Am I very wasteful with my money or is it the norm these days

[IvanDobskey]

Well that's it, IvanDobsky has single handedly fixed the housing market and it's totally down to people paying £50 a month on a phone and a couple of budget easyjet holidays a year. Next problem.

I was just single minded in my efforts to get on the property ladder. I wanted to do it at all costs.

It was my number one priority in life at the time.

I drove a battered old rover, didn't go on flash holidays, didn't buy expensive gadgets.

 

[Janesy B]

I was just single minded in my efforts to get on the property ladder. I wanted to do it at all costs.

It was my number one priority in life at the time.

I appreciate that, but it's really not that easy. In the 80's my dad bought out his brother's half of the house on a fairly modest income - I'm earning a lot more now when taking inflation into account and could never get near a £450,000 property.

 

[ttaskmaster]

I spliy my bills, savings and give my bank account exactly £500 to last me the full month to the next payday. I find that I easily hit the 500 and have to dip into savings and feel I'm really going overboard, or is this just the norm with most people?

You have a savings account, bills and expenses all paid, after which you have £500... and you still run out of money??!! What the flippin' heck are you spending that on??!!

That £500 is more than four months' money for me, and I don't have a savings account either.
Frickin' YES that's going overboard!!

 

[IvanDobskey]

I appreciate that, but it's really not that easy. In the 80's my dad bought out his brother's half of the house on a fairly modest income - I'm earning a lot more now when taking inflation into account and could never get near a £450,000 property.

I could never afford a 450k house either, but do I really need one?

You can get something modest for 140k, I could easily afford that on current wage.

Depends on your priorities.

 

[Janesy B]

I could never afford a 450k house either, but do I really need one?

You can get something modest for 140k, I could easily afford that on current wage.

Depends on your priorities.

My priorities are living within a reasonable distance of work - the house next door has been split into two flats, the downstairs 1 bed flat sold for £240k not so long ago. This is a fairly old property and not particularly nice either. I can only borrow 150k on my wages so I'd have to save 90k for a deposit... In 1997 the upstairs flat went for £35k.

 

[IvanDobskey]

My priorities are living within a reasonable distance of work - the house next door has been split into two flats, the downstairs 1 bed flat sold for £240k not so long ago. This is a fairly old property and not particularly nice either. I can only borrow 150k on my wages so I'd have to save 90k for a deposit...

I know a lot depends on location, but you can always look for a job in an area with cheaper property or commute.

Houses in my area aren't silly expensive, but not cheap either. Pretty average I'd say.

Me and the Mrs are currently saving for a property upgrade. Probably will buy something between us for about 200k.

 

[willhub]

You have a savings account, bills and expenses all paid, after which you have £500... and you still run out of money??!! What the flippin' heck are you spending that on??!!

That £500 is more than four months' money for me, and I don't have a savings account either.
Frickin' YES that's going overboard!!

What does your week spend normally consist of, how many times do you go out? Meals, cinema etc..

I'm wondering if I increase the cost of my weeks shop quite a bit ensuring I get a lot more to cover the week, it may end up cheaper overall as the cost at a supermarket rather than eating on the go would be cheaper.

 

[ScoTTyBEEE]

My priorities are living within a reasonable distance of work - the house next door has been split into two flats, the downstairs 1 bed flat sold for £240k not so long ago. This is a fairly old property and not particularly nice either. I can only borrow 150k on my wages so I'd have to save 90k for a deposit... In 1997 the upstairs flat went for £35k.

It sounds to me like you lack dedication. Ivan only earnt 15k a year and still managed to save 12k, so assuming you earn around 50k a year it should only take you 3 years to save the deposit, assuming you don't actually spend any money in those 3 years (why should you, are you not dedicated enough?).

What do you mean by the property isn't very nice? What do you expect for a 1/4 mil, a WHOLE house? Stop eating iphones on avocado and get saving serf.

 

[Janesy B]

It sounds to me like you lack dedication. Ivan only earnt 15k a year and still managed to save 12k, so assuming you earn around 50k a year it should only take you 3 years to save the deposit, assuming you don't actually spend any money in those 3 years (why should you, are you not dedicated enough?).

What do you mean by the property isn't very nice? What do you expect for a 1/4 mil, a WHOLE house? Stop eating iphones on avocado and get saving serf.

