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?

Paris is tiny compared to london, so the expensive central part is also tiny.

My friend lives a 20 min walk to the Louvre and pays 350 a month in a shared flat, in a down market area aka porn shops on their road.

Don't know anyone in london that is paying less than 600 a month, even in places really really far out.

Yes, my brother bought a btl flat in an up and coming district, near the Cite de Sciences, some years ago as part of his pension plan. The rent pays for the mortgage and management fees and when he's paid off the mortgage, it will be income to supplement his pension.

There was nothing similar he could afford in London at the time, tho' obviously, if he had been able to buy here, he'd be looking at a much better return, whether he eventually sold it or used it as income.

Long tenancies and controlled rents seem to have made it less of a hassle than London landlords experience.

Re Paris - the centre may be small, but even out in the suburbs people don't live in houses, they live in flats. It's the aspiration to live in a "proper house", even in the capital city, that is particularly British.

MariaJenny quite a lot of your points are not historically correct, as you are not factoring in the effects of inflation into real not nominal housing values - there were actually "hidden crashes" in the property market in the 70s when inflation rose at a greater pace than house prices, meaning asset prices actually dropped in real terms.

Also The state never used to feather bed mortgage holders in the way it now does - actually, you are forgetting the effect of MIRAS (mortgage interest relief at source) which no longer exists, but was a massive incentive to mortgage-holders during the 70s-90s, offsetting the effect of higher interest rates.

Your memories of that period seem very London-centric: far from waiting until their 30s to buy a one-bed flat, in most of the country between the 60s and 2000 it was the norm for couples to buy reasonably-sized houses in their 20s on quite ordinary salaries.

Things are markedly different now to even a decade ago, let alone our parents generation.

By way of example, my sister and her husband bought a house in 2002, a year after they graduated from university, with £15k deposit, made up of £5k savings and £10k gifted from parents and grandparents. Their house - a 3 bed terraced house in Manchester - cost £55k, and they could get this on one single salary of £24k.

They sold the same house four years later (2006) for £190,000, using the equity to trade up and move further out of Manchester.

An identical pair of graduates, attempting to buy the same starter home (now valued at £250,000) would need a deposit of £12,500 at a bare minimum (with help to buy), and more likely £25k (and who leaves university with £25k in savings these days?). To buy this very ordinary starter home on one salary they would need an income of £62,500 - but salaries have barely moved upwards at all in the intervening time. Even using two salaries they'd need to be earning at least £31,250 each. And that's before you take into account the reduced spending power that comes from student loan repayments.

Almost every single one of us will raise our families in a property smaller and less desirable than the ones we grew up in - even with massive parental help.

"Almost every single one of us will raise our families in a property smaller and less desirable than the ones we grew up in - even with massive parental help."

Not true, unlike many here I come from a working class background and was raised in a council house smaller than where I now live.

It's simply not true in much of the north.
My family is earning much less than my parents did but living in a similar sized house - they're in Essex, I'm in East Yorkshire.

there's obviously a London/rest of UK difference. Prices dropped in pretty much the whole country except London, where except for a minor hiccup or two, they have been climbing since 1995. I think a lot of people would like to leave London except that's where the jobs are.

It won't be true obviously if you've moved up a socio-economic class, or if you have moved from a more expensive to less expensive area. If you are in the same area, earning the same wages adjusted for inflation, you definitely will get less than your parents did for the same home.

The bigger issue is the number of properties that are simply bought as investments - in London 49% of all new builds are bought by overseas investors, a great many of which on a 'buy to leave' basis, so they're not even rented out, just kept as assets.

Population changes - people living longer, more single-person households - mean more homes are needed, and not nearly enough are being built. Investors (overseas, or buy to let) are pushing up prices, which prices out more and more ordinary buyers.

It used to be the case that an average family could buy an average sort of house on an average salary. In much of the country that simply is not the case anymore - and unless a lot more houses are built, and the law is changed to make property investment far less attractive, that's only going to get worse.

The flat I own in was built as housing for manual workers in the early part of the 20th century. The previous owner was a bus driver, who bought it for £6000 in the 70s. I bought it for £400,000 in 2009. It is now valued at £650,000. Nearly everyone on my street works for a bank (myself included); what used to be a smallish property aimed at someone on a below-average income is now only within reach of people right at the top end of the income scale.

The 1 bed starter home (1bedroom, 1 bathroom, living room and kitchen - was tiny) I bought with ex in 1989 for £48,000 - according to Zoopla the minimum value estimate now is £166000. My salary then was about 8k, exH was £10k. For similar income/cost rations now our salaries would need to be £27k and £35k. There is no way I can imagine DD1 and her boyfriend (both work in retail) earning that sort of income in the near future - they are on £18k each which is more than some of their friends.

*"Almost every single one of us will raise our families in a property smaller and less desirable than the ones we grew up in - even with massive parental help."

