Interest Rate Rise - a good idea ?

[Magdalia]

Donations to food banks and homeless charities are probably one thing the Green Team could very usefully do at the moment.

Charitable donations are one way to redistribute from the green team to the red team. They help to alleviate the symptoms, but don't do much on the underlying causes.

The green team paying more taxes, to fund better support to the red team, is another way.

But I did like paying those 4 people more money for the things they do for me. For too long the green team have got away with getting things on the cheap at the expense of the red team. It is going to take some inflation to sort that out.

 

[Dai Corner]

*sigh* here we go again.

The idea of treating everything as a speculative investment brought us into this.

The rich can acquire and sell these "assets". As many as they want. It's optional if they'll enjoy them or let others do so for rent. What matters is the value and if it retains or increases with time.

Some people probably already treat scale model trains as jewellery, leave them stored somewhere, and then sell them twice or thrice the original MSRP. More if the models they're selling are "rare".
Were they enjoyed as toys?
Why should they? The act of unboxing already slashes the potential resell value, so why bother!?

Those who can't afford to play the asset game don't even get to enjoy things, even if they desperately need them! And with income from savings becoming completely irrelevant, all we have left is to treat everything as a service. Simply a perpetual state of "now".

You pay rent to live. You pay a contract for a car through a leasing company. You play games on a console provided to you as a service that the studio/manufacturer can take away from you at any time. You watch TV with a subscription fee. And you use a phone that's part of a telecommunications plan.

And if that "now" suddenly can't afford your way of life... well... too bad!

The last line above is why I'm glad I own my house, car, phone, TV, computers. Everything I use.

Ok, it's taken a lot of hard work, thrift, patience and so on but it's been worth it to me.

 

[nlogax]

Ok, it's taken a lot of hard work, thrift, patience and so on but it's been worth it to me.

Same, and I hate that many of these things are now pretty unachievable for current and upcoming generations. I would not want to be a young person in the financial situation we find ourselves in now. It's the bloody wild west out there. Every major financial goal now seems to zip beyond a permanent horizon, always out of reach.

 

[Bletchleyite]

Charitable donations are one way to redistribute from the green team to the red team. They help to alleviate the symptoms, but don't do much on the underlying causes.

The green team paying more taxes, to fund better support to the red team, is another way.

The German saying is something like "we don't need charity, we pay taxes for that", and I largely agree with them. Homeless charities should not be necessary because people should be housed and supported in it if necessary. Food banks should not be necessary because everyone should receive enough income to feed themselves and their family three healthy meals of their choice a day with the food bought at a supermarket like everybody else does. Fundraising for the NHS should not be necessary because it should receive enough funding. Though charity does have a role as well in e.g. providing things that aren't necessary for life but may be desirable to some e.g. certain youth activities (like Scouting for instance) and the likes.

But I did like paying those 4 people more money for the things they do for me. For too long the green team have got away with getting things on the cheap at the expense of the red team. It is going to take some inflation to sort that out.

The "race to the bottom" is certainly a problem, yes. While "entry level" jobs are and always will (and should) be a thing, such as ones you're really expecting to do while still living with your parents, e.g. an office junior or apprentice, people should be able to progress out of those jobs to a point where, as a bare minimum, two "full rate" minimum wage incomes (ideally one, but certainly two) in any role outside of that can easily afford to purchase and maintain a basic but safe home* **, to eat good food three times a day, to have a week's British holiday once a year and to be able to afford reasonable leisure activities. We were there in the 1980s, and we need to be again.

I also think the "gig economy" has a role. If Deliveroo was a thing when I was a student I'd certainly have done some of it on my pushbike to get fit while earning a few quid for an extra pint or train trip here or there, and students like the flexibility of zero hours bar work and such. But that sort of job isn't what people should be needing to do to try to support their family, it's more of a slightly more grown up paper round for a bit of extra money.

* An example of such a home is the vast swathes of 3-bed terraced housing found all over our cities.
** London always was skewed somewhat and it's likely that people there will need more support in the form of social housing. But that shouldn't be needed in say Liverpool which has tens if not hundreds of thousands of such houses available.

 

[Magdalia]

If Deliveroo was a thing when I was a student I'd certainly have done some of it on my pushbike to get fit while earning a few quid for an extra pint or train trip here or there, and students like the flexibility of zero hours bar work and such. But that sort of job isn't what people should be needing to do to try to support their family, it's more of a slightly more grown up paper round for a bit of extra money.

