Cover me in debt, debt to the eyeballs (or advice on buying a shoebox in England)

[Drogue]

Originally posted by Cort Haus
"Deloitte and PwC", "city law firm"

Please, Drogue, spare us. You may move in upper middle class banking and legal circles, and a few people from elsewhere in society break into these income levels but please stop making out as if this is in any way ordinary. It isn't.

Are you really that unable to read what I've written. As I said, young graduates who have high starting salaries working in London are now regularly offered 7x mortgages for that reason. That was all I said. You decided to take issue through some notion that I was refering to other people. Of course it isn't normal for the nation, however it is normal for central-London graduates. Hell, PwC pay less than £20k in Cardiff, or other cheaper areas. It's why London's so expensive to live in. How else would 2 bed apartments cost £300k+? There have to be people able to pay for it. Go outside central London and people earn normal wages, and don't tend to get 7x mortgages either.

Please read what I've said and who I've said it about before building strawmen. I realise most people don't earn that. I don't think anyone in my family earns more than £30k. However my family doesn't live in central London.

[Lancer]

I pulled it right out of my buttocks.

Originally posted by korn469


Lancer how did you come up with that figure? That's like a yearly interest rate of around 415% on a 30 year loan.

[Snotty]

Re: Re: Re: Re: Re: Re: Re: Of course

Originally posted by Drogue

In London they do. Deloitte and PwC both had £30k first year packages this year, and I've never seen a city law firm offer less than £30k. Hell, even *I'm* getting a £30k+ starting package, and I work in the public sector. The issue is, at central London prices, I still have trouble renting a room in a nice area, let alone a flat or buying anything. Hence the huge mortgages on offer, as these people's salaries should rise a lot. One of my friends got a £35k starting salary last year, and is about to buy a ~£280k flat, as she knows her salary will be £75k in 2 years when she finishes her actuarial exams.

so what happens if they mess up/ have a break down and they are saddled with huge mortgages they are supporting solo, and are unable to pay in any other job?

[MikeH]

see increasing levels of reposessions.

[MikeH]

BTW Average London Salary is about £35,000

To buy an average home in London requires an average salary of £55,000, however in reality the average salary is only £34,777.

http://www.london-first.co.uk/improving_london/sustainabledevelopment.asp?L2=85

[padillah]

see increasing levels of reposessions.

This has happened here in the states.

For a short while the economy was doing quite well (this was before the war and I won't name any names *coughBUSHcough*).

The housing market went bananas and, with it, the mortgage arena. Several hundred new mortgage companies sprung-up offering very low interest (since the Federal rate was the lowest it's been in 30 - 40 years they could afford it).

However, when the terms of the mortgage came due and the people couldn't actually afford it, they defaulted and the house was repossesed.

Now, you've got a bunch of properties that can't sell without loosing money and a bunch of people on the hook for money they can't pay back.

All you need is some yahoo to start a war and BOOM, recession.

Tom P.

EDIT: Added quote. Mike got a second post in before I could finish mine.

[Dauphin]

Re: Re: Re: Re: Re: Re: Re: Of course

Originally posted by Drogue

In London they do. Deloitte and PwC both had £30k first year packages this year, and I've never seen a city law firm offer less than £30k. Hell, even *I'm* getting a £30k+ starting package, and I work in the public sector.

Certain people will do, but the average starting salary in London is not based on a few ad hoc examples from two of the top four accountancy firms. Check salary review surveys for London wages which show its closer to £25k average starting and £40k for newly qualifieds in London. You have to remember to look at central London as a whole as the people who work in the City don't usually live in the City. The cost of living of a Londoner is raised by the City, for sure, but the City is not the average Londoner, anymore than Ken and Chelsea is the average real estate.

Also, I've seen the civil service pay grades for accountants and lawyers. I presume you must be starting as an Senior Executive Officer to be getting that much money, and to be that you have to be qualified. i.e not a fresh graduate.

[Dauphin]

You also have to remember, the biggest benefit of working for a lawyers firm or accountancy firm is the investment they are putting into your education. You are receiving a fairly standard wage by graduate standards, but you get massive benefits - study time and courses take the effective cost to the firm up around 50% from your basic salary.

[Provost Harrison]

Very much depends on your sector as well. I can testify that science is lousy beyond belief. I always thought it was a noble thing to do, to go into science, but it has worn rather thin with the poor treatment you receive compared to other professionals.

[Solly]

Re: Cover me in debt, debt to the eyeballs (or advice on buying a shoebox in England)

Originally posted by Dauphin
Dear homeowners, please give me your anecdotal advice on buying a property. Things that you wish someone could have forewarned you about before you made the purchase. Housebuying guides are good for stock things, but it's the quirks of housebuying that often tell a story.

So anyway, I've seen a place I like and am currently looking at the selling price of similar housing in the immediate neighbourhood. Doing that I see that the asking price for the place I'm interested in is 5-6% more than the highest selling price in the last 6 months. Fair enough house price inflation, but I think the vendor is chancing his luck...hoping that by asking for a high price it will at least raise the prospective offers a percent or two.

It still hasn't hit me fully I don't think, but a debt mountain of 4 times my salary will be moving to a headache near me....

Rent.

And try not to get landlords that will send the cleaners in due to a bit of limescale.

[Provost Harrison]

I can cope witha debt mountain 4 times my salary, but I require more than that - much more than that...

[Dauphin]

Drogue, check this out:

http://www.hays.com/library/pdf/accountancy/practice-aug-2006.pdf

Starting public practice salaries in 2006. Probably need to add 4% for inflation for 2007:

Graduates entering contracts:
Central London and City - Typical £20k. Range £20-£25k.

Newly Qualifieds:
Big 4 in Central London and City - Typical £40k. Range £38-£42k.
Top 20 in Central London and City - Typical £40k. Range £35-£42k.

And the legal side of things:

http://www.hayslegal.com/pdf/salaryguides2006/law-firms-paralegals.pdf

Legal Executive or Paralegal starts on £18-25k

http://www.hayslegal.com/pdf/salaryguides2006/public-services.pdf

Newly qualified solicitors in public sector - typical is £30k.


This does not seem out of the ordinary in my experience. I think your educational circles are misleading you in what is average.

[Provost Harrison]

Damn, they're my intellectual circles too but I am still nowhere near an income like that!

[Dauphin]

Face it Rich, you are a dunce.

[Provost Harrison]

I was never compelled by that kind of career, I was too keen on 'doing the right thing', see the scientist post I made above. It's been a slow and agonising crawl since...