I should be saving at least 60k a year. It's that bloody Samsung S8 thing I got in 2017 that's killed my dream of owning 1/4 of a crap house.

 

[IvanDobskey]

If you want your own property enough, you find a way of doing it.

My house was a complete dump when I bought it. An ex rental property that had fallen into disrepair.

It may only be a little two bed semi, but it's looking pretty nice these days

A lot of hard work / DIY put into it.

You can mock all you like

 

[Housey]

Housey TERRIBLE science coming your way now...

I bought my first house around 1990 when the average house price was £54,694 in the West Midlands. The average UK wage in 1990 was £13,760 so that would equate to circa 3.95 times annual income. Today the average house price in the West Midlands is £185,000 and the average wage is £27,271 so a scary jump to circa 6.8 times annual income. I understand the challenge it has changed. However, if I put £125K house prices into Rightmove in the location (and within 3 miles) of my first house, I am presented with LOADS of houses within the reach of someone earning £25K per year.

If I was on average wage today would I be moaning I could not find a house in the same location I bought in 1990? Nope, I'd be saving and buying in the same location. I can't speak for other locations and this isn't scientific. Would I have a nice car, iPhone, big tellies, expensive computers? No chance, but neither would I back then (I was lucky as I had company car/phone) as neither were my mates.

 

[Jokester]

You have to remember though that these days families typically have two incomes.

#capitalistslaves

 

[Housey]

You have to remember though that these days families typically have two incomes.

#capitalistslaves

I bought my first house a sad single

 

[Janesy B]

You have to remember though that these days families typically have two incomes.

#capitalistslaves

and the second person's wages normally get completely spent on extortionate childcare costs so they can go to work.

 

[Scam]

But I'd be earning considerably more than 15k, so it's all relative

The house is worth 140k now, about double what I paid, but I'm also earning more than double.

As has already been pointed out you clearly bought at the right time which was nothing other than luck. Stop kidding yourself you did something clever or hard. That goes for most baby boomers that insist millennials just need to knuckle down and stop eating avocados.

I have earned the right to treat myself

It's self entitlement these days,

lol. Just lol. That's almost sig-worthy. "I got lucky with the housing market therefore I'm entitled to ***** my money away and complain when I think anyone else is doing the same". Good job. It's that sort of attitude that really makes me wish the housing market completely and utterly tanks.

Housey TERRIBLE science coming your way now...

Here's some terrible science from the DM; https://www.dailymail.co.uk/property/article-4290586/Homeowners-earn-property-work.html

Baby boomers be like "there's no problem with housing affordability" whilst watching bricks and mortar literally earn more than average salaries How are you supposed to save for a house when said house is earning more than you? lol.

https://www.boredpanda.com/funny-baby-boomer-complaints-comebacks-millennials/ personally I like #5.

 

[krooton]

Housey TERRIBLE science coming your way now...

I bought my first house around 1990 when the average house price was £54,694 in the West Midlands. The average UK wage in 1990 was £13,760 so that would equate to circa 3.95 times annual income. Today the average house price in the West Midlands is £185,000 and the average wage is £27,271 so a scary jump to circa 6.8 times annual income. I understand the challenge it has changed. However, if I put £125K house prices into Rightmove in the location (and within 3 miles) of my first house, I am presented with LOADS of houses within the reach of someone earning £25K per year.

If I was on average wage today would I be moaning I could not find a house in the same location I bought in 1990? Nope, I'd be saving and buying in the same location. I can't speak for other locations and this isn't scientific. Would I have a nice car, iPhone, big tellies, expensive computers? No chance, but neither would I back then (I was lucky as I had company car/phone) as neither were my mates.

Based on previous flat purchases and sales in not particularily desirable parts of London (Morden Zone 4, Tottenham Zone 3).

1 bed ground floor flat in Morden
Purchased in 2010 for £153k (4.1x the London average salary of £37k)
Sold in 2015 for £360k (9.7x the London average salary of £37k)

2 bed flat in Tottenham
Purchased in 2012 for £170k (4.6x the London average of £37k)
Sold in 2018 for £400k (10.3x the London average of £39k)

And we just purchased a 3 bed detached house in Zone 6 for £600k (15.4x the London average of £39k)

Now keep in mind that the London average is quite significantly inflated by city types earnings hundreds of ks.

