To wonder how the next generation will afford a house?

[Housepricewoes]

DH and I want to move to what will hopefully be our family home, in 2 years. Work commitments means we can't do it sooner but I'm stressing about how much house prices might rise in that time.

That got me thinking about how today's children will ever be able to buy a home.

I know it's a very British thing to aspire to home ownership but rightly or wrongly it is the norm.

Many of my friends and extended family have only been able to get on the property ladder with a significant hand out from the bank of mum and dad, but unless their circumstances drastically change, they are not going to be in a position to do the same for their children.

What do you think will happen about houses with the next generation?

No one is boomer blaming. But they have had it much easier than the generation before them, and almost certainly will have it much better than the two after. Thats just basic economics.

Help to buy is such a con, just trying to win votes. People don't want the government to substadise them buying a home. They just want it at an affordable price. The government did not interfere when they rose, but they are interfering to stop them falling back down. It should be criminal.

The problem will not be solved by government handouts, longer mortgages, intergeneration mortgage and all these other stupid products that detract from the cause.

They just need to come down, for all of our sakes.

Idealist mortgages of up to 95% are being supported by the government through the help to buy scheme, at rates that (whilst obviously not being amazing) are reasonable. Of course, that may well still be too much for some to save, but it at least puts a £100k home in reach for a greater proportion of the population.

Obviously, if you're a Londoner, then that'll presumably just about buy you a parking space, but outwith the South East there are many areas where that will get you a 2/3 bed terrace, at least.

Suzie the government isn't subsidising the mortgage per se; it's just providing a guarantee to the mortgage lenders for part of the loan - a guarantee that the lender has to pay for. So effectively it's just providing a lower cost insurance scheme to the lender in the event of default by the borrower. The scheme itself is self-financing.

A lot of these "it can be done" type posts assume there are always two adults in the mix. What about single people, or those who want to leave unhappy relationships ? If it's almost impossible (or actually impossible) for a significant number of couples to save enough for a deposit and afford repayments, how much harder will it be for single adults on low or even "average" wages ?

Someone else upthread pointed out how ludicrously low many FT wages are these days - was it something like 3 out of 5 new jobs were around £15K or something ? ...... and I know from perusing job ads that "bog standard" admin style jobs which nonetheless often ask for a plethora of skills and experience usually offer not much more than that. How the heck can a single person on that sort of wage, who, remember may also have children to accommodate, possibly afford a basic home ?

I agree that you shouldn't close your mind to "less desirable" postcodes - as many have pointed out you could be cutting your nose off to spite your face, and of course you should consider all potential locations but there does come a point where the equation of housing costs + commuting costs + childcare costs (which are more expensive the further you travel to work as you'll need more hours) just doesn't balance out. We (and doubtless many others) are effectively restricted to particular parts of the country due to the availability of work we can specifically do as well as affordable commuting to where the work is. Unfortunately, "cheaper" areas which in themselves may be perfectly nice are often "cheap" for reasons which go beyond mere snobbery ..... maybe transport links are poor, maybe employment opportunities in those areas are poor, maybe amenities are very limited etc.

So .... for me, it goes back to the fact that if you're an adult and you work fulltime, you should be paid enough to house yourself - and ideally, to buy, given the dreadful rental system in the UK. Your ability to buy something - even on a low wage - shouldn't be reliant upon getting together with someone else, or on inheritances. It's such a basic right to have a secure home surely ? Yes - people with higher incomes would of course be able to buy something "better" and "nicer" but everyone who works FT should, in an ideal world be able to afford something for themselves. I'm no economist and I don't really understand all the ins and outs of the housing mess, but I do feel very strongly this is a moral issue as much as an economical one. Why are so many people, doing their very best denied such a basic "right" to a secure home ?

Good post, Catsmother.

I agree Catsmother.

And would go one step further to say that multiple house ownership should not be possible, until ALL those people, who are doing their very best (or are unable to through disability etc) are provided with such a basic "right" to a secure home.

Yay Catsmother

Cat, well when we bought in outer London 30 years ago it had to be with two wages. No way could it be done on one wage. It's not too different now.

If you want the £50k 3 or 4 bed like my grandparents had they are there in the North East. If you want the £100k Luton or London Zone 5 flat it is there to be had including on one wage of £30k. It is not an impossible dream to own if you really want to and make it happen but it's hard. Life is never handed to anyone on a plate and never was.