I delivered newspapers all through my O level and A level years. In future, any Deliveroo I see I shall think "slightly more grown up paper round"!

 

[johncrossley]

*sigh* here we go again.

The idea of treating everything as a speculative investment brought us into this.

I couldn't agree with you more. Blame those who are responsible for hyping home ownership and making renting unattractive.

 

[Dai Corner]

The "race to the bottom" is certainly a problem, yes. While "entry level" jobs are and always will (and should) be a thing, such as ones you're really expecting to do while still living with your parents, e.g. an office junior or apprentice, people should be able to progress out of those jobs to a point where, as a bare minimum, two "full rate" minimum wage incomes (ideally one, but certainly two) in any role outside of that can easily afford to purchase and maintain a basic but safe home*, to eat good food three times a day, to have a week's British holiday once a year and to be able to afford reasonable leisure activities. We were there in the 1980s, and we need to be again.

I feel the 'race to get your own place' is part of the problem young people have brought on themselves. Forty years ago they'd have lived with parents, paying towards the household bills but saving what they now pay to their landlords in rent. As a result they proved their ability to afford a mortgage to the Building Society and built up a substantial deposit.

Then traditionally a couple would buy a house when they got married and friends and relatives would provide them with furniture and other items as wedding presents.

 

[Magdalia]

people should be able to progress out of those jobs to a point where, as a bare minimum, two "full rate" minimum wage incomes (ideally one, but certainly two) in any role outside of that can easily afford to purchase and maintain a basic but safe home*, to eat good food three times a day, to have a week's British holiday once a year and to be able to afford reasonable leisure activities. We were there in the 1980s, and we need to be again.

Absolutely. The difficult bit is working out how to get there.

 

[Bletchleyite]

I couldn't agree with you more. Blame those who are responsible for hyping home ownership and making renting unattractive.

There's nothing wrong with home ownership. It has many, many advantages, such as the ability to customise your home as you wish and to own outright by the time you retire so to have far lower outgoings by then and thus a better life on a smaller pension.

The problems with it are almost entirely being caused by people seeing it as a speculative investment rather than as a means of acquiring somewhere to live.

I feel the 'race to get your own place' is part of the problem young people have brought on themselves. Forty years ago they'd have lived with parents, paying towards the household bills but saving what they now pay to their landlords in rent. As a result they proved their ability to afford a mortgage to the Building Society and built up a substantial deposit.

Then traditionally a couple would buy a house when they got married and friends and relatives would provide them with furniture and other items as wedding presents.

I think you're missing that people got married much earlier, though, so it's not an actual race.

My parents got married and bought a house in their early 20s and that was the norm, sometimes even younger. I bought one alone, but not until my 30s. 30s is a fairly typical time to get married now.

Also don't forget that the concentration of certain jobs in certain locations (e.g. the South East) has forced many people to move into rental accommodation and not live with their parents.

 

[johncrossley]

There's nothing wrong with home ownership. It has many, many advantages, such as the ability to customise your home as you wish and to own outright by the time you retire so to have far lower outgoings by then and thus a better life on a smaller pension.

The problems with it are almost entirely being caused by people seeing it as a speculative investment rather than as a means of acquiring somewhere to live.

The promotion of home ownership at the expense of renting will inevitably lead to speculation. Renting could potentially enjoy many of the same advantages of buying if it was regulated differently. People in Germany and Switzerland rent quite happily. There isn't the feeling that you are a second class citizen like what renters in the UK feel.

 

[yorksrob]

That's not correct. Business and government investment are critical, and, for decades the UK has not done enough of either. There's a huge opportunity now for investment to improve fuel and food security, build new capacity in health and social care, deliver net zero carbon emissions, and do mitigations on the climate change that's already baked in, to give just a few examples.

But, referring to my earlier post, consumer spending by the red team needs to be supported, without splurging any money on the green team.

Business and Government are indeed crucial, and I agree with the areas highlighted, but it's consumer spending that keeps millions in employment.

I agree that consumer spending by the red team needs to be supported. We need to not take the money off of them in the first place.

 

[Bletchleyite]

The promotion of home ownership at the expense of renting will inevitably lead to speculation. Renting could potentially enjoy many of the same advantages of buying if it was regulated differently. People in Germany and Switzerland rent quite happily. There isn't the feeling that you are a second class citizen like what renters in the UK feel.

