LEAVE the Conservative Party and save your country!
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£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
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Yep, so a rate 15% higher and a threshold £25k lower than today. As I was saying...kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
That is an unfair comparison as we did not count our income as net of crushed avocado on artisan sourdough toastwallace_and_gromit said:
Worth noting that life was not a bed of roses in the early 90s when mortgage rates were 15% and mortgage affordability tests were much harder to pass. I attended an interview in person for my first mortgage!rick_chasey said:It is hard to overstate after tax, student loans, and housing costs, how little there is left for most under 40s
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So you didn't like the tax burden in 1989. How's it looking now?Stevo_666 said:
Yep, so a rate 15% higher and a threshold £25k lower than today. As I was saying...kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
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If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over.
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And don't forget:
https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source
I could do with tax relief on the £600-700 a month I'm spending on interest.0 -
Lower than in 1988 for an equivalent amount of income.kingstongraham said:
So you didn't like the tax burden in 1989. How's it looking now?Stevo_666 said:
Yep, so a rate 15% higher and a threshold £25k lower than today. As I was saying...kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
You've explained it over and over again, that we know. We await the magical solution.rick_chasey said:
If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Don't forget the skinny lattes.surrey_commuter said:
That is an unfair comparison as we did not count our income as net of crushed avocado on artisan sourdough toastwallace_and_gromit said:
Worth noting that life was not a bed of roses in the early 90s when mortgage rates were 15% and mortgage affordability tests were much harder to pass. I attended an interview in person for my first mortgage!rick_chasey said:It is hard to overstate after tax, student loans, and housing costs, how little there is left for most under 40s
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Get rid of the greenbelt and loosen up house planning rules so nimbys can't object to reasonable stuff and incentivise housebuilders to build houses where people will buy them.Stevo_666 said:
You've explained it over and over again, that we know. We await the magical solution.rick_chasey said:
If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over.0 -
Good luck. Wonder why this hasn't been done already at any time in the last couple of decades?rick_chasey said:
Get rid of the greenbelt and loosen up house planning rules so nimbys can't object to reasonable stuff and incentivise housebuilders to build houses where people will buy them.Stevo_666 said:
You've explained it over and over again, that we know. We await the magical solution.rick_chasey said:
If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Re the bolded bit, I know you pose this for a rhetorical flourish but such questions don't half make you look like a patronising twot, passing yourself off as the only person bright enough to know that 5% of £360k is £18k.rick_chasey said:
15% and a tax break on f*ck all is still f*ck all.wallace_and_gromit said:
Worth noting that life was not a bed of roses in the early 90s when mortgage rates were 15% and mortgage affordability tests were much harder to pass. I attended an interview in person for my first mortgage!rick_chasey said:It is hard to overstate after tax, student loans, and housing costs, how little there is left for most under 40s
What proportion of income do under 40s pay on housing? And how has that changed over time?
I'll give you an idea. My house was £75k in 1996. I bought it for £425k.
So my deposit was almost the same as the entire house was worth in 1996.
Sure, you have inflation etc but that doesn't account for a lot of it.
So say I saved £10k and then my mortgage was £75k. 15% on £60k is what, £9k?
Currently, 2 year fixed on 85% LTV is what, 5%?
What do you think 5% of £360k is? £18k. Twice as much.
And then childcare costs 2x as much as it did in the 90s, and then you're paying off your student loan too.
But anyway, what you're missing is wage inflation since 1996. Assuming this was 3% pa (quite conservative I think) then one's salary at a fixed age / stage of employment would have doubled from the mid 90s to the 2020s. So your £18k pa now is worth circa £9k in the mid-90s. Or put another way, the proportion of your income used to pay mortgage interest is the same in both years.
That said, I certainly sympathise re student loan repayments. Both my offspring will have those to contend with these.
Also, I'm not a big fan of the various government schemes since the GFC that have deliberately or unintentionally fuelled house price inflation.
But life wasn't the bed of roses in the early 90s that you appear to assume it to be. Mass unemployment ("Major's Millions") and negative equity were non-trivially challenging issues.
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We only had 4 TV channels too. And cheap flights were something that only happened when Hoover got a promotional offer wrong.surrey_commuter said:
That is an unfair comparison as we did not count our income as net of crushed avocado on artisan sourdough toastwallace_and_gromit said:
Worth noting that life was not a bed of roses in the early 90s when mortgage rates were 15% and mortgage affordability tests were much harder to pass. I attended an interview in person for my first mortgage!rick_chasey said:It is hard to overstate after tax, student loans, and housing costs, how little there is left for most under 40s
https://en.wikipedia.org/wiki/Hoover_free_flights_promotion0 -
This will be millenials in 30 years time...
https://youtu.be/26ZDB9h7BLY "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
What we need is a national strike. "Nah, I ain't paying stupid money, I'll give you £X."Stevo_666 said:
You've explained it over and over again, that we know. We await the magical solution.rick_chasey said:
If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over.
