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?

On the timeline given, this is pretty obviously not the era OP is talking about though. If he's early 50s he was a small child at that time.

Its reasonable to be fed up with this, and the many other reasons, that have resulted in the largest propert price bubble this country has ever seen.
Its more likley now than at any other time though that that bubble is at least going to deflate, and could even pop.
Yes be annoyed - but focus on being ready to take advantage of the next hiccup - I dont know how big it will be, but its in the post.

You’re making quite a few assumptions here.

Firstly, someone in their early 50s today would have been in their 20s during the 1990s and early 2000s so I’m not sure why you’ve automatically placed his purchase around the 2007 financial crisis.

Secondly, self-certification mortgages and considerably less stringent income verification practices did exist. The fact that you may have needed three months’ payslips doesn’t mean every borrower went through an identical process.

Thirdly, obtaining a mortgage using inflated income figures doesn’t automatically establish that the borrower couldn’t afford the monthly repayments. Qualifying under a lender’s criteria and being able to service the debt are two different things.

I’ve never suggested that what he described was legal or advisable. I simply found it interesting to hear a firsthand account of something I’d previously only heard about anecdotally. I’m not entirely sure why that warrants such an incredulous response.

Of course housing was relatively a lot more affordable, but IIRC it was still usual to have to show payslips or bank statements in order to prove earnings.

People who actually worked for banks were best placed - I heard of people getting mortgages from their own bank at way below normal interest rates.

@mindutopia If your mum is early 50s then she isn't a babyboomer. Youngest boomer was born Dec 1964.

Dont forget all the "travelling" seeing the world with a backpack, Instagram packed with photos, look at me Im in the jungle!!
Get to 30 and start whinging they cant afford to get on the property ladder 🤣

For every great story like that there were also a lot of people losing their homes too. Several of our friends and colleagues back in the 90's had to hand their keys back to their lenders due to negative equity, struggling with repayments and are several are still recovering.

We purchased our house in 1998 but were boringly sensible and didn't include my salary as we didn't want to be mortgaged up to the eyeballs.

Some make out buying a house years ago was so super easy, we didn't find that to be the case (both now in our early 50's and still in the same house).

Pretty sure I bought my first mobile 30 years ago and I was giving members of the public beginner lessons in how to use the Internet in our local library 😆.

I’m in my early 50s, and I can be pretty certain that my employers never committed fraud so I could buy a house. Plus we had to provide payslips. YABU to assume this was commonplace.

20 years ago I was able to lie about my earnings with my dodgy mortage dealer. My partner at the time failed the credit score so he just bumped my salary up. We also had mobiles, sky TV, smoked, drank and had copious takeaways and went on holiday. Had a van and a car.

Fast forward and I now earn a lot more and have to have a second job to live in the flat I do now but I am single. Its insane.

My interest rate was between 12 and 17% when I bought my first dump of a property it was not easier it was just different

There are various reasons why you might be jealous of people my age who were able to get on the property ladder much easier than someone can do now. I understand that.

But the odd employer exaggerating wages wasn't the main reason. The main reason is because properties were cheaper!

Our combined wages in the early 80s were £25k. Our flat was £17k. So our home was less than our combined salary, and we're were both late teens/early 20s so nowhere near our full earning potential.

I, in turn, envy my parents who had both kids left home and standing on their own two feet while they were still in their 50s. I and my friends have our kids still at home and can't see them going any time soon because they can't afford it.

But my parents, in turn, had to live with my nan for the first 7 years of their marriage because they couldn't afford to buy anywhere - and there was was less choice anyway because a lot of their city had been bombed and flattened in the war and it took a few years after the war for the clearance and rebuilding to take place.

Again, the comparison is to people the age of the bloke OP spoke to who were young in an era where it was much easier to travel loads and buy a property. You must surely know how popular backpacking and cheap flights were by the time someone born in about 1975 came into early adulthood? The low cost carrier model was very popular by the mid to late 90s.

Times have changed and no 'good deed' goes unpunished. It was fraud surely? Though back in the day it was likely to go undiscovered. The man would likely have shouldered full responsibility for it.

Nowadays, if that man had been unable to pay his mortgage, he would be likely to blame the employer who helped to get a bigger mortgage.

If this was happening across the board it may have played a part in rising house prices.