Yes, rental should be improved and some would choose it. But some people do choose ownership in Germany and Switzerland too (despite the utterly swingeing house prices there which make the UK look cheap) and that's fine too, it has considerable advantages.

The promotion of ownership does not cause speculation. I bought my house to live in, thus its value now is of no relevance to me whatsoever. It's investment purchases that cause speculation. Rental in Germany etc is generally done by the likes of housing associations (Wohnstiftungen) rather than private BTL landlords.

 

[Dai Corner]

Business and Government are indeed crucial, and I agree with the areas highlighted, but it's consumer spending that keeps millions in employment.

I agree that consumer spending by the red team needs to be supported. We need to not take the money off of them in the first place.

Would you support further increases in the Income Tax allowance, perhaps with balancing increases in the (higher) rates?

 

[Bletchleyite]

Would you support further increases in the Income Tax allowance, perhaps with balancing increases in the (higher) rates?

I think it'd be sensible to take minimum wage earners entirely out of paying tax and NI, yes, paid for by increasing the higher rate (the 40% rate) by a couple of percentage points and the "upper" rate by considerably more than that.

I also think households (not just married couples, but any two or more adults living in the same home that isn't an HMO, so as not to be discriminatory on how people choose to live) should be able to pool their income tax allowances, in order to stop there being a tax (dis)advantage of both parents working part time vs. one working full time.

 

[jfollows]

I feel the 'race to get your own place' is part of the problem young people have brought on themselves. Forty years ago they'd have lived with parents, paying towards the household bills but saving what they now pay to their landlords in rent. As a result they proved their ability to afford a mortgage to the Building Society and built up a substantial deposit.

Then traditionally a couple would buy a house when they got married and friends and relatives would provide them with furniture and other items as wedding presents.

Forty years ago I left home to go to university and never went back home, in my first job I rented for a year or two I guess and then used an advance payment from my grandmother's will (maybe £1,000?) as part of a deposit on a mortgage for a £24,000 house on my own. At the time I felt it was bad how expensive property was compared with the previous generation, some of my colleagues had £30,000 mortgages on large detached houses whereas my new one was a shoebox. But it's probably true that the increase in house prices has been out of proportion to affordability since then, I'll grant you.

 

[yorksrob]

Would you support further increases in the Income Tax allowance, perhaps with balancing increases in the (higher) rates?

That would be one way of doing it.

 

[ainsworth74]

How do you plan to regulate house prices?

I'm not sure that you need to directly control house prices but you can influence them I'd have thought.

For instance why are buy-to-let mortgages a thing? Why are we allowing a product which encourages people to buy a house to get someone else, in effect, to pay their mortgage through the rental charge? I'd very much consider if they shouldn't be banned outright (I wouldn't force anyone with one to sell to be clear but probably no new ones and no re-mortgaging). It seems odd that we're encouraging this sort of thing when it rather feels like it's encouraging a transfer of wealth from the poor and the young to the wealthy and the old. Including, often, considerably sums of tax payer money! We won't allow people who have their own mortgages to claim help paying their mortgage and buying their house through the benefits system but as long as someone renting acts as the intermediary we're happy to allow a landlord to have the taxpayer buy them a house?

 

[Giugiaro]

Forty years ago they'd have lived with parents, paying towards the household bills but saving what they now pay to their landlords in rent. As a result they proved their ability to afford a mortgage to the Building Society and built up a substantial deposit.

It doesn't work. The interest rate on savings accounts is useless nowadays.
Over the course of a year and a half, I saved 500€ every month from my 700€ salary. I lived in my parents' home and whatever was left had to be enough for my monthly expenditures in public transport, car (my workplace was 6km away from the railway station and I had 10min to make the trip), software licenses and my Japanese classes (whenever I had the time to attend them), and a bit of sporadic leisure.

Since COVID took away my goal of interning in Japan (for which the saved money was going towards) and changed jobs to work much closer to home on the railway company, I took the savings I had to replace my petrol car with a second-hand electric car.

I was in for a shock! (Mind you, not related to the car!)

It turns out the interest rate of 1,7% was soo stupidly low that what I got from it couldn't cover both the withdrawal fee and the taxes associated with it!
SAVING MONEY ON A SAVINGS ACCOUNT LOST ME MONEY!!!

I was always told that keeping money under the bed is not the proper way to save. With interest rates now at 0,35%, I beg to differ.

 

[Dai Corner]

I'm not sure that you need to directly control house prices but you can influence them I'd have thought.

