To wonder where the money is coming from to buy houses?

[00100001]

So, if houses used to be (say) 4-5x average annual salary back in the olden days of the boomers.

And now house prices are 10 X average salary... Bit they're still being bought, and people want to buy...

Where is this money coming from?

Are boomer parents artificially inflating house prices by giving huge sums of money by releasing equity etc?

Who is buying the expensive houses??

Again, there's benefits beyond moving up the ladder!

@Woahthehorsey I'm specifically talking about people who say move up the ladder to make money. Of course if something lowers your LTV than that's good but economically most will still suffer from wage stagnation & increased taxes & receiving "less" for those taxes so what is the overall benefit? My mortgage is lower but I'm going to face a significant increase to my tax soon.

ITS not IT’S! I hate it when autocorrect introduces misplaced apostrophes.

Yes, I know. I'm a financial adviser. It's just an odd example to use. Most moves are to a larger or smaller house.

@Seashor
But, can't you see that it wasn't the lack of false nails that got them to the £70k, it's the fact they were living at your house for free/subsidised.

Lets assume your son and gf bring home around £3000 pcm, and and pay £2000+ in rent and bills, and general living costs.
And let's say if your son got false nails and his hair cut once every month. That's, what? £100? And let's even multiply that by 5 to show that he had no luxuries, because they were saving, and the rest of their salaries went on rent, bills, one off costs (MoT etc) etc.
So they're saving £500pcm, that would have taken 140 months to save £70k. That's over 10 years!

However, if they didn't have to pay rent and bills totalling £2k a month, they'd be able to save £2.5k a month. They'd save £70k in 28months (Call it 2.5years)

So saying they didn't have help, and implying that they did it by not having false nails is just utter bollocks.

Unless you're going to drip feed and say it did take them 10+ years, because you were charging market rates etc.

@kinko but most people are buying a more expensive house which has increased proportionally by more.

www.google.co.uk/amp/s/amp.ft.com/content/5c49931e-9ddd-3db3-8a67-3fc2bc18f0d2

@00100001

So, if houses used to be (say) 4-5x average annual salary back in the olden days of the boomers.

And now house prices are 10 X average salary... Bit they're still being bought, and people want to buy...

Where is this money coming from?

Are boomer parents artificially inflating house prices by giving huge sums of money by releasing equity etc?

Who is buying the expensive houses??

It was 4-5 times joint salary and of course depended where you lived in the country as it does now.

I think the differences between how easy or hard it is/was to buy a place has changed because of a few reasons.

Firstly I think we need to realise that when looking at average house prices and salaries we need to realise that when starting out most people aren’t on average salaries and didn’t buy average priced properties for their first home.
If that is what you are trying to do today then you are making it very difficult for yourself.

I think you can’t compare todays property buyers with that of someone who was looking to buy in the 70s and 80s

Firstly people tended to live with parents as rental properties were scarce and even if you were forced into private rental it was a case of being lucky if your rental was clean and nice. Most were so horrible that you saved as much as you could to buy anything to get out of the rental.

I think the removal of the first step on the housing ladder when mortgage companies stopped lending on small studio flats means that people stay in rented for longer.

Then providing the multiples added up then you didn’t need a deposit so there was no waiting around for years saving.

Also very few people went to university
It was the exception rather than the norm. So people had been working 5 years when most people today are just leaving university

Most people I know took in a lodger for the first few years to help with mortgage repayments.

The only thing that helps today is the increase in multiples you can borrow but then that could be a negative as well.

My first place I bought with Dh was nearly 12 times my gross salary and nearly 7 times dhs

We did need a very large deposit because the multiples were 1x my salary and 1.5 times Dhs

@Seashor

My son has just bought a house with his girlfriend. 70 thousand deposit. They worked their arses off, didn’t spend on false nails, hair, etc. They lived at home and they didn’t decide to have children and then bleat on about how the ‘Boomers’ had it so easy. They didn’t! They were also prepared to move to a cheaper area.

So they were heavily subbed by their parents because they weren't paying rent and bills, but people who don't have that option are 'bleating'. It's the equivalent of a cash handout worth likely tens of thousands between the two of them.

Living with parents to save money is not quite an equivalent of a cash handout because it is sometimes an option for people who could never afford a cash handout.

Mortgage interest rates were only that high for a relatively short period. They peaked with BoE base rate in the late 1970s and again in the early 1990s. In between, rates were much lower

Our bank was charging 25% interest (8% above base.) and it didn’t just come down as quickly as the BOE base rate.
Whilst that might not be what they are supposed to do. Our mortgage company were a shambles who had to be threatened with legal action before they begrudgingly reduced the mortgage payments. Friends at the time had a similar experiences with their mortgage companies.

Of course interest rates were a lot lower in between
Anything in single figures would have been amazing. Anything that didn’t begin with a twenty was amazing.

I've never known anything but low interest rates, it would be quite nice for my savings to actually increase.

@Seashor

My son has just bought a house with his girlfriend. 70 thousand deposit. They worked their arses off, didn’t spend on false nails, hair, etc. They lived at home and they didn’t decide to have children and then bleat on about how the ‘Boomers’ had it so easy. They didn’t! They were also prepared to move to a cheaper area.

Do some research.

[quote 00100001]@Seashor
But, can't you see that it wasn't the lack of false nails that got them to the £70k, it's the fact they were living at your house for free/subsidised.

Lets assume your son and gf bring home around £3000 pcm, and and pay £2000+ in rent and bills, and general living costs.
And let's say if your son got false nails and his hair cut once every month. That's, what? £100? And let's even multiply that by 5 to show that he had no luxuries, because they were saving, and the rest of their salaries went on rent, bills, one off costs (MoT etc) etc.
So they're saving £500pcm, that would have taken 140 months to save £70k. That's over 10 years!

