Coronavirus

[River Don]

I don't think Billy Idol really sums up our generation that well.

No, the song that really did sum it up was Ghost Town by The Specials.

So Generation Ghost Town AKA The Special Generation.

Wasn't he in Generation X?

The Specials had some good records. I liked Gangsters and Rat race.

It's a cover but this is still my favourite.

https://youtu.be/cntvEDbagAw

Of course Ghost Town became extra Special when it featured on Father Ted.

[Stocksbridge Owl]

Don't see many challenges for the 'yoof' today. It's too easy for them to play an 'ism' card.

Affordable housing?
And don’t forget that it’s the young who’ll be paying back the bill for Covid for years to come.

[Filo]

I was born in the last year of the BB cohort, my working life started in 1979, not long after Thatcher was elected, by 1984 I was “A one in Ten, a statistical reminder of a world that doesn’t care” for three years, life is not a breeze, each Generation had their own problems to deal with

[selby]

  As a boomer I will pass on a secret, we hate snotty nosed little kids.

[Bentley Bullet]

It's wrong that the rich are rich and the poor are poor. The rich should give all their money to the poor and then it would be right.

.....As long as the poor are still classed as poor even though they're rich, and the rich are still classed as rich, even though they're poor!

[BillyStubbsTears]

Here's an example of how the BB generation had it far easier when younger than the current one.

Back in the 1970s, house prices as a ratio of average annual earnings were at the lowest level they had ever been - about 4x. yes interest rates were high, but so was wage growth, which meant that a lot of the pain of the debt was inflated away very rapidly. I've said before that my parents' mortgage was cripplingly expensive in 1965 when they bought their first house, at £15/month. By the 1980s, they were still paying £15/month and it was almost small change.

There was a report last week which said average house prices are now more than 8x average annual earnings. And while interest rates are lower, inflation and wage rises have almost vanished, so the debt remains a high burden. Which makes the overall process of house buying much more onerous.

[albie]

Covid, and the 6 lessons for the better;
https://theconversation.com/six-lessons-the-uk-should-have-learned-one-year-on-from-its-first-lockdown-157518

Not that Bozo looks on here, but he should!

[selby]

  Billy, the people to blame for house prices going up are solicitors and estate agents, the first house I bought in 1968 their fees were banded  so much for lets say up to £1000 then up in stages but banded and prices had risen very slowly since the end oif the war.
  Then they hitched their prices to a percentage of the selling price and bingo gave themselves a good rise every year. Building materials have not risen at the same rate or wages compared with land and houses forced up by estate agents and solicitors.

[drfchound]

I bought my first house in 1974 and the monthly interest only repayment was around 60% of my monthly take home pay including the endowment payment to the insurance  company.
It wasn’t anything particularly grand.

[SydneyRover]

  When the numbers are finally put together especially the census and the vaccination numbers, that should indicate where we are, and just how many people are outside the system and don't exist or are claiming off the state while not being in this country.
  That is where the biggest fraud is taking place, the reason why ID cards are needed.
  This pandemic and the vaccination roll out and the traceability of who have had the vaccine should be used in conjunction with medical records of those not having the vaccine combined with the census to have a massive shake out of the benefit system and who is claiming fraudulently.
 

The royal family are in enough trouble without you help selby

[BillyStubbsTears]

And follow my logic Hound.

How much was that interest payment as a percentage of your take home pay by 1985? And even more importantly, by the time inflation had eaten into it, what was the capital sum you had borrowed as a ratio of your salary? That is my point

Conversely, look at today's situation. Assume someone on £20k per year, wants to buy a house at £180k which is way under the average price. On £20k income, assuming zero pension contributions and zero student loan, you're taking home £1400 per month. Let's assume this person has somehow managed to put away £20k for a deposit on the mortgage.

The best fixed rate mortgage you can get on that is £800 per month. Or about 58% of take home pay. Granted, that does include paying off the capital too (although i suspect you did rather well out of the endowment policy, with the tax giveaways that it included, no?). But my main point is that in an era of very low inflation and pretty much stagnant pay rises, that £800 per month remains a millstone for many, many years. Whereas I suspect the crippling amount you were paying per month in 1974 was less than you'd had spent on a decent night out for the family in 1990. Right?

[wilts rover]

  Billy, the people to blame for house prices going up are solicitors and estate agents, the first house I bought in 1968 their fees were banded  so much for lets say up to £1000 then up in stages but banded and prices had risen very slowly since the end oif the war.
  Then they hitched their prices to a percentage of the selling price and bingo gave themselves a good rise every year. Building materials have not risen at the same rate or wages compared with land and houses forced up by estate agents and solicitors.

When you bought your first house - how much of our housing stock was owned by private landlords?

Of our housing stock today - how much is owned by private landlords?

[selby]

  I haven't a clue Wilts, and am not that bothered , I read many years ago that the Duke of Westminster said "never sell property lease it" thought it was a good idea and it has stood me in good stead.

