To be jealous of older generations who were able to buy houses because their bosses exaggerated their salaries?

[HonestTealPoster]

Yesterday I was at the spa and got talking to a man who was older than me (I’m 33 and I’d put him in his early 50s at most).

He told me that when he was in his 20s, he and his friend were able to buy properties in the area of South London where I grew up.

Despite not earning particularly much at the time, his boss wrote a letter stating that he earned £90,000 a year! He openly admitted that he wasn’t earning anywhere near that amount but the letter helped him secure a mortgage. He also received £5,000 from his grandmother towards the purchase.

I’d heard stories about people being able to do things like this years ago but I’d never actually met someone who’d benefited from it!

I was genuinely gobsmacked. Imagine being able to get on the property ladder like that.

AIBU to feel rather envious of how much easier some people had it when it came to buying their first home?

Nobody mentions it because rhe multipliers are so much worse today.

If I committed mortgage fraud like this I'd only end up with a mortgage I can't afford.

Wasn't the problem the ERM or something. Norman Lamont putting up interest rates to 15 per cent. Plus the double miras changes that caused panic buying, all leading to a property slump.

A purchase price of £225,000 in the 1980s woukd have bought an incredibly huge, top of the market house. For contrast, we paid £35,000 in 1982 for a reasonably large four bedroom house in south London.

We had a beanbag, a bed and a cooker, when we moved into our first, two bed terraced, home. My monthly salary was £220 and the mortgage and endowment policy that had to accompany it came to £190. Feb 1978.

I was going to post a photo of the first page of my household finance book, which I still have, but despite blocking the rest of the items out, I thought it probably wasn't a good idea.

We really weren't living in clover.

Then they had them repossessed when interest rates shot up and they couldn't keep up with the repayments.

Boohoo

While i am not going to say this never happened this is the first i have ever heard of it and even if if there were a few rare cases it would be an idiotic thing to do. Apart from being fraud the person buying a property they do not have the income to pay for is just asking for trouble. We had to submit pay slips and bank statements and a letter from the employer (all on paper of course as it was the olden days) and while i guess these could be faked, altered or just false information I've never known it to happen. Why be jealous about what is essentially an illegal act?

This.

I have never had an inheritance. Not one single bean. My grandparents and parents lived in rented accommodation, and had no assets. I wasn't even left enough to pay for and organise my parents funerals. Same story with DH. We both had to pay for our parents funerals, as our siblings - (we have 1 each, both a few years younger,) did fuck-all to help and contributed fuck-all.

It makes my blood boil when younger people assume we all had it easy back in the day. Not all younger people do, (my 2 DC don't,) but the ones who haven't researched things properly, and educated themselves on the subject, assume everyone over 55 has had a piss easy life.

I don't know whether to laugh or cry, when I hear this, and think of how DH and I struggled so much financially during the 1990s and the noughties, with horrific mortgage rates, and the 1990s recession and the late noughties credit crunch... whilst raising our 2 children, and giving them everything they needed...

Yes. We bought a house in 1988 his employer exaggerated his overtime earnings, because we couldn't afford the house without it. It was common. Negative equity was common, with friends having to wait 15 years before they could sell. Mortgage rates went up to 15 per cent. Our mortgage became more than the whole of my husband's salary. I had to get a cleaning job on top of my full time job. A lot of people on these mortgages paid higher interest for the privilege of being able to include overtime etc on the original mortgage, all sold by unscrupulous brokers, banks and building societies. Our mortgage even then, was £804 a month.

Also - I was working doing a job with the title "admin officer" which was identical to the man next to me his job title "project manager"! at nearly twice the salary. There is still inequality in pay between the genders of course
I am not belittling what you are saying OP, I know it's hard currently, some people did make lots of money buying property in the past, but a lot of people lost their houses too.

I knew someone who did this in the early 2000s.
Didn't end well...
They lost the house because - surprise! - they couldn't actually afford it.
They ended up in negative equity and had to live with their parents for a time.

My grandma used to say “look after your pennies and your pounds will look after themselves.”
There is some truth in it, I have discovered.

The dates sound more like latish 1990’s or early 2000’s if he’s is early 50’s.

I bought my third house in 2001 for 300k so it doesn’t sound impossible.

We bought out house in 1982 and yes it was cheap compared to today, but it was almost a slum. I had a toddler running around on bare floorboards, a garden full of old cookers and glass and we have virtually replaced everything in the house, walls, floors, electric etc which we mostly did ourselves. I don’t think we had it particularly easy, all our clothes were from jumble sales and we never went out. A treat was a weekly bottle of cider between us! Our income was pretty low too.

