Out of recession ?

[nightrider]

antony1969 - 2012-10-30 5:13 PM

 

I'm telephone bidding , I have seen it and it's never worth that kind of money . I will go to £450.00 and no more .

Splashing the dosh again Tony?

[Dave225]

Peter James - 2012-10-29 8:26 PM

 

Dave225 - 2012-10-29 6:03 PM

Houses are now cheaper to buy per salary than for many a generation.

 

you're talking b*llocks http://www.housepricecrash.co.uk/graphs-ftb-average-house-price-to-earnings-ratio.php

 

I do not see what you are trying to say. In 1975 when i bought my 1st house I was allowed 3-3.5 times my salary and allowed, if lucky, 1 times a wife's salary to get a mortgage. Things do not appear to have changed. What has changed is the deposit required which if you wish a decent rate is now anything up to 40%, however, there are a lot of deals for 10% deposit. which is the same as my parents paid in the 1950's, and I paid in the 70's. In both cases we worked all the hours given to raise the deposit.

 

What has changed, which you seem to have totally ignored is that interest rates on any loan have dropped significantly. I see even today a mortgage offer of 1.99% fixed, oh how I wish i could have had such a deal in 1976 when well over 10% was the norm. Therefore the amount of interest you would pay on a loan today is far less than in times gone by.

 

As for house prices I agree with other comments that apart from the South East most of the UK has seen a drop in values. Now, where I think most would agree is that the lending policies of the banks is totally out of kilter with what the country needs, but that has nothing to do with affordability of houses.

 

Again, I come back to the point of my comment that it is the supply and demand, especially the demand from extra population, plus the demand for 'holiday homes' that has exacerbated the situation.

[Brian Kirby]

No, what has changed Dave, is the price of houses. Average 3 bed semi-D hereabouts seems to be around £350,000. Even taking a 10% dep, that only reduces to £315,000. Say 3 x salary, + wife on same salary, means 315,000/4 is required in salary to service that mortgage, = £78,750 pa. However, average family incomes, even around here, are nowhere near £78,750. Even for a £250,000 house, which is nearer starter territory, using the same calc, a joint income of £56,000 would be required.

 

The only way these prices have been made affordable, is because the salary multiple was relaxed to 4 or more times incomes. When we bought our first house, in '69, the salary multiple was 2.5 times mine + 1 x my wife's, so even by the time you bought yours, the ratcheting up was well under way.

 

That is the multiple I think we are both referring to. That extra cash over 40 year is what has allowed prices to rise as they did. If the multiples hadn't increased, very few folk would have been able to afford mortgages and the market would have at best stagnated. That has nought to do with increasing population, just with the buying power of the public.

[malc d]

Brian Kirby - 2012-11-01 1:12 PM

 

 

The only way these prices have been made affordable, is because the salary multiple was relaxed to 4 or more times incomes.

 

 

Plus the fact that a lot of the money lenders no longer asked for proof of income - so you could tell them that your salary was any level that suited your requirements.

 

 

 

 

 

[Guest pelmetman]

Brian Kirby - 2012-11-01 1:12 PM

 

No, what has changed Dave, is the price of houses. Average 3 bed semi-D hereabouts seems to be around £350,000. Even taking a 10% dep, that only reduces to £315,000. Say 3 x salary, + wife on same salary, means 315,000/4 is required in salary to service that mortgage, = £78,750 pa. However, average family incomes, even around here, are nowhere near £78,750. Even for a £250,000 house, which is nearer starter territory, using the same calc, a joint income of £56,000 would be required.

 

The problem is that London & South East distorts the averages for the whole country Brian ;-) ............There's plenty of affordable property around here for someone on average earnings............

 

The only problem is there are no jobs *-) ...............

 

Our whole economy has been distorted by London & the South East *-)...............and it seems like the penny has dropped with old Tarzan Hesseltine ;-)....................Will anything change ? *-)

 

"The only problem is there are no jobs *-)" ...............Correction ...there's loads of work if you speak Polish :D

[CliveH]

The problem is a multifaceted one - not single issue.

 

The main issue is that we live on an island - and one that has a large agricultural base as well as designated green belt. This restricts the amount of land available and so the price per packet of land is greater on average than in France (an example given) where roughly the same population exists in a country circa 5 times the size of the UK.

 

If anyone thinks that the answer to the economic problems we have is a significant reduction in house prices then have a look at Spain.

 

Errrrr! - that worked didn't it.

 

They went on a building bubble and then when it went pear shaped the perceived lack of value in the housing market rolled over into a nightmare reduction in the value of everything. I think I saw that Spain has 50% unemployment for those aged under 25 and a 25% unemployment rate overall.

 

This primarily driven by the collapse of value in the housing market.

 

I am not saying our situation would be or is the same - but anyone that thinks what is needed is lower house prices need their bumps felt. The fallacy of this is that this would allow first-time buyers to get on the ladder. But the reality is that higher up the chain nobody sells.

 

Which is roughly where we are now.

