Do your parents understand how much harder getting on the property ladder is today?

[formicha]

For some reason, my mum just cannot and possibly will not understand how much harder it is to get on the property ladder today.

Her two grandchildren are struggling to save up enough of a deposit for a small flat. All she has to add is that maybe the girls shouldn't go on a summer holiday and back when she bought one house, interest rates were 15%.

When I point out that her and dad would only be able to afford a two bed flat, maximum, if they were buying today, she doesn't believe me! She still lives in the 5 bed detached that they bought in the early 70s.

Another 'boomer' bashing thread.

The OP is talking about her parents.

Based on what? You sound very theoretical and lacking in actual knowledge ?

Both of my children have bought 'up north' in the past 3 years. One with a partner and 1 alone. They have very average jobs. A £216 k mortgage is just about within the reach of 2 minimum wage earners- the deposit is more tricky. All of their friends have also bought in their mid 20s- non have had help from families other than being able to live with them to save a deposit (which is a considerable help). They have spent between £200 and £290 on their first homes (friends not just my children) .

Barclays tells me that with a deposit of 30K (tricky) 2 minimum wage earners could borrow £216k and so spend £246K. This drops to £180,000 and a total of £200k with a £20,000 deposit.

My children opened help to buy ISAs age 16. They worked summer and all through Uni. They put in £200 a month and each had about £16k in them with the top up. - the partner had about £10k in his. They also had additional savings from working.

Surely the message is to save from an early age?

My mum doesn't get it/ refuses to get it too. She always says my sister can't be struggling and it's ridiculous she doesn't have a house. My sister is a teacher and lives in an expensive part of the county. Can't move due to a court order involving her children's other parent who she is separated from.
I've experienced the situation over and over again because she always says inappropriate things to my sister but it just won't go in. She thinks as she has a house it can't be that hard for my sister to get one and it must somehow be her own fault. My mum was a stay at home mum and my dad had an office job and they could easily buy a house.

Chuckle all you like, but you are deluded. We had no 'luxuries' whatsoever.

I'm in my early 30s and I disagree with you that it's a struggle to buy these days. Whilst it is difficult, when has it not been in the past? Buying requires discipline, and hard work and plenty in my age group, and even younger, have succeeded in getting on the ladder.

Average wage is around £36k, for a household that's over £70k p/a and average house price is £300k. If you're still going to struggle on a salary like this, you ought to look at your finances properly.

That's a mortgage of £270k with a 10% deposit so a buying price of £300k

Chuckle all you like, but you are deluded. We had no 'luxuries' whatsoever.

Who was in the 75000 pubs?

• “19% of adults in Great Britain currently smoke, down from a peak of 46% in 1974 when the series began. Among smokers, the average consumption was 11.4 cigarettes a day – the lowest daily cigarette consumption since the series began, the peak being in 1976 at 16.8 cigarettes a day.“

Perhaps cig’s have been swapped for coffees?

Yes. The initial searches say things like that.

A couple of years back. Me (small part time wage, professional though so just over £30k) and DH who is just over 6 fig salary ran our numbers.

Initial results gave us borrowing potential of £475k-£525k. Lovely. Well, the repayments are £3k+ a month so still ridiculous but anyway...

Then when you actually drill deeper and put your actual expenditure through, they assess your affordability. And the affordability stress tests are now crazy. So the actual mortgage we were offered was £295k. We have no debt.

My husband is in the top (I don't know...) 5%? of earners. And we were offered a mortgage of the average house price. With repayments of £1850 per month.

I don't understand how some people are so hard of thinking that they can't see it's phenomenally harder to buy a house and sod all to do with the fact someone spends £400 a year on haircuts.

My mum couldn't afford to buy a house until 2006 and is still paying off her mortgage so she gets it. I won't ever be able to buy as a single person but I have a council flat so I consider myself lucky.

But debt matters
Having children matters, particularly when they need childcare ?

Surely that is obvious?

