It used to take 3 years for a British family to save for a home down-payment; now it takes 20 years

If you’re just now suspecting this, my condolences. I realize sounds like sarcasm, but it’s not. One of the darker truths of social progress is that with some people, you just have to wait for them to die. Although merely waiting isn’t enough, either. People are being born every minute to replace those people and the new ones don’t come out the chute all sparkleflowers and enlightenment.

All of this stands in the shadow of what I see as a larger, darker truth: social progress is illusory; only human nature is real.

ETA-- Cuteness chaser:


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Sadly true. Barack Obama would never have been electable in a world where Civil War veterans still made up a sizable chunk of the voters.


That is absolutely true.


Worth noting that people did not save up to buy homes by borrowing against earned income in Dickens.

Back to the future!

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That’s the main reason I balk at using the political term ‘progressive’. Also it’s teleological (progressing towards what, exactly?) and its use is inherently divisive by othering anyone who opposes views or policies labeled and such.

The progressive movement during the Unites States’ gilded age (the first one, that is) was a mess of special interests and only in the hindsight of tidied historical narrative does it seem like there was some profound unity. I feel that today’s self-described progressives are unwittingly making a beeline to disillusionment if they think such unity is a requisite for social change.


“Full time?” One of them was a news anchor, which I suppose counts as a real job. The other two were a bad amateur rock guitarist and a terrible amateur standup comedian. That family would have been lucky to afford a two bedroom in West Oakland. Maybe Tanner got a big insurance payout or inheritance from his wife’s death.


A decade of near zero interest on cash investments has pushed more and more money into inflating asset bubbles such as housing.

A decade of near zero interest on cash investments has made it far more difficult for working and middle class families to accumulate a nest egg.

A decade of 5% interest on passbook savings would go a long way to solve the problem from both ends, but under the Bush/Obama/Trump administrations, (or the Clinton or Sanders administrations for that matter), it’s not happening.


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This story is about the UK.

The problem has been around for longer than a decade. Near zero interest rates may have exasperated the problem, but the cause was a lot earlier.

My parents got a mortgage on their house in their early 20s. When I was the same age I had little hope of being able to do the same for a similar house and that was about 15 years ago.


But 15 years ago the interest rates were still only about 5-6%, whereas when your parents were buying they were probably 12-15%. Lower interest rates have a lot to do with it.

I agree there are lots of other factors such as speculation and real increase in the value of land in cities. But massive drops in interest rates are definitely a factor.

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That’s about what @lolipop_jones said will go a long way to fix the problem. I’m saying it isn’t anywhere near enough.

It seems that even if we go a long way, we still have a long way further to go. So much is broken in the world, but no-one really wants to fix it, and we just end up with things patched up with gaffer tape until it’s someone else’s problem.


I’m not sure we should have central banks controlling interest rates. If there is anything at all that ought to be set by the market, I would think the cost of borrowing money. Of course bringing the top tax rate back up to 70%+ would probably help with the speculation issue. Maybe Trump’s right - let’s roll things back 50 years.


A two bedroom in West Oakland is at least $1,600 to $2,000 a month these days. To buy anything like a two bedroom in West Oakland, it is over $300,000 or $400,000 easily.


Just for reference, in a sane market a property should rent for somewhere around 1/100 it’s purchase price. So you know it’s a mess when you couldn’t rent a home out without losing money, it means the market is full of speculators, not investors.

The central banks actually have limited control over mortgages, they can only set the overnight rates. Everything else is markets, and the movements of those rates can vary quite a lot from the overnight.


Is it because if Carlisle fell into the sea, caught fire, exploded, was consumed by Cthulhu, then verped out of his tenticles it would be better than the current Carlisle?

(Goring on Thames nearish to Oxford is lovely)


As a recent property buyer I can confirm the state of the UK property market is horrific. We only got on the bottom rung because of a gift from my other half’s grandfather. I live in Aberdeen which is a pretty expensive place to live because of the oil and gas industry here. The market is set up so you can just afford the rent (we earn approx £48,000 between us) and saving is difficult.

You could save every spare penny and probably take about 5 years but then what about life? What if you want kids? Want to go on holiday? Visit friends? Drive a car? Yeah life just doesn’t allow you to save to your max potential so we’re talking a long time before a 10% mortgage is reachable. Even then its for a place right on the edge of the city and you are having to travel an hour each way through shitty traffic. I’m grateful for the gift and that we have a house but things shouldn’t be this difficult when two of you have jobs.


I’m saying it’s close to the edge because the strongly held views on pensions appear only in threads where financial discussions are tangential to those strongly held views. It’s never really off topic, and I don’t think it’s malicious, and it’s certainly, at least in this thread as I’ve already pointed out, engendered some discussion with people other than those who have already decided that that persons views are not only not good enough for them but not good enough for anyone else, including those people actively engaging them in conversation.

It is stepping on or near a mark and is a lot more complicated a scene than the perfect case for off topic flags. It is definitely not a perfect case unless you consider it perfect because you can ignore all the contributing factors which make it messy and set a precedent for ignoring these unimportant considerations.


Maybe in the US where there are more banks this is true. I might be looking at it through a Canadian lens, where there are basically five big banks and their rates fall in line with the overnight rates in lockstep (overnight + 2-3 points). But if you shop around, does the best deal you can get on a mortgage really vary that widely from the overnight rate? What’s the most extreme example - like, if the overnight is half a percent, is someone going to be advertising a mortgage at 8%?

I’m not 100% sure I agree with myself, but basically I don’t like what central banks have done with interest rates. Maybe it’s just because I’ve lived my life in an era of neo-liberalism and ever falling interest rates, and it’s left me feeling like a libertarian on the issue (governments just can’t be trusted to do it right). I’m sure there are good policy reasons to have the interest rate set at one level or another, but I can’t believe there are good policy reasons to have it set at 0.5%, and I think that has essentially been a transfer of wealth from people who are trying to establish themselves (young people/poor people) to people who have already established themselves (old people/rich people). Conversely, maybe a higher than “natural” interest rate would be a transfer in the other direction. So maybe when I say I don’t like central control of interest rates, it’s like I’m saying I don’t like taxes because I think they are too low.

I’m not entirely sure.

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Actually, low interest rates hurt the retired quite a lot too, they tend to have their wealth in safer investments most closely tied to to the rates. Part of what is driving bubbles is institutional retirement managers like CALPERS looking for returns that will keep their clients solvent. As usual, it’s the very wealthy coming out with ever more from this system.