To wonder how people are going to actually buy houses?

[slatternlymother]

There's going to be a whole generation that can't, isn't there?

What about those people who rented due to circumstances/not knowing if they wanted to live there long term/work commitments etc, and then hit the wrong end of the financial crisis?

We rent, and have (luckily) really well paid jobs for our age. We are 25, and between running a car, putting DS through nursery, and just living, I doubt we'll have enough of a deposit to buy anything reasonable before we're 30. 28/29 at an absolute push. And that will be pressuring us to make a choice on where we're going to be living, but we won't be able to leave it much later because otherwise we'll be tied up in a mortgage forever.

But we are so, so lucky. Actually, it was blind luck that got us here.

And if we're struggling, how the hell is everyone else coping? Tbh, I'd happily rent all my life, but I worry about retirement age and no longer being able to pull in a decent wage.

AIBU to think that long term, more and more elderly people will have been in rented accommodation their whole lives, so when they do retire; they're going to have to fall back on the state, aren't they? To put them up in council accommodation?

Isn't this just a massive time bomb for the future?

Sorry for rambling thoughts, I just have been thinking about this quite a lot recently

There are so many permutations though, it's very hard to generalise.

1 Some people will never be able to buy - they don't earn enough and don't have family to help out and no amount of cutting back will change anything.

2 Other people are earning little but have families to help with a deposit or can decide to live frugally for several years to build up a deposit.

3 Some people are earning enough to buy but can't buy their forever house first and have to buy small then upgrade every X years once they've saved more money (by being frugal)

4 Others are earning enough to get a mortgage easily on their forever house first time round.

Obviously there are even more cases than that.

DH and I are in case 3. We earn good wages but for years lived in tiny bedsits in order to save and buy our first, small flat. Then we continued to live frugally (despite earning a good wage) in order to buy a larger flat once DS came along (and we didn't start TTC until we knew we could afford a bigger flat).

Our friends (same earnings) didn't want this and now complain that they can't afford a flat big enough for a family. These friends have spent over 8K on holidays each year for the last 5 years as well as 35K on their wedding. That's 75K they could have saved (I'm not even going to calculate all the michelin star restaurants they eat at every month). They could easily have bought small (instead of renting big) and then, like us, upsized when their DS came along.

I know this is a particular case as we're earning good money but DH and I accepted that despite having a good wage we would live in crappy places to save money.

We are very very fortunate to have had this choice though.

So hang on, the average house price is 7 times the average income, and the banks want 25% as a deposit. So that means that your deposit has to be 1.8 times your annual income? If you're single, you have to SAVE UP two years's income.

Fuck me. I mean, seriously? TWO YEARS?

Mosman, on your figures I don't see why you are all "we'll find a way because we have to". There are times you just ... can't. And I'm really not seeing where the private school fees are going to come from!

If you're single, you have to SAVE UP two years's income.

2 years is nothing, my grandparents saved for 5 years. To buy a 2 bedroomed flat on tottenham high road ie a friggin dump.

But they didn't save up five years' income. It takes a lot longer than two years to save up two years' income.

And what about all of the people (ie half the population) that earn less than the average wage?

Sorry I misunderstood you're right they didn't but it still took 5 years to save up whatever they did need.
Talking of the average house is just silly nobody walks into an average house as their first home, you start off in a dump, a flat, a shared ownership, whatever to get yourself started.

What percentage of your income do you think it is possible to save, if you're just starting out, you have small children, you're paying market value rent?

It is only as silly as assuming that first home buyers are on the average income, frankly. Young people looking for their first home are probably on commensurate wages to the sort of house they're looking to buy; i.e., if you're in the lowest 40% of the market, that's also the part of the housing market you're looking at.

I don't know what your deal is here, Mosman. You've admitted that it's hard, that you've had to move somewhere you dislike in many ways, that even then you'll need to find 5 times your DH's salary in order to buy. So why are you even arguing against the OP?

I don't know if this has already been mentioned, but one of the differences between you and me and mortgages is that you have had your children very young (congratulations - not knocking it - just pointing it out...)

So, I didn't have to worry about over the top baby gear and nursery fees until my mid thirties which meant my salary had crept up by then and the mortgage had gone down a leetle tiny bit.