 

If it were as simple as land availability then Australia should have the cheapest houses. But it does not - what it does have is a Tax System re house purchase that is fair and equitable - such that all sectors of the market get equal stimulus

 

Whereas we have - Stamp Duty - ask any Estate Agent or Economist and they will tell you that a house at £249,999 that attracts a tax of £2,500 is more attractive than a house at £250,001 that attracts a tax of £7,500.

 

So as I say - houses above £250K are not selling and because they are not selling there is no natural market- only one skewed by a ridiculous tax that does no favours to anyone. OK the situation in the SE and London is different because we are seeing Euroland money flooding into what is seen as a safe haven by many in Euro la la la land from the vagaries of the Euro.

 

I would suggest that the idea mooted by many more knowledgable than I - that Stamp Duty should be reorganised on the basis I and MelB set out above - would actually increase the tax take because the market ACROSS THE UK would get the resulting stimulus and as a result of that stimulus the ancillary market in house improvements etc would take off.

 

But once again a total lack of joined up thinking by those in power causes the problem.

 

The Opportunity Cost of Stamp Duty on the economy as a whole is immense. Trouble is the glitterati that masquerades as a government (both this one and the previous) are not capable of looking beyond their little bubble world that is based in London and the SE. So they see no problem! Nothing to see here - No problem here - Move along please.

 

 

[Brian Kirby]

pelmetman - 2012-11-01 2:06 PM...................The problem is that London & South East distorts the averages for the whole country Brian ;-) ............There's plenty of affordable property around here for someone on average earnings............

 

The only problem is there are no jobs *-) ...............

 

Our whole economy has been distorted by London & the South East *-)...............and it seems like the penny has dropped with old Tarzan Hesseltine ;-)....................Will anything change ? *-)

 

"The only problem is there are no jobs *-)" ...............Correction ...there's loads of work if you speak Polish :D

But even that is a bit of a distortion, because not all of the south-east is the same. I'm not sure London really causes such a distortion beyond the main commuter belt. Once you get to more that about 50 miles out, its effect tails off, and the property prices are far less steep. There are places within 20 miles of where we live, still in Sussex, where the prices are sharply lower. The reason there, is that they are too far from rail stations to appeal to commuters.

 

Even in Brighton, there has always been a local economy that is sharply less well paid than the same people could earn if they were prepared to commute to London. They are not, so they get paid less. Folk have found "prime" London property has risen disproportionately in price over the past decade or so, largely attributed to the impact of a buying spree by the international the mega rich. So, the ripples spread out, with folk selling up in the centre, and spending the inflated proceeds to out bid potential buyers in the inner suburbs, and then the outer suburbs, and so on down the commuter lines to anywhere with reasonable facilities that has not had it appeal lobotomised.

 

Hence the price of houses around here is largely out of reach for anyone who either doesn't work in London, or who hasn't moved out from nearer London. Parts of East Sussex and Kent, beyond about one hours rail travel, have relatively low employment and low wages, while pockets are quite wealthy. The other factor is infrastructure. Most of the roads are lousy, a deliberate policy of governments for decades to try to tip the balance in favour of areas broadly north and east of Brum. Look where all the motorways, and the higher speed rail links are. This was all supposed to favour those areas over the south-east by giving them better communications links. It has certainly worked to shackle the south-east (outside London) in terms of restricting its appeal to manufacturers, or even large warehousing operations, not helped by the higher land prices. If you can afford the land and build the factory or whatever, you'll be strangled by your transport costs in all save a few areas bordering the M2/M20.

 

Not just Hezza, but others before, have at last realised that over-reliance on "services" doesn't solve your economic problems, it merely solves some of the problem, for some people, in some parts of the country. If that policy is pursued to the exclusion of others (and it has long seemed to me it was - by those I shall not name because it always causes offence to those too blind to see :-)), you get what we now have. Pockets of long standing unemployment and low pay where far too much of the wealth generated by services is spent on welfare for the low paid and unemployed.

 

Add to that the ever widening pay differentials of the past 20 years or so, and you add to the mix cynicism and demoralisation on the part of those who can see they are being suckered, but can see no way out. It is no use expanding jobs for generally well educated Polish immigrants, because we have run out of generally well educated Brits. We need jobs for less well educated Brits as well, and it seems to be those jobs that are missing. Folk simply don't know what they are supposed to do. They can't get suitable employment where they are, and they don't have the skills that are in demand elsewhere. It is unrealistic to expect them to become "entrepreneurs", because the depressed areas in which they live have insufficient wealth to support an army of service providers, and they can't get investment to start anything more ambitious because they have no track record. So, they sit on the dole and wait for the "right" jobs to turn up, which is a bit like waiting for Billy Bunter's postal order! There can be no instant fix, it will take many decades, and a lot of soul searching, to develop the policies that may generate the kinds of employment that are needed alongside services.