[big fat yorkshire pudding]

And follow my logic Hound.

How much was that interest payment as a percentage of your take home pay by 1985? And even more importantly, by the time inflation had eaten into it, what was the capital sum you had borrowed as a ratio of your salary? That is my point

Conversely, look at today's situation. Assume someone on £20k per year, wants to buy a house at £180k which is way under the average price. On £20k income, assuming zero pension contributions and zero student loan, you're taking home £1400 per month. Let's assume this person has somehow managed to put away £20k for a deposit on the mortgage.

The best fixed rate mortgage you can get on that is £800 per month. Or about 58% of take home pay. Granted, that does include paying off the capital too (although i suspect you did rather well out of the endowment policy, with the tax giveaways that it included, no?). But my main point is that in an era of very low inflation and pretty much stagnant pay rises, that £800 per month remains a millstone for many, many years. Whereas I suspect the crippling amount you were paying per month in 1974 was less than you'd had spent on a decent night out for the family in 1990. Right?

This of course likely will inflate but not by as much as others suggested.  I'm fortunate to afford the house I have but many of my friends and family my age can't get on the property ladder easily.

Could I have afforded my first house 6 years ago without help to buy? Not a chance. How do young people get a deposit? It's very difficult and then stuck with mortgages that are too high.  Help to buy really kept our mortgage down and with no interest it was a huge benefit for us (we sold the house before interest kicked in).  It was nearly £250 cheaper than renting, crazy.

As for renting, it has a place but it's a financially stupid concept if you can avoid it.

Unless you've a reasonably successful career or inheritance it's a long slog, it took me a few years living back with parents to get to the deposit.  Not everyone has that opportunity or the lower house prices we have in Doncaster.

[drfchound]

And follow my logic Hound.

How much was that interest payment as a percentage of your take home pay by 1985? And even more importantly, by the time inflation had eaten into it, what was the capital sum you had borrowed as a ratio of your salary? That is my point

Conversely, look at today's situation. Assume someone on £20k per year, wants to buy a house at £180k which is way under the average price. On £20k income, assuming zero pension contributions and zero student loan, you're taking home £1400 per month. Let's assume this person has somehow managed to put away £20k for a deposit on the mortgage.

The best fixed rate mortgage you can get on that is £800 per month. Or about 58% of take home pay. Granted, that does include paying off the capital too (although i suspect you did rather well out of the endowment policy, with the tax giveaways that it included, no?). But my main point is that in an era of very low inflation and pretty much stagnant pay rises, that £800 per month remains a millstone for many, many years. Whereas I suspect the crippling amount you were paying per month in 1974 was less than you'd had spent on a decent night out for the family in 1990. Right?

I wasn’t arguing with you bst, I was just adding to the thread.
Just a point on the endowment though, when I eventually cashed it in it paid me seven times the original price of the house.

[wilts rover]

  I haven't a clue Wilts, and am not that bothered , I read many years ago that the Duke of Westminster said "never sell property lease it" thought it was a good idea and it has stood me in good stead.

So you don't think less houses for sale is a factor in why house prices have risen so drastically in the past 30 years? Fascinating.

When you bought your house you couldn't buy property if you were not a British ctizen and tax payer. Today around 100000 UK properties worth £billions are owned by foreigners and tax exiles. Around 800000 properties are second homes or holiday lets. The % of people in rented accomodation has more then doubled in the past 20 years.

The massive rise in house prices has nothing to do with estate agent fees. It is down to people with wealth using that wealth to buy assests to make them more wealth - rather than people buying homes to live in.

Not that you are bothered.

[BillyStubbsTears]

Hound
Precisely. You were given massive tax incentives to invest in the endowment policy which poured money into your pocket. Despite the eyewatering initial cost of your mortgage, society made it both possible and very lucrative for you to buy a house. Very few young people have anything like that opportunity today. In part because the BB generation voted to pull up behind them many of the benefits they had.

Look at the relatively generous occupational pensions and the state earnings related pensions that the BB generation enjoyed then denied to the next generation. Look how many had the chance for social progression through massively subsidised higher education, then voted to deny that to today's 20 year olds.

This is not pointing the finger at individuals, but there is no doubt that collectively the BB generation is the most fortunate, self-centred and selfish one of the past 100 years.

[drfchound]

I saw a comedy programme a few years ago and the young male character in the show was asked by another whether he had any investments.
He said yes, my parents house.
It got a laugh from the audience but therein lies a truth.
The children of the incredibly lucky baby boomers won’t be too disappointed with their inheritance when it comes, or already has come, along.

[BillyStubbsTears]

Except that for the most part, that inheritance (if it survives care home fees) will go to people who are 60-odd years old already. It doesn't help the 25 year olds who are saddled with tuition fee debt, unable to buy a house and deprived of decent pension provision.

[BillyStubbsTears]

Oh aye. Not to mention the amount of this inheritance that seems to be going into caravan holidays...