Not true, unlike many here I come from a working class background and was raised in a council house smaller than where I now live.*

But Grennie, I think the poster above meant the younger generations - forgive me if I'm wrong, but I infer from reading other posts of your that you're over 35/40? In that case what you say is true for your generation, but not for mine (under 40s), except for unusual cases.

Iseenyou the issue isn't just one of number of houses, but how those houses are occupied. For various reasons I've seen the electoral roll list for my town/area, and there is a lot of underoccupied (owned) housing - and the more expensive the area, the greater the proportion of the houses are underoccupied (eg. a 4, 5 or 6 bed house with one older person or couple living there). There are whole districts in my town where the majority of large houses are occupied by one elderly lady; families, however, tend to be squashed into small terraced houses in more overcrowded areas.

This wasn't the case when I was young; my parents' family-sized house was bigger by far than both my grandparents' houses.

Exactly so, traininthedistance. It used to be normal for people to buy in their 20s, trading up from a small starter home to a bigger one when a family came along.

This is no longer the case. Amongst my friends - all of us on well above average incomes - not one of us owns a house. We all either own or rent flats, often small flats, and are unlikely to ever afford to trade up as prices are rising so much faster.

Take this example of what is currently being built in Poplar (ie the cheapest corner of London), that my colleague and I were discussing. The housing being built there now is being marketed at over £500,000 for a tiny flat, not exactly ideal for a family.

...which is just as well, as they're being marketed at buy-to-let investors in Hong Kong

www.hamptons-asia.com/en-asia/New-Developments/Aberfeldy-Village-E14/ (the marketing video beggars belief)

My colleague's family are from that area - his dad was able to buy a small terraced house in Poplar on a factory work's wage. Nowadays that would be laughable.

Can be true for us over 40's too train

We're raising our family in a slightly less desirable house in a less expensive area than our parents did, and so are all/nearly all of our siblings on both sides.

That marketing video is hilarious! Love how they didn't even bother to shoot inside the flats, they are no doubt far far too small to shoot there and have 3/4 size furniture

I'm under 35 and I grew up in a council house too - I'm raising my family in a more desirable house than I was raised in, but it's smaller although in a nicer part of London. My parents had 4 dc and I will only have one. I think that has been the key to being able to find a nice home and have a good standard of living, I think most families I know living centrally in London have very much limited their family sizes and so are happy living in flats/no garden. I see lots of comments about needing a bog-standard 3 bed terrace with garden to be able to raise a family, which is something that we don't feel we need to have, our house is only 2 bed but that suits us pretty well.

I've probably moved up a socio-economic class as well, my parents grew up abroad so not the stereotypical boomers, and DH earns more in a couple of months than my parents earn in a year.

Hopefully there will be more shared ownership schemes and the like ok n the future.

Me and husband moved back in with my parents with our baby to try and save up to get a house. We saved 12k but with our combined salary of 25k we could only afford cramped 1 bed flats where we live. In the end we found a shared ownership home with us paying mortgage for 40 per cent, and affordable 'rent' for the other 60. So although it's not really what I envisaged we have a spacious new build with three bedrooms and a big garden in a nice area, that costs us less per month than what the same size property from our local housing association would. Even though a lot of people turn their noses up when I mention the 'part buy' bit I'm happier this way than privately renting someone else's home or having a full mortgage on a flat too small for a family. I'd love to fully own a house one day, I'm only 22 so who knows but for now I've kind of accepted it's unlikely. I do worry about DS future though, we don't have much in the way of savings for him and I hope he won't struggle even more than we have.

Oh and the point about worse house than we were brought up in rings true for me but not for DH. We're in a part buy three bed new build end terrace in a nice area with a big garden. However I grew up in a much bigger detached four bedroom house with a garage and a huge garden, something we will never be able have! Hubby in the other hand grew up in cramped council flats and houses in pretty bleak places and was really in awe when moved into our house.

maria it's all well and good saying to move to places like Luton but the prices round here are just increasing as people do move out. I live in a town close to Luton we bought our house last year for the exact same price as another house for sale on our road- that house is now up for sale for £40,000 more than it was bought for last year.

And this is in the least desirable area of town

I have not said it's easy eve now. I just said two professional salaries 30 years and now can buy a similar small house in one 5 outer London. My grandfather shared a house with 26 young men in 1901. Life was pretty hard then and worse on the other side of the family. In the 1930s after the crash a lot of local children did not even have shoes and then then there was the second world war and the austerity 1950s. I just don't think there was some golden earlier time when everyone found it easy to buy their own place.

When my parents were young, many, including them, had shared outside toilets and only coal fires for heating. As a young married couple, my parents lived in various rented rooms in shared houses, as did many couples.

And in the fairly recent past, lone mothers found it hard to get landlords to rent anything to them as lone mothers were very looked down on. Any "respectable" landlady would refuse to have them.

For some people, their housing situation is worse than their parents. For some it is much better. I remember sitting round with some friends who had all come from poor backgrounds and we were all marvellling at how our housing situation was so much better than where we grew up.