 

And, in the meantime, we are still selling the family silver by letting foreign (including foreign government) owned, firms buy up more and more of what is productive. As one example, Hondas may be assembled and part-produced in the UK, but they are still called Honda, and a lot of the value from their production goes back to Japan. That is not, IMO, British industry at all. It is Japanese industry doing in Britain what British industry should. We get better than the crumbs from their plate, but we don't get the whole meal either, and we don't get to make the strategic decisions about what is produced where. Those I must not name destroyed the ailment that was preventing much of our industry from performing as it should, but did it by killing the patient as well as the disease. Now we need the likes of Christ to raise Lazarus from the dead, and our recent governments haven't quite demonstrated the required qualities - despite the closeness to his dad some of their members have professed. :-) Is Hezza the new Messiah? I do hope so.

[Guest Peter James]

Dave225 - 2012-10-31 7:46 PM

, oh how I wish i could have had such a deal in 1976 when well over 10% was the norm.

You actually got a very good deal there because of inflation, which you have ignored.

Just as an illustration, say you have interest rates and inflation both at 10%.

You borrow £100,000, so you pay £10,000 a year in interest.

But your house goes up in price;

year 1 +10% = £110,000

year 2 +10% = £121,000

as you can see by year 2 your house has increased in value by £11,000, but your interest payment is still £10,000. So you are £1,000 in profit as the years go on, your annual profit multiplies.

Even better for you, house price inflation has been greater than interest rates.

You have actually done very well, and been extremely lucky to buy when you did.

You have profited at the expense of today's first time buyers, for whom, even with much lower interest rates, its much more expensive to get a roof over their head. Because house price inflation at the rate you benefited, is unsustainable.

[Guest Peter James]

Brian Kirby - 2012-11-01 5:54 PM

 

pelmetman - 2012-11-01 2:06 PM...................The problem is that London & South East distorts the averages for the whole country Brian ;-) ............There's plenty of affordable property around here for someone on average earnings............

 

The only problem is there are no jobs *-) ...............

 

Our whole economy has been distorted by London & the South East *-)...............and it seems like the penny has dropped with old Tarzan Hesseltine ;-)....................Will anything change ? *-)

 

"The only problem is there are no jobs *-)" ...............Correction ...there's loads of work if you speak Polish :D

But even that is a bit of a distortion, because not all of the south-east is the same. I'm not sure London really causes such a distortion beyond the main commuter belt. Once you get to more that about 50 miles out, its effect tails off, and the property prices are far less steep. There are places within 20 miles of where we live, still in Sussex, where the prices are sharply lower. The reason there, is that they are too far from rail stations to appeal to commuters.

 

Even in Brighton, there has always been a local economy that is sharply less well paid than the same people could earn if they were prepared to commute to London. They are not, so they get paid less. Folk have found "prime" London property has risen disproportionately in price over the past decade or so, largely attributed to the impact of a buying spree by the international the mega rich. So, the ripples spread out, with folk selling up in the centre, and spending the inflated proceeds to out bid potential buyers in the inner suburbs, and then the outer suburbs, and so on down the commuter lines to anywhere with reasonable facilities that has not had it appeal lobotomised.

 

Hence the price of houses around here is largely out of reach for anyone who either doesn't work in London, or who hasn't moved out from nearer London. Parts of East Sussex and Kent, beyond about one hours rail travel, have relatively low employment and low wages, while pockets are quite wealthy. The other factor is infrastructure. Most of the roads are lousy, a deliberate policy of governments for decades to try to tip the balance in favour of areas broadly north and east of Brum. Look where all the motorways, and the higher speed rail links are. This was all supposed to favour those areas over the south-east by giving them better communications links. It has certainly worked to shackle the south-east (outside London) in terms of restricting its appeal to manufacturers, or even large warehousing operations, not helped by the higher land prices. If you can afford the land and build the factory or whatever, you'll be strangled by your transport costs in all save a few areas bordering the M2/M20.

 

Not just Hezza, but others before, have at last realised that over-reliance on "services" doesn't solve your economic problems, it merely solves some of the problem, for some people, in some parts of the country. If that policy is pursued to the exclusion of others (and it has long seemed to me it was - by those I shall not name because it always causes offence to those too blind to see :-)), you get what we now have. Pockets of long standing unemployment and low pay where far too much of the wealth generated by services is spent on welfare for the low paid and unemployed.

 

Add to that the ever widening pay differentials of the past 20 years or so, and you add to the mix cynicism and demoralisation on the part of those who can see they are being suckered, but can see no way out. It is no use expanding jobs for generally well educated Polish immigrants, because we have run out of generally well educated Brits. We need jobs for less well educated Brits as well, and it seems to be those jobs that are missing. Folk simply don't know what they are supposed to do. They can't get suitable employment where they are, and they don't have the skills that are in demand elsewhere. It is unrealistic to expect them to become "entrepreneurs", because the depressed areas in which they live have insufficient wealth to support an army of service providers, and they can't get investment to start anything more ambitious because they have no track record. So, they sit on the dole and wait for the "right" jobs to turn up, which is a bit like waiting for Billy Bunter's postal order! There can be no instant fix, it will take many decades, and a lot of soul searching, to develop the policies that may generate the kinds of employment that are needed alongside services.