Houses will cost stupid money as long as people are prepared to pay stupid money.
#notgonnahappenThe above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
So you’ve no interest in the overall tax burden.Stevo_666 said:
Lower than in 1988 for an equivalent amount of income.kingstongraham said:
So you didn't like the tax burden in 1989. How's it looking now?Stevo_666 said:
Yep, so a rate 15% higher and a threshold £25k lower than today. As I was saying...kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
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You're still ignoring the cost of the deposits to begin with, plus the duration of having to pay off something an order of magnitude plus more to begin with.wallace_and_gromit said:
Re the bolded bit, I know you pose this for a rhetorical flourish but such questions don't half make you look like a patronising twot, passing yourself off as the only person bright enough to know that 5% of £360k is £18k.rick_chasey said:
15% and a tax break on f*ck all is still f*ck all.wallace_and_gromit said:
Worth noting that life was not a bed of roses in the early 90s when mortgage rates were 15% and mortgage affordability tests were much harder to pass. I attended an interview in person for my first mortgage!rick_chasey said:It is hard to overstate after tax, student loans, and housing costs, how little there is left for most under 40s
What proportion of income do under 40s pay on housing? And how has that changed over time?
I'll give you an idea. My house was £75k in 1996. I bought it for £425k.
So my deposit was almost the same as the entire house was worth in 1996.
Sure, you have inflation etc but that doesn't account for a lot of it.
So say I saved £10k and then my mortgage was £75k. 15% on £60k is what, £9k?
Currently, 2 year fixed on 85% LTV is what, 5%?
What do you think 5% of £360k is? £18k. Twice as much.
And then childcare costs 2x as much as it did in the 90s, and then you're paying off your student loan too.
But anyway, what you're missing is wage inflation since 1996. Assuming this was 3% pa (quite conservative I think) then one's salary at a fixed age / stage of employment would have doubled from the mid 90s to the 2020s. So your £18k pa now is worth circa £9k in the mid-90s. Or put another way, the proportion of your income used to pay mortgage interest is the same in both years.
That said, I certainly sympathise re student loan repayments. Both my offspring will have those to contend with these.
Also, I'm not a big fan of the various government schemes since the GFC that have deliberately or unintentionally fuelled house price inflation.
But life wasn't the bed of roses in the early 90s that you appear to assume it to be. Mass unemployment ("Major's Millions") and negative equity were non-trivially challenging issues.
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But it is not about the size of the debt as that is irrelevant compared to the cost of the debt servicing.rick_chasey said:
If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over.
In the early '90s 15% of £100k would have been hammering our lucky boomer as hard as 2% of £750k that has benefited millenials for the last decade.0 -
Yes but you need to save so much more to get to the deposit to get on the ladder to begin with, as rental prices only go up and up.surrey_commuter said:
But it is not about the size of the debt as that is irrelevant compared to the cost of the debt servicing.rick_chasey said:
If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over.
In the early '90s 15% of £100k would have been hammering our lucky boomer as hard as 2% of £750k that has benefited millenials for the last decade.0 -
As a sensible chap I am sure you will be fine when that goes up £1k a month but assuming your peers are in the same boat are they aware of the tsunami heading their way and will they be able to coperick_chasey said:And don't forget:
https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source
I could do with tax relief on the £600-700 a month I'm spending on interest.0 -
It is indeed pretty irritating to hear the same bilge time and again about 15% interest rates on much lower loan to ave salary ratios 30 years ago.
It is almost as bad as cyclists run red lights.
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lol, you mean up to £1400-1500 a month. plus the equity payments.surrey_commuter said:
As a sensible chap I am sure you will be fine when that goes up £1k a month but assuming your peers are in the same boat are they aware of the tsunami heading their way and will they be able to coperick_chasey said:And don't forget:
https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source
I could do with tax relief on the £600-700 a month I'm spending on interest.0 -
I was assuming a monthly increase of £1k a month. I was more interested in hearing a straw poll of whether your peers know what is coming, how long it will last and if they will be able to cope.rick_chasey said:
lol, you mean up to £1400-1500 a month. plus the equity payments.surrey_commuter said:
As a sensible chap I am sure you will be fine when that goes up £1k a month but assuming your peers are in the same boat are they aware of the tsunami heading their way and will they be able to coperick_chasey said:And don't forget:
https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source
I could do with tax relief on the £600-700 a month I'm spending on interest.
