing association on buy/rent) expect a 10% deposit at least on the percentage you're planning to buy.
Soldato
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Lol one eighth. Did you pay in shillings and crowns too?
I couldn't work out what the percentage was so yes we actually did pay in 10 bob notes - shillings- half a crowns - three pence pieces -pennies and halfpennies.
The reason I asked the original question was because wife and I were discussing if people today are having it harder than we did. We are baby boomers but nothing came easy - We rented for a few years then went to see houses for sale in the £4500 price range -knocked on door and first thing woman said was we have been offered £6500 can you match it -50% increase on asking price - stupid woman £4.5k was just in our reach. We then stayed in for 12 months and saved £1k which we put down on a house costing £8.5k - doesn't sound much does it but the interest rate must have been around 6% soon to rise to 12%. At that point my repayments were more than my income of £19 a week. Fortunately wife was working so we kept our heads above water.
At that point we had house valued and we had doubled our money in 4-5 yrs so I asked work if they could transfer me to Wales where houses were cheaper. Fortunately they had a vacancy in north wales and it was winter time - Wales is grim in the winter so I ended up in Telford - sold house and rented . I could then take my time to find another house and in the end found one in the sticks for £15k - There was all the profit from old house gone so we put down every penny we had for deposit and had a small mortgage. I had sworn that I would never be held to ransom by Building Societies again.
Years on sold that and bought this bungalow which again cost us what we sold old house for. So unlike house owners darn sowf we never made a killing.
The other thing we were discussing was is the wages of today in same percentage as it was for us all those years ago - We saved a grand on our joint income of around £40 a week so today can people save £20k in a year on today's wages. - I know there are a lot of people on big money and it's not those I am asking - just the general worker.
Caporegime
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I couldn't work out what the percentage was so yes we actually did pay in 10 bob notes - shillings- half a crowns - three pence pieces -pennies and halfpennies.
The reason I asked the original question was because wife and I were discussing if people today are having it harder than we did. We are baby boomers but nothing came easy - We rented for a few years then went to see houses for sale in the £4500 price range -knocked on door and first thing woman said was we have been offered £6500 can you match it -50% increase on asking price - stupid woman £4.5k was just in our reach. We then stayed in for 12 months and saved £1k which we put down on a house costing £8.5k - doesn't sound much does it but the interest rate must have been around 6% soon to rise to 12%. At that point my repayments were more than my income of £19 a week. Fortunately wife was working so we kept our heads above water.
At that point we had house valued and we had doubled our money in 4-5 yrs so I asked work if they could transfer me to Wales where houses were cheaper. Fortunately they had a vacancy in north wales and it was winter time - Wales is grim in the winter so I ended up in Telford - sold house and rented . I could then take my time to find another house and in the end found one in the sticks for £15k - There was all the profit from old house gone so we put down every penny we had for deposit and had a small mortgage. I had sworn that I would never be held to ransom by Building Societies again.
Years on sold that and bought this bungalow which again cost us what we sold old house for. So unlike house owners darn sowf we never made a killing.
The other thing we were discussing was is the wages of today in same percentage as it was for us all those years ago - We saved a grand on our joint income of around £40 a week so today can people save £20k in a year on today's wages. - I know there are a lot of people on big money and it's not those I am asking - just the general worker.
A general worker will never be able to save £20K. First of all the average wage is like between £25-£30K so it would be impossible to save £20K unless you lived with parents or something like that.
If you earn £75K+ then yeah £20K would be easy.
As for house prices £4.5K lol? A summer house costs more than that today and dare I say it some peoples sofas.
The older generation had it much easier when it comes to quality of life. I don't see how anyone who is single can afford a home these days. Most just live with parents now.
You are forgetting inflation, it's cheaper than today but not sofa money.
Soldato
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Depends how you view 'quality of life'. The UK does not have poverty i.e. poor families have kids in schools, legal/fire/health cover, equal opportunities (jobs, university), H&S in the workplace is good, and you get heated homes with fresh food in the fridge, plus internet (do not get this confused with the 'OMG POOR' guff the tabloids sell), people live healthier lives and live longer.
Yes houses cost a heck of a lot, but moaning about it makes absolutely no difference.
Save hard and buy a house in area you can afford. If you are not willing to do so, then you won't own a home.
Caporegime
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I own my own detached home in a half decent area. It's up and coming with house prices constantly rising unlike some places near me (5-10 mins away).
However I was making the point for the average worker saving £20K a year is a pipe dream if they are single unless they live at their parents. That is the facts. An average worker cannot save anywhere near that in a year. Your lucky if the average worker can save £5K a year. which is greater than £400 a month. which is a lot for someone earning £1200-£1500 a month after deductions (tax, etc).
