Trying to buy a house in this area is near impossible

[Jeremy]

I know... totally agree that the affordability situation is fcked up.

Just pointing out that

- we've not yet reached a point where highly paid professionals cannot buy property

- again, buying "where you grew up" is not a useful indicator of anything

[EDLove]

miga Wrote:

> If you were earning 80k and saving 40k after tax a

> year you should have a TV show called "world's

> best saver"!

Why? Not everyone lives to their means - it's possible that people can comfortably live on half their salary (especially if that salary is ?80k).

I'd watch that TV show though! :)

[Mick Mac]

StraferJack Wrote:

-------------------------------------------------------

> well depends on where on teh ladder in the orgs

> they are

>

> A regular doctor on NHS wards or someone not

> senior or in trading in the city isn't going to be

> on too much more than the 40k ish mark are they?

We are currently recruiting at not much below that level of salary for a junior role in FS Tax and we are struggling to get someone half decent.

[StraferJack]

"- we've not yet reached a point where highly paid professionals cannot buy property "

are we waiting for that to happen before we come to an agreement that the situation isn't just f**ked up but needs addressing?

"- again, buying "where you grew up" is not a useful indicator of anything"

I would argue it's a useful metric

Ireland was ALWAYS a place you could afford to buy if you grew up there. Until the celtic tiger and property boom put paid to all that. But when people couldn't afford to buy when they grew up, it told them something

edited because - my typing is atrocious!

[miga]

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[miga]

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[Jeremy]

StraferJack Wrote:

-------------------------------------------------------

> are we waiting for that to happen before we come

> to an agreement that the situation isn't just

> f**ked up but needs addressing?

Nope I already agree it needs addressing... just don't think exaggeration/half truths are necessarily helpful

> I would argue it's a useful metric

Specific examples can be of interest, of course. But the general case of being "priced out of your home town" is totally meaningless because it says nothing about how the cost of the specific area has changed and what sort of career you've chosen (if indeed you've been fortunate enough to choose a specific career)

[Mick Mac]

Don't forget that on 80k the government is going to take about 1/3 of your salary. So if you can then save half of 80k from what you have left then good for you, I don't think we will see you out and about much.

[StraferJack]

Mick - I'm on nowhere near that but I plucked a figure out of the air with extreme savings to show how silly the situation is

Jeremy - I think we are on the same side of the argument but they way you present it, it's as if it comes down to mere choice. My point is if you choose a certain higher paying career you are unlikely to linger in a small 2 bed in unglamorous locations

I'm still not 100% with you on the priced out of area comparison - if you are priced out of an area you were born in, then obviously the price has changed dramatically. The question is why?

That why question underpins this whole thread tho - people can't agree on why. Some say supply and demand but I disagree

the demand (in my view) should be, by an large, people who live here wanting to buy somewhere to live. The supply should be people moving out, people trading up, some building etc

But to me the demand is completely corrupted by two things

a) people in a herd mentality doing ANYTHING because they think they need to get a foot on the ladder. We have seen this before and it always ends badly

b) the multiples of salary are now so ludicrous compared to historical standards that those who already have property can speculate on additional properties with a view to (ugh) yields. I can't comprehend loz' viewpoint who views speculation on people's homes as a business but hey

Anyway - multiple home owners and investors (be they domestic or foreign - matters little)

Strip them out of the equation and you have a healthier view - except all of the people who paid top dollar wll fight tooth and nail to keep their investment at a higher price.

Lower house prices are supposedly a good thing (we want lower prices for everything as consumers right?) but too many vested interests have no wish to see prices come down

[david_carnell]

Nail on head.

The mentality of too many people is that their home should be an investment rather than a home. They'll bleat about the 'shocking' rise in prices but go all bashful when it's pointed out that their own home has doubled in value in under 10 years.

Yet you look at the stink that would be caused if the government, any government, actively pursued a policy to cause house prices to fall. There would be merry hell up and down the land. Because everyone wants prices to come down, except their own.

[EDLove]

Very true - ?80k after tax is about ?53k. So, yes, saving ?40k out of this would probably lead to a very solitary existence! But it's not impossible, especially as it is more than people earn on minimum wage.

[Otta]

True dat.

I don't mind if the price of my place stays where it is, I just don't want it to fall because I'll be fucked.