 

And, in the meantime, we are still selling the family silver by letting foreign (including foreign government) owned, firms buy up more and more of what is productive. As one example, Hondas may be assembled and part-produced in the UK, but they are still called Honda, and a lot of the value from their production goes back to Japan. That is not, IMO, British industry at all. It is Japanese industry doing in Britain what British industry should. We get better than the crumbs from their plate, but we don't get the whole meal either, and we don't get to make the strategic decisions about what is produced where. Those I must not name destroyed the ailment that was preventing much of our industry from performing as it should, but did it by killing the patient as well as the disease. Now we need the likes of Christ to raise Lazarus from the dead, and our recent governments haven't quite demonstrated the required qualities - despite the closeness to his dad some of their members have professed. :-) Is Hezza the new Messiah? I do hope so.

 

You should go into freelance journalism and write for the Quality press. Your contributions here are better than most of the stuff I have read in the broadsheets.

[Guest Peter James]

CliveH - 2012-11-01 2:26 PM

 

The problem is a multifaceted one - not single issue.

 

The main issue is that we live on an island - and one that has a large agricultural base as well as designated green belt. This restricts the amount of land available and so the price per packet of land is greater on average than in France (an example given) where roughly the same population exists in a country circa 5 times the size of the UK.

 

Germany has about the same population density as Britain, but Germany has about 13% of its land area developed, compared to Britain's 9%........

[Dave225]

Peter James - 2012-11-01 6:59 PM

 

CliveH - 2012-11-01 2:26 PM

 

The problem is a multifaceted one - not single issue.

 

The main issue is that we live on an island - and one that has a large agricultural base as well as designated green belt. This restricts the amount of land available and so the price per packet of land is greater on average than in France (an example given) where roughly the same population exists in a country circa 5 times the size of the UK.

 

Germany has about the same population density as Britain, but Germany has about 13% of its land area developed, compared to Britain's 9%........

 

Of course you refer to 'Britain which by definition includes the large area in the Scottish Highlands where very few people per se actually live. This is due to a combination of lousy climate, poor transport facilties, lousy climate, expensive food, lousy climate etc. You get the drift I hope. Many from the 'deep south' move up in the vague idea of a 'getting away from it all' and finding the locals are trying desperately to get out of 'away from it all'. After a couple of years of misery they all move back to the great south east. However, if you look at the areas of the country where people actually live I suspect you will find population density is pretty high.

[Guest pelmetman]

Peter James - 2012-11-01 6:55 PM

 

Brian Kirby - 2012-11-01 5:54 PM

 

pelmetman - 2012-11-01 2:06 PM...................The problem is that London & South East distorts the averages for the whole country Brian ;-) ............There's plenty of affordable property around here for someone on average earnings............

 

The only problem is there are no jobs *-) ...............

 

Our whole economy has been distorted by London & the South East *-)...............and it seems like the penny has dropped with old Tarzan Hesseltine ;-)....................Will anything change ? *-)

 

"The only problem is there are no jobs *-)" ...............Correction ...there's loads of work if you speak Polish :D

But even that is a bit of a distortion, because not all of the south-east is the same. I'm not sure London really causes such a distortion beyond the main commuter belt. Once you get to more that about 50 miles out, its effect tails off, and the property prices are far less steep. There are places within 20 miles of where we live, still in Sussex, where the prices are sharply lower. The reason there, is that they are too far from rail stations to appeal to commuters.

 

Even in Brighton, there has always been a local economy that is sharply less well paid than the same people could earn if they were prepared to commute to London. They are not, so they get paid less. Folk have found "prime" London property has risen disproportionately in price over the past decade or so, largely attributed to the impact of a buying spree by the international the mega rich. So, the ripples spread out, with folk selling up in the centre, and spending the inflated proceeds to out bid potential buyers in the inner suburbs, and then the outer suburbs, and so on down the commuter lines to anywhere with reasonable facilities that has not had it appeal lobotomised.

 

Hence the price of houses around here is largely out of reach for anyone who either doesn't work in London, or who hasn't moved out from nearer London. Parts of East Sussex and Kent, beyond about one hours rail travel, have relatively low employment and low wages, while pockets are quite wealthy. The other factor is infrastructure. Most of the roads are lousy, a deliberate policy of governments for decades to try to tip the balance in favour of areas broadly north and east of Brum. Look where all the motorways, and the higher speed rail links are. This was all supposed to favour those areas over the south-east by giving them better communications links. It has certainly worked to shackle the south-east (outside London) in terms of restricting its appeal to manufacturers, or even large warehousing operations, not helped by the higher land prices. If you can afford the land and build the factory or whatever, you'll be strangled by your transport costs in all save a few areas bordering the M2/M20.

 

Not just Hezza, but others before, have at last realised that over-reliance on "services" doesn't solve your economic problems, it merely solves some of the problem, for some people, in some parts of the country. If that policy is pursued to the exclusion of others (and it has long seemed to me it was - by those I shall not name because it always causes offence to those too blind to see :-)), you get what we now have. Pockets of long standing unemployment and low pay where far too much of the wealth generated by services is spent on welfare for the low paid and unemployed.