For instance why are buy-to-let mortgages a thing? Why are we allowing a product which encourages people to buy a house to get someone else, in effect, to pay their mortgage through the rental charge? I'd very much consider if they shouldn't be banned outright (I wouldn't force anyone with one to sell to be clear but probably no new ones and no re-mortgaging). It seems odd that we're encouraging this sort of thing when it rather feels like it's encouraging a transfer of wealth from the poor and the young to the wealthy and the old. Including, often, considerably sums of tax payer money! We won't allow people who have their own mortgages to claim help paying their mortgage and buying their house through the benefits system but as long as someone renting acts as the intermediary we're happy to allow a landlord to have the taxpayer buy them a house?

Rental property offers the flexibility some tenants want/need, perhaps because they expect to move around to take better paid jobs etc.

Should these be provided purely by the State/ Housing Associations or by companies or individuals with the capital to purchase them outright?

It doesn't work. The interest rate on savings accounts is useless nowadays.
Over the course of a year and a half, I saved 500€ every month from my 700€ salary. I lived in my parents' home and whatever was left had to be enough for my monthly expenditures in public transport, car (my workplace was 6km away from the railway station and I had 10min to make the trip), software licenses and my Japanese classes (whenever I had the time to attend them), and a bit of sporadic leisure.

Since COVID took away my goal of interning in Japan (for which the saved money was going towards) and changed jobs to work much closer to home on the railway company, I took the savings I had to replace my petrol car with a second-hand electric car.

I was in for a shock! (Mind you, not related to the car!)

It turns out the interest rate of 1,7% was soo stupidly low that what I got from it couldn't cover both the withdrawal fee and the taxes associated with it!
SAVING MONEY ON A SAVINGS ACCOUNT LOST ME MONEY!!!

I was always told that keeping money under the bed is not the proper way to save. With interest rates now at 0,35%, I beg to differ.

Yes, that's one of the problems the negative real interest rates is causing at the moment. A year and a half isn't very long though. It took me ten years of full-time work and saving to afford to buy my first house. I didn't have a car at all for most of that, and my first one was very cheap.

 

[Xavi]

If you read Tim Worstall, he often points out times when Richard Murphy gets basic economics wrong. (E.g. Murphy has suggested a fix for our current inflation crisis… is to print more money.)
Now Worstall works for the Adam Smith Institute and appears to have a particular axe to grind with Murphy, but the points he makes seem to accord with my recollections of economics from school.

Murphy does not believe traditional economic theories will work in this debt-ridden society. BofE and government are currently following the textbook (Adam Smith) approach and the consequences are not going to be pretty. Murphy does not suggest printing money is a solution to the economic mess, rather that to do so would be less damaging for those people and businesses who will be hit the hardest.

 

[Bletchleyite]

Rental property offers the flexibility some tenants want/need, perhaps because they expect to move around to take better paid jobs etc.

Should these be provided purely by the State/ Housing Associations or by companies or individuals with the capital to purchase them outright?

Private rental is a perfectly sensible means of providing for some rental needs. The thing that's broken is that investing in it is more financially expedient than investing in a savings account or in (positive*) stocks and shares, because of the silly house price rises of recent years, which are mostly caused by a population increase without enough houses being built, specifically in places where people want to live (i.e. the South East) and no real attempt to distribute the economy.

* Short selling should be banned; betting on the failure of a company is a disgrace. Investment in companies should always be positive with a view to helping them grow.

 

[ainsworth74]

Rental property offers the flexibility some tenants want/need, perhaps because they expect to move around to take better paid jobs etc.

And for those that don't want flexibility? Who want to set down roots but cannot because of the cost of buying outright? Plus the flexibility cuts both ways. Once you're out of the fixed period of an Assured Shorthold tenancy (which typically is six months, perhaps twelve if you're luckily) the landlord can evict you without having to provide any ground for doing so using Section 21. Now that is being addressed, in theory, as Section 21 is for the chop (but we wait and see as it was announced way back before the Pandemic started). But renting is less secure.

Should these be provided purely by the State/ Housing Associations or by companies or individuals with the capital to purchase them outright?

Perhaps they should. Again I'm come back to my initial question. Why are we encouraging small landlords? Why are we setting it up so that the taxpayer will buy a house for a landlord but not the person actually living there? What good is that doing other than helping to turn a basic need, shelter, into a commodity?

Is there a reason we couldn't have an arms length Government house builder which goes out and builds and then sells houses to private individuals at or close to cost? What would be the harm in that? Other than giving the current private house builders some competition?

