Quote:
Originally Posted by Vetracer
Some might say owning expensive watches before buying a property might be considered financially irresponsible. I don’t know...
|
That's easy to say from someone who is presumably rather wealthy. The reality of the property market is wildly different to how it was 20 years ago. Many thirty-somethings are living with their parents despite being, by most measures, financially well-off.
In my unfashionable part of East London, house prices have quadrupled in 2 decades. Many of my neighbours would be unable to afford their homes if they were buying today. They happened to get lucky with when they bought.
If you want to live in this part of the world, and not live in one of the pockets of neighbourhood where you live in fear of your car getting chored off the drive or your home being burglarised by an organised crime gang, then you'll have to pay north of £750k for a four bedroom family home. As I said above, this is not a fashionable area either. If you want a decent mortgage rate, you'll need to pony up at least £150k for a deposit. However that means you're looking to borrow £600k for your mortgage. In order to be approved for a £600k mortgage, you need to be earning £120k p/a
minimum. If you get approved for such a mortgage, you're going to be paying over £2k pcm for the privilege on a typical capital repayment loan.
That's simply not realistic for the vast majority of people and it's perfectly possible, in London and the South-East at least, to earn 3-4 times the national average wage (i.e. be relatively wealthy) and not be able to afford to buy a home for you and your family. If I'm that guy, earning that much money and am comfortable renting, having paid all my bills, taken care of my wife and kids and have saved up some spare cash, then I'm going to spend my hard-earned on things that make me happy during my all too brief stint on planet Earth rather than worry about buying a slab of land, bricks and mortar that I might never be able to afford no matter how hard I try.