The average age of first-time buyers in the UK is 35. At that point most people will have children and only 30 years of their working life left. Do you really think it sensible, if you are in those circumstances, to buy a 'dump' when quite likely your earnings are pretty much already at their peak and the jump between your 'dump' and a decent place to live is getting bigger all the time? Or to go for shared ownership when you may never be earning enough to buy the place outright? (And most shared ownership schemes are pretty much scams anyway.)

Also - we might find that jobs and houses get further and further apart. I know plenty of people who work in London but communte at least an hour and a half to get there in order to own their own house in the sticks...

A long commute is soul destroying. I only live in Brighton but I know several people who commute to London who were keen initially and eventually decided to move back!

I'm not arguing against anyone/anything was merely suggesting how we overcame these issues.

Most of my friends bought quite easily in the 80s and 90s. I know we did. All of us who bought are still doing ok but those who didn't are really struggling with crappy rentals and little hope of buying now even though many have well paid jobs. I think the govt are missing a trick with social housing. There is a real need for affordable regulated suitable family homes and settled solvent families spend in the economy and keep the wheels in motion. Lots of depression people off work etc stress relating to money and housing too. It is a real problem. I am renting atm and I am very lucky it is temporary. It was the only place i could have my cats It is tiny no storage no central heating downstairs damp bathroom and it is £1150 a month council tax 160 and only big enough for a couple with 1 child.

I bought relatively easily right up until 2002 and that's why if I'm honest I don't have a lot of of sympathy for anyone over 35 in that position because you have to ask what were they doing with themselves ?

Well some were travelling and trying to get careers etc off the ground and no one could have foreseen the ridiculous rises. This is not a blame game a home is a sanctuary from the world and somewhere to just chill and be with your friends and family in what frankly is a world where everyone is working hard and just doing their best. It is unfair that so many are shut out of that

But Mosman, you moved to Australia because there were no jobs for your DH in England. Presumably you couldn't support the family on your wage in England. You now rent in WA, right? And you hate the schools, and you can't afford to buy. Even though you bought before 2002.

So why have no compassion for others, when your own life plans have so clearly gone awry? I think you are doing a great job under unexpected circumstances, but clearly, things don't always go to plan and we all have to deal with what we're given. So why the smug 'well if you'd just' attitude?

We moved for DH's self esteem, we were managing on my salary and tax credits to pay the mortgage and everything else, school fee's included.
I wasn't trying to be smug, more helpful, sorry if it came across that way.

And the only reason we can't buy here right now is because I won't sell in the UK, I won't even commit to shipping our stuff over but that's due to my lack of confidence in other areas of my life at the moment.
I'll take a 2nd job if I have to in order to raise the deposit, you do have to get creative because as i've said a million times or so it feels the alternative is what ?

Mosman "I bought relatively easily right up until 2002 and that's why if I'm honest I don't have a lot of sympathy for anyone over 35 in that position because you have to ask what they were doing with themselves ?

Just Wow. What a selfish and ignorant post. People really shouldn't have superiority attitudes just because they bought a house at the right time. It has been all about timing/luck and nothing to do with the smartness of the buyer.

Absolutely, of course it's timing.
The people who left school with a few GCSE's and went and got jobs and bought houses at 20 who I went to school with are nearly mortgage free. The ones who went to university paid almost double for their houses but earn double so can cope i'd imagine, the ones that spent 5 years smoking dope in Bali, finding themselves or living it up whilst living off their parents, well the writing was on the wall - front page of the express actually - that house prices were increasing dramatically and it was a now or never situation.

Smoking dope in bali are you for real?

Yikes. I think mosman may be related to xenia!

Not many people I know were saving in their 20s because they just didn't make enough income. Only in their 30s do they have a capacity to save but it takes year.

As an example - I was at Univ from 19-23, then working in low paid jobs and paying off student loan from 23-27, then did a Masters degree from 27-29, then spent a few years paying that off. That's me at 32. Renting, have a child at 35, then all money goes on childcare costs (eg £800 month), then at 40 when child is 5 finally don't have to pay childcare. So, um, where in all that is the opportunity to save a lot.

TBH the people I knew who dropped out of school at 16 and started working right away, bought a house at 20, are in a much better financial position. Who'd have thunk it!

But that was the point in 2002 you didn't need to save at all, a 100% mortgage for three times your salary would buy you a 3 bed semi at 5.5%, where could you go wrong ?
Evidently some did and those are the ones you're a bit at when they bemoan house prices, they had their window and missed it.

And that was three times one persons salary in the west midlands, never mind two.