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'm surprised that they were still doing that as late as 2008, after so many repossessions and negative equity in the 90s and early noughties.

I don’t think it’s unreasonable to infer that exaggerating his salary enabled him to borrow more than he otherwise could have. That’s rather the point of what he told me.

What I am questioning is your repeated insistence on constructing a detailed picture of his financial circumstances without actually knowing them. Higher interest rates don’t establish what he borrowed, what his repayments were or whether he could comfortably afford them.

And no, I haven’t claimed that everyone in their early 50s could simply approach their employer and obtain a fraudulent salary reference. You’ve taken an anecdote about one individual’s experience and turned it into a sweeping claim about an entire generation, which you’re then arguing against.

There’s also a difference between saying that particular lending practices existed and claiming they were universally available or representative of everyone’s experience. I can acknowledge that some borrowers faced considerable financial difficulties, that mortgage fraud was illegal and that interest rates were higher, while still finding it enviable that this particular man apparently accessed homeownership through an arrangement that wouldn’t withstand today’s scrutiny. Those positions aren’t contradictory, however determined you seem to be to make them so.

The moral of this thread is that 50 year old blokes who frequent spas on a weekday will tell any old bullshit to gullible younger women.

There is no way on earth that a bank would think that a 20 something bloke in the 90s was on £90k. That would have been more than the Prime Minister.

It happened for ordinary people, too. DP bought their first house in the mid 1980s. DM remembers them being invited to self-certify on the mortgage and the bank's attitude being "just tell us how much you want to borrow" because DF was an accountant (in a small town firm! not big 4 stuff!). DM thought this was madness.

My 22 year old sister edited her payslips and bank statements to say she earned quite a bit more than she did to get a mortgage.

As a low paid single parent of a disabled ds now in my 60s I completely sympathise with younger generations for whom property ownership and even renting is very difficult. And depends on where you live, the stability of your job and of course your salary. Very many can only purchase with the help of the Bank of Mum and Dad, myself included, although I had to wait until my mum died to get help in the form of an inheritance. I still have a mortgage to pay too.

However, I really don't think you would be jealous of my life at all, because basically it's pretty shit. So, YABU.

Why do you all think the whole sub prime mortgage thing happened? Just take a look at how much Northern Rock used to lend people.

I bought a house with a self certified mortgage. The repayments were almost equal to my monthly income. It was interest only at 7%.

It was a short term and much cheaper alternative to a bridging loan.

I remember turning down a promotion in the 90s to stay at the top of a grade that automatically got overtime at time and half rather than go up to the next level and have to do 10 hours extra a month for free.

I left home in 1975, bought my house in 1982 and didn't have any furniture or appliances bought new until the end of the decade or early in the 90s. I can still remember the thrill of sleeping in a bed no-one else had ever slept in!

I had a secondhand Indesit washing machine that seemed indestructible. I got it approx 1985 and it worked until well into this century.

Then there was buy to let. I didn't take part, but I know many who did. Buy a flat for 40k rent it out for 400 a month. One year later it was worth 60k, draw out 20k and buy another one and so on. Often tenants were people who had been caught out when interest rates soared to 15 per cent and were renting from the carpet baggers who had bought their flats for 2/3 what they paid for them in the late 80s boom.

YABU. No-one was earning £90,000 a year in the 1990s. (Well, very very very few people, like supermodels and film stars and pop stars and actors etc...) Someone is yanking your chain. I was on £15,000 in the early 1990s, as a secretary, and that was classed as a good salary then. (It would be around £40,000 now.) £90,000 some 30 years ago would be £250,000 now. An infinitesimal amount of people would have been on that salary. Even the Senior Manager in my company was only on around 2 times more than me (so like £30,000-£33,000 or so - (£80,000-£85,000 or so in today's money....)