@Koolaidhighlights thats correct. Early 90s we took out a 100% mortgage, when they were allowed. Interest rates went up to 17%. Many people lost their homes including me. So maybe these Gen Zs or whatever they are now might want to look at a bit of history before they start tantrumming about "how great" we had it

@CaptainMyCaptain is right. House prices had already started to get crazy in 1987, just not nearly as crazy as now. DH and I in our 20s when we bought first house in Sep of that year and only managed it with parental help.

LOL. This was not a "thing" back then. Believe me, I was there. You were scrutinised before you got a mortgage, and women were even asked whether they were planning on getting pregnant any time soon! Yes, I was asked this in the meeting for my first mortgage. So the guy at the spa was a one off, I'd say.

But granted, the salary to house price ratio was certainly much better.

Have you looked at the mortgages where parents can help their kids get onto the ladder? I have helped my son buy his first flat, with a Barclay's family springboard mortgage. The parent puts 10% of the purchase price into an account and no deposit is required from the buyer. It's locked away for 5 years, but earns 5.38% interest. At the end of 5 years, I get my money back, with interest. Other Banks do similar things. Brilliant product.

It’s definitely harder if you live in London. House prices are three times higher related to earnings than in 1995. People like to pretend it’s down to their hard work or frugal lifestyle. But if you can’t ever safe enough to afford a deposit you might as well keep buying lattes.

Well, let's say he was born in 1974, so he's 52 now. I don't know how old he was when he bought, fair enough, but a 90,000 salary in 2000 (when he would have been 26) is about 175,000 today so I'm not sure how believable that would have been if he was, say, 19 at the time so I'd think he was at least mid 20s. Mortgage interest rates were around 6% at that time. I'm guessing he must have been earning a fair whack because otherwise, how could he have afforded the repayments?

I am not sure where the huge advantage of having a massive loan at a high rate of interest come in. He will have paid a shitload in interest. Maybe your anger should be aimed at those younger than this guy but slightly older than you, who benefited from the low mortgage rates from about 2012-2022 and bought before the prices went crazy during the pandemic.

And as I said in the post, there are still (or were a couple of years ago) lenders prepared to lend what I consider quite an unaffordable sum, so maybe you too can get a house where 70% of your salary goes on your mortgage.

the pipe like that man benefitted it because of crazy house price growth, a lot riskier today if that were to happen. Our financial services are much more highly regulated post 2008.

If he did do this, then maybe the type of mortgage he got was one of the contributors to the crash in 2006!.

I think @MirrorClocks has it right. Some people then were lucky and some weren't. I'm early fifties..I didn't manage to get my first house until I was in my thirties and that wasn't uncommon.

I had become self employed from circumstances and my exh got a reasonable job. I saved a decent deposit after quite some time. There's some truth to the expectations that some younger folks have for their standard of living. I didn't have anything on finance. Only the mortgage. I wasn't paying £300 for a nice car. We had a banger we shared between us and this was after working for years. I didn't have a holiday in my twenties at all that I remember.

We had been unfortunate with security and had to move a lot for work. I think if we'd settled somewhere earlier we would have done better.

Friends in the public sector at that time, were doing much better because debt was easy to get but only if you had secure jobs. They were all out earning me and exh back then.

In real terms, my salary has never increased much despite 25 years+ experience. If I had managed to stay in my industry it may have but I would then have still been moving around perhaps which was impossible for having a family. I got a second career in higher education eventually and my salary has not increased for years and years. Since divorce I have a tiny house and this isn't what I hoped for after decades of graft but who said life was fair?!

It's a waste of time being jealous of another generation. You just have to make the best decisions you can right now.

Yes and there was a slump in 1989.Because my flat was worth less than I paid for it in 1984.

That. I'm of the generation that you're jealous of, @HonestTealPoster and I've never heard of this happening, nor can I see how it could. We had to jump through hoops for our first mortgage and provide proof in the form of payslips and bank statements (and I seen to remember having to prove that I had a permanent contract). A letter from a boss and nothing else? Nope. I don't buy it.

It was normal. They were practically throwing houses at ppl back then. Anyone could get one.

Thirty years ago, I was 26 and my then H was 28. We had a 4 bed detached house, we had mobile phones (bricks), we ate out every week, we had take-aways, we had a brand new Ford Escort, and we had foreign holidays. And we were also pregnant with our first baby and bought everything needed and had enough money saved for my Mat leave. That's the point isn't it? You could buy a nice house and afford all the niceties on fairly normal salaries. We were not big earners.