A life of Poverty...

[Steven]

Who knows what's around the next corner?

Life isn't easy, and the way things are going it's not going to get easier. You have to make the most of it though. Compared to some of the above I consider myself lucky...

 

[The Jim]

By my reckoning that makes 15x12x500 = a £90,000 lump sum.
I will own my house outright and I'll have a very cashable commodity should the worst happen.

Yes but you'll be taxed the 28% off the 100GBP you invest into your mortgage PCM which equates to 25,200GBP taxed from your wages for the 90,000GBP investment which either means you've lost 25,200GBP additional spending money to tax, or you deduct it off the total cost of your mortage, which brings your cash lump sum back down to 64,800GBP.

But fair enough, at least it's unlocked, however, you'd actually be 25,200 personally richer if you invested in the pension - possibly, unless you'd invested the full 90k to the pension.

 

[Stu DemonD]

£100 pcm contribution is actually a £128.16, or thereabouts, contribution to the scheme, the £28.16 being that amount at BR tax - i.e. 22%.

 

[Dr_Pepper]

Maybe this is the downside of everyone having nice new cars to drive around in? Puts the motors into contrast a bit methinks.

Good luck to all of you having problems.

 

[Steven]

Maybe this is the downside of everyone having nice new cars to drive around in? Puts the motors into contrast a bit methinks./QUOTE]

Very true. I would never buy a car on finance and commit to £150+ in replayments per month, who knows what could happen that would change your circumstances.

My cars may be that bit older, but if one breaks I have another to fall back on, and if that breaks I have another to fall back on, and if that breaks I have another to fall back on...

 

[Stu DemonD]

One more repayment left on Ulysse :woot:

Also, everyones circumstances are different - what suits my budget/lifestyle may not suit someone elses.

 

[James M]

This thread strikes a real chord with me, although I now have a well paid career ahead, it could have done with coming a couple of years earlier, prior to house prices rocketing.

For example, my mate, who earns slightly less than I'm starting on, bought a house three years ago for £90,000, he's since spent £20,000 extending it, and just had it valued at £210,000

How the hell people starting out just now are ever going to be on a par with those who got on the ladder just a couple of years ago is anyones guess :bang:

 

[Stu DemonD]

Yep, we were fortunate to buy before the boom, in 1998. We borrowed the maximum we could at the earning levels we had then, and now look. Seems to have paid off. It is nice to have that fallback....To do it now would be impossible.

 

[gaz.d]

i live a life of poverty, but at least i will be able to sleep in tidy car

i have just left uni, so got student debt and car loan debt

no fooker wants to give me a job, i need experience :bang: so looks like i will be stuck in tesco for life, although there aint nothing wrong with that, but i slogged for 6 years education after school so i dont really want to be stacking shelves

 

[James M]

What I find funny is when you look round some really posh areas, you often see huge houses which are literally dropping down, usually owned by someone who bought it in 1960, but now couldn't afford curtains for the 10ft high bay windows

 

[Babysei]

Ive just bought my flat for £65,500 and thats a 2 bed flat with a garage nr the M6, ive considered myself lucky that ive picked up a bargain...i dont know what id do if i hadnt have found this..i cant get a mortgage on my own for more than 65k and even the mortgage ive had means that im literally paying out per month what i earn..so im fooked if the car goes wrong, i want a holiday, car services etc...its so tight now its unbelieveable...i should find a rich man

 

[The Negotiator]

I seriously can't see house prices contintuing at such levels.

James, it's so true, somebody about 27 or so now, if they bought a house when leaving school around 16-18 or whatever they are no so far ahead of my specific generation I am always going to be playing catch up even if i earn seriously more than them...

 

[Neofolis]

Gaz, it's usually pretty easy to get experience, if you want to make the effort. You just phone a prospective employer and ask to do some work experience. Funnily enough, most of them are quite obliging, when offered free labour. There are still those who won't take you on, because they think they are so busy that they couldn't afford to have a member of staff supervising you, but most are normally willing and usually impressed that you would go to such lengths to gain experience.

As far as the car thing goes. I bought the newest car that I could afford to finance, because it enables me to budget better. I know the amount of the loan repayment won't change, the payments are protected if I should become unemployed and it is less likely to go wrong, plus there is still some warranty cover if it does. The other advantage is that I have a more valuable asset should the need arise to sell it.

 

[Babysei]

im not sure if the house prices will drop? Jeeese if they do i will be suicidal...

