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

Round our way, house prices have been forced up by second home owners. These are people who leave the place empty for the bulk of the year so plough very little back into the community, and have removed a property for someone local to live in too. I would like to see 500% Council Tax on those properties. Maybe more. It won't happen as it's the rich and powerful who own them.

House prices need to drop until they are once more in line with wages.

I know several uni grads who no longer live at home. But those are the ones who have jobs in cities, or large towns, but their families fo not live in cities or large towns.
Thought I would just say that, as some sort of balance to what noddyholder said.

Yes amillion if your family live rurally, I think as a grad you would be forced to move out/rent. Which counts for a lot of graduates, I bet.

Even worse then, because they won't be able to save much because they'll need to live close to work if their families aren't nearby.

Can't really 'plan' for that.

It's not about 'planning' and not having kids. Realistically, you either need financial help from parents, or you need to live at home for a bit during your early 20's in order to save. If your parents happen to live where you work; great. If not, you're stuffed really, aren't you?

House prices have risen because they could. From the 80's onwards, many more women went out to work, so there was more money sloshing around the economy. Hence more money chasing houses, so house prices rose as they were sold to the highest bidder. Along with more credit available.

Now, not so much credit available, and finances are on the whole much tighter, so house prices have stabilised or fallen. Except in areas where there is still money sloshing around, ie places like London and holiday home places.

Quite agree slatternlymother.

Not only that, but for your average situation to be comparable to the 80's; a couple would need to earn £150k between them for a mortgage on a £200k house. (Based on a lady upthread saying her parents got a 1.5x mortgage on their first home based on their wages at the time; a teacher and a journo if I remember correctly).

I live in a city and its commutable to London but these grads cannot afford to commute and pay rent so they either live at home or work locally in 'any' job Mind you not many are working in anything like the sort of job where saving is an option atm.

The problem is noddy that if you work in 'any' job outside of your specialisation simply in order to save; you're losing valuable career experience and you're going to have a massive gap in your CV. A potenti employer isn't going to care that you only did it to save enough so you could live where you work. They only care about experience. Chances are, your better off peers whose parents have given them a 'leg up', are a now a few years ahead of you.

If people are talking about planning; is it bad planning if parents don't move to the same city their DC work in, in order to allow them to live at home so they can save? It's not taking it out of context. If you're going to criticise people for having children before they've secured a house (and if the average ftb age is 37; a lot of people are leaving themselves a very small window. Besides, I'm not sure I'd want to be only just getting a mortgage in my 40's; I'd have to guarantee employment until my mid 60's! What about poor health? What about redundancy? These things are more likely to happen as you get older. Not only that, but it's an aging population. The next generation has got to come from somewhere so we can all have this NHS and state welfare.), what about those who go to university from poorer backgrounds in order to give themselves a brighter future? They get themselves into debt in order to learn, and then have a huge chance of having to live away from home immediately. This has a very high chance of being renting. So 'lack of planning' doesn't come into it.

potential employer, sorry about that typo

I wouldn't be so foolish as to try and defend BTL landlords who rank so poorly in everyone's view, but something to consider - those of us who try and do the right thing and provide for our future in the hope that we can support ourselves in old age without having to rely on state handouts have seen pensions destroyed and devalued.

Many young professionals turn to BTL as a pension alternative, not because they are capitalist scum trying to fleece other hard-working people, but because they want to provide for their future.

Something else which I know is unpopular - posters scoff at the silliness of saving on Sky and phone contracts or whatever to save £4k or £5k over 10 years as being a ridiculous drop in the ocean. Well, if a couple both do that over 10 years, and cutback on one bottle of wine and takeaway too then they will have a 10% deposit for a £100k house. Why is that ridiculous?

It took dh and me nearly 6 years to scrape up the bare minimum deposit to buy a shithole house in a crappy area. We had no holidays, no car and put off having children and were frankly bloody miserable for much of that time, but we did it.

Someone has said that you shouldn't have to make a choice between owning the roof over your head and having a nice standard of living - of course you should have to make that choice. Why is there this sense of entitlement to own your own home and have a comfy life too?

I have never travelled, had kids late and am in my early 40's...that is why I have a house with no mortgage

sticky I do appreciate the 'If you can't beat them, join them idea'

And the whole deposit thing; we worked out you could save £6600 if you did what you suggested for 10 years. Even if you save £10k in 10 years, where are you going to be able to buy for that money? And you're 10 years down the line as well. 10 years ago, you could buy a 2 bed semi for that round here (well, maybe more like 12 years ago). Now, you can buy a 1 bed flat above Londis, or a park caravan and have £20k to spare. £100k doesn't really cut it. It might in some areas, but I can't imagine the wages in areas like that would be that good.

Which bank are you going to for a 90% mortgage for an FTB?

And where are you buying a house that doesn't need money spending on it for £100k?

Also I'm sure you're aware that most couples share a sky and broadband subscription so aren't exactly going to be saving £5k each.

It took dh and me nearly 6 years to scrape up the bare minimum deposit to buy a shithole house in a crappy area. We had no holidays, no car and put off having children and were frankly bloody miserable for much of that time, but we did it.

sticky now look at the other side of the coin. My argument is; what is to stop people 'living the life of luxury', renting all their lives, spending what they earn etc, then hitting the age of 65 (for argument's sake), getting evicted and then throwing themselves on the council to house them? Which they would be obliged to do? No one in your family is obligated to house you.

This is my point. I think a lot of people will do this.