 

[Bassmansam]

and the second person's wages normally get completely spent on extortionate childcare costs so they can go to work.

The situations people get themselves into..

I would only have kids if i earned enough so that my gf/wife could be at home. Otherwise it just makes life complicated juggling kids and working full time. Its just stress that cna be avoided.

 

[IvanDobskey]

As has already been pointed out you clearly bought at the right time which was nothing other than luck. Stop kidding yourself you did something clever or hard. That goes for most baby boomers that insist millennials just need to knuckle down and stop eating avocados.

lol. Just lol. That's almost sig-worthy. "I got lucky with the housing market therefore I'm entitled to ***** my money away and complain when I think anyone else is doing the same". Good job. It's that sort of attitude that really makes me wish the housing market completely and utterly tanks.

Here's some terrible science from the DM; https://www.dailymail.co.uk/property/article-4290586/Homeowners-earn-property-work.html

Baby boomers be like "there's no problem with housing affordability" whilst watching bricks and mortar literally earn more than average salaries How are you supposed to save for a house when said house is earning more than you? lol.

https://www.boredpanda.com/funny-baby-boomer-complaints-comebacks-millennials/ personally I like #5.

Oh yes, it's just luck I managed to save up a deposit and luck I bought at the right time

Just luck I ploughed all my spare money into overpayments.

Just luck I went without loads of stuff, drove an old banger for years.

Just luck...

 

[ttaskmaster]

What does your week spend normally consist of, how many times do you go out? Meals, cinema etc..

I don't usually eat out more than twice a month, if that, but even then it's at cheap pubs. I do go round a friend's place and we get kebab shop burgers maybe once or twice, but that's factored into weekly spend anyway. Cinema... maybe thrice a year, depending on what's out. I watch most things online at home. I don't drink, so pubs don't really feature.
Two or three times a year I'll be at a Michelin starred restaurant, but we're outside London so a 5-course lunch is £35 per head. That's instead of a holiday.

I'm wondering if I increase the cost of my weeks shop quite a bit ensuring I get a lot more to cover the week, it may end up cheaper overall as the cost at a supermarket rather than eating on the go would be cheaper.

Vastly so... assuming you don't buy loads of top brands at extortionate prices.
You'll also have to plan meals and stick to those, so you don't end up throwing any food away. Buy decent veg so it doesn't go off before you even get it home, and make use of your freezer.
I only bother with dinner anyway, so it gets stupidly cheap.

Now keep in mind that the London average is quite significantly inflated by city types earnings hundreds of ks.

The average salary in many other places is also inflated by those highly-paid who live here, but commute in to London... which drives property prices here up to take advantage of their higher pay.

Also, is there any analysis of the average property prices compared to the average salaries of the people who actually buy them?
I have a theory that a good number of properties are bought by private landlords, not resident-owners, which would affect the numbers... particularly the overseas investor types.

 

[Scam]

Oh yes, it's just luck I managed to save up a deposit and luck I bought at the right time

Go on then I'll bite. Tell us how much you saved (or a %age if you'd rather) of your income every month, for how long, to what deposit amount, before you purchased your house. Because I'm betting it's nothing impressive. Prove me wrong.

I've been saving every single month since I started working in London 12 years ago on minimum wage. To sit there and insinuate I haven't worked as hard as you is not only wrong but quite offensive. The facts and stats prove beyond all doubt that you were in the right place, nothing more. My landlords bought a £270k flat pre-2007, then in 2007 were 'lucky' enough to inherit some money and so bought the upstairs flat for a similar price, to rent out. They're now sitting on 2x £650k goldmines 11 years later. Do they sit there and say "well we worked hard for that" -- no. They know they've basically won the lottery of life and are all set, by nothing more than sheer circumstance of this ridiculous bubble.

Also, is there any analysis of the average property prices compared to the average salaries of the people who actually buy them?
I have a theory that a good number of properties are bought by private landlords, not resident-owners, which would affect the numbers... particularly the overseas investor types.

There's plenty of statistics out there. Here's one; https://www.theguardian.com/money/2...rice-times-annual-salary-official-figures-ons Gosh, judging by those bar charts one could almost say it's twice as hard to afford a house wherever you are in the country...

And to your second point. This isn't a theory. It is fact and well-documented.