In what way is the current system, which seems to act solely to ensure that house prices rise quickly for the benefit of those who already own a house or who are already wealthy at the cost of those that do not own, actually working well? It seems to me that the housing market has been commodified and turned into something akin to the stock market when it should be about providing housing to people at an affordable and reasonable price.

Which brings me back to my initial response to @johncrossley. There would seem to be plenty of policy levers which could act to restrain house prices without needing the Government to actively try and set the price.

 

[Dai Corner]

And for those that don't want flexibility? Who want to set down roots but cannot because of the cost of buying outright? Plus the flexibility cuts both ways. Once you're out of the fixed period of an Assured Shorthold tenancy (which typically is six months, perhaps twelve if you're luckily) the landlord can evict you without having to provide any ground for doing so using Section 21. Now that is being addressed, in theory, as Section 21 is for the chop (but we wait and see as it was announced way back before the Pandemic started). But renting is less secure.

See my 'race to get your own place' post above. Spend as little as you can on housing, living with parents or in shared houses, work every hour you can get and save like mad for five or ten years instead of renting the home you'd really like. The current negative real interest rates we currently have don't help, I'll admit. That needs to be addressed.

Why are we encouraging small landlords? Why are we setting it up so that the taxpayer will buy a house for a landlord but not the person actually living there? What good is that doing other than helping to turn a basic need, shelter, into a commodity?

Is there a reason we couldn't have an arms length Government house builder which goes out and builds and then sells houses to private individuals at or close to cost? What would be the harm in that? Other than giving the current private house builders some competition?

The same reason we lease trains instead of the Government buying them outright. It keeps the public sector borrowing requirement down.

 

[XAM2175]

Plus the flexibility cuts both ways. Once you're out of the fixed period of an Assured Shorthold tenancy (which typically is six months, perhaps twelve if you're luckily) the landlord can evict you without having to provide any ground for doing so using Section 21. Now that is being addressed, in theory, as Section 21 is for the chop (but we wait and see as it was announced way back before the Pandemic started). But renting is less secure.

Thanks for reminding me to be grateful that tenants' rights in private rentals in Scotland were strengthened in 2017

 

[ainsworth74]

See my 'race to get your own place' post above. Spend as little as you can on housing, living with parents or in shared houses, work every hour you can get and save like mad for five or ten years instead of renting the home you'd really like.

But the average age of buying a first house is rising and is currently the region of 32 up from mid/late 20s in the mid-00s. The rate of people aged 25-34 owning has fallen from 50% in the late-80s down to around 25% shortly before the pandemic. I see what you're saying and don't necessarily disagree, it's basically what I'm doing myself(!), but it seems a bit hollow to just tell people "live at home or in shared houses until your in your 30s" when previously they would have been able to buy a house. That doesn't feel like a market that's working to allow people to buy a house rather than those who are wanting to invest.

Why should houses, the things people live in, investment products? What's the benefit to society at large of the housing market we've ended up with?

The same reason we lease trains instead of the Government buying them outright. It keeps the public sector borrowing requirement down.

Is that a good thing? I don't want the Government just spraying money up the wall for no reason or to help out their mates (see dodgy PPE contracts) but equally it seems to me that the Government stepping into help ensure its citizens a) have shelter full stop and b) can afford a house of their own because the market isn't distorted may well be a good use of money.

Any thoughts on the issue of buy-to-let mortgages being a vehicle for landlords to have the taxpayer buy a house for them through Housing Benefit/Universal Credit? We don't let homeowners access such help* but we're happy for someone with a buy-to-let mortgage get it as long as it's "laundered" through the tenant?

*If you have a mortgage on your own home then you can, after nine months on benefits, claim help paying the interest costs. But only at a fixed percentage set by DWP (currently 2.09%) and only on a loan/mortgage of up to £200,000. This is itself paid in the form of a loan which is recouped when the house is sold or transferred.

Thanks for reminding me to be grateful that tenants' rights in private rentals in Scotland were strengthened in 2017

Happy to help!

 

[jfollows]

Perhaps they should. Again I'm come back to my initial question. Why are we encouraging small landlords? Why are we setting it up so that the taxpayer will buy a house for a landlord but not the person actually living there? What good is that doing other than helping to turn a basic need, shelter, into a commodity?

