Are earnings too low / living costs getting too high??

[Royal Fleet]

I am not sure there is any one factor driving up house prices and rents, rather a number of them. It comes down to supply and demand.

Supply is limited by virtue of land, planning restrictions and developers sitting on land.
Demand is driven up by immigration, people getting married later, and therefore living alone first, people not staying married, older people not dying, older people not downsizing. Also low interest rates mean that BTL is more attractive to people with cash relative to interest payable on savings.

 

[Buffman]

I'm giving way too much help here. There is literally anything you or she could do.

You're not really giving anything away... You're grossly over simplifying it (eg not considering costs and how practical these ventures are to scale up)

There was a guy on this forum I believe who was a window cleaner... The kit is fairly expensive (extension poles to do high windows at ground level) and I imagine you would need pretty damn strong shoulders to do it all day!

 

[rubberduck]

What?!

I meant frugal but instead typed froogle as in the google search engine... I think someone else pointed this out already. I'm not going make excuses such as autocorrect etc. I just confused the two in my head when typing my post.

 

[D.P.]

You're not really giving anything away... You're grossly over simplifying it (eg not considering costs and how practical these ventures are to scale up)

There was a guy on this forum I believe who was a window cleaner... The kit is fairly expensive (extension poles to do high windows at ground level) and I imagine you would need pretty damn strong shoulders to do it all day!

This is always the problem with people looking at poorer people who are struggling. Gross simplification and completely ignoring the real world many people live in. Starting a bussines window cleaning is hardly trivial, starting any bussines has risks and complexity with accounting, legal issues, marketing etc. E.g., someone starts a business window cleaning and gets a mate to help out. Mate falls off ladder and is seriously injured. No insurnace of course because why would you think of that. Now you're up **** Creek.


And that totally ignores the reality of the lives many people lead. It may be obvious to you how to dig yourself out of a hold and make success of something, but to many people exposed to abuse, or completely lacking any quality education, or surrounded by a culture without work ethic, or simply lacking the cognitive capabiliy, or stuck helping a sick family member, health issues, grew up in one of the rotting forgotten dumps that remain when industry has left, etc.

When I went to school there were complete retards that would bully you if you did well.in homework or answered teacher's question. They had no work ethic and failed most exams leaving school with nothing. We're always stealing alcohol or on drugs. Complete chavs who didn't give a flying **** about life. Of course I hated them. Its easy to see that I make a successful living because I tried hard, and they are failures because they were lazy scrotes.

But why were they so lazy, why were they do stupid? What was their family life like? What did their parents do to help? What was the effect of peer pressure to confirm to their idiot friends? 5% of the population have an IQ under 70, you can't blame someone for being literally stupid. A load of them definitely had attention deficit disorders and such like. Some of of them had parents who had gone to prison, other were just extreme chav families. Easy to blame such people, harder to forgive them by understanding it's not exactly their fault. One particularly cretinous scrote I found out some years later was physically abused by his father, who then went to prison after the father hospitalized his mother. He left school with nothing after years of terrorizing anyone who dared tonputvthibgs effort at school, went on and got heavily involved in drugs, and the last I heard was on some kind of rehab program and doing a part time job stacking supermarket shelves for minimum wages.

 

[martin363]

All the house price discussion is interesting, as it is clearly a major cause of living costs being too high.

Apologies for being a pessimist, but;

1. Today the UK employees salary / general purchasing power is worth 20% less than a year ago. Just look at prices of Electronics over the last year as evidence we should all identify with.

2. A significant proportion of current UK property buyers are foreign and paid in foreign currencies (mainly USD). For these expats / foreigners, UK House prices are 20% down YOY, and likely to drop further. A perfect foreign / expat buyers market.

researchbriefings.files.parliament.uk/documents/CBP-7723/CBP-7723.pdf

- I know many UK expats paid in USD, who are in the process of, or planning to buy further UK property now (and who will live back in the UK in the future). I would imagine there are many non-UK individuals planning to do the same thing as well. The decline in the value of GBP (20% to date) is likely to increase foreign investment and ownership and property prices, not decrease them.

- A lot of the money driving the UK housing market does not originate in the UK. The government knows this and supports this, as they view it as positive foreign investment in the UK. They just don't want it taken back out again in the future, and their policies demonstrate this.

- This can only further increase the cost of living for those living in the UK and paid in GBP. Predictions are a further 7 to 15% decline in GBP value over the coming year which will exacerbate the situation.

3. That's before we consider all the other UK industries where costs have increased and margins declined significantly.

4. On a global stage, the UK worker paid in GBP is paid 20% less than last year, and can buy 20% less than last year. no doubt someone will spout 'Buy British', or restrict the market, but that is not a solution, simply lack of understanding of global economics and the realities of the UK economy / manufacturing capabilities on the global stage.

5. The GBP will only start to recover value when the BOE ceases quantitative easing and raises interest rates, and they currently cannot do this, but when they do (likely minimum 2 years away), it will of course increase costs in other ways.

Martin

 

[Pawnless Endgame]

I agree with the OP.

In year 2000, I was an admin monkey on £13.5k with the income tax threshold @ approx. £4k. Remember those days? So that's £4k untaxed and the remaining £9.5k taxed. Yet I could afford to go clubbing every week, upgrade my computer a few times a year and still save into an ISA. My rent was £260 per month.

