Vegemite Kids

But one of the upsides of renting, is that if there is anywork needing done on the property from major structural, plumbing, rewiring, roofing type jobs through to little fix'em up type jobs, it doesnt cost the person renting any money.

flashman

How typical is this? For instance how does this compare to the national average for salaries and family income and how wide are the regional variations?

dugongs

well i estimate this couple would be netting after tax/ni £2,693 per month. No rent as living with mum & dad. beer money of £1,443 per month (very high) ? Leaves them £1,250 per month to save. They could easily have saved £30,000 over a two year period.

2 bed flat in north london say £160k less £30k deposit means they need a mortgage of £130k which is 3 times joint income no problem. say £725 a month based on 25 year capital repayment loan. Throw in insurances, council tax etc say £1k per month outgoings or 37% outgoings to income. Leaves them £1,693 per month to live.

Easy. its bullshit to say they cannot afford to buy. £725 in London is about the same cost as renting.

what they cannot afford to do is buy the average house in london which is £240,000 unless they wanted to expose themselves to a monster self cert mortgage. but hello these are young people who said they should be able to buy the average home at this stage in their life.

london is a big place and there is an awful lot of expensive property there so average is higher than uk but this example does'nt induce any sympathy in me. these people are earning good money which will increase as their careers continue.

if they cannot save a deposit where is all their money going ?

iaink

Paying the mortage was never the issue here, the original article clearly says....
"They can afford a mortgage, says Dan, but 'the issue is the £200,000-plus price of houses in north London where we want to live. At that price, we need at least £30,000 for the deposit"

I think there are a few ommisions in your calculations...Why do you assume that if they live with their parents, they pay no rent. I was never that lucky, if I stayed with my folks, I had to pay my keep.

Its not clear if mum and dad live anywhere near where they work, so they could well be shelling out big money to commute everyday too. How much is a season ticket now??? Maybe they need a car, as a newly qualified professionals they probably have car payments there to cover in the hundreds per month.
Your calculations dont take into account the student loan repayment requirements either. Kind of sucks to start your adult life already 13k in the hole, but I guess it is worth it in the long run.

I think you are right about one thing, in some respects the younger generation want everything now, and would rather go straight to "where we want to live" rather than "where we can afford to live", but the wider issue here is that if these young professionals are struggling what chance is there for people on average or below salaries, or if you dont have the option of living with your parents until you have a nest egg saved.

I am glad I dont have to deal with this situation myself anymore.

Iain

Manc

Don't live there then.

I want to live in Manhatten, wah wah wah.

Jesus, as soon as ****tards stop paying these ridiculous prices then they will come down.
kapeesh?

or just move oop nawf.

iaink

....where the property is half the cost, but then so is the salary, and in some cases the employment opportunities. For some folks you may as well tell them to move to Canada...its not going to happen.

Iain

Manc

whilst I agree, it is more likely to earn £43 in London per couple. You can still earn that in and around the M62 corridor.
and house prices are a lot cheaper.

jandjuk

I also thought that saving only £300 a month didn't seem like very much.

We earn about the same as them, and pay £750 a month in rent! Yet we manage to save at least 800 a month! That's a big discrepancy.... not a very good case study....

Surely they wouldn't be paying that much in rent to their parents.

But in saying that the general problem of not being able to afford housing as a first time home buyer is a problem. The fact that we could not afford to live in anything bigger than a shoebox is one of the primary reasons we decided not to settle in the UK permanently.

Mercedes

Ummmm Ive missed out here somewhere, never had any of the below happen to any of the rentals. Maybe I just didnt rent a dump . Still its the landlord who wins as he has the rent money and a property that will go up in value if hes lucky. You wont see the money again, hence why its dead money renting. Still would rather put it into a mortgage.

dunroving

- and more power to you, you did something about the situation rather than whinge incessantly.

- I seem to recall that we lived in a "shoebox" my whole childhood. I think as someone else implied earlier, part of the problem is wanting too much. These days we have so many more toys and so much more "stuff". and every kid has to have his/her own bedroom. What was acceptable only 20 or 30 years ago is now not "what I want". I'm not saying people should have to live in a pee-ridden, burnt out shell of a place, but that even if you are a young couple with a baby, maybe a 3-bedroom (or even 2-bedroom) place isn't a reasonable expectation. There are lots of adults in the U.K. who shared bedrooms with brothers or sisters, or even maybe with their parents when they were very little. No, it's not a "perfect" situation, but who ever said everyone can live in a perfect situation? Start small and build up - in 5 years you can sell your 1-BR flat and use the profit to put down a deposit on a bigger place. Too many people seem to expect everything and expect it NOW.

I'm a middle-aged professional with advanced degrees who spent his life savings getting through college and now is faced with the prospect that if I do go back to the U.K., I may just have to live in a terraced house - but you know, it could be a lot worse.

p.s. I like to whinge about the housing situation too, sometimes - but ultimately I think I have realistic expectations.

