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?

'It is a major concern that we are not seeing enough houses coming on to the market. For the market to operate effectively, we desperately need more homes in areas where people want to buy and want to live. Until this happens, we're likely to see prices continue to increase.'

As soon as the baby boomer generation downsizes/sells to pay for care the market will be flooded. While demand outstrips supply; the housing market will remain high.

Source:
www.thisismoney.co.uk/money/mortgageshome/article-1671748/House-prices-What-expect-news-predictions.html#ixzz2zk964olj

Means you live with absolutely fuck all and then you keep working until it gets better. I used to moan on here 6 years back when I was riddled with damp/condensation, my shower cubicle completed collapsed and I had a bin bag with brown tape as a wall for months. I had to live with no running water, bath, shower or bathroom sink with a new born baby for 4 months! We were living like tramps, and yeah it was pretty crap but now no damp, posh bathroom, the lot. You get there in the end even in the dark days when it seems you never will.

Jam tomorrow means the promise of good things to come which probably won't materialize - because 'tomorrow never comes'!

That's awful Precious. It makes you count your blessings. These rogue "landlords" should be heavily fined and imprisoned and the government should re-divert their help to buy money to building more social housing.

It's the only thing politicians are any good at, promising 'jam tomorrow'.

What will happen is people of my generation will reach the age they can no longer work through age/illness/whatever and throw themselves on the mercy of the state for social housing. It's storing up a huge problem for the future.

I've just read this article which discusses the fact that the MMR rules seem to factor in all the bad side without including any of the up side.

www.thisismoney.co.uk/money/mortgageshome/article-2610831/JAMES-CONEY-The-new-stringent-mortgage-rules-prove-hard-test-pass.html

ihategeorge - it's not about the house just going up in value, but you start off with something small, and a repayment mortgage, pay off some of the debt, so even if all house prices remain the same, you'd then have a larger deposit (your orginal deposit plus what you've paid off the debt), then you can use that to buy something bigger, reborrowing the same amount as you orginally did. Throw into that the assumption your wages will go up as you get older /more experienced, meaning that you could borrow more/afford to repay more.

That's the ladder idea. You are "supposed" to start with 1 bed small flat, then trade up and up until you get to the family home, not start with buying a family home having saved the deposit for that.

(house prices going up or staying the same shouldn't really matter as long as they go up roughly in same amount, so if the one you are buying has gone up by £50k, if yours has gone up by £50k too, it doesn't matter - it's when the larger property has gone up by more than the smaller one so the gap gets bigger that this is a problem.)

This falls down with a whole generation who go off to uni and run up huge debts, which by the time they've paid off and are ready to save for a deposit, they are 5-10 years behind where they should be "on the ladder" so are trying to buy a family home as their first property, not a studio flat. Or because the deposit needed to start with is so much higher in real times, so takes longer to save for, again, meaning that by the time you are looking to buy, you are trying to buy a property that really is a step behind where you need for your life stage.

The problem is ziggie, politicians don't think further ahead than their current term in office. If most of the electorate are home 'owners', that's who they will please. Things will only change when there are more renters than owners. It's a massive problem for the future I agree. They don't care though as they will be alright and it be someone else's problem by then anyway.

I do agree marywestmacott as not everyone but some people wont buy small they want massive detached garden the lot straight from the off. Theres nothing wrong with a 2 bed flat/house for a young family, or 1 bed flat for a couple or couple and 1 child

Jasminemai - one of the other problems with higher prices though is that as well as it taking longer to save, the costs of moving are higher, the fees to estate agents, stamp duty, not just removal van costs - they go up when house prices go up - because of this, reducing the number of moves you do over a lifetime makes more sense than it did 20 years ago, it takes more.

My son aged 25, says he could afford the mortgage on a small flat, but has not got the hefty deposit. At present the bank of mum and dad can't help out! So he is resigned to renting for a few more years.

The flat in Wembley is very cheap.
It says at the bottom that it needs some work. This usually means 'a lot of work'. Also the lease must be very short which means it will be very hard to sell it.

I am in zone 5 like Maria and the cheapest 1bed flat is 150K. Those 'bargains' @150K are ex-council ones! They would house someone in need! If they haven't been sold.

I don't think that London has 'crap' areas anymore. No bargain areas. Years ago i was renting in Hackney, Bethnal Green, Holloway, and Clapton that someone mentioned earlier. Those days many people wouldn't go to those arreas. Now you cant go because they are out of reach! I was in Clapton the other day and i couldn't recognize it. The betting shop is now Organic Cafe.
Seriousely where are the cheap areas in London? Name me 2 please.

Move further out - again, as i said in my earlier post the alternatives are usually easier for the richer. If for example your job is IT based, consaltancy etc it is easier maybe to move further and visit London twice a week? Shop assistants, nurses, receptionists, cleaners cant do that.

