buying your first house - impossible!

[matz]

I really feel for the young or even not so young people, the price of houses has gone way out of reasonable reach and I feel almost guilty having been able to buy ours having first bought back in 1993 before prices went stupid.

To counter claims that it was as hard back then as now and how us oldies all struggled just as much, well heres the maths. So I bought my first property in 93 and paid £36k for a 70s 3 bed end of terrace. Mortgage deposit £1800 (not insurmountable) multiples wise I had to be earning around £8500 so not too bad.

Fast forward to 2018 and if the house had only gone up by rate of inflation it would now cost £52K odd with deposit of £2500, multiples of £12875 so all still pretty affordable for the average bloke.

Except this isnt whats happened, the self same house is now £220k so deposit reqd is £11K and earning multiples needed is a whacking great £52K.

So these kids have it very hard now IMO and I feel for them greatly, dont know what the answer is to this

edit
oops it appears the online calculator I used was wrong and the £52K should actually be £70K but the principle still applies I think

 

[EFLImpudence]

You've not mentioned what your mortgage interest was in '93.

 

[Doggit]

Now why should you feel guilty Mazt; you didn't cause the problem - or did you. And you didn't benefit from it either, that's just the way things were at the time, but you'll also have more to pass on to your kids. There are those on here that will say that Thatcher caused the problem by selling off council houses, and others who will say it's because the councils didn't rebuild council houses. And Cameron pushed up house prices with the help to buy schemes, and the BOE printed money with quantative easing, and the low interest rates gave people spare money helped push prices up, and uncontrolled immigration caused a housing shortage, and pushed up rental prices as well, so pretty much everyone is to blame, except you.

We are a small Island, and we cannot continue just to build houses to accommodate a population that can only ever expand because government fiscal policy is based on the premise of using people to expand GDP rather than efficiencies and non conventional thinking.

Japan now has 50 year mortgages, and I can see our current 25 year mortgages getting extended as well soon, so reckon that things will only get worse.

 

[matz]

You've not mentioned what your mortgage interest was in '93.

well thats a good point and I cant recall but I know rates are low now. But wouldnt it be prudent to think rates could during the life of mortgage be the same as 93 or are they going to be sub 5% for 20 yrs?

edit
between 5 and 6% in 1993

 

[Keithmac]

We bought/ mortgaged our house 12 years ago, I very much doubt we'd be able to now all things considered.

My two are 6 and 11 years old, can't see any chance of them getting a foot hold at all, even with our help when they're ready to move out.

 

[EFLImpudence]

Matz

You just missed the worst of it.

https://www.bsa.org.uk/BSA/files/5c/5c180498-5e52-4a41-b022-5821c25f3cbd.pdf

 

[Bosswhite]

In mid 1970`s our mortgage rates went up to 16%, that was a struggle. Thanks to Maggie .

 

[Roger928]

the self same house is now £220k

An end of terrace cack hole is worth £120k tops.

 

[matz]

cack hole I was chuffed to bits lol nothing beats your first house

 

[noseall]

An end of terrace cack hole is worth £120k tops.

Or......

A couple of million depending where in the UK you live.

 

[Doggit]

I had a lovely little 2 bad flat in a mansion block in Madia Vale which I bought for £116K in 89, and sold for £128k in about 94. Now it's worth nearly £1m.

 

[matz]

my stepdaughter 29 tells me her generation prefer the idea of renting. I put it to her that was only because buying was so difficult. Maybe if you have not experienced home ownership, its no big deal and renting is fine.

 

[Keithmac]

I had a lovely little 2 bad flat in a mansion block in Madia Vale which I bought for £116K in 89, and sold for £128k in about 94. Now it's worth nearly £1m.

Hindsight is a wonderfull thing!.

 

[Doggit]

The attitude of the young are changing. Kids nowadays aren't bothered about learning to drive a car, but that could be because they are used to parents ferrying them everywhere. If todays younger generation can't afford to buy their own house, then I expect there will be a period of resentment, then they'll get used to renting, and we'll be back to where we were before Maggie changed peoples perceptions.

Hindsight is a wonderfull thing!.

You are soooo right. The properties I should bought, as with the shares I didn't snap up when I had the urge to. I used to be on the ball with finances, and the other half and I were in a restaurant, and it was just the two of us, and Richard Branson and that Piers guy in a table close by, and after we'd left, she said that Branson was listening in to what I was talking about.

 

[crystal ball]

I know Bill Gates hacks my email on a regular basis