You used a dodgy mortgage broker presumably? Because banks and building societies asked for wage skips.

The late eighties was the time of job title inflation. In my workplace before then most people who managed staff were called supervisors, To have manager in your title you were pretty senior. Then everyone started getting manager in their job title instead of a pay rise. Even people who didn't manage staff.

Project managers previously managed big infrastructure projects. Then yes people who would have been called admin started to get called project managers.

It's why when people say things like my father in the eighties was only a supervisor and earned gazillions it's meaningless. Job titles from then till now are not comparable,

A pp nailed it when they said for some reason we’re not allowed to acknowledge that it’s more difficult to get on the housing ladder these days. People using the the argument that they had to pay 15% interest, well yes but that would still have been cheaper than than paying 4% in the same house that was bought today for three times the price!

No one can deny that house prices have sky rocketed so then you can’t argue that today’s generation are not in a worse situation. My house has gone up by £60k in about 10 years without any adjustments to it. That will be the same up an down the country and whilst it makes no odds to me, in that if I wanted to move, that house would be mor expensive too, it does impact first time buyers as they would need to find an extra £60k more than what we had to, simply due to timing. So anyone thinks they younger generation don’t have it harder needs to give their head a wobble!

we didn't have central heating, no carpet (we painted the floorboards and put a large rug down) no freezer, just a small fridge with an ice box, single glazing, no car, saved up to get a land line installed and had a second hand black and white TV. Thing was that everybody we knew were in similar circumstances, nobody had much and nobody expected to have every thing all at once. One of my mates had deck chairs in her living room as they could not afford chairs and a sofa. We had to work and save, I do think that things are difficult for young people today and the main reason for this is the extortinate price of property and sky high rents

I’m early 50’s. No fraud here to get a mortgage in the 90’s. I’m rocked to the core being described as “the older generation “. I had no idea we were viewed as “older “.

I agree. Not sure why the OP thinks this is any less ‘anecdotal’ than the other tales she’s apparently heard. I mean, unless he produced paperwork from inside his towelling robe, then it’s safe to assume he may well have been exaggerating.

There was also the issue of banks and building societies mis-selling endowment policies in the 1980s. I still have the diagram that the manager from our bank drew when he was trying to convince us thst an endowment mortgage was a wonderful thing and would leave us with a huge lump sum when the mortgage was paid off. In common with many people, we believed what we were told and there was no internet to do our own research or forums to seek advice. When we started to get the predicted value of the endowment 15 years later we started to get concerned but the bank reassured us that it was on track for a couple more years, and then we realised thst we would be in trouble if we didn’t do something. It turned out that the full endowment we had been told we had taken out was actually a low cost endowment, which had no chance of ever paying off the capital sum. Fortunately because I had kept the original diagram and letters from the bank from when we first took out the mortgsge, we were able to claim compensation successfully and we got enough back to repay the mortgage at the end of its term, but never got to see the best egg we had been promised when we took out the mortgage.

The only reason he would need to inflate his salary would be to borrow more than he would have been permitted on his actual salary. If he was after a comfortably affordable mortgage there was no need to lie.
The figures are just an example to illustrate the reality of what a person lying they were on £90k to afford the sort of mortgage available on that income would likely be facing, to demonstrate that its not a position I'd be jealous of.

Yes if I had to choose one thing that was a terrible mistake it would be allowing interest only mortgages. That and selling off council property

I really don't know of anyone who did this - 'older generation' or not - and i don't believe this fraudulent behaviour was widespread.
What I was always jealous of was 100% mortgages, no deposit required. Although on a mortgage rate of 16% when i bought my first home perhaps it might have brought its own challenges.
Different times, different circumstances bring their own set of problems we would all do well to acknowledge.

Eta typo

I don’t disagree that the purpose of inflating his salary was presumably to qualify for borrowing he wouldn’t otherwise have been offered. That’s the advantage I’ve been referring to throughout this exchange.

But qualifying for a larger mortgage doesn’t automatically tell us whether the resulting repayments were manageable for him. The figures you’ve provided illustrate one possible scenario not the reality of his particular circumstances.

I understand perfectly well why you wouldn’t envy the prospect of taking on potentially unaffordable debt. But that’s not what I’ve said I envied.

You seem to be evaluating whether you’d personally have wanted his mortgage, whereas I’ve been commenting on the fact that he apparently gained access to homeownership through an arrangement that wouldn’t withstand today’s scrutiny. Those are two different observations and I don’t think we actually need to disagree about the financial risks to recognise that distinction.

Your feelings of jealousy are valid, It was easier for a lot of people then.