Trying To Work Out What This Bloke Has Said Wrong

[bednobs]

https://www.bbc.co.uk/news/business-67890334

i see thes comments are being lambasted all over.  However, i would have thought this person was ideally placed to know how many mortgages they are lending?

[ToraToraTora]

I saw this and wondered the same, I'll be interested in the answers.

[Deskdiary]

I do feel a bit sorry for youngsters trying to get on the property ladder. I know of two people in their 20s who have been denied mortgages for affordability reasons even though their monthly rent, which they can afford, is more than what their monthly mortgage payments would be.

 

It seems the 10% deposit causes issues. 
 

Where I live the cost of a starter house is more that the average UK house price, so I can see why younger people, where I live, would struggle without the help of mum and dad.

 

My kids are 20 and 15, with the older one at University. My wife and I are fortunate in having a lot of equity in the house and therefore it is our intention to downsize in a few years and pay for the deposits for our kids...but many people cannot do this.

 

I would hate to be a youngster trying to get on the property ladder now without help.

[Ellipsis]

> NatWest's chair has said he believes it is not currently "that difficult" for people to get on the housing ladder.

Get on the housing ladder, ie first time buyers. It's not easy for them. If you look at their salary, the house prices, the availability of decent housing, the mortgage rate, the size of the deposit ... there's not a lot in their favour.

[Rosetta]

Is it because  he challenges the victim mentality?

Yes I am in the older generation age group but we also had to save for a deposit. I do feel sorry for youngsters who live in high price areas and I know its very difficult for them but as a general point people need to save. Again as a miserable old fogey maybe they could cancel their expensive mobile contracts  😉.

I would also put in some punitive measures against second home owners and property investment foreign owners

[Peter Pedant]

lambasting his lack of knowledge of how big a deposit has to be to get a house

 

[Peter Pedant]

yeah but no but - at midnight I was discussing this with the night staff who were doing my obs

and I said - my first mortgage was £12k, based on a wage of £6k per annum

and my mudda said "£6k was the peak earning of your father and myself - 1962" - My fathers pension was £2k a year.

He bought a house £8k which has just gone for £1m ( I think)

The past is a different country - the go-between

[New Judge]

It's always been difficult to buy a house. If it was easy everybody would do it. What Sir Howard is saying is that access to cheap money is a lot easier now than in the past. It's certainly a lot easier than when Mrs NJ and I took out our first mortgage. We had to pay some spiv (aka a "mortgage broker") about 5% of the cost of our house to "oil the wheels".

House prices have risen for two reasons: the country's ridiculous strategy of allowing money to be borrowed at virtually 0% for about thirteen years and the country's population growing by about 10m in the last twenty years. Thankfully the first of these has ceased - at least for the time being). Somebody needs to get a grip on the second.

[tomus42]

The man is hopelessly adrift from the realities of the modern world. What an arsenal.

[Ellipsis]

This explains it in some detail ...

https://www.schroders.com/en-gb/uk/individual/insights/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/

[Cloverjo]

I agree with New Judge. It has always been difficult to buy a house. My grandparents never did. My parents only did, thanks to a small legacy that gave them a leg up. They are/were all hard-working sensible people. 
I never expected to be able to own a home. 
I can't feel sorry for Gen Z in particular, because it's always been tough. 

[Ellipsis]

It's tougher now.

[pastafreak]

22:31...how much are mobile phone contracts compared to a landline now? I've no idea, but back in the day I seemed to be paying a fortune to BT every month. Now, it's buy/upgrade a phone every few years...then pay monthly. Contract or payg. I'm an old fogey too...and it's just £9 a month for a mini computer in my pocket. I know contracts are more...but you get more. I think...correct me if I'm wrong.

For a young professional, that mini computer is a necessity. 

My daughter and her partner both have excellent jobs in London. They are sensible with money and save/invest. They've had their flat for less than 4 years...helped on the property ladder by my ex's mother. Got their inheritance early...otherwise I'm sure they would have had another few years of saving. I couldn't help...not sure about ex.

[pastafreak]

A graph in the link above compared rises in salary  and house prices since 2000. Salaries rose by 112%...houses by 240%.