 

Add to that the ever widening pay differentials of the past 20 years or so, and you add to the mix cynicism and demoralisation on the part of those who can see they are being suckered, but can see no way out. It is no use expanding jobs for generally well educated Polish immigrants, because we have run out of generally well educated Brits. We need jobs for less well educated Brits as well, and it seems to be those jobs that are missing. Folk simply don't know what they are supposed to do. They can't get suitable employment where they are, and they don't have the skills that are in demand elsewhere. It is unrealistic to expect them to become "entrepreneurs", because the depressed areas in which they live have insufficient wealth to support an army of service providers, and they can't get investment to start anything more ambitious because they have no track record. So, they sit on the dole and wait for the "right" jobs to turn up, which is a bit like waiting for Billy Bunter's postal order! There can be no instant fix, it will take many decades, and a lot of soul searching, to develop the policies that may generate the kinds of employment that are needed alongside services.

 

And, in the meantime, we are still selling the family silver by letting foreign (including foreign government) owned, firms buy up more and more of what is productive. As one example, Hondas may be assembled and part-produced in the UK, but they are still called Honda, and a lot of the value from their production goes back to Japan. That is not, IMO, British industry at all. It is Japanese industry doing in Britain what British industry should. We get better than the crumbs from their plate, but we don't get the whole meal either, and we don't get to make the strategic decisions about what is produced where. Those I must not name destroyed the ailment that was preventing much of our industry from performing as it should, but did it by killing the patient as well as the disease. Now we need the likes of Christ to raise Lazarus from the dead, and our recent governments haven't quite demonstrated the required qualities - despite the closeness to his dad some of their members have professed. :-) Is Hezza the new Messiah? I do hope so.

 

You should go into freelance journalism and write for the Quality press. Your contributions here are better than most of the stuff I have read in the broadsheets.

 

Thanks Peter :D

[Dave225]

Peter James - 2012-11-01 6:49 PM

 

Dave225 - 2012-10-31 7:46 PM

, oh how I wish i could have had such a deal in 1976 when well over 10% was the norm.

You actually got a very good deal there because of inflation, which you have ignored.

Just as an illustration, say you have interest rates and inflation both at 10%.

You borrow £100,000, so you pay £10,000 a year in interest.

But your house goes up in price;

year 1 +10% = £110,000

year 2 +10% = £121,000

as you can see by year 2 your house has increased in value by £11,000, but your interest payment is still £10,000. So you are £1,000 in profit as the years go on, your annual profit multiplies.

Even better for you, house price inflation has been greater than interest rates.

You have actually done very well, and been extremely lucky to buy when you did.

You have profited at the expense of today's first time buyers, for whom, even with much lower interest rates, its much more expensive to get a roof over their head. Because house price inflation at the rate you benefited, is unsustainable.

 

Unfortunately your numbers do not in any way match reality. Although inflation may have risen house prices have not followed suit. In over 20 years my house has doubled so in terms of real money has actually lost. In the last 5 years it has flatlined. Yet the amount I paid was far greater.

 

As for being 'extremely lucky' I suspect you are living in a cloud cuckoo land. Luck has absolutely nothing to do with it. My parents managed to do it and my children have managed to do it, so timing is totally irrelevant. None of us had silver spoons to use. It is a desire to do something for one's self and be prepared to pay the price. Being penalised for hard work and sacrifice is insulting to all those who have endeavoured to make good. Having a negative attitude and blaming everyone else for your own misfortune will never work.

 

Fortunately, many of the young today do not share your defeatist approach as even in my own area many are moving forward, despite all the difficulties Governments and society throw at them.

 

 

[Guest pelmetman]

Dave225 - 2012-11-02 7:34 PM

 

Fortunately, many of the young today do not share your defeatist approach as even in my own area many are moving forward, despite all the difficulties Governments and society throw at them.

 

 

Ah............but those of us who have a negative attitude can also have a nice time ;-)................I haven't enjoyed a recession so much in years :D

[nowtelse2do]

Dave225 - 2012-11-02 7:34 PM

 

As for being 'extremely lucky' I suspect you are living in a cloud cuckoo land. Luck has absolutely nothing to do with it. My parents managed to do it and my children have managed to do it, so timing is totally irrelevant. None of us had silver spoons to use. It is a desire to do something for one's self and be prepared to pay the price. Being penalised for hard work and sacrifice is insulting to all those who have endeavoured to make good. Having a negative attitude and blaming everyone else for your own misfortune will never work.

 

Totally agree, and may I also add that young couples nowadays don't want to work their way up to a semi or a detached, they want it now. Instead of working your way up the property ladder they feel they must start at the minimum half way up the ladder, anything below that will not do.

 

We bought our first 2 bedroom terraced house in 1971 for £1100,00p. It was a struggle but it was ours. The next step 2yrs later was that we were able to get a grant to modernise it, that meant getting a 2nd mortgage of £2000 to match the grant (back to struggling again, no luxuries). After 3yrs and only another year to pay off the 2nd mortgage, O/H decided she would get pregnant again and blamed me *-) Well if it was to be a boy then that would have been ok because it would have gone with the other two, But oh no, a girl in 1976, boy did Eve suffer in the heat, and I was working in Glasgow 15 days on, 4 days off for over 5 months.