In year 2017, I am still an admin monkey on £13.5k. I can still occasionally put the odd £50 into my ISA, but the clubbing and computer upgrades have been squeezed out. The only reason why I got given a new computer in 2015 was because of house insurance following water damage. Otherwise, the next PC would have still been years off. My mortgage is £266 per month.

 

[SpeedFreak]

You have not improved your income in 17 years and inflation has run at 2%, what do you expect?

 

[Freakbro]

You have not improved your income in 17 years and inflation has run at 2%, what do you expect?

Yes, but whether it's Pawnless in the same job or he leaves and someone replaces him, the job is still paying the same, so the new person is still in a worse position than Pawnless was 17 years ago.

 

[Jez]

I agree with the OP.

In year 2000, I was an admin monkey on £13.5k with the income tax threshold @ approx. £4k. Remember those days? So that's £4k untaxed and the remaining £9.5k taxed. Yet I could afford to go clubbing every week, upgrade my computer a few times a year and still save into an ISA. My rent was £260 per month.

In year 2017, I am still an admin monkey on £13.5k. I can still occasionally put the odd £50 into my ISA, but the clubbing and computer upgrades have been squeezed out. The only reason why I got given a new computer in 2015 was because of house insurance following water damage. Otherwise, the next PC would have still been years off. My mortgage is £266 per month.

This isnt apples with apples at all;

How much would £ 13,500
from 2000
be worth in 2016?
£20,852.86
Inflation averaged 2.8% a year.

In 2000 you "earnt" £20,852.86 effectively.

 

[Buffman]

Isn't that less that minimum wage at full time?

I appreciate the point but would apply more if you now earn the previous plus inflation (eg 18k off the top of my head). Edit: ahh the above has worked it out

 

[mattyg]

Why do people think they need to jump straight into a 400k property.

What happened to working your way up.

 

[Buffman]

Why do people think they need to jump straight into a 400k property.

What happened to working your way up.

But I want it now! :grumpy face:

I think the idea of working up now doesn't apply to lots of people as house price increases will be quicker than wage increases. (and there is a limit to what difference saving makes).

Also a 400k house now could have been a 100k hovel 10years ago in some areas..

 

[mattyg]

This isnt apples with apples at all;


In 2000 you "earnt" £20,852.86 effectively.

So he's earning much less now then???

 

[Avenged7Fold]

Supply and demand controls house/rent prices like most prices.

What has considerably effected supply and demand?

Anyone remember when buy to let mortgages were made available?

Not the 'borrowing the tip of the iceberg' kind but the borrow the whole iceberg kind... 1996 was it?

 

[Ayahuasca]

I agree with the OP.

In year 2000, I was an admin monkey on £13.5k with the income tax threshold @ approx. £4k. Remember those days? So that's £4k untaxed and the remaining £9.5k taxed. Yet I could afford to go clubbing every week, upgrade my computer a few times a year and still save into an ISA. My rent was £260 per month.

In year 2017, I am still an admin monkey on £13.5k. I can still occasionally put the odd £50 into my ISA, but the clubbing and computer upgrades have been squeezed out. The only reason why I got given a new computer in 2015 was because of house insurance following water damage. Otherwise, the next PC would have still been years off. My mortgage is £266 per month.

You are of course free to do what you want in life, but I don't think you're in a position to complain about earnings being too low if you've done nothing to improve that in 17 years. There's jobs available that require zero qualifications or experience that pay 18k.

The problem is you've shot yourself in the foot as they'll take a look at your CV, realise you've made no attempt at progression in 17 years and hire a younger person with some ambition.

 

[Ayahuasca]

As for those moaning about buy to letters, my father worked down the pit and then factories for the majority of his life, got to 50 and realised his money was going nowhere and bought a couple of buy to lets, now he's in a far more comfortable position and able to retire earlier. Not sure why anyone wouldn't want that for themselves if it was a possibility.

Do you go into work crying at your employers because they're getting rich whilst you're slaving away?

 

[mid_gen]

Why do people think they need to jump straight into a 400k property.

What happened to working your way up.

The issue isn't people wanting to 'jump the ladder'....it's that 400k is what you need for a decent family home in a good area in the South East these days.

The whole 'property ladder' is a strange British thing. Banks love it I suppose if people want to be in debt their whole life. Ze German way is to just rent until you want the family home, and quite often with that you'll buy a plot and have it built to spec.

 

[mid_gen]

As for those moaning about buy to letters, my father worked down the pit and then factories for the majority of his life, got to 50 and realised his money was going nowhere and bought a couple of buy to lets, now he's in a far more comfortable position and able to retire earlier. Not sure why anyone wouldn't want that for themselves if it was a possibility.

Do you go into work crying at your employers because they're getting rich whilst you're slaving away?

It's not just your employers getting rich....it's that they are taking away your wealth at the same time. I don't begrudge anyone doing the sensible and selfish thing getting into Buy-To-Let....it's the culmination of Thatcher's dream after all.

 

[Psycho Sonny]

Around 4 quid

that is actually cheap.

it's around £5.50 for a pint of peroni even in a dump around here. however you could go to spoons and get a pint for £2 odd.

people need to be far more specific when they mention how much is a pint. a pint of peroni for example will always be £2 dearer than a pint of carling for example.

 

[dr_volki]

that is actually cheap.

it's around £5.50 for a pint of peroni even in a dump around here. however you could go to spoons and get a pint for £2 odd.

people need to be far more specific when they mention how much is a pint. a pint of peroni for example will always be £2 dearer than a pint of carling for example.

people still drink carling or fosters?
i rather not drink beer at all if these are my only options