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?

I think he's talking rubbish. I'm late 40s and when I first got a mortgage in my early 20s you had to prove your salary with payslips etc. Although it's possible his boss forged those also.

What was different to now was the ability to get a mortgage of 5 times salary with a 5% deposit, or a 110% mortgage. That all changed after the financial crash in 2008.

YANBU I'm 56 and bought my first house in 1994 when I took a £1600 personal loan and used it as the 5% deposit of a shared equity house! Couldn't have got it otherwise.
Bought and sold over the years and now thankfully mortgage free.
I was always jealous of the generation above me who paid £12k for a house.

As a young-ish person (30s), I can honestly say that I am currently prioritising little luxuries over saving for a deposit. Why? Because DH and I love living in a nice neighbourhood in which we would never be able to buy (1-bed properties are 1M+); we like the flexibility of renting as we don’t know where life is going to take us (in an exciting way!); we live in one of the most amazing cities in the world and don’t want to waste our youthful, child-free years staying in every night counting the pennies.

There’s more to life than amassing wealth at all costs. Not a single person in our social circle lives remotely like the way @Meadowfinch lived in the 1980s. Fair play to those who did and are now far up the property ladder. But it’s just not a life that I or anyone I know my age has chosen. So there is some truth in young people having different priorities these days and this being partly why we are still renting.

"He also received £5,000 from his grandmother towards the purchase."

He must have been from some kind of money as my Gran or Grandad couldn't have given me that today never mind 30 years ago!

So it sounds like while he might not have been earning as much as £90,000 he still had more money than the majority behind him.

http://news.bbc.co.uk/1/hi/programmes/file_on_4/7010415.stm

I think you will find that interest rates were over 10% so yes property was cheaper and your boss may have lied a bit but you still had to cover the monthly payment which people couldnt do which is why so many houses were repossessed

I wonder if this differed across parts of the country. I purchased a flat which I viewed at a price of £15,000 in 1987 and moved into after finalising in early 1988. In my area, 1988-1990 were when prices shot up as by 1990 the flat next door was for sale at £37,000. Slump came early 1990s, and I sold in 1995 for £25,000, so still a nice profit for me but would have been awful for someone who had bought at the 1989/90 peak.

I’m on my early 50s and couldn’t afford to buy a house until I was in my mid 30s. I dont know anyone in my university educated cohort who bought a house in London/ South East in the circumstances you are describing.

But I’m not sure why recognising that some people benefited from particular advantages in previous decades is being interpreted as envy of absolutely everything about those decades.

You're lambasting a whole generation on one overheard conversation @HonestTealPoster ?

And you're trying to undermine all the posters who've told you they had a very different experience of trying to get their first mortgage /house. The person you overheard lied; I certainly didn't have the opportunity to lie about my income, nor would I. I borrowed as much as I could afford and worked 3 jobs to pay for renovations - basic stuff like putting in heating & hot water!

Buying one's first house is generally difficult, whenever one was born. People today seem to get a lot more help from their parents than a lot of people in my generation did. Nowadays people can borrow more, ad there are much higher expectations of the sort of house/flat people want to buy.

https://www.theguardian.com/money/2005/jan/18/mortgages.business

@thestudiothe biggest lifestyle change in the past was people had more dc & had then younger. thats unaffordable to many now even if you cut back on coffees

Where, precisely, have I lambasted an entire generation? I’ve shared an anecdote about a conversation with one individual and reflected on an aspect of homeownership that I found enviable. That’s hardly a wholesale condemnation of everyone born during a particular period.

Nor have I attempted to undermine anyone else’s experience. I’ve repeatedly acknowledged that mortgage lending practices varied and that many people faced considerable difficulties purchasing their first homes. The fact that your experience differed from his doesn’t invalidate either account.

I’m also not sure why you’re presenting the fact that you worked three jobs and had to undertake substantial renovations as though I’ve suggested otherwise. I’ve never claimed that buying a home was effortless for everyone in previous generations.

As for your final point, parental financial assistance is hardly universally available today and greater borrowing capacity doesn’t automatically translate into greater affordability when property prices have risen substantially relative to earnings.

