' A chicken would cost £50'

[stopitandtidyupp]

Leisurely watching ' The big questions'
discussing is London only for the rich?

One woman said if house prices were a chicken then a chicken would now cost £50. Now she meant in London but I wonder about the rest of the country.

I live in the NE and I am struggling to get on the ladder.

I guess my AIBU to be annoyed at house prices and is there an answer?

BorisBogtrotter, off topic a bit, but it does make me roll my eyes when older folks mention not “wasting” money on mobile phones when they were young, as if they resisted through prudence and virtue, not because mobile didn’t bloody exist back then!

Mobiles were not around, but WE could have had a landline phone, holidays, comics, haircuts etc , they were available, but we got a house instead. The idea of sacrifice was more common place, perhaps because there was less inequality, so everyone around was making hard choices.

It’s the generalisation that I object to MIdgebabe. These days owning a mobile phone is pretty essential and not really a sign that someone is unwilling to make hard sacrifices. Many younger people are making sacrifices, but as many posters have already explained, the problem lies in the cold, hard, fact that in many parts of the country houses cost much greater multiples of the average wage than they have done in previous decades.

No amount anecdotes from people who bought more than 10 years ago about the noble sacrifices they made, or generalisations about shallow youngsters wasting their money on iPhones and avocados is going to change that fact.

I don't get this 'forever home' thing. We saved and eventually bought a house in our 30s. Modest terraced house, two bed, downstairs bathroom, nothing extravagant about it. A good hour away from our jobs, public transport not great, but workable.

We had no plans to stay there a bit then get somewhere bigger, no dream of a perfect 'forever home', I've never heard of the concept outside of Mumsnet. We were just glad to have been able to get somwhere.

And yes, we had one crappy old car, no holidays etc. etc. Still took us eight years to save a deposit. Good thing we never bought it as an investment given the massive amount of negative equity we have.

In general there are so many things worse , unstable employement, lack of (secure) council housing and house prices in relation to income. on average it’s worse, but there are also a lot of people who seem to think that the way their parents and grandparent live now is the lifestyle those people had aged 18, and there are younger people who do really have the choice between house and lifestyle but don’t admit it

I guess I would be happy if we could focus on the causes and solution rather than getting caught up in a narrative of generational divide. don’t blame a single generation, blame politicians who would be happy if the general population could blame each other and not them.

@Oliversmumsarmy

^You do realise that the kitchens/boiler replacements are not free. They will be paid for out of your rent.

At some point your rent will go up to pay for these things the landlord doesn’t do these things for free^

Yes I am aware of this, what I should have said is no extra or unexpected cost to me. I agrew the £100 saved in rent could be budgeted and saved for emergencies.

My rent for my 2 bedroom house with the same HA in 2003 was £360 pm and gradually rose to £400pcm after 14 years. I've had another child and although I had to wait longer for a suitable home than if I private rented, my rent in 2019 for a 3 bedroom with utility and additional downstairs WC is £500pcm.

There is a massive difference in service and care from private landlords and HA. HA is much more secure as its down to one person to decide to sell the house and its pretty much unheard of unless the houses are to be demolished, and even tnen you are re-housed as priority.

So my thinking is, I currently rent for £500 p/m. To scale it down, over 10 years I will have paid £12,000 in money I wont see again.

If I bought a house for 12,000 now and after 10 years it's value was the same, I haven't achieved anything have I, other than 'savings' or money towards another home.

If i keep this 12k owned home until retirement, I will have to sell it to pay for my care. I can hope there is money left to give my children. If I go to state care, the money in the house will be claimed by the state an I right? Yet if I stay renting I can receive state care anyway?

So if a house doesn't make money, it's simply a contribution to care in your later life?

Therefore someone in my situation, putting pride aside, only benefits from a mortgage if the house is an investment that makes money? Or obviously, if you don't mind coming debt for longer you can keep upgrading the type and cost of house you live in.

Getting a mortgage used to be a huge goal for me, but recently I'm questioning why and think it was for my own sense of status and desire to live somewhere more fancy.

My conclusions above are just a theory and I am still figuring it all out so please let me know if you have a different spin on it and dont think I am trying to belittle being a homeowner! I know for a lot of people it's the only option to have their own home.

So many typos, apologies.

Where are you getting £12000 from name? By my calculations if you pay £500 a month over ten years you’ll pay £60,000

At which point you could sell your house and even if it stays the same price at £60,000 you can use the money to pay for better care.

I’m not saying you should buy a house but I’m not sure you have the maths right.

And if you don't need care then you have a house without having to pay rent in old age and can leave all proceeds to family.

And eventually you stop paying a mortage but have to keep paying rent.

