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?

You didn't need your employer to do it. There were self certificate mortgages.

My boss added a tiny bit so I could get a first mortgage in the 80s. I was still the one paying half my salary for the mortgage, dealing with soaring interest rates, spending years in negative equity in the 90s and worrying I'd have to hand my keys in to the bank on Black Wednesday. The only house I made any real profit on was the last one and every house I have bought has been a fixer upper.

That was my mum’s generation. She was in debt up to her eyeballs with car finance and expensive holidays and buying me a pony and eating out several nights a week. The baby boomer generation was definitely not living a life of austerity. She was blowing money on all sorts of stupid shit, as were a lot of people around her. She thinks it’s wild that I cook from scratch every day, grow our own food, only drive secondhand cars and have no credit cards or any debt but our mortgage.

oh yeah... self certified 110% mortgages were a thing! I almost did that, but was convinced not to by a local mortgage broker. A few years later the housing market went totally bust, so he was right and saved my skin! But yeah, I was a single mum earning the minimum wage and I could have taken out a %110 mortgage. Bonkers. No wonder it all collapsed

I can assure you I know nobody that did this. Please do not go around thinking this was normal.

Agree with this. I'm in my early 50s, and while I don't deny that I was lucky to get on the housing market just before it exploded, checks were rigorous and I'm extremely doubtful that this was a widespread practice!

I think you are picking up on the wrong thing here. Fair enough to be jealous of people being able to buy a property at the time when a single person could buy somewhere with a mortgage of 3 x a very basic salary. But the issue is that property was so much cheaper at this time, both literally and relatively. An employer lying so that someone became over their heads in debt would have meant they would have defaulted on their payments as soon as interest rates went up and the property would have been repossessed.
I would also be surprised if this was a common thing.

We’re talking about the 90s here, people still had cars, holidays, Sky TV, and mobiles were fairly common by the end of the decade.

I got my first mortgage nearly 30 years ago. They weren't as thorough on the financial checks as they are now but I did need to send several months of payslips, not just a letter.

Am the same age as you and this rings true.

Also in the early 2000s people could get a more than 100% mortgage. We also didn’t have to pay tuition fees for university.

Cheap flights to Europe were around got weekends away and we had internet and most people had a car.

Internet is vital for so many things, like banking, applying for anything from the government, looking for a job, looking for accommodation. The world expects you to be online. So I don’t buy the whole ‘ditch your smartphone and the few hundred pounds you might get and the £20 a month you save might allow you to buy a home’. It would probably give you rent for a few weeks. Not everyone can get to a library, and my employer bans access to personal email, banking websites and job websites.

(This response isn’t aimed at you, more at those with rose-tinted glasses - I just didn’t want to add two responses).

I don't know how old your Mum is but that was certainly not my lifestyle. I bought my first house in my 30s in 1987 and had to move 200 miles out of London to find anything affordable. A pony ffs.

I had the same conversation with my oldest but sitting down with him
£45 phone
£230 lease car ( doesn’t need it for commute)
£130 insurance and tax
£55 gym
£27 Netflix Amazon prime and Spotify

didn’t even add in holidays ,petrol and buying his dinner each day

so that’s well over 1/2 of what his mortgage would be and he could afford a house if he didn’t have these

i didn’t run a car no holidays 2 jobs and second hand furniture that’s how I afforded my home years ago

That's crazy. Taking those things out would never get anyone remotely near to being able to buy a house. Besides, a mobile phone and internet are essential to enable navigation of daily life.

What a load of Daily Mail nonsense. The same flat I bought on five times my salary would be more like fifteen times the salary of a similar job nowadays.

Obviously it depends where you live but house prices have gone up massively in relation to salaries, certainly in the London area. Unless you have the bank of mum and dad it’s almost impossible to save a deposit unless you’re living at home, paying no rent and have a very good job.

I bought my first house in 1994 with a mortgage 2.5 X our joint wage and 5% deposit. We had to jump through lots of hoops as other half earned basic salary of £3k plus bonuses in sales so couldn't prove a guaranteed wages. No minimum wage back then. We bought a doer upper as couldn't get a bigger mortgage for one already done.

Neighbours house was about 50k, I got mine for 40k as it had no kitchen or heating , needed a rewire and re plumbing to remove all lead pipework. Exact same house is now about 220k and a couple of first time buyers would easily get a mortgage for it. Only difference is deposit might need to be 10% and not 5 %.