Couldn't agree more catsmother.

And in tandem with a return to a living wage, we also need to cap this "you can't stop rich people from spending their money" attitude, recognise that land and housing is a finite supply and we all have a right to it, and cut down heavily on buy to lets, holiday homes, and multiple house ownership of all sorts.

Ginocchio, I am aware you can get 95% mortgages now. Something that helped to create the last credit crunch. We can't afford repayments on a debt of 95k, even at current interest rates, never mind when they eventually go up.

It is ridiculous that that level of debt on so little security is considered normal now - good grief I remember when a personal debt of 100£ was a big thing, and mortgage debt of more than 30k was considered dangerous. I still think more that way than the current norm. Sensible given the proven consequences for individuals and society, but the current situation isnot favouring us sensible folks and boy are we pissed about it.

MariaJenny, my father was a university lecturer on a modest salary in Surrey. He could afford to buy an equally humble property and support his wife (who didn't work) and family (close to the bread line, no foreign holidays, kids clothed from jumble sales etc) for our whole childhood.

DP and I can only dream of this way of living.

Unfortunately Cat, most people don't like to admit the reason house prices AREN'T dropping significantly and becoming attainable to those who cannot afford today's prices (wages couldn't increase significantly enough on their own) is that it would mean many influential voters, party funders and possibly the entire cabinet would be out of pocket.

And while we're at it, let's not forget: stop the 'right to buy' on council homes, and start building some more, of all sizes including 1 bedroom flats!

I've wondered a few times if we wouldn't be better off with all housing owned collectively and allocated on the basis of need (cf. username!), to be reviewed every 5 yrs, say. Not compatible with capitalism of course, but pure capitalism isn't compatible with either social or environmental needs so let's get rid of it. Why not have something like uni halls of residence available for all 18 yr olds as standard, and something similar for all over-65's?

There, sorted.

Ginocchio the government giving out sub prime loans, what ever could go wrong...

Because idealist the rich and the politicians will still live in nice expensive houses. They will apply one rule for us and another for them. Largely as they do now in fact. It would be communism for the little people but not for them.

I can see that - in theory - on one wage of £30k it's still possible to buy something, somewhere.

But that assumes it's possible to earn £30k in the "cheap" areas concerned (or within affordable commuting distance of them) and more than anything it does of course also assume that you earn £30k in the first place ! Significant numbers of FT adult workers with years of experience simply don't earn that much.

I know life isn't handed to you on a plate. I also know past generations have struggled as well. But I think it's also fair to say that right now and for the foreseeable future, the housing situation now is especially acute. Until comparatively recently for example while it might not have always been possible for everyone to buy, it was a damn sight easier to obtain secure social housing and I think it's therefore fair to say that the utter desperation so many feel now wasn't as widespread because there was a safety net that barely exists today.

I think that the next government that gets in, regardless of colour, will do something around multiple property owners, holiday homes, etc. They know they have to do something and there probably aren't that many people in this category, although I know a few. At the moment, owning 4 houses and letting them out is really easy money where I live. I know a couple with 3 buy to lets looking at buying another as they say they can't get the same return on savings. I think it's wrong that people can generate so much cash just sitting on their arses because they have the spare cash to buy another property. This will definitely be eyed up for taxation purposes in the next couple of years and quite right too in my opinion.

I'm fully supportive of any policy that allows ordinary hard working families (the politicians' favourite catch phrase) afford a decent home (not a mansion in a trendy area) within a decent commute. This is NOT aspirational people, this is basic need!

And yes to everything that catsmother said!

Why the absolute obsession with London to the detriment of the rest of the country?

In many parts of the country the environment/schools is so much better for kids. (In London your kids may not even get a school place, forcing you to go private - additional expense!). Frankly I don't think the jobs situation in London is as attractive as it was 20 years ago due to increased global job applicant competition either.

Head up North or into Wales and a 3 bed semi can be had for £100K without much trouble. Go to Scotland and there are no Uni fees to pay, which if you have several children is now saving you the cost of a house in it's own right!

