Reply to: State Pension Affordability

[willendure]

Reckon we are heading back to a similar financial situation as the 70s. With the Iran oil shocks, I mean. This has barely gotten started, unless Trump manages to pull off a deal or a wildly succesful military option to take back control of Hormuz, and I don't assign a high probability to either outcome.

USA might even prefer to have Hormuz closed for some time to weaken their strategic rivals and keep Europe in line.

2007 - oil went to $100 and there was too much debt. Sounds very familiar...

[Protagoras]

What we need now is "In place of Strife" and the Prices & Incomes Board back again. .

Wasn't it the Prices & Incomes Board that gave rise to the perk of the company car?

I think I read within the last few days that the government was looking to regulate the price of grocery essentials. Yep, that'll work with no unintended consequences.

[Protagoras]

British heavy industry in the 70s died because it couldn't compete with other countries' standards. Compare a Morris Marina to the equivalent Toyota for example, or a ship built for around a2/3rds the cost of a Clyde side yard. Not everything you read about Thatcher is even vaguely accurate; she was addressing the union's powers who were holding back the country. Sadly when that did happen it was rather too late.

Agreed privatisation did a lot of damage, but you have to remeber that there wren't a lot of alternatives at the time.

Still, hang around a while longer, once Sir Keir is replaced by Rayner you will be able to experience the 70s all over again.

I can well recall the 70s with the shipyard workers seemingly on strike all the time, or the car workers or some other bunch. Following WW2, UK failed to invest in the machinery to improve production efficiency and by the 1970s was unable compete; there was an industrial leader who's name escapes me who famously said that there was no point investing in machines if the unions would not accept manpower level cuts. It was a great shame to watch the closure of the shipyards, steelworks, mines, foundries and other heavy industries which could with investment and flexibility from the unions facilitated further growth in the UK.

Maggie's model of privatisation required regulation, but it was not long before regulation was too ineffective to matter. So we end up renting essential services at high prices which when worked through the system render the UK uncompetitive in many areas. That said, it should be remembered that successive Westminster governments had failed to invest in the English water industry and for it privatisation was supposed to bring investment; somewhere along the line someone forgot that government can borrow for long term investment at preferable rates to rent seekers. And energy privatisation negated any notion of national energy strategy. I can see how we got here, but sorting out the muddle seems to be beyond any current party's vision.

1970s rerun inbound; I don't think it needs Labour Party chair re-arrangement to help it on its way.

[DoctorStrangelove]

Still, hang around a while longer, once Sir Keir is replaced by Rayner you will be able to experience the 70s all over again.

I thought we were already, except it's the medics who are on strike all the time instead of the miners. .

What we need now is "In place of Strife" and the Prices & Incomes Board back again. .

Ah, them were the days.

[gables]

I imagine a lot of us have stories like this.

When I first started working in London, after a couple of years of renting, in 1992 we bought a 2 bed flat in West Ealing for £77k, I think our joint salaries was around 28k. I seem to recollect the max mortgage was 2.5 * joint and required a 10% deposit; so 7k down and 70k mortgage with interest rate approx 12% - money felt tight.

According to Rightmove the exact same flat today is valued 475k

[Snooky]

In 1980 the UK average hose price was £18k.

Tell me about it. I had to use watering cans for years until hoses came down to a more reasonable cost.

[malvolio]

I remember a chap around here buying a house for £10k cash, late 70s.

Ah. The 1970s when half of industry was on strike, and the other half was playing cards whilst hiding under the factory track.

We used to build things here. Admittedly they were mostly crap*. But The Great She Elephant cured all that by shutting it all down as quickly as possible. Then getting herself reelected by winning a war. You can fool some of the people all of the time etc.


*them were the days:


From the date that was a P6 not the even worse SD1.

British heavy industry in the 70s died because it couldn't compete with other countries' standards. Compare a Morris Marina to the equivalent Toyota for example, or a ship built for around a2/3rds the cost of a Clyde side yard. Not everything you read about Thatcher is even vaguely accurate; she was addressing the union's powers who were holding back the country. Sadly when that did happen it was rather too late.

Agreed privatisation did a lot of damage, but you have to remeber that there wren't a lot of alternatives at the time.