And for those posting about cars/holidays. We both had a car, his was a company car. We had several foreign holidays a year and ate out regularly.

What? No-one I know did this. Houses were just cheaper then, that's all so they were affordable for most people. I certainly didn't need to inflate my salary (which tbh wasn't high).

Very few employers would have ever done that and I remember having to produce pay slips, and bank statements for proof of income and savings, and that was longer ago than that. Just because it wasn't online you still had to prove things. And of course you then have to actually pay the mortgage which if you don't have anything like the income you claimed would be pretty much impossible. Sounds like an urban myth.

Yabu because it sounds made up, and if not made up, then a financial nightmare.

Amilliontomorrows - is not wrong on some of her comments
I have a niece and nephew - both earn roughly the same 26 and 27 yrs old..

Both work hard on roughly the same salary circa 32K - one has saved a reasonable amount for a deposit goes on holiday once per year, a concert couple of times per year, never eats takeaways, meal out once per month makes own sandwiches for work etc, 10 quid mobile phone sim only deal - if you get the picture, invests and maximises the potential of their unspent monies

The other goes on 3-4 holidays per year, concerts monthly, eats out weekly, buys convenience food and does not cook from scratch. Mobile phone 32 quid per month ^ get the picture.

Both are happy have friends socialise and enjoy life. One is looking to buy a flat and I said I would match the deposit, the other will not in anyway be in that position in the next 5 years, has no investments, savings etc - lifestyle choices

Things were different in different generations- not harder or easier - just different

I got my first mortgage in 1998 and worked for a financial advisers company and we did something similar, although I think my salary was increased from 16k to 20k on the letter. £52.5k for a two bed starter home in the West Midlands, but no one at the time could believe I was paying over 50k for a 2 bed and the fixed rate was 5.7% I think, so it was about £600 pm which seemed quite a lot at the time.

Bullshit. 25 years ago or so, you still needed three months of payslips for your mortgage and bosses were not in the habit of lying about salaries. Equally, someone could still lie now, for instance if you work for a family business, your boss could exaggerate your salary and assist you with mortgage fraud, which is what it is and always has been.
Also someone in their early 50s is not someone of the 'older generations' who has benefited from very low property prices. They would probably have been buying around the time of the 2007 recession, when prices were somewhat inflated.
And so what if you get a huge mortgage on the back of a fake salary? You still have a huge mortgage that will not be affordable. Some banks were lending 7 x salary a couple of years ago to first time buyers. Sounds like a recipe for disaster imo.

Mid 50s homeowner here! Self cert mortgages were originally from specialist lenders intended to help self-employed people get on the housing ladder. It was (and probably still is) notoriously hard to do and what someone recognised was that sole traders' nett incomes looked smaller because of deductions which PAYE employees couldn't make. In other words self-employed people's spending power was bigger than it looked on paper. People were affording rent so as long as you had a decent deposit (it needed to be 20% when we bought) you should be able to cover the same or less in mortgage repayments. The rates, however, were never quite as competitive as trad mortgages.

We (DH and I both self-employed) got on the property ladder in London in 2001 thanks to them. Of course then EAs and other vultures glommed onto them, and they became known as liars' mortgages and got banned. By then we'd moved up the ladder and switched to a trad mortgage. Lots who didn't ended up mortgage prisoners.

And, uhh, yeah we had cars and mobile phones and avocados and foreign holidays in the 90s. 😂

Most people did not have a boss who was willing to do this,neither l nor my DP found this possible in the 1980's.

Yes that’s true. I had forgotten what someone else just mentioned about the cost of electrical appliances. We rented a TV for many years and owed our first TV in about 1983 when my dad bought us a second hand one. We didn’t have a proper washing machine in the first two flats we lived in because they were too expensive, and I can remember saving up to buy a single tub upright washer for abkut £80, which we got through a friend using his employee discount at the Co-op. I think another big difference is in people’s expectations with property nowadays. At the time we bought our first house in the early 1980s, it was very rare for people to expect to move into an immaculate grey house with dressing rooms, en suites, and fitted kitchens like people expect now. We mostly did our own home improvements once the basics like requiring had been done. Like all our friends, we fitted our own kitchen with flat packs from MFI and Texas, and did all basic home improvements ourselves; no-one ever wasted money on decorators because we couldn’t afford it with mortgsge rates of 15% or more.

it’s true thst many people of my generation have ended up with houses that have increased dramatically in value over the years, but for most of our contemporaries, it was very difficult to get to that position.