I looked at what I could get for a modest amount London in my forties with the equity I'd accumulated and opted to get out of London, and be mortgage free elsewhere. Given the rising levels of teen victims of violent assault etc there, it's a huge worry off my mind for DS as he gets older and wants more independence. I won't be encouraging him to purchase there when the time comes either, (rent a shared room immigrant style maybe for a few years if he thinks it'll help him boost his career - the young often have to be mobile & flexible in their first few years).

I think people need to shut down the greed and look for security & quality of life instead. For instance if you are an IT professional then the M4 corridor & commuting distance to Dublin both have some fantastic well paid roles combined with affordable housing. Schools and hospitals can be found all over the country for medics and teachers. Yet in London the jobs market for all these areas is over saturated, house prices are insane and general quality of life for families often isn't that good. It's pure madness and shortsightedness.

The charity and financial services sectors are the only two industry areas I think that are truly London-centric, yet not so many people are exclusively employed in these areas as want to live in London. The private rental sector is grim and not worth decades just to say you live in London and are employed in these areas (esp as financial services isn't a family friendly industry anyway!)

I call it the Brighthouse approach to life. Just as people won't accept a second hand sofa but insist on a leather at Bright house never never rates, so they won't accept that clinging to London as the ONLY place to live won't provide them with the long term security they crave. The larger your mortgage the further you have to fall if job loss, relationship breakdown, illness or accident hits.

'I think that the next government that gets in, regardless of colour, will do something around multiple property owners, holiday homes, etc.'

I don't think they will - too many MPs of all sides own multiple properties.

Taxing foreign-owned property seems more likely to me - the people it will annoy won't even be voters, after all.

Both my children left school after Alevels and went straight to work. They didn't move out from home and saved a big chunk of thir wages until they were in their early twenties when they had saved enough for a deposit and mortgage. My eldest bought an absolute shit hole of a flat that had been used as a drugs den and needed a major overhaul, it took a lot of work but has become a lovely home for her. The other bought a flat that needed less work, but still had to have a new kitchen to make it liveable. I think the key to them being able to buy was not racking up university debt or renting.

I've read pages 1,2,15,16 so apologies if I'm repeating!

I think that some of the next generation of homeowners will have deposits fuelled by this year's budget changes to pension drawdown legislation.
House prices kept up my mum & dad sacrificing their pension.
Assuming kids will look after them. Or be in a position to remortgage and buy them out of the equity they have in the child's house when they retire - if they have kept legal ownership.
Ticking time bomb, IMO.
I also think people will release pension cash to pay off debts and we're in for a massive increase in pensioner poverty in the next 20 years.

But then... the economy goes in cycles. Give it 20 years and will we all be complaining about the younger generation having it easy for some unforeseen reason?!

This idea that anyone who works, regardless of how much they earn or how many children they have to support, should be able to buy property is ridiculous.

I know it's a much hated word on this website, but it seems incredibly entitled to me.

A roof over ones head is a right that everyone in this country should have, owing property, especially one that gives them a garden and good transport links and all other 'desirable' things is not.

It's just basic common sense that that is never going to happen, no matter what politicians do or don't do. It's not only MPs that choose to keep house prices high, it's the fact that too many people are having too many children, then living separately, then to add to that we have immigration. It's basic supply and demand. Wages are low partly because there are too many unskilled people which decreases the value of their work, and demand for homes will always be high because the population is continually increasing.

Every single one of us that has had more children than will replace ourselves and our partners, or who has split up with a partner meaning that one family needs two homes rather than one, has contributed to this problem.

MariaJenny - My DPs always talk about how they struggled to buy their first home 40 years ago, and how they both worked 7 days a week. But their first home was a 3 bed semi, worth over £400,000 today! They both had very modest jobs and it was their choice to struggle and buy this house and not a 1 bed flat. ( My DM had an extra night job for a year to earn the money for the deposit. But this would be near impossible today, as doing those extra hours at night would in todays money have earned my DM an extra £5000 which would be no help in affording a £100,000 deposit for a house! ) Indeed most of their friends on similar low wages also bought large first properties. Some of them bought 2 bed flats but very quickly made the move up the ladder to a a house.

Most young couples today on modest salaries could not dream of this, and struggle to own a studio or 1 bed flat. It does not seem right that all the large houses in my area are owned by older couples, with high earning families squashed into the small 2 bed terraced housing.