House prices have far outweighed inflation over the past 30-40 years. I personally have seen people who bought a house for £65K sell it for £650K+ and that is in Glasgow (Scotland) not down south or in London either. Houses were pennies back then compared to today. They were not sofa money but they were closer to Sofas than they ever will be now.
I couldn't work out what the percentage was so yes we actually did pay in 10 bob notes - shillings- half a crowns - three pence pieces -pennies and halfpennies.
The reason I asked the original question was because wife and I were discussing if people today are having it harder than we did. We are baby boomers but nothing came easy - We rented for a few years then went to see houses for sale in the £4500 price range -knocked on door and first thing woman said was we have been offered £6500 can you match it -50% increase on asking price - stupid woman £4.5k was just in our reach. We then stayed in for 12 months and saved £1k which we put down on a house costing £8.5k - doesn't sound much does it but the interest rate must have been around 6% soon to rise to 12%. At that point my repayments were more than my income of £19 a week. Fortunately wife was working so we kept our heads above water.
At that point we had house valued and we had doubled our money in 4-5 yrs so I asked work if they could transfer me to Wales where houses were cheaper. Fortunately they had a vacancy in north wales and it was winter time - Wales is grim in the winter so I ended up in Telford - sold house and rented . I could then take my time to find another house and in the end found one in the sticks for £15k - There was all the profit from old house gone so we put down every penny we had for deposit and had a small mortgage. I had sworn that I would never be held to ransom by Building Societies again.
Years on sold that and bought this bungalow which again cost us what we sold old house for. So unlike house owners darn sowf we never made a killing.
The other thing we were discussing was is the wages of today in same percentage as it was for us all those years ago - We saved a grand on our joint income of around £40 a week so today can people save £20k in a year on today's wages. - I know there are a lot of people on big money and it's not those I am asking - just the general worker.
I think you only need to compare what your wages were back then to today and work out whether you could afford to purchase the homes you bought back then.
I know there's the age old argument of interest rates were very high back then, but I would say high interest on low amounts of money is better than low interest on high amounts of money.
http://news.bbc.co.uk/1/shared/spl/hi/guides/456900/456991/html/nn2page1.stm
And that only goes up to 2005.
Average house price to average wage ratio in 1985 was 3.4, in 2005 it was 6.1.
Average salary in 2019 is £36k average house price in 2019 is £215k so ratio is 5.97.
So there you go - compared to wages, houses are far more expensive.
And that only goes up to 2005.
Average house price to average wage ratio in 1985 was 3.4, in 2005 it was 6.1.
Average salary in 2019 is £36k average house price in 2019 is £215k so ratio is 5.97.
So there you go - compared to wages, houses are far more expensive.
Where did those stats come from?
The ONS has put median weekly earnings as of April 2019 at £585, which works out around £30.5k a year.
Although it's a bit silly in a way because median will only look at the middle which i'd be betting is getting morphed upwards by those on 7/8 figure earnings.
Would more interested in seeing mean weekly earnings, as that would be more representative of "average" salaries.
Average UK salary is way below £36k, its more like £29.5k.
From ONS...
'On average, full-time workers could expect to pay an estimated 7.8 times their annual workplace-based earnings on purchasing a home in England and Wales in 2018.'
1997 average house price was 3.8 times salary.
From ONS...
'On average, full-time workers could expect to pay an estimated 7.8 times their annual workplace-based earnings on purchasing a home in England and Wales in 2018.'
1997 average house price was 3.8 times salary.
Here: https://www.findcourses.co.uk/inspiration/average-salaries-uk/average-uk-salary-2019-15395
Which cites ons, but having looked at ons I agree it doesn't backup what they're saying. They're saying average full time and not saying what 'average' they're using.
Either way, it'll change the ratio from 6 to 7 if the average salary is £30k, it doesn't detract from my conclusion that it's more expensive relative to wages to buy a house now than 30 years ago.
Which cites ons, but having looked at ons I agree it doesn't backup what they're saying. They're saying average full time and not saying what 'average' they're using.
Either way, it'll change the ratio from 6 to 7 if the average salary is £30k, it doesn't detract from my conclusion that it's more expensive relative to wages to buy a house now than 30 years ago.
I agree house prices are stupidly expensive but saying they cost the same as sofa money was a bit extreme (unless its one of those fancy corner sofas everyone loves on here
)https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator
£4.5k in say 1975 would be about £37k, and £8.5k would be about £70k so yes very cheap compared to prices now.
Outside of London I think its closer to £27k but that is still skewed by South East wages.