Most of them are working in 'any' job because there aren't many others! I have one friend whose son has excellent degree and living in London but has had to take any job and stay at home. He is one of the few of his fellow 2012 grads who have any sort of job and so he can't share with them and he isn't earning anything like enough to rent alone.As well as a shortage of homes the jobs situation isn't great either. My dp has 5-10 grads a week coming to his workplace offering to work for free.

@sticky FWIW I got an iPhone and have managed to start up a business on it while commuting to and from my full time work. I have broadband at home so I can work on my business in the evenings. DP needed it to freelance when he was fired from his job.

We don't have Sky, just Freeview.

I am planning to put all the profits from my business into a 'deposit fund'.

So where can I make these savings?

Plus either you do the Government's first buy scheme where you sort of only have to pay a 5% deposit, but it is on new builds which are v over priced. Or you have to find 20-40% (most commonly 25%) for a normal mortgage. The average deposit in the UK now is £40K. Your 10K comes a bit short tbh.

'Someone has said that you shouldn't have to make a choice between owning the roof over your head and having a nice standard of living - of course you should have to make that choice.'

No, she said living, because the reality for an increasing number of people is that they can live in hovels on beans and water for those same 6 years and still not have enough for a deposit because the rent on the hovel has gone up, up, up, up and their wages have stagnated or dropped.

Sticky, what year did you move into your house?

Cutting back on takeaways and wine is all very well if you have been having them to cut out!

I agree op that for money that will actually be a lifestyle choice - why bother struggling for something which may never be achievable when you can chose the "luxuries" and rely on the state to house you. But then there are many people who see state help as a choice not just as a fall-back position.

I fear more for those who actually really don't want to be reliant and are just priced out by house prices and mortgage companies.

Perhaps we just have to accept that house ownership is effectively a luxury now not something we can all expect in our lives. Do we just need to readjust the way we think of salaryies and income brackets vs what standard living is attainable? Despite good jobs and, on paper, good money, we will never live in a lovely house in a lovely area or have foreign holidays or actually afford to buy furniture and clothes that are not secondhand; but at least we do own the roof over our heads. So do we accept that those on lower incomes simply cannot have the luxury of home ownership anymore. Face facts, people earning £50k can no longer afford private schools for their kids, and people earning £20k can no longer afford to buy a house.

amillionyears - we bought our house in SE London in 1999 for £80,000 with a deposit of £5000 (our saving pot also covered the costs etc).

Sorry, hit before finishing and editing......... The average deposit in the Uk may be £40k but that is a really misleading stat, obviously taking account those who throw themselves into the housimg market at higher levels for assorted reasons.

There are thousands of homes around the country for £100k and under, and there are also lenders offering 90% and 95% LTV loans - they might not be as competitive, but they are there. So saying that all these people are hopelessly stuck trying to save up £40k is not totally a fair reflection.

Is your main point, OP, that when lifetime renters get to 65 ( or whatever the retirement age is) and then don't have an income to pay their rent then what do they do? Rely on the state to house them?

It's worries me. With the way the economic climate is going there may be no public money to house them. It doesn't matter which political party is in power. It may be a question of do we give out council housing, or keep the NHS going? Or stop paying out pensions? Etc

Yes it is my point. And can I just say, that I'm not an advocate of falling back on the state by choice? I absolutely agree that it's there as a safety net, as a last resort. I'm just trying to make a point iykwim.

sticky, yes but think about the areas where you'll find a house for 100k. Are the wages going to match that? Or are they going to be low wage areas, where you'd be turned down for a mortgage anyway? And I agree, there are a number of 90% ltv products at the moment; but the bank has to think the house is worth the risk, or they will demand at least 15%. It's very hard to get a 90/95% mortgage on a non new build house, which can often be part of the condition of getting the mortgage; hence the new estates still moving apace even now.

More than likely, you will get a bit of a wreck for 100k. this is what you can get for 100k around my area, where wages are amoungst the lowest in the country: this or this I don't live in either Redruth or Truro, I live within 30 minutes of both. But you get the idea.

Yes, they're not bad. But both are 1 bed flats/maisonettes with little room for improvement. That's what you've got to look forward to, if you save for 10 years, don't have children and never go on holiday. The only other options were a park home, or a non standard construction home which required £99,950 cash only.

I think the big problem is that we have a "double whammy" going on at the moment.

When our parents bought their house 30 / 40 years ago mortgages were hard to get but house prices were relatively lower compared to salaries.

When we bought our first house 11 years ago, prices were pretty high but as two young professionals the building societies were throwing money at us.

Nowadays prices are high and a huge deposit is needed. It must be very difficult for new graduates and I am concerned about the future for dd and dbump.

However, the name of this site shows that most of us do have a very expensive luxury in our lives. Just doing a few quick calculations and I think in the city I live in if you save the equivalent of one child's full time childcare costs for 18 months then that would give you a 20% deposit on a 1 bed flat. 2.5 years would give you a 20% deposit on a 2 bed house. And personally I find dd quite expensive when she isn't in childcare as well.so delaying having children for a few years is one way that people could speed up saving.

Also it is a lot easier to cut the fat off your spending pre-kids. When my db was saving for a deposit 6 years ago he spent a year living in a ridiculously cheap share house with a room just big enough for a single bed and a wardrobe. But that just couldn't be done with a child.

I know people are saying that average age of a FTB is 37 but as average age of first child is 28 (according to Cherry Healy) that means that people are having kids pre house buying on average.

Not very helpful for those who already have kids I know but it is something I'll be telling dd (once I get the potty training sorted!)