Baby Boomers - Where's My Audi Then?

[hopless500]

That's true, but it's not the whole story. They had greater social mobility, better job opportunities, free university education, much cheaper house prices and much better company pensions.

And much lower wages. My first mortgage was crippling. If I was starting out today, it would still be crippling. I remember being jealous of older people who nearly owned their own houses and didn't have much left to pay on their mortgages. People look at me the same way now as I looked at others then. It's no different, the figures are just proportionally larger.

 

[User482]

And much lower wages. My first mortgage was crippling. If I was starting out today, it would still be crippling. I remember being jealous of older people who nearly owned their own houses and didn't have much left to pay on their mortgages. People look at me the same way now as I looked at others then. It's no different, the figures are just proportionally larger.

I had a look at some numbers relative to income: my parents' house (which cost £45,000 in 1984) would've cost £169,000 in today's money. Its market value is in fact over £300,000. So the figures are not in proportion...

 

[GrumpyGregry]

An entire generation of folk, probably myself included, will be redefining the meaning of crippling once the current, artificially low, mortgage interest rates start to ramp up. Austerity would not even begin to cover it. Meanwhile the generation who have paid off their mortgage and are reclining in retirement on index linked final salary pension schemes will continue to smile, as well, compared with their parents, they might, and their grandchildren and great grandchildren can only hope and pray....

 

[Kies]

I object As a middle aged Volvo 4x4 driver, not sure what I qualify as then? Audi=C*ck, BMW=See Audi, Range Rover=Tosser (not my opinion but that of some here...), Volvo=Clunk, Click, blindfold on and we're off

Skoda or Datcha

 

[GrumpyGregry]

I had a look at some numbers relative to income: my parents' house (which cost £45,000 in 1984) would've cost £169,000 in today's money. Its market value is in fact over £300,000. So the figures are not in proportion...

The tiny single bedroomed flat I bought with TLH in '84 in Brighton just before we wed cost us £21,500. Last time it sold it went for somewhat more than ten times that. Which is more than I paid for Chez Collins in the same year albeit in da 'sham.. Location, location location or bubblenomics?

 

[hopless500]

I had a look at some numbers relative to income: my parents' house (which cost £45,000 in 1984) would've cost £169,000 in today's money. Its market value is in fact over £300,000. So the figures are not in proportion...

House prices rose. Wages rose. Paying a mortgage still takes up a huge amount of anyone's income. It has always been the case, and will continue to be so, regardless.
In the late 80s mortgage interest rate rises meant our mortgage became almost unpayable. Managed to keep the house. With a huge struggle. But it was in negative equity for years. But of course, that was easy compared to today.

 

[asterix]

That's true, but it's not the whole story. They had greater social mobility, better job opportunities, free university education, much cheaper house prices and much better company pensions.

Yes, I am afraid you are right. But I am trying not to be in CAD mode and giving an opinion as to why this might be. In the picture of the future I can see no roses growing.

 

[martint235]

An entire generation of folk, probably myself included, will be redefining the meaning of crippling once the current, artificially low, mortgage interest rates start to ramp up. Austerity would not even begin to cover it. Meanwhile the generation who have paid off their mortgage and are reclining in retirement on index linked final salary pension schemes will continue to smile, as well, compared with their parents, they might, and their grandchildren and great grandchildren can only hope and pray....

I think once the interest rates start to rise it will get "interesting". I've already been told that next year I'll be receiving a 1% cut in my take home pay, an actual reduction rather than just a comparison taking into account inflation etc. Every 1% rise in the interest rate will equate to £200 more on my mortgage so I may be moving house before I'd planned to.

 

[User482]

House prices rose. Wages rose. Paying a mortgage still takes up a huge amount of anyone's income. It has always been the case, and will continue to be so, regardless.
In the late 80s mortgage interest rate rises meant our mortgage became almost unpayable. Managed to keep the house. With a huge struggle. But it was in negative equity for years. But of course, that was easy compared to today.

The figures I quoted are related to rising wages, so, as a proportion of your income it is higher today than it was in 1984. In other words, the cost of a house has risen much more than increases in wages over the same period.

Edited to add: the story is the same with rent. In 1996, my rent in university halls was £35/ week. Accounting for RPI, that's £53.01 in today's money, or £62.63 if we relate it to increases in wages over that period. The actual cost? £82.25.

 

[hopless500]

I had a look at some numbers relative to income: my parents' house (which cost £45,000 in 1984) would've cost £169,000 in today's money. Its market value is in fact over £300,000. So the figures are not in proportion...

Out of interest, I've just had a look too. I bought a house for a similar price at a similar time. Today they go for between £145k to £180k.

 

[delb0y]

In the picture of the future I can see no roses growing.

I see no roses growing in the future, either. But neither do I see any now - I'm just about about keeping the flowerbed free of weeds. Maybe the most pertinant thing is that, SWMBO and myself aside, there are three other adults in the household who don't appear interested in gardening at all.

 

[asterix]

I see no roses growing in the future, either. But neither do I see any now - I'm just about about keeping the flowerbed free of weeds. Maybe the most pertinant thing is that, SWMBO and myself aside, there are three other adults in the household who don't appear interested in gardening at all.

Why do you think I am building a large patio? I suggest you do the same.

 

[User482]

Out of interest, I've just had a look too. I bought a house for a similar price at a similar time. Today they go for between £145k to £180k.

Have a look here: http://data.gov.uk/dataset/ratio-of-median-house-price-to-median-earnings

Even in a much shorter period, we see that from 1997 to 2012, the ratio of median house price to median earnings has increased from 3.54 to 6.74. That's a staggering reduction in affordability when you think about it.

 

[Dan B]

Have a look here: http://data.gov.uk/dataset/ratio-of-median-house-price-to-median-earnings

Even in a much shorter period, we see that from 1997 to 2012, the ratio of median house price to median earnings has increased from 3.54 to 6.74. That's a staggering reduction in affordability when you think about it.

Anyone who had their mortgage approved on the basis of a 2.5x or 3x income multiple might want to consider that ratio for a moment or two ...

 

[Speicher]

I'd always had Volvo drivers pegged as considerate, charming, handsome and witty.

So you don't think they are intelligent with extensive practical skills?