 

Now we required a 3 bedroom house, definitely could not afford one, so off to the council for a 3bed which they refused to let us have one, said there were more needier people who required one. The winter of 1978/9 was very lucky for us, I was made redundant, Christmas Eve. Found a job same day, on more money, and started 1st working day in the new year. The luck stayed with us two more times, we put the house up for sale and had a cash buyer within 2 weeks so we rented a 3 bed terraced. After about 6 months a 3 bed semi came onto the market that had been repossessed, the asking price was out of our range but I put a bid in for it which was the lowest out of three bids, long story but we got it. Struggling again !! it needed work and we couldn't afford to do the work.

 

After a 18 months with my new firm I was made redundant again out of work for three weeks then found a job which paid a third more plus a monthly bonus. That enabled us to get another 2nd mortgage and finally got all the work done 'BUT' struggling again. Had the house for nearly 30yr all when the prices went up. Happy Ending, apart from one misfortune.

 

So that's it, if you want something you start from the bottom rung and work your way up as best you can, and maybe a bit of luck does help, unless you have that silver spoon, but that's a lot of luck.

 

Dave

 

Forgot to mention and to give credit where it's due. Whilst I was working 6 and 7 days a week, Eve was raising 3 children and working any part time jobs she could find, That gave us our little luxuries.

 

 

 

[Brian Kirby]

Dave225 - 2012-11-02 7:34 PM......................Unfortunately your numbers do not in any way match reality. Although inflation may have risen house prices have not followed suit. In over 20 years my house has doubled so in terms of real money has actually lost. In the last 5 years it has flat-lined. Yet the amount I paid was far greater..............................

Which, I guess, illustrates the error of citing one's own experience as representative of anything wider! Somehow, we have managed to occupy our present home for 30 years. Wasn't planned or expected, and I am surprised it has been that long. Bought 1983 for £45,000. Current market value, based on other sales in same area, probably a little over £350,000. I am fully aware that this rate of increase is not representative of England as a whole, and that in some areas, not just London or the south east, that rate has been exceeded, while in others it has fallen far below.

 

On Clive's point regarding tax, of course lower taxes on property sales would help. That wasn't my point. My point was that the tax alone cannot be the explanation. Surely, having to pay even £5,000 extra tax, is hardly relevant to the affordability of a house costing £250,000? It is raising the deposit, and having an income sufficient for the mortgage, that seem to me the major hurdles.

 

On Clive's further point, citing Spain as the example of what would happen if property prices were to fall, I can only say :-D. Aunt Sally argument! Who suggested prices should fall off a cliff, as they did in Spain, which had far too much of its economy based on property development before the crash? With the crash, the money dried up, the developers went bust, the builders follower them to Carey St, the employees lost their jobs, the banks went wobbly, and the unemployed can't, generally, afford to buy houses. So, prices imploded. It wasn't the fall in house prices that caused Spain's present problems, the fall is a consequence of its problems. Same, for different reasons, in Ireland.

 

If land prices could be stabilised in UK, rather than as they did for years running way ahead of inflation, inflation would gradually bring the real cost of property down relatively painlessly, leaving homes generally more affordable.

 

Don't know about where Clive lives, but down here developers are not building "starter homes", because the "starters" can't afford them. Even if the mid-price market became more active, and it is fairly moribund, it would hardly get starters into homes, because at this price point they are even more un-affordable. Most of the stuff being built at present is in the higher price bracket, in small developments. Price limits the number who can afford them so, even though those buyers may be "trading up", they are too few in number to have any impact on the mid price market in general, which merely stagnates. Many of those buyers are, in any case, escapees from the Great Wen, so not local, and their wealth is generated by the trickle down from the mega bucks houses being sold in and around mainly west London.

 

Having said that, it is noticeable that there is an increase in the amount of stuff on offer in excess of £1M - and there is not that much of that around in relative terms - so quite a high proportion of owners of such property seem to be deciding to sell. Whether that is the effect of recession, or merely the moderately rich trying to score off the mega rich, seems a bit of a moot point. Whatever, either incomes must rise, which would be inflationary, or the cost of property, but especially land, must fall, if the starters are to be able to buy. Or, we just have to drop our fixation with property ownership, and accept rental at realistic rents with secure tenure. Something the French and the Germans seem to manage quite well.

[CliveH]

I agree with most of what Brian says here - and before - my only point re Spain is that whatever the reason why Spanish property prices fell - it has not been a panacea for those wanting to get on the housing ladder.

 

As for what is being built where we live - well that is skewed by the well known restrictions applied by the New Forest District Council - that in the past limited building by the simple expedient of restricting the available floor area. This meant that per square foot of usable space the building cost was far greater than could be achieved elsewhere.

 

However, these rules have been relaxed and there has beed a mini boom in backland development - those people with large gardens are selling of packets of land and having starter homes built. In one area alone near one of our local pubs the Augustus John, there has sprung up two such garden or backland developments - one to the side of pub and one to the front.

