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??

@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.

Well done to them! But not everyone has the luxury of living at home.

My salary has gone down in real terms, despite being 14 years more senior (in a role where seniority dictates salary).

I finished uni in the 00s, salaries in many fields haven't changed at all since I started my career.

@Brainwave89

In some areas, notably London, but also Manchester and the Midlands, money is coming in from abroad to invest in property. Tower Hamlets council noted that they had a large number of properties which had never been lived in- not rented, just left as new and foreign owned (mostly Chinese). It would be relatively straight forward to give councils powers to tax properties which have been empty for a long time period, but we do not currently do this. We also do not limit ownership to UK residents.

You would have to tax them pretty bloody high because china is already doing that, they have so many ghost cities now its had a massive effect on their ability to grow food, they have gone from having 17% of the land farm land to 13% in about 10 years. the CCP has been trying to stop the massive house buiding.

Once you're actually on the property ladder, 'flipping' houses is a very good way to make your way up it.

It isn't today. Not when the starting rung is so high, ftbs are older, salaries aren't increasing much & building work is ££££

www.propertyreporter.co.uk/property/why-the-housing-ladder-no-longer-exists.html

No one really benefits from ever increasing house prices unless you are downsizing.

@jeanne16

When my husband and I bought our first one bedroom flat in 1986, interest rates were at around 12 to 13%. Half of our joint income went on the mortgage and I had sleepless nights that one of us would lose our jobs, as we would have lost the flat. So it has never been easy to buy and I get fed up with the suggestion we had it easier.

What is different now is you need a much larger deposit before you can buy. Otherwise with interest rates so low, it is actually cheaper to fund the mortgage.

Interest rates were terrifyingly high. I remortgaged in 1990, and the 13.25% deal I got was regarded as an absolute bargain.

I bought in 1982 and had to rent out my spare room for the first 7 years as my mortgage was huge. And everything in it, including carpets, was secondhand until 1990.

Several friends had houses repossessed around that time.

@weansu

Because the baby boomer generation are beginning to die? In the next 10-15 years there will be the greatest transfer of wealth in history. Up to £5.5 trillion in the UK alone will transfer from those born between 1945 - 1965 down to younger generations. 2035 is predicted to be the peak year.

I think there will be a wealth tax, they can't push more on income & our nhs & social care costs will increase dramatically due to an ageing population

That will NEVER happen under a Tory government, fuck they wont even tax the energy industry :(

anyway, who is buying houses down here? BTL landlords, cash buyers with property portfolios, either AirBnB or rental.

Same in local estates being built, very few local genuine buyers can afford a £220k "affordable" property.

My DD and her partner recently bought their first house in Plymouth, 23 at or above asking price offers were submitted, 20 were from BTL buyers, theirs was accepted because the seller wanted to sell to a genuine buyer, each offer was asked to write a letter stating why they wanted the house.

The traditional ladder seems to have been sawed away for most around here though QE has enabled asset price inflation. I think through enabling multiple purchases of houses down the ladder. Wealth is, like the future, unevenly distributed.

That will NEVER happen under a Tory government, fuck they wont even tax the energy industry :(

Look at taxes now! The health & social care levy is nowhere near enough to fund what we need. Now I don't mean they are going after Jeff Bezos, I mean Mr Smith with his 1m property. Remember they haven't increased the IHT bands so by default more will fall into it & I do expect CGT rises at some point.

@Zilla1 yep

Despite the eye rolling from some on this thread, there is an element of some people living frugally in order to save quite a lot of money over a short space of time.

My parents have always been terrible with money. Particularly in the 80s, they really bought into the idea that you could have whatever you wanted and you just kept getting credit cards to fund it. They almost lost the house twice.
So, I vowed to never be the same as them. I have always been frugal with money

I think people are.just ticked up to the eyeballs. Niece and boyfriend have just bought a 4 bedroomed house for the two of them. I don't think they realise how much running a house costs over and above the mortgage. They're young they should be travelling the world not saddling themselves with all this debt. It is of course their choice but I do worry.

In these discussions it’s always boomers who are the villains of the piece despite Gen X having had the same access to housing in the “olden days”. What about people who bought their council houses at a huge discount?

I agree, and I say that as someone who is Gen X. My parents are post war babies who grew up with little and bought their house in the 70s while contending with 27% interest rates, 60% tax (Ireland), fuel shortages, mass unemployment... anyone who thinks they had it easy is choosing not to think what that was really like. It wasn't all lovely and affluent like now. At all.

I on the other hand left school in the 90s, and could buy a reasonable place in 2002 for 3.5 times my average salary as soon as I got my first job, on a 100% mortgage with a 4% interest rate. The value of that property has increased 500% in the last 20 years. The credit crunch didn't hit me because rates dropped to nothing.

I am not saying this to be sickening, I am saying it because I frequently hear people my age and younger being bitter about "Boomers", who actually lived through a lot of shit. Whereas my generation had it good, in my opinion.

@00100001

ThisIsEngland

In wasn't an insult...it's a term of a generation born post war....

It used to be 'just a term' but is now definitely an insult too.

I'm just sick of being lumped in with all these golden handshake pension pots and rich white men whose wife never had to go to work.

