House prices

Quite.

It would cost you £300k meaning a £30k deposit + a £60k salary.

I'm curious, is this a blanket £ cap on all properties, or would it be tiered based on sq/ft or number of rooms?

The speed at which house prices rose was what shocked me. I am lucky to be old enough to have bought my home before prices dramatically rose, but I only expected to be in that house for a few years. But then the prices rose and my salary didn't in any way keep up so I've never been able to 'move up' the housing ladder, I'm still there, blocking someone else being able to get on the first rung.

It felt like it happened because banks started lending higher multiples of salaries, and certainly where I live, people taking on buy to let mortgages also seemed to push the price up. I have known people who really couldn't afford those mortgages but benefited from renters paying it for them while being told they (the renters) couldn't afford to buy. I think that's dropped back a bit now though.

buy do-er upper properties separately for around £90k in 2003, both earning around £18k at that poin

No doer uppers for that price around greater London now

On a 25k orc30k salary for young professional not a banker they can only buy a 1/4 share in a flat shared ownership

Absolutely and everyone has their individual priorities.

I’m a millennial who bought at a very young age and was screwed completely by the financial crash in 2008. So I haven’t exactly made a killing in the house price increases, even though I’ve owned most of my adult life. I’ve just about kept up with GDP in terms of growth.

People talk about house price inflation as if it’s a standalone thing, but most of the increase is just normal inflation.

We only bought a couple of years ago, so not significantly. I’m not really talking about my own position, but even from being relatively comfortable, having plenty of other savings, no huge expenses, no family to support, I’ve felt the pinch of higher payments. It must be incredibly hard to balance if you’re borrowed up to the hilt with additional commitments.

The UK is full offer people who think their property wealth is down to ‘hard work and good financial sense’ rather than luck.

Properties on my road in London are worth 4-5x what they sold for in 2003. Wages have not increased 4-5x.

Your first properties at £180k between you would now be worth ~£720 - £900k at that level of growth. So about where you have ended up.

The massive growth in the equity is not because you’ve done anything clever - it’s just timing.

I mean you £90-160k first property is a good example of the issue. Initially you could earn ~£20k and afford a flat as a sole earner. A few years later that was ~£35k to afford it. Now… £80k? £100k? It’s a very different prospect.

My parents were in the situation in the first few years of mortgage - they both had good jobs and mum had to resign shortly before giving birth (statutory maternity pay only, no maternity leave and next to no childcare) - no fixed rate mortgages so when the mortgage rate went up to 13% for a short time it was a struggle.

It is indeed a huge amount. I was purely stating that it is not impossible to get on the housing ladder, as some people make it out to be.

Have your salaries increased since you bought your house? The first few years are the most difficult, but actually mortgage payments become deflated as salaries increase and normal inflation occurs.

The (maximum) 4.5 x multiple for the hypothetical average income couple would have allowed them to borrow up to £65,000 MORE than the average house price. So they could realistically borrow substation ally less than this and still afford to buy.

‘People doing jobs they don’t like or are injurious to their health’ people are doing this to stay alive forget buying a house this is how it’s always been my grandad was a miner not a job he wanted to do and that eventually killed him but it kept food on the table and a roof over their heads

Another massive problem with the high costs in London is stamp duty.

I’d be looking at £100k in tax to move to a bigger house. I don’t think I’ll ever be able to rationalise that.

This. Someone posted upthread to demonstrate how an average house should be affordable for two people with average salaries borrowing 4.5x joint income- but that’s an absolutely huge amount that leaves you with no flexibility at all in the event of redundancy, serious illness, needing to cut hours to manage childcare or any other life event. It shouldn’t be the norm. Our mortgage is about 3x our joint income, and it’s as high as I’d want to go.

Huge sustained increases in house prices have not particularly benefited society, even on an individual level it doesn’t help much - maybe inflating debt away feels good. Maybe it feels really good when you are dead? It needs a very long more gradual erosion of prices or everyone starts crying about how unfair it is that their lovely house they worked hard for isn’t worth as much as it should be. It’s perceived as a one way bet and mostly it has been for 20+ years for lots of complex reasons. Huge amounts of debt and money tied up in housing, could be used more effectively in the wider economy IMO.

@iamtheblcksheep 100% agree.

Cut public sector waste, red tape and nonsensical procurement policy before you ask anyone to pay a penny more in tax.

And if you want to overpay tax voluntarily there's a mechanism to do so.

The first rung is often the crappy shared ownership flat where you have all the costs and responsibilities but cannot do up as it is a high rise flat

lol you wouldn't be able to start off like that now, rung has vanished above the clouds. Boomer mentality.

If the mortgage companies phased in the old way of calculating loans 3x higher and 1x lower then the house prices would not rise as quickly.
We had a point of being able to borrow 5x joint (and for some professionals based on their projected income)

My inheritance has been tax free thanks. There is no loss as they were never going to get their hands on it.

But I don’t know maybe cutting waste in the monster that is the NHS and using the money properly. There’s also the quangos that have spent almost £1 million on support groups hosting events such as lectures on the 'Queer History of Tango'. The issue for this country isn’t how much we tax people but the ridiculous amount we waste on stupid shit instead of the necessities for people to have a basic standard of living.

I've advised my daughter to leave the UK when she starts working, nothing for her here but slavery for a 1%'er sitting on huge land/property wealth wanting a second yacht. I'll be sending my inheritance her way so she has an easy life.
Australia beckons, lots of land, good work/life balance, larges homes, encouraged to start families.

We live in one of the areas you mentioned to be close to family including elderly parents and because we like it. Didn’t realise we were just too stupid to be aware that there are cheaper areas we could live in, how silly of us!

Agreed. Research has shown that the IHT rate that would raise the most would be 5% with no exemptions. That’s the sort of level that the really super rich wouldn’t bother avoiding.

Not everywhere in the country has had the enormous price rises seen in London. My house is barely worth more than it was 15 years ago despite ploughing money into maintenance and upgrading. Maybe if you could correct the prices that actually need correction and leave the rest of us alone?

I’m torn on the Inheritance tax too because the very wealthy will pass on their wealth outside this system (who was the son that inherited 32m tax free?) and us ordinary serfs will be the ones paying. Two fingers right up to social mobility yet again.

@Bushmillsbabe I don't think it's really possible to make money by doing up houses for the average person these days. Since covid prices have gone up SO much.

Sometimes it just takes time to get where you want to be. Husband income £45k, mine £35k. We currently live in a house worth we think about £850k. My salary is national average, husbands just a bit more. No inheritance. Both worked through uni but took student loans, used these as deposits to buy do-er upper properties separately for around £90k in 2003, both earning around £18k at that point. Did them up ourselves around full time jobs, sold for around £160k. That gave us around £140k equity after expenses. We used that to buy a £300k house in outer London, did it up, sold for £490k 6 years later. Bought current house at £680k, again did it up and now worth around £850k with a 200k mortgage. Yes it took over 15 years from start to finish, but with hard work, good financial sense it can be doable.