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 dont think that employers would all be routinely lying about salaries back then either although I expect it probably did happen more than it does now as there may have been a lot less stringent checks

Yep & it would be your fault if you over leveraged yourself!

I'm also sceptical this approach was widespread rather than an experience of the particular person you spoke with. There was the ability to self certify income, which a couple of my friends did. By the time I was in a position to buy self certification had been heavily stripped back.

I think you’re attaching quite a lot of meaning to a fairly casual expression of envy.

Feeling envious of an advantage someone else enjoyed doesn’t automatically mean begrudging them that advantage, resenting their success or being incapable of appreciating the broader circumstances. Nor does recognising that someone benefited from a particular opportunity mean assuming their entire life was effortless. I’m perfectly capable of understanding that he still had a mortgage to maintain.

What I find rather strange is the suggestion that acknowledging differences in opportunity between generations is somehow negative or self-limiting. Historical and structural advantages don’t cease to exist simply because individuals are encouraged to focus on their own circumstances.

You’re turning a fairly straightforward observation into an assessment of my attitude towards life which seems rather unnecessary.

When we moved in 1981 we had just exchanged contracts when the interest rate went up to 18%. It didn’t stay thst high for very long but was around 15% for most of the time we lived in that house. While house prices were very much lower, people nowadays see to forget just how high mortgage repayments were with the sky high interest rates, and how much less people earned at thst time.

I remortgaged at some point later in the 80s to raise the money for some work that the house needed and managed to get a fixed rate mortgage at 13.5%. It was only a few weeks later that a friend found it impossible to get an interest rate below 15.5%.

They stayed high for quite a while, too, well into the early 90s. I remember one of my colleagues crying her eyes out at work when John Major announced that the base interest rate was going to go to 15%. Mortgage rates were usually at least a couple of per cent higher than the base rate, so she could have been paying as much as 17%. She had no idea how they were going to manage; they'd borrowed the absolute max on a bloody big house.

I have friends who obtained mortgages on inflated self-assessed self-employed incomes. This involved moving money from parents' accounts, or similar, into their own business accounts for 6 months and moving it around a bit. There seemed to be less insistency on transparency then.

I haven’t disputed that mortgage interest rates were higher during that period. What I’m pointing out is that you don’t know when he purchased, how much he borrowed, what interest rate he secured or what his actual earnings were.

You’ve now introduced a calculation based on borrowing 3.5 x £90,000, despite having no evidence that this was the amount he borrowed. That’s what I mean by constructing hypothetical scenarios.

You’re also continuing to conflate the ability to obtain a mortgage with the subsequent affordability of its repayments. They are related considerations but they aren’t interchangeable.

My original observation was about access to homeownership under lending practices that differed from those today. Whether his particular mortgage represented a financially advantageous arrangement overall is a separate question and one neither of us has sufficient information to answer.

I’m not sure how many more hypothetical calculations are needed to establish a point I haven’t actually disputed.

I think I was just addressing the post as it was stated, at face value, AIBU - to be jealous of older generations who were able to buy houses because their bosses exaggerated their salaries?

You didn't caveat your particular definition of the word 'jealous' so it was left open to generalised, interpretation:

noun
jealousies

1. jealous resentment against a rival, a person enjoying success or advantage, etc., or against another's success or advantage itself.
2. mental uneasiness from suspicion or fear of rivalry, unfaithfulness, etc., as in love or aims.
3. vigilance in maintaining or guarding something.
4. a jealous feeling, disposition, state, or mood.

https://www.dictionary.com/browse/jealousy

Anyway, my view stands. Don't be jealous. Get productive and move within your circumstances. Otherwise, you're just jealous and that's the only ownership you'll ever acquire. Best of luck.

But are younger people doing this because there is absolutely no chance of getting on the ladder? If it was within reach, there would be a point in saving. But if it's so out of reach, that even giving up everything for 5 years won't even touch the sides, do people then spend on things to give their lives meaning, because what else do they have? Everyone wants some enjoyment out of life.

@Patatiipatata my in-laws had an interest only large LTV on their 2nd home bought in their 20s. They did extremely well out of it.