[tomus42]

//It's always been difficult to buy a house. //

No it hasn't. 30 years ago all you needed was a job with a half decent income. That is nowhere near enough these days. House prices have increased massively more than average incomes. Great for old fogeys like you and me that bought a house for 5 quid back in the day. Not so good for young people now.

We probably both also benefited from a free university education. Now they come out with a 50k debt to start with.

[Rosetta]

Tomus, as an aside I agree about the debts from a uni education, but old fogeys went to uni in the days before the whole world and his dog went to uni, thanks to Tony Blairs policy, which I personally believe was introduced   to reduce unemployment figures amongst the young.

Uni educaion needs a radical rethink. Though I doubt that will happen as uni' s  are now big business

[tomus42]

//I personally believe was introduced to reduce unemployment figures amongst the young.//

Yes, we needed to send school leavers somewhere because the jobs and apprenticeships had disappeared. It's changed somewhat, and the uni incomes currently rely on foreign students.

[Rosetta]

Apprenticeships were curtailed because they werent trendy not because the need wasnt there, Tomus. 

Sorry to digress as the thread was about housing not tertiary education

[tomus42]

//Apprenticeships were curtailed because they werent trendy not because the need wasnt there, Tomus. 

Sorry to digress as the thread was about housing not tertiary education//

I didn't say the need wasn't there. I said they weren't there.

It's all related to the cost of living, so you haven't digressed that much.

[puzzled54]

I've always said that mine was the first generation to grow up, get married and expect to buy our own homes. My parents never owned their own home. When we got married, the mortgage was 3 times his salary and one half of mine. When mortgage allowance changed to 3 times each salary, it seemed that house prices rose to reflect that. We didn't pay uni fees, in fact, I was given a grant to go for 3 years, and there were also plenty of summer and Xmas temporary jobs to help out with the finances. It's way more difficult for people to come out of uni and get a good job now than it was. I think it's much harder for young people now

[New Judge]

“House prices have increased massively more than average incomes.”

Yes they have – mainly for the two reasons I cited above.

“Great for old fogeys like you and me that bought a house for 5 quid back in the day.”

The house that we bought for 5 quid we really only wanted to pay £4.50 for. That extra stretch meant that both Mrs NJ and I had to work six days a week (me sometimes seven whilst she did the housework). It also meant we had no holidays for about five or six years, ran a twelve year old car until it almost fell to pieces and ate out twice a year (once to celebrate our birthdays which are close together and once on our wedding anniversary). Now when I holiday abroad I speak to young couples who have paid perhaps £5k for their trip, who complain that the flat that they rent has no charging point for their electric car, and go on to bemoan that they cannot get onto the housing ladder. As well as that our mortgage rate at times hit 17% and was rarely, if ever, below 10% until the 1990s. Even then it was far higher than the current “unprecedented” levels. . So please don’t tell me how great it all was. We just got on with it.

“We probably both also benefited from a free university education. Now they come out with a 50k debt to start with.”

Then that’s their fault. The blame for this situation lies initially with Mr Blair who had the bright idea to get 50% of young people to attend University. Nowhere near 50% of jobs in this country require a degree level education (it’s probably no more than 10% tops). And nowhere near 50% of young people are capable of completing a proper degree course successfully (again, it is probably about 10%). The other 80% of graduates leave Uni not only £50k in debt but also with a degree that is worth less to them than the paper it is written on. They then get disappointed that they’ve been conned into thinking the world is their lobster because they got a 2:2 in childminding from Barnsley “University” and they end up flipping burgers in McDonalds. They and their parents need to think for themselves to assess their life chances realistically, and not go along with what a two bit chancer of a politician fooled the electorate into a quarter of a century ago.

“…and the uni incomes currently rely on foreign students.”

Indeed they do. And what do foreign student’s need, of which this country has a shortage? (For a clue, refer to the topic of this thread).

“Uni educaion needs a radical rethink.”

Yes it does. Two things need doing: far fewer UK students are suited to a University education and nor do they need it, so the numbers attending need to be drastically reduced; the University system needs to be shrunken to a level where huge numbers of foreign students are not accommodated.

“It's way more difficult for people to come out of uni and get a good job now than it was.”

It’s perfectly possible to get a good job and pursue a successful career without going to University – and you can begin three years earlier.