 

[hmallett]

Babysei, if house prices do drop at all (and there has been a small fall in some prices), it's the top end of the market that will fall. For people like us who are in lower price bracket housing, the prices won't drop unless there's a major recession, simply because the demand for cheap housing is so great. I'm gutted that you got a garage for that price though - I just got a parking space (though I use 2, what with me being so rich I have 2 cars )
H

 

[joecinq]

TBH, it is very unlikely that houseprices will drop with out a very large change in our economical conditions. However it is likely that there will be decrease in the rate in which house prices will rise. If house prices did fall, most people would not be prepared to let their houses go.

Don't quote me on the figures, but IIRC house prices are rising at rates around 15-20% in my area. This figure is far greater than inflation and is obviously the reason behind everyones struggle to get on the housing ladder. Hopefully house prices will plateau of in the coming years, because it will be impossible for anyone of my generation to even think about buying a house.

 

[Citizen Smith]

Well I went straight from school at 16 (1996) into the motor trade and have stuck it out this far. My wages only became 'decent' in 2003 because of more experience gained after a 4 year apprenticeship.

Fortunately i didn't have any student loans to deal with, but i did have a loan which i repayed about 3 years ago. Good so far...

Even though my wage is 'decent' I'm still unable to move out on my own as house prices in London where I live, and anywhere, start at £250,000 for 2 bedroom flat/house complete with scum neighbours and 14 year old mothers on their 3rd child .

House prices go up yet there is no say/advisement to employers to also raise wages in relation to this, i'm actually hoping that this house pricing will be more sensible when i have paid for my new car in 4 years time and that I might get a better wage to go with it.

...Or maybe babysei could do with a lodger:chin: .

 

[Stu DemonD]

...Or maybe babysei could do with a lodger:chin: .

Good thinking

 

[Neofolis]

They are unlikely to drop at the moment, because there are still plenty of people from the city buying up all the houses as holiday homes or for renting. The worrying thing is that it means we are heading back towards a very large rich/poor divide. I know there is a place in Yorkshire that has decided that properties sold there can only be sold to people currently living within a certain radiius, but unless the rest of the country does the same, the prospects are not good. All this has come about due to the prices in London mainly being so far higher than elsewhere having increased rapidly, leaving owners in London with large amounts of equity to borrow against or selling their London homes and buying two or more larger homes in other areas.

The easiest alternative for the rest of us is to emigrate. The existing home owners on a tight budget can purchase cheaper abroad and use the remaining money to clear their mortgage and set themselves up in their new country. For those who aren't home owners, at least they have the opportunity to join the property ladder in other countries, once they have found work.

For those who are determined to buy property in this country, the best bet is to hunt for something derelict and renovate. Due to the high prices, you can make a fortune, if you know what you are doing, but it is also very easy to lose money and get ripped off, if you don't. If you repeat that process three or more times per year, you will soon be in the position of being able to do more than one at a time and then living in one while doing another, etc. Unfortunately it does require knowledge of the building industry, planning offices, auction procedures, etc. as well as knowing good trust worthy tradesmen and suppliers.

 

[The Negotiator]

Trust me, I know, they will (yes, this is of course opinion)

20 years ago my house cost 20k, it's now worth over 10x that which is a high price for a Nottingham house. Hence to buy it, you would need a 4 x salary mortgage on a £50k salary. My dad bought the house (my mum wasn't working since she had my sister) and was a teacher. I assume earning approximately 17k. Hence he need about a 1x salary mortgage.

Now, a similar teacher in such a position would be earning little over 23k, so, to buy a comparable house, they would need over a 9 x salary mortgage, which isn't going to happen.

Even if you consider that more families have two people working within the family these days, equivilent family would still need a 4-5x combined salary mortgage for an equvilient house, again, not going to happen!

So tell me, how can this be sustained? The house prices have gone so quickly up and so high that none of the salaries have stayed close.

On top of this, my dad hadn't got student loans or the like, he graduated having received grants. Graduates are now graduating with debts on average of £9k I believe. I know I will be in debt of just over £12k when I finish uni (how much I can pay back immediately depends on lots of factors) hence again, this takes out a proportion of any potential salary. I should hopefully graduate with a masters in chemical engineering, statisitcally the third highest paying career at £21k on average at graduation (only surpassed by Medics and dentists, who obviously have to study a lot longer). So, on my average salary which is a large salary for a graduate I will have to pay off a debt of 0.5 x salary possibly and have to buy a house...oh dear me.