RoB1833

There's still bargains to be had out there and money to be made. It's like a lot of people are saying are your expectations realistic as far as house size and areas are concerned?

I was looking for a place 2 years ago and was on approx 22k. I wanted to live in Cheshire or Trafford but knew I couldn't afford it, so then I looked at areas I hadn't even considered before. In the end I found a large terrace for less than half I would have paid in the areas I wanted to live in. It was on a quiet back street, 5 minutes from the motorways and five minutes from the train station. The rooms were half as big again as some of the other houses I had viewed and I sold it for a big profit in just 15 months.

My advice is to open up your mind and look in the 'so called' less desireable areas. You might be pleasantly suprised!

dunroving

First of all, what kind of a mortgage broker is he if he can't find a mortgage with less than a 15% deposit? [if I need educating, then educate me - surely there is SOME way to get a mortgage at less than 15% deposit?]

Second of all, why complain about what you can't change? Change what you can - in this case, all the whinging in the world won't make this house affordable/buyable. So change what you can - your own pickiness about where you "want to live" (see bold).

dugongs

even if you add in the student loans say £150 per month and a car loan (£7k 3 years) £235 per month maybe 2 car loans and rent to mummy & daddy say £250 per month (has to be cheaper than the alternative as why live with mum & dad otherwise) that still leaves them enough to live just and maintain their savings at £1,250 per month.

the more likely scenario is payment on bmw £450 per month, payment of mini cooper £300 per month, out and about living the good life £1000 per month, rent to mum & dad £100, clothes, holidays etc £500, savings doh £100 if we are lucky.

main topic of conversation down the winebar shit those houses are expensive in hampstead where we want to live, our parents were all lazy bastards who did'nt really work their whole lives to afford a modest 3/4 bedroom home when real interest rates were 3 times what they are now and you had to beg the bank manager for a loan. we are just so unlucky to be born today. lets move to rural canada theres loads of great big houses there for less than the cost of my car. i could become a farmer and you could paint landscapes. head in the clouds.

this is a story in today's evening standard. get in while you still can.

House prices to top £650k
By Jonathan Prynn, Evening Standard
11 March 2004
London house prices are set to surge to an average of more than £650,000 in the next 20 years, a new report claims today.

The predicted rise means that getting on the property ladder will become an even more daunting task, with typical homes costing-around 10 times average London-earnings by 2024.

The average house price is currently around £230,000 - or seven times earnings. This figure has doubled in the past six years. First-time buyers are already struggling to raise the finance for their initial purchase, with very few properties available below £200,000.

The report, from a respected economic think tank, suggests that the £1 million house - once regarded as an impossible dream for the vast majority of people - will become the benchmark for a standard family home in much of London.

The Centre for Economics and Business Research says that London's once booming property market will take off again around 2010 after a prolonged slowdown, regaining its position at the head of Britain's property "hot spot" league table.

The growth will be driven by the capital's booming population and economy.

House price inflation in London will average around five per cent - slower than in the late Nineties but still well ahead of inflation.

For the UK as a whole the rate will be around 4.5 per cent, the Housing Futures 2024 report claims.

Co-author Doug McWilliams said the inexorable increase would force more young people to flat-share in ever larger households. "I think we will see flat sharing coming back in a big way," he said.

There has been a 20 per cent increase in the number of people living six or more to a house in recent years, he added.

In the more immediate future, the London property market will pass a major milestone as early as next year, when the average house price rises above £250,000. This will dramatically increase the cost of moving for thousands of people, as it marks the threshold of three per cent stamp duty.

According to the report, moving house will cost almost £15,000 - including all taxes and fees.

The report says a national house price collapse is unlikely unless the market continues to boom at its current rate.

"We think a soft landing is more likely than not," it concludes

iaink

You seem to be under some misconception here, or are just showing your ignorance. I am a professional engineeer, my wife was a teacher, but looks after our kid now. My neighbours include a dentist, production supervisor,plant manager, financial consultant, insurance agent, and an Air Force NCO. But there are regular "hourly" paid workers as well.

I live in the country, about 15 miles from a small city, but much as Canada may be a bit behind the hip and trendy UK, we have recently benefited from the introduction of the "Automobile", so driving for 20 mins to get to work is a lot easier than when we had to get the horses harnessed up Some of us "high rollers" even have more than one.

Iain

mickj

Dugongs,


Lets clear this up , you sure didn't hear it from me that you can buy a house for 25k pounds

I told you how things are in my neck of the wood here, west of TO, and you saw the link for the houses i showed you. Well of course people move to the boonies when they are older, that is not even an option am considering.

Am not a "high roller", am just a Business IT analyst person than earns a reasonable crust. Surely if i was in the UK i could be earning more, i was earning 15k before i left uni in the UK, but am quite happy here in my 4 bed house with a basement and great room, 100k canadian less than my docklands 2 bed flat. oh...and the house is in an urban area, poln 150k minimum.

No misconceptions around here