However, if they didn't have to pay rent and bills totalling £2k a month, they'd be able to save £2.5k a month. They'd save £70k in 28months (Call it 2.5years)

So saying they didn't have help, and implying that they did it by not having false nails is just utter bollocks.

Unless you're going to drip feed and say it did take them 10+ years, because you were charging market rates etc.[/quote]
The answer is that they don't pay £2000 / month in rent, but they live in a houseshare for £500/month with bills included.

Boom, 70K saved in 4 years.

@MrsSkylerWhite

Lots of “boomers” are in pretty dire straits too, these days: whilst at the same time expected to be bank of mum and dad and Sunnydays residential home for elderly parents, too. It’s not all fun and games and sports cars. Dismissing a group of people as boomer is about as accurate as labelling another group as snowflakes.

There's nothing wrong with admitting that one generation had it easier in some areas than other generations, cheap housing is something that boomers benefitted from. Cheap travel is something millennials benefited from, obviously not ALL people in these generations did

[quote 00100001]@Seashor
But, can't you see that it wasn't the lack of false nails that got them to the £70k, it's the fact they were living at your house for free/subsidised.

Lets assume your son and gf bring home around £3000 pcm, and and pay £2000+ in rent and bills, and general living costs.
And let's say if your son got false nails and his hair cut once every month. That's, what? £100? And let's even multiply that by 5 to show that he had no luxuries, because they were saving, and the rest of their salaries went on rent, bills, one off costs (MoT etc) etc.
So they're saving £500pcm, that would have taken 140 months to save £70k. That's over 10 years!

However, if they didn't have to pay rent and bills totalling £2k a month, they'd be able to save £2.5k a month. They'd save £70k in 28months (Call it 2.5years)

So saying they didn't have help, and implying that they did it by not having false nails is just utter bollocks.

Unless you're going to drip feed and say it did take them 10+ years, because you were charging market rates etc.[/quote]
£70,000 isn't that much to save for 2 people living rent free at home, on a good to average salary.
£35,000 each at £1,000pm would take 3 years.

We lived somewhere tiny pre-children and saved like hell to buy a small terraced house. It's not that great but it's a home and we wanted it to be possible to pay the mortgage on one income or two part time incomes while our DC were little.
Not much point having a massive house if you are never in it because you have to work three jobs to afford it in my opinion. I appreciate others feel differently and that's fine.

We used help to buy in 2014 on a newbuild so needed 11k for a deposit. We also bought a County further out from London where it was cheaper (now you have to go another county out again to get this benefit). We tried to overpay a few hundred a month before ds was born then when our 5 years interest free was up we remortgaged to cover the difference so we only owed the lender and weren't paying interest on the mortgage and the equity loan.

To be honest the house was big enough that we could have stayed there but as it was a town house there was quite a small family living footprint so we moved to an older house, quite a jump in price so had to remortgage over 35 years again but this could be our forever home. We had equity in the newbuild but wanted to secure the best interest rate possible - we were very lucky to have been gifted around 18k from family.

I am so aware of how lucky we are and even 6 months on would already have been priced our of this house even with the family help. It's madness.

how much do you think they will be amenable to boomers getting free care from taxation as well as keeping v expensive homes they can’t afford? In any case it won’t work, financially

Nobody with assets worth more than £23.5k gets free residential care now.

The expectation that a whole generation can have a) a state pension b) free healthcare c) largely free social care d) a massive house price windfall that they get to keep and not liquidate — not all of these will be able to be met. That’s the simple truth.

That isn’t the expectation now. Most people who own their homes and need non residential social care pay for it out of income. The state pension and NHS healthcare form part of a social contract, no party that seeks to renege on that contract will gain or retain power. Most pensioners these days are also tax payers.

Nobody with assets worth more than £23.5k gets free residential care now.

Surely care in the home will have to be means tested at some point? I don't free prescriptions will be around when I'm of age.

The state pension and NHS healthcare form part of a social contract, no party that seeks to renege on that contract will gain or retain power.

See my NI goes up soon & my pension age has increased despite it not looking like we will live longer. I don't expect to see my state pension or a free at the point of care NHS despite paying NI since I was 17. I don't see how it's sustainable unless we all pay a hell of a lot more tax but i'm not sure that's possible.

As Babyboomers, prices were lower as were expectations and we didn't have stamp duty.

I think we did - it was introduced in 1694!

"£70,000 isn't that much to save for 2 people living rent free at home, on a good to average salary.
£35,000 each at £1,000pm would take 3 years.
"

Which of course assumes that they are actually able to live rent free at home, find 2 jobs that pay 35k (which is way above average salary for a graduate) and they have no other big expenses for that entire time.

I agree that the suggestion that not having your nails done and forgoing you smashed avocado on toast will mean you can get a 70k deposit is misleading at best.

No not all families can afford gift cash up front but by providing free/peppercorn accomodation they are giving a clear cash benefit to their child that others do not have.

The implication that this is an easy thing to do and that anyone who doesnt is feckless and profligate is bloody insulting quite honestly.

@weansu

Nobody with assets worth more than £23.5k gets free residential care now.

Surely care in the home will have to be means tested at some point? I don't free prescriptions will be around when I'm of age.

It is already. Assets over £23.5k excluding your home mean you entirely self fund. May tried to include homes with her proposed “dementia tax”. We all know how well that went.

@Blossomtoes I meant including the home, it's obviously not popular but I still see it coming

@Whammyyammy agreed. But the poster implied it was not having his nails done that was the reason they saved £70k