 

This is good thing in my book and indeed we wish to do this with our rental property where there is scope to put a smaller starter home in the garden - either to sell one off or to rent out both of them.

 

There is development up the "ladder" but most development is sub £250K.

[Mel B]

I get sick to death of hearing how hard it is for first time buyers to get on the property ladder nowadays! There is plenty of affordable housing about which, in comparison to what was available for us when we bought our first home, is much cheaper in relation to their wages. What a lot of first time buyers, and not necessarily the very young, seem to want now is to go out and enjoy themselves for a while and expect to be able to spend as they wish and have the 'toys' they desire. Then they expect to be able to afford a nice house with all mod cons, ideally in the 'fasionable' are they really want to live and in 'move-into' condition. Sorry, it ain't gonna happen.

 

We had to save up hard for a deposit of over 10% for our first house and still couldn't get a mortgage! The only way we got one was because the first house we were going to buy was off a work colleague and she'd managed to get her bank to agree to look at giving prospective buyers a mortgage. Unfortunately when the survey was done they found loads of problems (remember when a survey actually meant that?). The upside was that as we'd already got our foot in the door they were happy to lend us some money on another property. It needed a lot of work and we were totally skint but we managed to do it by having stuff given and doing the work ourselves (rewiring, fitting a kitchen etc). Virtually everything was given or second hand, the only things we bought new (from MFI) were a couple of basic wardrobes. There was no such thing as charity shops or car boot sales then, so it was off to jumble sales for stuff and a good old 'fight' for the best stuff with the grannies!

 

Shortly after the interest rates went up to 14% ... yes 14%! How the heck we managed to kept the place I don't know but we did ... we scrimped and saved, ate and lived as cheaply as possible, and 'froze' to keep the heating bills down. No telephone, no colour telly or any 'luxury' like that for us ... oh no, our 'luxury' was being able to afford an automatic washing machine a few years later!!!

 

A lot of first-time buyers live beyond their means nowadays and want it all ... well that's just tough, they can't have it all.

 

I was watching a 'Location, Location, Location' programme the other night which hubby had recorded a while back, in that the couple wanted their 'forever' home (sick of hearing that!), they'd spent years in rented accommodation using their earnings to enjoying the night life, having expensive holidays and meals etc, only putting aside a small amount for a deposit and then weren't able to afford what they wanted - this was still enough to buy them a very nice home but they wanted more ... in steps 'Daddy' and gives them £60k ... yes £60k! So what do they do, oh yes, put it towards buying a bit better home but still intend to enjoy the 'high' life too ... I bet Daddy wasn't impressed!

 

For those who genuinely 'work' towards getting a home by saving and being sensible with what they can realistically afford I have a lot of respect, but for the others who appear to be in the majority who fritter away their earnings but still are of the 'gimme, gimme, gimme' attitude ... not a chance!

[Robinhood]

Mel B - 2012-11-03 10:47 PM

 

I get sick to death of hearing how hard it is for first time buyers to get on the property ladder nowadays! !

 

......with apologies to "the Pythons"............ :-D

 

FIRST YORKSHIREWOMAN:

Aye, very passable, that, very passable bit of risotto.

 

SECOND YORKSHIREWOMAN:

Nothing like a good glass of Château de Chasselas, eh, Mel?

 

THIRD YORKSHIREWOMAN:

You're right there, Maggie.

 

FOURTH YORKSHIREWOMAN:

Who'd have thought thirty year ago we'd all be sittin' here drinking Château de Chasselas, eh?

 

FIRST YORKSHIREWOMAN:

In them days we was glad to have the price of a cup o' tea.

 

SECOND YORKSHIREWOMAN:

A cup o' cold tea.

 

FOURTH YORKSHIREWOMAN:

Without milk or sugar.

 

THIRD YORKSHIREWOMAN:

Or tea.

 

FIRST YORKSHIREWOMAN:

In a cracked cup, an' all.

 

FOURTH YORKSHIREWOMAN:

Oh, we never had a cup. We used to have to drink out of a rolled up newspaper.

 

SECOND YORKSHIREWOMAN:

The best we could manage was to suck on a piece of damp cloth.

 

THIRD YORKSHIREWOMAN:

But you know, we were happy in those days, though we were poor.

 

FIRST YORKSHIREWOMAN:

Because we were poor. My old Dad used to say to me, "Money doesn't buy you happiness, daughter".

 

FOURTH YORKSHIREWOMAN:

Aye, 'e was right.

 

FIRST YORKSHIREWOMAN:

Aye, 'e was.

 

FOURTH YORKSHIREWOMAN:

I was happier then and I had nothin'. We used to live in this tiny old house with great big holes in the roof.

 

SECOND YORKSHIREWOMAN:

House! You were lucky to live in a house! We used to live in one room, all twenty-six of us, no furniture, 'alf the floor was missing, and we were all 'uddled together in one corner for fear of falling.

 

THIRD YORKSHIREWOMAN:

Eh, you were lucky to have a room! We used to have to live in t' corridor!

