My 21 yo son and 19yo GF plan to rent a house together

[Menomaddness]

This is a good thing generally, they've been together 2 years, spend a lot of time sleeping here and it's time. They both work but not in especially well paid jobs. About £45k income between them, but DS is on a decent career path. GF less so but she's very young.

Rent will be £1200 pm plus bills.

They do not have £1200 left at the end of the month currently, both spend money like water, but I guess when they have to they'll sort that out. DS pays keep of £200pm currently.

What worries me is the future. If they spend all this on rent, they'll never buy anything, but I also recognise that feels like an impossible dream anyway. An ex council flat is about £250k to buy here, so even if they saved 10 or 20% deposit, they wouldn't get the mortgage on their income.

However, I also know that as someone close to retirement with the mortgage paid off, buying young has made my current situation much better than it would otherwise be. I really can't imaging paying £1200 pm rent throughout retirement (more if they don't stay in a starter home forever).

Where will generation rent live as retirees?

Obviously it's a really long way off, but is there something of a time bomb for this gernation of young people?

They'll live where they rent

That’s a huge rent for a couple starting out. Are you in an expensive area or are these the prices nowadays?

OK, but how would a retiree who's always worked in an "ordinary" job pay for it?

It’s is very expensive to rent and now house prices are unaffordable for many young people. You are right.
I wonder if we will become more of a renting society like some of the European countries?
Also my friend recently told me she thinks that young people in their twenties now will probably never retire, which at the time I was quite shocked to hear, but as I’ve thought about it, sadly it may be right.

We're in the SE, but on the basis DS2 is paying £900pm for his university room elsewhere in the country, I don't think it's exceptionally high. It's certainly the bottom end of what available round here.

Are they being sensible with their choice of rental, I know prices are very different across the UK, but £1200 for a one bed flat seems ridiculous.

£1200 a month is enormous for a combined income of £45k! Then energy bills on top before you even start to think about the rest...yikes!

What is their level of education? Hopefully their salaries will increase throughout their 20s so they can save a deposit. I didn't buy until I was 32 and am still hoping to have the mortgage paid off before retirement.

£1200 is about right where I live in SE London. They're just going to have to learn to budget!

The one they've seen is a small house but it's "cheap" for this area. TbH I doubt they'll get it because it's a bargain (Or else there's something wrong with it!).

Would they not move together into one of the parents homes for a year, bank the 1200 they'd be paying on rent, then in a years time they'll have a decent deposit. Plus it's a trial for affordability.

Hopefully their incomes will increase at a faster rate than rents or house prices so one day this may seem less impossible. Also when you die (sorry OP) I guess your DS will inherit your house and could use that to buy a property.

Where are you based @rainbowtwist ? I'm south east and you'd be very lucky to get a 1 bed for 1200 around here.

They'll be Ok now, it's getting into a cycle of rent forever that worries me.

Yes, but I'm going to live forever so they'll be elderly before then 😆 Although I had had the thought that at least they should be able to buy buy the time they're in their 70s. I probably won't make it much beyond that!

Could the girlfriend move in with you for a couple of year so they can save?
Otherwise, that's what rent is in the SE. You either get lucky with a big salary or move further and further away to cheaper housing.

Depends what the multipliers are for the local estate agents too. They might find that no one will rent to them for 1,200 when they ask about their finances. The hoops we had to jump though while renting, submitting bank statements to estate agents when we were interested in a place.

For what it’s worth I’m 43 and me and dh only bought our first house last year. We had to move hours away to a dump to be able to afford to. So it’s not just the younger generation.

My son is almost 21, in the police and staying out with us to save.

My now DH and I paid £900 a month for private rental in an expensive city for our first house 20 years ago Our joint salaries then were about £45k too. We did manage to buy for £250k a few years later and since move up the property ladder. Career trajectories will be important and renting is a good lesson in money management it you have the right attitude.

Honestly? I'm not going to encourage that. I have a friend who currently has 10 adults living in the house, four adult children plus partners. None of them contribute much in time or money and she and Dh get no privacy and although in theory it's an opportunity for DC to save, in reality it's a comfortable home on the cheap, that they have no responsibility for. None showing any signs of moving out and all enjoying a very comfortable life with loads of disposable income.

If they want to be grown ups, they need to be grown ups IMO.

That's a bit short sighted. Give them a deadline.

Housing benefit.

Or whatever the equivalent will be then.

I bought my first home at 30 in the last few years and will be able to pay it off by the time I retire and it’s a fairly sizeable mortgage. A lot of people I know bought in their late twenties - they either moved back in with parents to save, lived in a house share (even couples) to save, used buying schemes or had inheritance plus savings. There’s lots of ways of making it work as you get older

Then what, you throw your kids on the street?

Are there cheaper areas they can look at? It's a lot cheaper up where I am (lower wages too) but it still tends to be the case that you rent in some of the cheaper areas when starting out with a longer commute and then can be a bit picker as your salary increases.

I think sometimes young people can assume that because they live in a specific area with Mum and Dad, that's where they stay. They don't consider the possibilities of moving 20 minutes down the road and saving a fortune.

@Menomaddness well you asked how this generation can buy anywhere and you've had your answer. For lots of young adults, it's living with parents for longer and saving.

No-one is suggesting you fill your house with young couples indefinitely but in two years they could save 30k based just on the rent they'd be paying.

You could set a time limit, have very clear rules and would help them have a much better start.

A retiree would not normally be starting out buying a house??