I'm not convinced we are encouraging small landlords, the changes introduced by Theresa May (compelling landlords to verify their tenants have the right to live in the UK) and George Osborne (significant increase in income tax plus significant reductions in allowances against capital gains tax when you sell) made me sell my property back in 2014. I have a friend who decided to invest in rental properties more recently (I advised him to put his money in stocks and shares) and he now regrets it and is trying to sell. I actually think the balance now might be about right - "accidental" landlords like me really don't see why it's worth the bother, but people who are prepared to run it as their own business and not contract out to agents and the like can probably still make some money.

 

[Dai Corner]

But the average age of buying a first house is rising and is currently the region of 32 up from mid/late 20s in the mid-00s. The rate of people aged 25-34 owning has fallen from 50% in the late-80s down to around 25% shortly before the pandemic. I see what you're saying and don't necessarily disagree, it's basically what I'm doing myself(!), but it seems a bit hollow to just tell people "live at home or in shared houses until your in your 30s" when previously they would have been able to buy a house. That doesn't feel like a market that's working to allow people to buy a house rather than those who are wanting to invest.

But people are starting work later too. Back in the day many left education at 16 and as you say bought a house about a decade later in their mid-late twenties. You could work your way up and achieve an average salary by your late twenties.

Now many stay in education into their early twenties and buy in their early 30s. @Bletchleyite says he bought his house at the age of 30 and so did I in 1990.

Is that a good thing? I don't want the Government just spraying money up the wall for no reason or to help out their mates (see dodgy PPE contracts) but equally it seems to me that the Government stepping into help ensure its citizens a) have shelter full stop and b) can afford a house of their own because the market isn't distorted may well be a good use of money.

We could go back to the time when social housing was more the norm and home ownership more of an exception? You got the house you were deemed to qualify for rather than the one you could afford.

Any thoughts on the issue of buy-to-let mortgages being a vehicle for landlords to have the taxpayer buy a house for them through Housing Benefit/Universal Credit? We don't let homeowners access such help* but we're happy for someone with a buy-to-let mortgage get it as long as it's "laundered" through the tenant?

*If you have a mortgage on your own home then you can, after nine months on benefits, claim help paying the interest costs. But only at a fixed percentage set by DWP (currently 2.09%) and only on a loan/mortgage of up to £200,000. This is itself paid in the form of a loan which is recouped when the house is sold or transferred.

If retailers and service providers are allowed to make money from customers spending their benefits, why not housing providers too?

I'm not convinced we are encouraging small landlords, the changes introduced by Theresa May (compelling landlords to verify their tenants have the right to live in the UK) and George Osborne (significant increase in income tax plus significant reductions in allowances against capitals gains tax when you sell) made me sell my property back in 2014. I have a friend who decided to invest in rental properties more recently (I advised him to put his money in stocks and shares) and he now regrets it and is trying to sell. I actually think the balance now might be about right - "accidental" landlords like me really don't see why it's worth the bother, but people who are prepared to run it as their own business and not contract out to agents and the like can probably still make some money.

I was an 'accidental landlord' for a while too. Never again.

If anybody asks if they should try BTL I ask them if they would borrow £250k to start a business in an industry they know nothing about. That's what they'd be doing.

 

[johncrossley]

because of the silly house price rises of recent years, which are mostly caused by a population increase without enough houses being built, specifically in places where people want to live (i.e. the South East) and no real attempt to distribute the economy.

So you don't blame low interest rates?

 

[Giugiaro]

A year and a half isn't very long though. It took me ten years of full-time work and saving to afford to buy my first house. I didn't have a car at all for most of that, and my first one was very cheap.

I would rather be disappointed in a year rather than in ten years.
If I were to do the same struggle now of 75% of my salary saved for the next ten years, I'd end up with 60k to 72k and nearing 40 years of age.
That money would be enough to buy a rundown, two-bedroom flat in my area at its 2022 market value.

Let's hope that my salary to expenditures ratio stays the same. I would spend ten years living in my parents' house. I would forgo any vacation, adventure or mildly costly hobby. I would avoid having any kids or engaging in further education.

Then we have the issue of safe financial products costing us money instead of saving it. And we can't forget that said "real estate value" would still require reconstruction and furniture on top of its purchase!

Does it feel like all this hassle is worth it?

 

[gg1]

So you don't blame low interest rates?

Interest rates have been low for the past 14 years, house prices greatly outstripping inflation have been a feature of the British economy for the past 40 years. Low interest rates may have exacerbated recent rises but they're certainly not the primary cause.