[selby]

  No Wilts I am not that bothered at all, it is what it is and you can moralise all you want you will just get angrier because you can't do anything about it.
  But being in the company of people involved in legal transfers of property in the late 60's and early 70's I know the way the market price was manipulated to their advantage, where as before that they got a fixed price instead of a percentage of the selling price.
  Every price rise was an equivalent wage rise for them.
 Hence the boost that is playing out at the moment and the government playing ball with stamp duty after the ballyhoo about extending the date back, they are not going to stand the last year like the rest of us they will just put their prices up a few percentage points to make it up.
  The sellers love it, those that don't sell have a pricier asset and the rest like you are kidded on it is down to market forces, whats not to like if you are in on it.

[Bentley Bullet]

Oh aye. Not to mention the amount of this inheritance that seems to be going into caravan holidays...

Oh aye, good thinking, don't forget the caravan they're inheriting!

[big fat yorkshire pudding]

Except that for the most part, that inheritance (if it survives care home fees) will go to people who are 60-odd years old already. It doesn't help the 25 year olds who are saddled with tuition fee debt, unable to buy a house and deprived of decent pension provision.

It's a very fair set of points this.  I still have 3 living grandparents which is brilliant at 33 years old.  The amount of money spent on care for one of them is huge. Absolutely worth it but the finances on it are staggering.

Student loan fees are an interesting one. I do believe that we should pay something for higher education.  How much and the rate it's paid back is the bigger issue but is a very hefty tax, no doubting that.

[Bentley Bullet]

https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

[wilts rover]

  No Wilts I am not that bothered at all, it is what it is and you can moralise all you want you will just get angrier because you can't do anything about it.
  But being in the company of people involved in legal transfers of property in the late 60's and early 70's I know the way the market price was manipulated to their advantage, where as before that they got a fixed price instead of a percentage of the selling price.
  Every price rise was an equivalent wage rise for them.

Market prices are driven by the people that can afford to pay them - not the people selling.

It's Thatcherism. The people who have the wealth use this to purchase assets which then brings them more wealth which they use to purchase more assets so they have more of the wealth etc. It's exactly the same principle that formed the Premier League and Champions League.

We ain't in the 60's or early 70's any more.

[drfchound]

Wilts, is it wrong for people to use their wealth to create more wealth though.
Back in the seventies I knew people who were doing just the same back then.

[SydneyRover]

Is it right for the government to provide financial incentives to those already wealthy without providing fully for those that are not?

[BillyStubbsTears]

Hound.

The problem is the current concentration of wealth.

In the current economic circumstances, it is extremely difficult for those without wealth to get a start. It didn't used to be like that 50 years ago. You are an example, being able to buy property and enjoy the resulting increase in wealth. That is increasingly becoming harder for the younger generations.

 So wealth is becoming increasingly concentrated and disparities between rich and poor are bigger now than they have been since the 1920s. That is the source of a great deal of modern social friction.

Essentially, in the modern world, wealth generates more wealth than simple hard work does. That is well recognised by economists and many of them see it as a massive societal problem.

There is a solution to this but it is deeply unpopular among people who have done well in the current system. It is to heavily tax wealth and use it to provide more opportunity for those who (through no fault of their own) are currently unable to get into the virtuous circle. For example, by taxing the profits that you and I have made through our houses increasing in value, and using that to subsidise houses for 25 year olds.

You probably wouldn't like that. But it is exactly what was done between 1945 and 1980, and it's a reason why you and I were given a leg up. The very fact you were able to buy a house at all in 1974 is because there had been 30 years of aggressively taxing the rich and subsidising the poorer. At some point in the future, we have to return to that principle.

And here is why it is morally correct to do that. In 2011 I bought my current house. Since then, according to a recent valuation, it has increased in price by nearly 70%. The improvements I've spent money on barely amount to 10% of that increase. The rest has just been sheer good luck on my part. Why should I get to keep all that and deny younger people a chance of ever owning a house? Why should I complain if a big chunk of that increase in my wealth was taken from me and used to subsidise cheaper houses for first time buyers?

[normal rules]

  Billy, the people to blame for house prices going up are solicitors and estate agents, the first house I bought in 1968 their fees were banded  so much for lets say up to £1000 then up in stages but banded and prices had risen very slowly since the end oif the war.
  Then they hitched their prices to a percentage of the selling price and bingo gave themselves a good rise every year. Building materials have not risen at the same rate or wages compared with land and houses forced up by estate agents and solicitors.

Just like football agents, who I blame for the overinflated prices and wages demanded these days.

[MachoMadness]

On this theme, the ONS posted more evidence of how the different generations have been impacted by the pandemic. From Feb 2020 to Feb 2021, 63.1% of jobs lost were held by under 25s. 88.3% were held by under 35s. Meanwhile, people aged 50-64 saw a net increase of 32,000 jobs.