I'm 20 years older than you and I'm always amazed to see how many people here seem to think the era before they were born was so primitive and we had nothing. It's like when children say 'in the olden days, when you were little ...'

I grant you the computer technology didn't exist, but cars, televisions etc certainly did.

I'd like to know when and why mortgages stopped being granted on a multiples of income basis. I think this is the time OP is referring to and it seemed to go mad for a while - probably never recovered. I would never have lied about income, at least not massively inflating it. What would happen if it all went tits up?

We couldn't actually afford the repayments on the amount the bank was prepared to lend us so this would not have helped us even if it had been an option, and it's absolutely inconceivable to me that my employer would have done this. I'm 51.

I'm a similar age to that man and what he's describing was not legal and not common at the time. Myself and all my friends had to show proof of earnings just like you do now. Also, beware of rose coloured glasses when it comes to the past. Women couldn't even get a mortgage in their own right until 1975. And even after that, you would still get asked loads of questions about boyfriends, husbands and potential pregnancies when applying for lending, even into the 90s.

What a foolish post!

Imagine the situation you’d be in now if you’d overblown your salary and were now paying 5%+ interest rates on that amount though.

@Glowingup is correct. Those in early 50s did not benefit from low property prices. Prices were already crazy by then. I'm a decade older and even then it was quite a bit harder than for my much older siblings, now mid 70s. They did indeed find it an easy matter to buy, even with low paying jobs. Yes, it's a lot worse now but it's all relative. The sinister thing is that in this country we're forced to buy because that's the only way to have secure housing. I have german friends who have always rented, and reading novels set in the past, some reasonably wealthy people never owned their homes and were none the worse for it.

mortgage interest rates of the past aren’t too dissimilar to the 5/6% of today because of the actual price of housing.

Did he also tell you about the 15% interest rates, the repossessions and negative equity resulting from irresponsible lending?

I got a loan from my bank early 2000s when I was 19. I told them I was getting a new job, interview Monday and job guaranteed as mums friend was interviewing. Got the loan, didn’t get the job as was total lies. Yes I was young and stupid but proof the banks didn’t care.

edited to add that this was around a similar time when I got into thousands of pounds of debt for a payment that left my account and made me 9p overdrawn. Those times were wild.

@Idontpostmuch of course some people in their 50s benefited from low house prices! Plenty of parts of London were affordable into the late 90s/early 00s.

You could self certify back in the late 90s early 2000s if you were self employed and had a good credit rating and a deposit

lots of people including myself and my DH did this but they banned them around 2008 when the crash happened 😂😂

I think the OP is being a touch gullible, believing the boasts of a man in the spa.

Don’t forget the 2m who benefited from RTB!

I think I’d take what he was saying with a massive pinch of salt! £90000 in the 90’s is equivalent to about £200000 now. If a salary was massively inflated I think questions would be asked. I got my first mortgage in the 90’s and they still did financial checks etc although obviously not as rigorous as now. They would still look at bank accounts and see that you were managing your money appropriately. If the employer was saying his salary was massively an inflated £90000 they’d expect to see equivalent cash flow going through his bank accounts. The thing is now banks are just much more risk averse. A friend of mine had a mortgage refused because her boyfriend was on a gambling website with money going out on an almost daily basis although not to the levels of being in serious debt. When he nex5 applied he had to produce statements tgat showed no evidence of gambling. I don’t think that would have happened in the 90’s. You could also get a mortgage with minimal deposits.

I’m well aware of what the word jealousy means. I’m also aware that words can have different connotations depending on the context in which they’re used. People routinely say they’re jealous of someone else’s holiday, home or opportunities without harbouring resentment towards them. I’ve already explained the context in which I used it, so I’m not sure why you’re insisting on assigning me feelings and motivations I’ve explicitly told you I don’t have.

What I find particularly interesting though, is how you’ve gone from offering a dictionary definition to making pronouncements about my productivity, circumstances and prospects of homeownership, despite knowing absolutely nothing about any of them. Recognising that someone else enjoyed an advantage and actively working towards one’s own goals are not mutually exclusive, however determined you seem to be to present them that way.

Your advice might be more persuasive if it weren’t accompanied by quite so many assumptions about a complete stranger.