The top 5% of earners is £160,000 a year- so that seems unlikely?
https://www.bbc.co.uk/news/50517136

But if your dh is a top earner, £1850 per month on mortgage is hardly breaking the bank though.

I bought mine in 2016, for £225k, on a salary of £32 p/a back then without any help whatsoever. Housing has never been easy, atleast not in my lifetime, and not just this country but in most parts of the world. It comes down to determination and discipline - and I know of many who have been successful on average incomes.

@BrownFlowerCarpet the article you linked says

The most recent figures, for 2016-17, show that you needed to be earning £75,300 to be in the top 5%.
If you adjust that using average earnings figures from the ONS, external, it's likely that you need to be earning about £81,000 to be in the top 5% of income taxpayers today.

Did you miss the bit where I said no debt?

Sorry, what seems unlikely? DH on over £100k plus my £30k and only being offered £295k after affordability tests?

That's the reality.

I have many friends up north, they are on something like 25K a year they wouldn't be able to buy up north. I have scrimped and saved a 5% deposit together and the standard of homes that I can buy in London is just ridiculous, the max I can borrow is £280k which doesn't get you a nice place in London really.

just because your children did doesn't mean it's been normal I work on housing policy

That's really lovely that you were able to live at home to save your deposit. Some people don't have that option so pay out 25% of their joint take home income in rent instead.

You are massively missing the point.

In the top 5% or whatever it is, we shouldn't be able to afford the average house. We should be able to afford the top 5% of housing.

The average wage should be getting the £295k mortgage. And maybe you could, the best part of ten years ago, without the current stress tests, and when rates make the payments miniscule (that £1850 we'd pay now, would have been £695 before rates shot up recently).

Mortgage affordability is insane now.

Sorry did you say being the top earner you should be able to afford top 5% of the housing? You do realise that house prices/incomes have never been on the same level anywhere in the world? The stress test you have described, I went through them along with all othe restrictions that exists today. 20 years from now on, the situation will likely be the same. It isn't going to change.

It's horrendous these days. I THINK my dad gets it but not entirely sure. He has given me some money towards the house though.

We bought 6 years ago at 40 (me) and 36 (DH), both professionals earning good money, working since early noughties. I had been saving since before I left college, a little bit from Dad and also had an inheritance due to the untimely early death of my mother. Only for that, we couldn't have bought as DH had little savings.

Since we bought, houses in our street have gone up 100k. If we hadn't bought when we did, we'd never get anything now. I feel for anyone younger than us.

The stress test you have described, I went through them along with all othe restrictions that exists today. 20 years from now on, the situation will likely be the same. It isn't going to change.

Things have changed though, wages have stagnated & house prices vs salaries have increased. Lending criteria tightened up after the crash, self cert mortgages aren’t a thing anymore. I don’t see why things won’t change.

I didn't think it needed further explanation, the point being our income at the top level should not only afford the average house price. Did you not understand that?

And sorry but now you're making things up because the current far stricter stress tests came in last year. When rates shot up.

So no. You weren't subjected to these tests when you bought nearly ten years ago.

Or the enormous post COVID price hike that you bought before.

Or the current interest rates.

But even comparing all your benefits at time of purchase compared to today, you still had it far worse than our parents.

@formicha I am 70 and I am well aware of how difficult it is to get a foot on the property ladder. we married in the late 70's with the high interest rates. now kill me for this but my hubby and i have worked ourselves up from nothing to now owning rental flats. these flats are let for minimum rent (because I know how hard it is) and when we die two grandchildren will inherit their late mums share of the proceeds and our son will inherit 50% for him and his family. This is what we have been working all our lives for. most parents and grandparents would do everything they could for their children and grandchildren. we didnt go to uni because we couldnt afford it. brought up in a council house and saved to buy our first tiny 2 bed flat. we all have to start somewhere. It is only in the past few years that my hubby and I have had lavish holidays. a few days in blackpool or a week in scarborough was all we afford when our kids were small