What is the average house?
We started off in a 2 bed terraced not a 3 bed semi. You normally start at the bottom and work your way up. Very few can go straight into the 3 bed semi.
Mortgage Rate Rises
- Thread starter glenimp617
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We started off in a 2 bed terraced not a 3 bed semi. You normally start at the bottom and work your way up. Very few can go straight into the 3 bed semi.
You understand that salaries are the same right Tony?
That's why we are comparing average income to average house.
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Even if you remove detached houses the house prices to income ratio is a lot higher now.
Yes, that's why I used the minimum wage as that would just about correspond to our wages back then
We're talking about people on an average salary only being able to afford a house worth half the national average, and the fact that that's a dramatic decline from the experiences of previous generations.
Can you honestly not see how this is a problem?
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Yeah remember the average salary isn't what most are going to be on at 18. So you're saving at a tiny rate as house prices surge. You may not even be on average at 30 years old.
And no one buying today is going to see their house jump 30x in 40 years.
That for me is the big one. Boomers are now mortgage free and have huge equity for what was a small outlay in terms of earnings.
We aren't going to see that type of house price growth again.
And that's where the pain is going to be felt by the young. Retire... Or moreover .. Lack of.
Pensions are dire, mortgage terms are enormous, interst rates high wage growth low.
Its a bleak picture at the same time public services are rotting
And no one buying today is going to see their house jump 30x in 40 years.
That for me is the big one. Boomers are now mortgage free and have huge equity for what was a small outlay in terms of earnings.
We aren't going to see that type of house price growth again.
And that's where the pain is going to be felt by the young. Retire... Or moreover .. Lack of.
Pensions are dire, mortgage terms are enormous, interst rates high wage growth low.
Its a bleak picture at the same time public services are rotting
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Thats because you earned half the avg salary and as we've pointed out multiple times, you wouldn't have even been able to afford that if it was double the price you paid for it (9x your salary instead of 4.5x) Which would reflect what FTBs are facing now.
Yes, and FTBs are struggling far more now to even get on that first rung than we did.
This is exhausting!
Soldato
The only question to those who are already own their house or in the property market is…
Would you sell your house now for the amount you paid for it plus the percentage increase of the average salary?
I suspect a lot of people would say no, as the market price of their house is worth a lot more.
Would you sell your house now for the amount you paid for it plus the percentage increase of the average salary?
I suspect a lot of people would say no, as the market price of their house is worth a lot more.
It's a sad thing you need to be in a relationship now to own a house really.
And that you need to have 2 parents working to have a family + that house.
And really you need above average salaries (plural) to even have an average house.
The maths doesn't lie.
Of course there are going to be people who waste their money. Just as there were "back then".
But there are so many money conscious people out there too. Just trying to get above the line of ownership.
Its so important as the state pension is looking less and less likely to even be there.. What's going to happen when people who haven't finished paying off their mortgage can't work due to health see everything ripped away?
Really.. If you can't get over that line.. Can you even blame people for giving up now and living while they can?
And that you need to have 2 parents working to have a family + that house.
And really you need above average salaries (plural) to even have an average house.
The maths doesn't lie.
Of course there are going to be people who waste their money. Just as there were "back then".
But there are so many money conscious people out there too. Just trying to get above the line of ownership.
Its so important as the state pension is looking less and less likely to even be there.. What's going to happen when people who haven't finished paying off their mortgage can't work due to health see everything ripped away?
Really.. If you can't get over that line.. Can you even blame people for giving up now and living while they can?
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We didn't earn average salary when we started work either but we wanted to buy a house so we saved up the deposit.yes, because most people don't immediately earn the average salary when they are young
Yes it is a problem I know, having 2 kids of my own who are buying their own house's.
Neither of our houses have jumped 30x in the 43yrs we've been married.
First one 15x
The one we're in now 7x
Yes and I can still afford to buy my old house on NMW not average wage. If you can believe the mortgage calculator.
I've said aswell that's why the way mortgages are handled now reflects that. The housing market would collapse if there were no FTBs getting onto the ladder. Yes it is more difficult now but not insurmountable, if you really need to own your property. We are beginning to see the problem of higher interst rates hit home for those who joyfully went for the fixed low interest mortgage. This will continue for several more years as more are coming off the fixed term.Thats because you earned half the avg salary and as we've pointed out multiple times, you wouldn't have even been able to afford that if it was double the price you paid for it (9x your salary instead of 4.5x) Which would reflect what FTBs are facing now.
Yes, and FTBs are struggling far more now to even get on that first rung than we did.
This is exhausting!
It's an inability to see reality due to their own lived experience getting in the way. Classic I'm alright jack mind set, if I did it that same time warped universal experience is available to everyone. No room for sliding door moments or changing environment.No, they aspire to have less than the average that their parents had, yet still cant manage it on a current average wage.
Average house prices are 9x the average salary now.
Continue this chart on to the peak in October 2022 and things look even more bleak.
I really don't get why some people find this so hard to understand?
Either acknowledge houses were cheaper to wages, state offered more support while you financially got on your feet or simply blame the feckless Ferrari driving youth. They should have bought a Nokia and walked to work like I did back in my day when I was doing the sacrifices *shakes fists at the sky *
My bad. I maths failed.
But still 16x isn't going to happen now. Even 7x.
Thats what next generation aren't going to have.
Hey have the repercussions from that.. Ie the difficulty getting on the ladder from it, that's all.
Its going to leave a bleak retirement
Soldato
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The idea that you work hard, get a house... work harder... get a bigger house... have a family... retire... downsize just doesn't apply like it used to.
Boomers had a good deal generally.
Boomers had a good deal generally.
Soldato
The problem is UK housing has become popular with investors from overseas on top of domestic.
And as the rich / poor divide grows, you have to appreciate how much wealth some people have, they can buy streets and streets of houses.
And more often than not the properties investors go for are you more typical first time buyer properties which drives the whole thing from bottom up.
Whats also the **** take is wealth isn't taxed, and it's becoming more common for even average trading companies now offsetting profits into property held in companies.
Your average Joe on an average wage is having to compete against all of this.
And as the rich / poor divide grows, you have to appreciate how much wealth some people have, they can buy streets and streets of houses.
And more often than not the properties investors go for are you more typical first time buyer properties which drives the whole thing from bottom up.
Whats also the **** take is wealth isn't taxed, and it's becoming more common for even average trading companies now offsetting profits into property held in companies.
Your average Joe on an average wage is having to compete against all of this.
I just checked and the cheapest 2 bed flat is £280k in my area, about 8x the average wage.