This all takes the piss, poor people have to pay their parents rent or move out.

I remember when my flat caught fire and I had to move back in with my parents, got threatened by SS over that as the property was deemed overcrowded so they threatened to put my son into care until I moved out gave me a 2 week ultimatum, not sure where they thought we were going to go, they thought I could threaten the landlord to speed up the repairs, it was the council who downsized my parents after I moved out anyway thus making sure they had no extra space.

if you get benefits you cant have more then 6k in savings or they reduce them.

if you managed to buy your own council home you can look forward to a compulsory purchase order below market value when the council want to gentrify the area.

honestly you cant win I think the 10% want the poor to all just die in a gutter.

Despite the eye rolling from some on this thread, there is an element of some people living frugally in order to save quite a lot of money over a short space of time.

But where does the narrative come that younger generations aren't frugal?

Posted too soon. I saved up for a deposit by forgoing most things we are told that we 'need'. We bought our first flat for 100k with a 10% deposit. I bought a book on DIY and taught myself how to do joinery etc. It can still be done with proper frugality.

When my husband and I bought our first one bedroom flat in 1986, interest rates were at around 12 to 13%. Half of our joint income went on the mortgage and I had sleepless nights that one of us would lose our jobs, as we would have lost the flat. So it has never been easy to buy and I get fed up with the suggestion we had it easier

Lol Interests were super hi for a very short time and meanwhile we've seen property prices far far out strip inflation since.

I benefited from this too BUT i don't pretend it was very hard at all, my mortgage repayments were v small compared to my salary and i didn't have to compete with the BTL market either,,

I 'm not quite a boomer but we all had free HE, as a mature student, i got £600 per term just for attending!!! far better job security, cheaper housing... my first rental (all inclusive) was £25 per week in Reading in 1989 ! and i was taking home £1300 per month! 'course i saved!

I and others born in the 50s and 60s (generally) had it easy, stupid to pretend otherwise.

‘ We're moving back to being a rentier economy which is what we always were, minus a little post war blip for a couple of decades.’

Very much this.
The broad expectation of home ownership is a relatively recent thing. Mostly people rented & moved often either as their income varied &/ or paid work became available.

Ask yourself if your great grandparents or grandparents owned or rented their home? Did your parents? Did your GG/Gparents move to keep in work? Did they bring up whole family in a small house?

Olden boomers? What does that mean? Is that like in Ye Olde Times?

Our attitudes & expectations are huge by comparison with previous generations of our own families.

But why would FTB generally be needing a 3 bed semi?

If FTB were aged 20-25 I’d agree. But they’re more like 35 and either have kids or are desperate to start. I was pregnant when we bought our first house so we needed at least two bedrooms and a garden in an area close to schools.

The flip side is that traditional FTB properties aren’t selling. My friend bought a flat in the early 2000s and can’t get rid of it. Everyone who can afford to buy property is old enough to be past the age of wanting a flat and has moved on to needing a family house.

There’s flats available for 100k but people expect to buy their “forever home” straight away. I blame Kirsty and Phil. We bought a tiny house, made 20k in 2 years (which is similar to current market with prices having risen) used that to buy next house. We made 35k on that and bought this house. That was over 15 years. Pre house we muddled along with one tiny car between us. Even in 2005 when we first bought it was hard to buy on one salary alone and dh and I were very low paid (9k and 10k a year) buying a £100k house.

I benefited from this too BUT i don't pretend it was very hard at all, my mortgage repayments were v small compared to my salary and i didn't have to compete with the BTL market either,

You must have had a small mortgage or an excellent salary. My parents lived in their overdraft for years - I grew up knowing how much our monthly income fell short. Luckily my DF had access to an overdraft because he has a good job. Without that they couldn't have kept the house.

I meant to add, the big difference is mortgage companies insisting on huge deposits. If someone has rented for 5 years with no missed payments and the mortgage payments will be less, banks should take that into consideration and allow access to mortgages! We only needed 5k for ours and that is the key to moving young people out of rented.

‘ I and others born in the 50s and 60s (generally) had it easy, stupid to pretend otherwise.’

I disagree. There was a massive hosing shortage after WW2. Credit for the working classes was hard to get & for minor expenditures (e.g. Hire purchase). Mass home ownership was not the expectation.

My middle class professional parents had expectations of home ownership BUT getting the mortgage was another matter.

Money supply well into the late 70s was tightly controlled so the process for getting a mortgage required a relationship with the bank manager. The ease of credit that we know now just did not exist for the average person however well paid they were.

Look at taxes now! The health & social care levy is nowhere near enough to fund what we need. Now I don't mean they are going after Jeff Bezos, I mean Mr Smith with his 1m property. Remember they haven't increased the IHT bands so by default more will fall into it & I do expect CGT rises at some point

CGT can be gotten round, as can IHT.
Why do you think the Tories will tax the very people who vote for them?
Look at the NI increases? this hits the poor the hardest, for the wealthy, its money down the sofa.

There are 171 billionaires in the UK, with wealth estimated at £580 billion.
Tax them an extra 1% and we'd raise 58billion, 5 x the health and social levy.... not quite as straight fwd as that but the point is we have chosen to tax the very lowest wage earners instead.