Or put another way did lenders test affordability at 2% or 5%?0 -
kingstongraham said:
So you’ve no interest in the overall tax burden.Stevo_666 said:
Lower than in 1988 for an equivalent amount of income.kingstongraham said:
So you didn't like the tax burden in 1989. How's it looking now?Stevo_666 said:
Yep, so a rate 15% higher and a threshold £25k lower than today. As I was saying...kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
Only if Labour's to blame.0 -
Only 2 of my mates have mortgages (the rest all rent...35yr olds), one is a bigshot city lawyer and so is his wife so they don't worry about that and the other's missus inherited a material 6 figure sum, so neither are that worried about that stuff > this is pretty standard for 30 somethings who have mortgages. A big proportion will have inherited money.surrey_commuter said:
I was assuming a monthly increase of £1k a month. I was more interested in hearing a straw poll of whether your peers know what is coming, how long it will last and if they will be able to cope.rick_chasey said:
lol, you mean up to £1400-1500 a month. plus the equity payments.surrey_commuter said:
As a sensible chap I am sure you will be fine when that goes up £1k a month but assuming your peers are in the same boat are they aware of the tsunami heading their way and will they be able to coperick_chasey said:And don't forget:
https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source
I could do with tax relief on the £600-700 a month I'm spending on interest.
Or put another way did lenders test affordability at 2% or 5%?
I can afford a tripling of the interest payments if needed, though clearly not desirable. Plus I've built up enough cushion through overpayments that I can draw down on that for around about 18 months if rates triple, so I have been very conservative (plus I managed to save enough that even after the deposit I have a safety cushion).
I'm locked into 1.9% until Jan 2025 so I might miss the worst of it.0 -
Miras went in 1988.
15% was a low interest rate in 1989. It was more like 18-19%.
Graduate salaries in 1987/88 were about £8,000 pa in London (outside of banking).
2 bedroom flat close south circular in Forset Hill, Brockley, Catford, Lewisham area was around £80,000. Hardly expensive areas of London at the time.
So with a 5% deposit, monthly mortgage cost was £1,153 pm over a 25 year term.
So more than the annual salary of a graduate, or if buying as two people then just under £580 pm, or around £6,950 pa! Not much disposable income left there....!
So about the same as the repayment costs on a £275,000 property over most of the last 14 years.
It is clearly harder to raise the deposit now, but the debt servicing costs haven't been relatively higher until very recently. So the issue has been getting on the ladder in the first place.0 -
Why do you assume that?kingstongraham said:
So you’ve no interest in the overall tax burden.Stevo_666 said:
Lower than in 1988 for an equivalent amount of income.kingstongraham said:
So you didn't like the tax burden in 1989. How's it looking now?Stevo_666 said:
Yep, so a rate 15% higher and a threshold £25k lower than today. As I was saying...kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
True. Apart from the strike bit, obviously.pblakeney said:
What we need is a national strike. "Nah, I ain't paying stupid money, I'll give you £X."Stevo_666 said:
You've explained it over and over again, that we know. We await the magical solution.rick_chasey said:
If only wages rose at the same rate as house prices eh?kingstongraham said:£41,200 in 1989 adjusted for inflation is £101,702 in 2023.
I mean, what about "house prices rising faster than wages" makes you think houses cost the same as they used to?
It's just so f*cking moronic having to explain the same sh!t over and over.
Houses will cost stupid money as long as people are prepared to pay stupid money.
#notgonnahappen"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
What was your tax relief? I'd imagine on 18% interest it was material.Dorset_Boy said:Miras went in 1988.
15% was a low interest rate in 1989. It was more like 18-19%.
Graduate salaries in 1987/88 were about £8,000 pa in London (outside of banking).
2 bedroom flat close south circular in Forset Hill, Brockley, Catford, Lewisham area was around £80,000. Hardly expensive areas of London at the time.
So with a 5% deposit, monthly mortgage cost was £1,153 pm over a 25 year term.
So more than the annual salary of a graduate, or if buying as two people then just under £580 pm, or around £6,950 pa! Not much disposable income left there....!
So about the same as the repayment costs on a £275,000 property over most of the last 14 years.
It is clearly harder to raise the deposit now, but the debt servicing costs haven't been relatively higher until very recently. So the issue has been getting on the ladder in the first place.0 -
What would the 80k flat be worth now? More, or less, than £275k?rick_chasey said:
What was your tax relief? I'd imagine on 18% interest it was material.Dorset_Boy said:Miras went in 1988.
15% was a low interest rate in 1989. It was more like 18-19%.
Graduate salaries in 1987/88 were about £8,000 pa in London (outside of banking).
2 bedroom flat close south circular in Forset Hill, Brockley, Catford, Lewisham area was around £80,000. Hardly expensive areas of London at the time.
So with a 5% deposit, monthly mortgage cost was £1,153 pm over a 25 year term.
So more than the annual salary of a graduate, or if buying as two people then just under £580 pm, or around £6,950 pa! Not much disposable income left there....!
So about the same as the repayment costs on a £275,000 property over most of the last 14 years.
It is clearly harder to raise the deposit now, but the debt servicing costs haven't been relatively higher until very recently. So the issue has been getting on the ladder in the first place.0