Yes, some will never buy ever. I am not suggesting otherwise and that was certainly the case in my parents' generation too and certainly my grandfather's. There was a time in the UK when you could only vote if you were male, over 40 and a "rate payer" (i.e. one of the few who could afford to buy a house).

I am not suggesting it is dead easy to buy.

My Jam Tomorrow point was just to say for some (not the poorest on the lowest earnings, but some in the middle) if you do this putting off the good things now for the better later it can come good. It's how my parents bought - married 10 years, no babies at all whilst they both worked very hard and full time to buy a place. My grandfather waited until he was 40 to marry as he could not afford it before then. I spent a lot of time working much harder than most people to get better exam results and jobs etc and it paid off. I am not saying it's a magic formula but it is something to think about for younger people - deferment of immediate gratification, tolerating the one bed in Luton you've bought, paying off debt and moving up and onwards.

Ex council houses do sell for a lot though npwadays. Ive never seen ex council for less than 100k and often a lot more even in my area.

Thanks for the explanation Mary. I don't think I'll be doing the property ladder. We are about to exchange on our first house at 42 years old. We have been saving for 10 years as we had to have something bigger than a one bed flat as we missed the boat when we were younger and had no dc. Now we have 3dc, a flat would not have worked for us. However, our mortgage is high, we have a 10% deposit and will not be in a position to trade up for a very long time if ever. It has the potential to extend, so I think we can be happy there for the long term. I worry for our dc though as we will never have any money to help them, as we will be paying a mortgage into our 60s. This is one of the problems, in that the boomers today have been able to help their dc through their massive equity increases from houses they bought in their 20s. Nowadays, as you say, graduates leave uni with massive debts and are not able to buy until they are in their 30s and 40s, so they will not be able to help their dc in the same way. There will be massive problems 20 years down the line and I can't imagine how this will all play out.

amothersplace I agree absolutely. Large deposits should be a thing of the past. If you have a flawless tenancy record; that should be enough. Let renting be good for something!

Agree with your comments on stamp duty/ removal costs too Mary. The house we have bought is just over the threshold, so we are paying 3%. I will not be in a hurry to repeat that experience. It is an ex-local authority terrace!

Ive never had a removal van I can get everything in a transit my mate drives, but we dont have a lot of stuff as we will have 3 dc soon but we are in a 2 bed flat so dont own much. I havent had a property with stamp duty luckily as you dont pay that in cheaper areas.

We are moving round the corner and borrowing a mates trailer. I am definitely not forking out £300+ for a removal firm when we can do it ourselves.

Hope it all goes well ilovegeorge hopefully we will be in a similar position to buy in a couple of years.

One of my DH's colleagues admitted that he is 'slumlording'. He has flats in a suburb close to ours(very ordinary suburb) and is renting out the rooms - two to three people per room and charging them only slightly less than it would cost them to rent a whole room themselves. He and his wife have a lovely house by the sea. I guess that is one way of doing it. We had students in a flat next to us who were living the same way - they had bunks in the loungeroom.

I do think it's incredibly hard at the moment. But also i think people want to 'get on the ladder' quite young. If you are an 'average' person on a national average wage with no children, then i do think it is possible to save over 10 years. Most people i know don't get their first property till early 30s when they are about to have children. I am always surprised when i meet 22yo who have bought a house.

If currently someone earns £23k that's about £1500 a month. if you are a couple then that's £3k. A one bedroom flat in Crystal Palace London, rental is about £900, say bills are £300, Travel £400, food £400. That would still give you £1k a month over. Now of course it would be miserable to save every penny, but you could reasonably save £500-800 a month. Say then you can save £6-8k a year. Over 7 years you could save about £40k. If you live outside London and SE the rent and CT will probably be cheaper too.

I know that's extremely general. A lot of places you couldn't get a property for under £250k, you may be single, you may have children earlier and only have one wage etc. But for many people the above is not unreasonable. I have worked in call centres outside London where the average age is 24yo, the average wage is £22k and a 2 bed terrace is £140k. If owning is really your dream and that kind of job is available then i do think it is do-able. It just isn't immediate.

DH and I are just buying our first house together and i am 37 and he is 33. We have one toddler and another on the way. We have a £30k deposit and are in the south east and buying a 3 bed semi for £220k. For the first 3 yrs we were together we saved £850 a month. We knew when we started having our family we couldn't save, so we saved every penny we had over when we could.

We were also very lucky in that DH's salary went up a lot. But we actually saved the majority of our money when he earned £27k and i earned £23k.

However, i do agree, it is very very hard for younger people and i have utter dread for our DCs future housing prospects.