Also, whilst property prices were cheap compared to today - even taking inflation into account, everything else was much more. Video recorders, TVs, cookers, fridges, washing machines, tumble dryers, microwave ovens, kettles, toasters, and all manner of electrical goods were really expensive. So much so that many people had to rent some of them. Also clothes and shoes, they were more expensive too. Although I have to say, everything was a much better quality back then. Same with houses. Many that are built now, especially generic starter homes are really poor... And food, that was expensive too....

Another thing, everything we needed for the children - pram, cot, baby seat, clothes, baby milk - for when they came off the breast - and all manner of things that we needed for them cost much more than they do now.

Not everyone who was born before 1970 had an easy time! It's such an ignorant and narrow minded comment, to assume 'the older generations' had an easy life.

I’m in my 60s and have never even heard of this being a thing. Interest rates were really high when I first bought and there wasn’t much left over once I’d paid my mortgage and fixed costs, so I have no idea how someone would be able to manage repayments on a mortgage secured on a a salary higher than they actually earn??

On a salary of £90k, he could borrow around £225k in the 80s. At a 15% interest rate this would be monthly repayments of £2800. Which equates to 50% of the £90k salary. Your man told you he was 'on nowhere near that', so imagine the percentage of his actual income those payments were eating up. There's no way that would be my idea of comfort.

There were also a lot of people who bought their flat for 60k and it went down in value to 35/40k. I rented a flat from a guy with massive negative equity, he stopped paying the mortgage in the end and lost the flat.

I was a mortgage broker from 1987 to 2007. If you had a sizeable deposit (20/25%) you could 'self certify' your income with no proof required. So if you wanted to borrow, say, £200k and the lender worked on 3 x income you just wrote £68k on the application form. Seems crazy now but the lenders worked on the basis that you earned enough but couldn't proof it and/or if you defaulted there was enough equity in the property to protect them.

Yanbu.
And I know one person who has somehow done it recently. A colleague was eye rolling as their son had got away with inflated earnings to get a mortgage. They're self employed which probably helped.

My husband and I had some massive mortgages based on inflated salaries, they were interest only so affordable. It was pretty easy to get one without any checks on if we actually had an endowment policy.

Sounds like he’s exaggerating. 90k was a big salary and sure to be checked out by a reputable mortgage provider.

But you’ve now assumed he purchased in the 1980s, borrowed £225,000 and was paying 15% interest, despite none of those details having been established. He appeared to be in his early 50s and told me he purchased in his 20s, which would place the purchase considerably later than the period you’re using for your calculations.

I agree that the repayments in your hypothetical scenario would be substantial but that doesn’t tell us what this particular man actually borrowed or paid.

And I think we’re returning to the same distinction. My envy was about his apparent ability to access homeownership through an arrangement that wouldn’t withstand today’s scrutiny, not about whether taking on his particular mortgage was financially comfortable or advisable.

I’m not suggesting his experience was universally representative or that irresponsible lending was without consequences. I’m simply questioning why hypothetical repayment calculations are being treated as evidence of circumstances neither of us actually knows.

Nor have I and I'm in my 60s. I do remember mortgage rates around 15% though. Different times.

Being envious of one man is fine. Being envious of all older people is not,
I got £709 inheritance when both my parents died. We paid money out for my in-laws funeral and inherited nothing. Lots of young people will get big inheritances.

When I got a mortgage you needed wage slips,that was forty years ago. There were dodgy mortgage brokers who charged high interest rates who were known to do dodgy practices like accept a letter. They did so because they made a lot of money through the higher interest rates and/or commission.

I am jealous of young people. I had no support once I left home at 18. My life would have been so much easier with the level of support taken for granted these days. I am disabled and the level of support for disabled people in the past was atrocious. I would at minimum have got DLA.

I got a substantial (for then) self certified mortgage with just 5% deposit.

Through a broker.

I did this exact thing. I worked at a bank and got my then boyfriend to say I had a second job earning such and such. It worked and I got a mortgage on a flat in London which I rented out to the council for 500 a month and my mortgage was 126 a month. This was I think 1990? Anyway the tax man found out I was hit with a massive bill and had to sell it to pay it 😂 what a massive twonk I was back then.

I believe him.