So if you live for 30 years you would be paying 180k on a 60k house

@Calvinsmam

I was originally going to do a 2 year scaled down example, whoops. So 10 years would be 60k gone to rent, or a house paid off at 60k but no profit made. To clarify, just as an example for my theory.

But you start making profit the second it’s paid off and you stop paying rent.

@stopitandtidyupp

That's a possibility. So using the 60k as an example, it's 60k I can then gift my children if I don't need care.

I could also downsize and gift the difference, leaving the house in a will.

But if I did have to go into a care home, the funds would be taken by the government rather than being able to give to my children?

But you could sell early and then go into state care with no assets?

This isn't something I've looked into so unsure if it's factual! Very interesting.

So we intend to stay in our house forever, (not because it’s our ‘forever home’ just because we’re lazy) so the price of it now is pretty much irrelevant to us.
But we want the mortage paid off ASAP so we don’t have to keep paying it so we overpay by almost double every month but if we had a rough patch we could go onto a longer term and pay even less monthly than we are supposed to now.
You don’t get that flexibility in rent.

But you could sell early and then go into state care with no assets?

Not sure about this I think they’ve really tightened their belts.

But surely you could also be saving or investing the money you would have paid towards rent to add to your assets to either pay for non state care or to gift.

@Calvinsmam

Good points. So the real goal is to become mortgage free and own the home. Those who continue to upgrade and mortgage to the hilt may have to work for longer. Ditto those who rent.

So the real goal is to become mortgage free and own the home.

That’s my goal, I know there’s arguments against it too, if you upgrade you can make more money on your house when you downsize but that relies too much on the market always climbing for my liking.

My entire goal in life has always to be to have a comfortable self sustaining life where I work the least as possible

I think it helps though that no one I knew had a big house when I was growing up.
No one had ‘spare bedrooms’ or dining rooms, it was perfectly normal for siblings to share bedrooms and though most people had gardens no one had a garage.

My husband thinks our house is tiny but I just think it’s a normal house.

That has changed my thoughts completely.
I was thinking of owning as a progression to bigger and better houses mostly (as that's what I see my homeowner friends doing).

I'm in the fortunate position that if the Right to Buy a HA house is given the same discount as council (possible in the future), I would receive the maximum 50% discount of house price which after 5 years I am free to sell and keep 100% of the sale value.
This means my years of rent has actually contributed to something tangible. I can achieve a discount now under Right to Acquire but hoping when I am mortgage ready the better discount will apply!

Must add the caveat that I am trying to word this as non-smugly as I can. I think I'm quite lucky to have such good choices available to me.

I would go for it name you don’t have to move!
Just pay it off at the same rate you were paying rent and when you retire won’t have to pay for rent or mortage. You could be mortage free in less than ten years!
My mother did this (then made horrendous financial decisions and remortgaged about three times so still owes more than the house is worth despite nearly being at retirement age, arrrrrrgghhhh and breathe) and she got a really good deal.

I have also read that the discount can be used as a deposit.

So there are some initiatives to get people on the housing ladder but I imagine this would get a lot of people's backs up that a 'scrounger teenage Mum got a council house and then was given a foot up the property ladder too!'. *

It's not fair that those who just want to work hard and buy a home are the ones who have it most difficult!

*I am not a scrounger, post graduate educated, professional career but had a baby at 18 (That probably game me my drive!)

name
Doesn’t bother me at all, that’s what those schemes are for.

I have a much harder time swallowing the help to buy scheme for new builds that one of my relatives used to buy a 600k flat in London despite her parents being millionaires and her living with her millionaire boyfriend.

@calvinsmam

Isn't it funny how quickly societies expectations grew?! My mum shared a bed with lots of siblings, was one of 12! We expect so much more now and hold ourselves against ridiculous bench marks.

I would love to live completely self sufficient!!

if you assume both Q and Z earn £2000 a month
if Person Q pays £550 in mortgage per month for 25 years then Q owns house no more rent, ( and as time goes on the £550 will be a lower and lower proportion of Q's salary even with just inflation assuming no promotion) so when Q gets their pension ( it doesn't matter what sort of pension it is less than working FT) Q don't have to find £550 a month out of less money, so they have £550 to do other things

while Z with renting it still won't be £550 in 4 years time nevermind 25 years so person Z in 25 years will be spending £800 maybe on housing but now their pension is the same as Q's but they are now £800 a month worse off than Q so Q might be quite comfortable on their pension but Z is going to really struggle on the same money as still has to find £800 a month for rent

so assuming mortgage paid off at 60 and retirement at 68 and living to 80+ that is an extra 20 years of paying over £800 a month or £192,000
maybe Q will find value of home disappear in care costs but even at the age of 85 only 16% are in care and even at 95 less than 50% are in care so for the majority they won't be in care