[StraferJack]

why would you be in trouble if it did Otta - you planning to move?

[Penguin68]

if you are priced out of an area you were born in, then obviously the price has changed dramatically. The question is why?

A lot of this debate is about the ease of first time buyers to buy in ED - when I bought, 26 or so years ago - when ED was still in the property doldrums (relatively) - it was my third purchase - a lot of buyers even by then were not 'first time' for family homes - so I wouldn't expect my children - ED 'natives' - to be able to first-time buy in the area they were brought-up in - certainly not in the type of property they were brought up in. Unless an area has a really wide range of properties (many in ED are houses) it is quite likely tha 'natives' will have to look elsewhere for first purchases. Once on the property ladder, at a time of rising prices, the equity you can bring to second and subsequent purchases will allow movement to more expensive areas.

[PokerTime]

Some good posts there and I completely agree with SJ and DaveC on the problem in doing anything. People have become greedy. They don't want to see a slow in growth, and they don't want to see a depreciation in value. What government, seeking votes, wants to rock the cart? In fact, Thatchers right to buy it is argued, was more about swinging Labour voters to the Conservative party than anything else. A theory that has some merit when considering that LAs were not allowed to replace stock sold off. In Turn New Labour had to appeal to the home owners of the South for exactly the same reasons. So they in turn allowed schemes like buy-to-let and other cheap investment opportunities. Nowhere in any of this is there a constructive policy of balance. Shameful given that were are talking about something that is essential. Atlee and Beveridge, and even Horace Cutler would be turning in their graves.

SJ posed a question, how bad does it have to get before we finally do something meaningful about it? It's a good question. There is plenty of debate about housing amongst MPs, but no-one is really pushing for any of the measures discussed here. Mesasures that would all help in some way. Boris Johnson has faced strong opposition in the London Assembly. No-one is really tackling the problem head on in spite of a torrent of warnings about where it will all end.

http://www.london.gov.uk/media/assembly-press-releases/2014/04/assembly-highlights-weaknesses-in-mayor-s-housing-strategy

Just on Jeremies question about measurement of priced out long standing communities. It's not a thing so easy to measure in big cities, but it can definitely be measured in rural towns and villages. Villages have traditionally stayed a constant social mix for centuries. They are not the magnets cities are. So when you have a given constant that suddenly shifts (in a matter of decades) from being a community of young through to old, to one of just old, then I think thst is a measure of something. Granted, some young people will leave to pursue careers and a different life, but not all. There is a constant complaint from born and bred villagers and rural communities that they have had to move to cities to find a home. There is also a measurable trend of bankers buying up in villages in the South East and home countries that has sky rocketted prices too. These are measurable changes that have forced local average people out.

[StraferJack]

Penguin

Have I misunderstood or are you basically saying "same as it ever was" ?

[Otta]

StraferJack Wrote:

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> why would you be in trouble if it did Otta - you

> planning to move?

At some point, hopefully, yes.

[StraferJack]

So if house prices decreased you would be able to buy cheaper no?

[Zebedee Tring]

Is anyone really suggesting that ?150K is a normal income for an ED couple or family? What is the evidence for this? ?150K for the more expensive parts of Dulwich Village maybe, but ED?

[PokerTime]

That's the point SJ. It's no longer about the relativity of pricing, but finishing at a point of maximum profit and value.

[PokerTime]

I'd say 70-80k is probably more realistic Zebedee, and that's joint income. I don't know of anyone in ED on a joint income of 150k.

[Zebedee Tring]

That's what I thought too, PokerTime

[miga]

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[MrBen]

Agree with you Penguin re. your children.

However...don't forget that a first time buyer on say a ?45 -?50k salary could reasonably afford a 1 bed in ED just 3-4 years ago. The shift in the past year has been dramatic i.e. you'd now need a salary of ?70k for the same. This timeframe is abnormal. This is a bubble.

[PokerTime]

But only 33% of proerties in ED are houses Miga. 66% of properties are flats. So your equation doesn't work, because the majority of buyers are looking at flats (that cost less), not houses. My impression is that ED has attracted up and coming professionals (the usual backbone of gentrification) rather than affluent 150k joint salaries. And the lack of available houses compared to flats in turn may have a bearing on house price inflation.

The truth is anyway that we have no way of knowing what the average salary of ED is without hard data. Guessing by any parameter is not useful.