Still, hang around a while longer, once Sir Keir is replaced by Rayner you will be able to experience the 70s all over again.

[woody1]

Property certainly seems a lot more unaffordable now than it was back in the 80s and 90s.

In 86 we bought a new 2-bed semi in Stockport for (1) £20k, on a 95% mortgage, based on one university research assistant £7k salary.
The following year we bought a 2-bed semi in York for (2) £30k, on a 95% mortgage, based on a university research £10k salary.
In 92 we bought a 3-bed detached in Wantage (Oxfordshire) for (3) £85k, on a 90% mortgage, with two modest research and admin salaries (£14k + £16k).

Couldn't see that being anywhere near attainable now.

Out of curiosity, I looked up recent sold prices of similar houses on the same streets.

(1) £230k
(2) £270k
(3) £450k

I doubt salaries of the jobs we had have gone up by the same multiples.

[DoctorStrangelove]

I remember a chap around here buying a house for £10k cash, late 70s.

Ah. The 1970s when half of industry was on strike, and the other half was playing cards whilst hiding under the factory track.

We used to build things here. Admittedly they were mostly crap*. But The Great She Elephant cured all that by shutting it all down as quickly as possible. Then getting herself reelected by winning a war. You can fool some of the people all of the time etc.


*them were the days:

production problems at British Leyland. This was highlighted in August 1975 when Drive, the magazine of the British Automobile Association awarded a trophy to a Rover 3500 as the worst new car in England.

It reported that a Rover 3500 purchased in 1974 had covered 6,000 miles (9,700 kilometres) during its first six months, during which period it had consumed three engines, two gearboxes, two clutch housings and needed a complete new set of electrical cables.

The car had spent 114 of its first 165 days in a workshop.

From the date that was a P6 not the even worse SD1.

[GregRickshaw]

in 1981 we bought a three bed semi in north london, for 36k with cash from 15 months in KSA.
Then discovered MIRAS and got a 25k mortgage on it

I remember I 'set' a lot of adverts at the time for the Islington Gazette and gazing with wonder and open eyes at how much property was in London! £50k used to get us all excited when average house prices in my area at the time were probably about £18k for a property like yours.

[WTFH]

in 1981 we bought a three bed semi in north london, for 36k with cash from 15 months in KSA.
Then discovered MIRAS and got a 25k mortgage on it

Oh yes, MIRAS, that went in the 1990s. All those "lazy" people who can't benefit from it.

[sadkingbilly]

in 1981 we bought a three bed semi in north london, for 36k with cash from 15 months in KSA.
Then discovered MIRAS and got a 25k mortgage on it

[woody1]

Property certainly seems a lot more unaffordable now than it was back in the 80s and 90s.

In 86 we bought a new 2-bed semi in Stockport for £20k, on a 95% mortgage, based on one university research assistant £7k salary.
The following year we bought a 2-bed semi in York for £30k, on a 95% mortgage, based on a university research £10k salary.
In 92 we bought a 3-bed detached in Wantage (Oxfordshire) for £85k, on a 90% mortgage, with two modest research and admin salaries (£14k + £16k).

Couldn't see that being anywhere near attainable now.

[malvolio]

So, you were paid well below the average salary at the time and bought a house off the government, and consider yourself “average”.
When Maggie started selling off council houses in 1980, the UK average salary was £6k. By 1988, the UK average salary was £12,130. In 1980 the UK average hose price was £18k.
It appears you were way below average, and if you were actually working a full week, you might not even have been getting paid the legal minimum, if anything you claim is actually true.

It's all true, sweetpea.

We didn't have minimum wage legislation

We bought on a local government mortgage scheme just before it closed giving a 95% mortgage. Tte other 5% we had to find ourselves. Nothing o do with right-to-buy.

You clearly have no idea of the financial problems in the 70s. And fwiw Thatcher was very clear up front that fixing them was going to hurt, but they were fixed. Blair ran on her solutions for several years before remembering he was supposed to be a Labour politician and f***ed it all up again.

However if you're' going to insist on using 21st Century approaches to 1970s reality, you're really wasting everyone's time. Again...

[DoctorStrangelove]

UK Minimum Wage was introduced in 1999.

House prices depend on Location Location Location.