 

FIRST YORKSHIREWOMAN:

Oh, we used to dream of livin' in a corridor! Would ha' been a palace to us. We used to live in an old water tank on a rubbish tip. We got woke up every morning by having a load of rotting fish dumped all over us! House? Huh.

 

FOURTH YORKSHIREWOMAN:

Well, when I say 'house' it was only a hole in the ground covered by a sheet of tarpaulin, but it was a house to us.

 

SECOND YORKSHIREWOMAN:

We were evicted from our 'ole in the ground; we 'ad to go and live in a lake.

 

THIRD YORKSHIREWOMAN:

You were lucky to have a lake! There were a hundred and fifty of us living in t' shoebox in t' middle o' road.

 

FIRST YORKSHIREWOMAN:

Cardboard box?

 

THIRD YORKSHIREWOMAN:

Aye.

 

FIRST YORKSHIREWOMAN:

You were lucky. We lived for three months in a paper bag in a septic tank. We used to have to get up at six in the morning, clean the paper bag, eat a crust of stale bread, go to work down t' mill, fourteen hours a day, week-in week-out, for sixpence a week, and when we got home our Dad would thrash us to sleep wi' his belt.

 

SECOND YORKSHIREWOMAN:

Luxury. We used to have to get out of the lake at six o'clock in the morning, clean the lake, eat a handful of 'ot gravel, work twenty hour day at mill for tuppence a month, come home, and Dad would thrash us to sleep with a broken bottle, if we were lucky!

 

THIRD YORKSHIREWOMAN:

Well, of course, we had it tough. We used to 'ave to get up out of shoebox at twelve o'clock at night and lick road clean wit' tongue. We had two bits of cold gravel, worked twenty-four hours a day at mill for sixpence every four years, and when we got home our Dad would slice us in two wit' bread knife.

 

FOURTH YORKSHIREWOMAN:

Right. I had to get up in the morning at ten o'clock at night half an hour before I went to bed, drink a cup of sulphuric acid, work twenty-nine hours a day down mill, and pay mill owner for permission to come to work, and when we got home, our Dad and our mother would kill us and dance about on our graves singing Hallelujah.

 

FIRST YORKSHIREWOMAN:

And you try and tell the young people of today that ..... they won't believe you.

 

ALL:

They won't!

 

[Guest pelmetman]

By Eck............ those Yorkshire folk are lucky :D

[donna miller]

Mel B - 2012-11-03 10:47 PM

 

I get sick to death of hearing how hard it is for first time buyers to get on the property ladder nowadays! There is plenty of affordable housing about which, in comparison to what was available for us when we bought our first home,!

 

Wow, such a caring attitude. Never mind, here's a nice social experiment for you Mel;

 

1 : Get rid of everything you've got, including your home and savings (give it all to your favourite charity)

2 : Get your husband a job on the national average wage of about £26-27000.

You get a job on minimum wage of about £12-13000 (both pre tax don't forget)

3 : Move into rented accomodation and pay full rent, council tax, water, gas,electric, travel costs to work

or maybe have 1 car between you, pehaps have a baby and one of you give up work.

4 : Get together a 25-30% deposit to buy your first house, don't forget, by your own reckoning it's easy. also no more 95% deals available on mortgages.

5 : Find one of these plentifull affordable houses you mention, don't forget you should be happy to take

one in the worst, most violent, immigrant ridden areas of the town or area you are living in, because after all, it's affordable and in your price range.Don't let the fact that there are drug dealers either side of you and a crack house opposite, put you off, or that 75% of the houses are boarded up and contain squatters, because after all, it will get you on "The housing ladder"

6 : Get the mortgage you say is so readily available to everybody, including those on a low wage.

7 : Start telling everyone how easy it is to get on the housing ladder.

8 : Enjoy life in your new home.

 

[Guest pelmetman]

Mind you Donna ;-)....................The fact that your likely to end up in a drug ridden area, with dealers as neighbours is probably down to the caring attitude of our judiciary :D

 

Care in the community they call it (lol) (lol)................... I'd rather a drug dealing neighbour though, than a psychopath 8-)

[Guest Peter James]

Dave225 - 2012-11-02 7:34 PM

blaming everyone else for your own misfortune will never work.

Could you just point out where you think I did that?

(Because I think I have been very fortunate)

[donna miller]

pelmetman - 2012-11-04 11:48 AM

 

Mind you Donna ;-)....................The fact that your likely to end up in a drug ridden area, with dealers as neighbours is probably down to the caring attitude of our judiciary :D

 

Care in the community they call it (lol) (lol)................... I'd rather a drug dealing neighbour though, than a psychopath 8-)

 

Ah, but what if they were psychopathic drug dealers? :-D

 

 

[Guest Peter James]

nowtelse2do - 2012-11-02 11:15 PM

I was made redundant, Christmas Eve. Found a job same day, on more money, and started 1st working day in the new year.

 

Yes, you could in those days. And, with unions in the workplace, they were real jobs. Not the part time McJobs, and unpaid shelf filling at Poundland forced onto todays graduates.