It’s perfectly possible to acknowledge the difficulties your generation faced while also recognising that some people benefitted from opportunities that others didn’t. I’m not sure why this discussion keeps being framed as though one must come at the expense of the other.

@PrettyPicklehow would someone earning 20k be able to borrow 5.5x their salary?

Car ownership in the 1980s was at 65%, today it's at 75%. Not that much difference

The idea that people could afford mortgages because they didn't have cars is complete nonsense.

You do realise this sort of lending contributed to the financial crash. Having benefitted from this kind of lending from Northern Rock (now collapsed) for my first mortgage in 1999, when I was 18 and worked one summer in a phone shop, and got a 110% mortgage on my first flat, then subsequently lost a huge amount of money on the crash on another property deal.. then I think YABU. You didn’t live through the consequences of this kind of lending, this one bloke did alright, but millions of people were entirely fucked, and a main central cause globally was bad mortgage debt.

But the people who had used Liar Loans regretted it in 2007 when their house price was down 30% and banks were going bust all over the place, then they got bailed out and a new generation of borrowers piled in, now it is their turn to feel some pain as rates go up, difference this time is that the global central banks are not co-ordinating to bail them out (they were actually bailing out the bankers in 2007 but people with mortgage debt got a free pass that time as a side effect of the bail out, the banks need their debt back with interest after all?)

That “help” gets forgotten too. Someone will be come along & say “I only got pounds” but it cost the gov millions hence why they got rid of it. I’d love them to bring it back!

Difference is that the 1980"s car wasn"t on monthly payments.

What pisses me right off is the ones that rattle on about coffee and netflix, so trite and clichéd. My stepdad regularly yaps about how youngsters don't want to cut their cloth and leave within their means and want everything now now now without giving up luxuries whilst he was given a 3 bed council house to himself as a 21 year old apprentice car mechanic, bought the house at a discount with 100% mortgage so didn't save fuck all for his deposit, sold it at such a profit he bought his next house outright yet has the cheek to lecture about saving and sacrifice when he got all the help youngsters today never will. My mum bought a 3 bed house as a waitress, her dad (my grandad) went with her to help talk to the Bank manager and she got approved, which would never happen now. I get so cross with out of touch Boomers I'm afraid

I’m not, it’s standard on here to deny it was easier. It’s just another one of those crazy MN things.

well thats a load of rubbish, me and my hubby have never smoked, never went out 3 times a week, poss once every couple of months and never owned a conservatory !!

Yes, irresponsible lending had serious consequences and the financial crisis exposed just how damaging those practices could be. But I’m not sure it’s accurate to suggest that everyone who obtained a mortgage through questionable income declarations subsequently regretted it, experienced a 30% fall in their property’s value or suffered financial difficulties. Individual circumstances varied considerably.

I also think there’s a difference between the consequences of irresponsible lending at a systemic level and whether a particular individual ultimately benefitted from the arrangement they described. The man I spoke to may have encountered financial difficulties later on or he may have managed his mortgage perfectly comfortably. I simply don’t know.

What I found interesting was his account of how he initially accessed homeownership rather than any suggestion that the wider lending practices of that period were financially sound or without consequences.

They had an offshore business called "Granite" that was punting all the UK subprime mortgage debt to dumb American investors packaged up as AAA UK mortgage backed investments, LOL, I think they and the other banks were also selling the U.S dross to dummies in the UK as well, absolutely the biggest scam perpetuated on the UK public ever, and still going on although people are more awake to the debt pyramid scam nowadays due to all the online podcasts etc.

Ten years earlier he could have bought his council house for 12k in many parts of the UK, but I agree, many individuals are/were happy with their house purchase, I am not challenging that, all I am saying is that the wider picture of ever increasing debt for basic shelter is an obvious scam and a disgrace, but of course it can"t last because the bond markets are calling time now, the bankers won"t suffer they will just move on to the next thing, people who seriously overborrowed because they could afford the "monthlies" will suffer though.

@Differentforgirls

It’s about the ratio of salary vs house price…