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?

Then how do people afford what I see as a more extravagant lifestyle?

Two of my dc's are on fixed rate mortgages. Don't know the rates but a lot less than 6%. They bought about 5 years ago. I know I was worse off than they are, and so do they because they lived that childhood.

Lol Train.
Mind you our dcs will need 16 coffees a day if the solution is to work 15 hrs per day and to commute 5 hours from the beach or forest house!

thymeout 5 years ago interest rates dropped to their current level, the economy was rat shit, mortgage lending was less strict than today and house prices had dropped, it was a great time to buy a house.

And do you know for sure that your DC's lifestyle is bought and paid for or might it be on the never never?

If i had a penny for the number of times my mother has said they had 15% interest... And i have tried to explain until i am blue in the face that i would far rather have a £20k 10% LTV mortgage with a 15% interest rate, than a £300k 80% mortgage at 5%!! I know it was hard at the time but it would be a walk in the park compared to current normal payment levels

How should I know how people pay for extravagant llifestyles. I don't have one, neither do most of the people I know. We'll the local landowner seems to do fairly well but I know who he is rather than know him. I predict though that him being landed gentry and living on the country estate that's belonged to his family for a few hundred years collecting rent from his numerous tenants and running businesses on the estate have a bearing on what he can afford. Who knows though, it could be all front and minus what is tied up in his property he may be just as skint as the rest of us.

Thymeout 5 years ago it was still possible to get lower interest rates before all the low rates for FTBs were pulled from the market. Deposits required by most lenders now for FTBs are 10-20%+ and to get lower rates you need to put down about 40%+ But you know of course that low interest rates are not a good thing....they are the only way the bubble is being propped up. Once they revert to anything near the historical norm the market is completely unsustainable.

How do people afford what you see as a better lifestyle? 1. Living standards rise over time due to technological advancement, for one thing. 2. In the last two decades the West has been able to take advantage of global labour arbitrage so that commodities have dropped hugely in price in real terms because they have been imported from Asia (this process is now coming to an end). 3. Most young people under 30-35 never have had that lifestyle anyway. And the relative changes in prices of consumer durables re housing and other expenses makes a mockery of that notion of lifestyle anyway. Which would you rather have, a couple of trips to Berlin on Ryanair, a flat white every day, a laptop and an iPhone and some clothes from Topshop; or a stable job, a house, a family and the possibility of a pension?

15% interest is seared into my soul because it came when we had just overstretched ourselves to move from a 2 bed flat to a house, 2 dcs and one on the way. i don't recall MIRAS making much difference.

And I don't remember a time when it cost more to rent than have a mortgage. Is that because rents are high, or mortgage repayments are low? Genuine question.

If you go back to my previous posts - no, don't (yawn) - you'll see that I'm generally on the side of the current generation. The situation in London is ruining people's lives. I'm thinking of the friend who has her daughter, daughter's dp and gs living with her and her dh. AND doing ft childcare of a toddler at the age of 68. They thought it would only be for a year, max. They thought they'd found a property. After 5 months waiting to exchange, the vendor pulled out. Thought he could get a better price, we think. Dead right. It's now been 16 months and no end in sight.

But we're talking about the next generation and, whatever happens, I'd start saving sooner rather than later.

The smartest and most ambitious of our kids will emigrate, just as those from Ireland and Poland have done in this generation. I've met one too many African office cleaners with PHD's and Spanish barristas with MBA's during my last couple of decades in London to come to any other conclusion. The rest will sink into the mass poverty that pervaded the British Isles pre WW1.

This concerns me greatly as my own kid is SN so doesn't fit into the sub-group that will be able to escape our overcrowded island, unlike his older half brother who has already carved out a better life overseas. Tbh I worry more about the disintegration of the welfare state and the abject failures of care in the community than I do about how he'll scale the glorious heights of the housing ladder.

We can help by pushing our kids to look at what few non-London centric career opportunities there are. It may hurt if we investigate and find those opportunities are overseas, but we owe it to them to manage their expectations. I also think we need to research more about how the working classes survived in the past one child per bedroom would have been an unimaginable luxury to most of our ancestors. Multi-generational living was the norm, not the sneered at exception. The golden era the boomers enjoyed is long one and not coming back again.

It's not just housing costs we need to think about either. The era of cheap food has also come to an end + energy costs will continue to increase now we have reached peak oil. The fact that the food riots impacting other nations haven't reached our shores yet, doesn't mean they won't arrive at some point in the coming decades.

Yes houseprice. Both sets of parents are pretty wealthy. My parents said they would give us the full amount. We found a house before they sold theirs so dh's dad lent it to us. Then when their house sold they changed their mind and gave us half. Dh's dad lends but does not give(he has over a million pounds worth of property and a huge pension but squirrels it all away). So we have to pay him back his half. Difficult but affordable as dh got a pay rise. We are very lucky really.

thymeout I assume rents are high at least in part because of buy to let. BTL mortgage rates are always more expensive, and landlords need to cover the mortgage,maintenance and letting costs. even if it is interest only on a mortgage, by the time you add other costs and a profit element, it would easily exceed a repayment mortgage. Whereas previously the assumption was that the property value would grow, enabling the btl mortgage to easily be repaid from sale proceeds, i doubt there is that confidence now, so the investor needs to make a profit. And of course the lack of social housing and peoples inability to buy pulls up the prices due to supply and demand.

Its a country divide here the vast majority of young people have smart phones, foriegn holidays, sky, multiple children and/or their own property under 30. On here a lot dont but after seeing that council house programme last night and seeing some grotty places being rented out at ridiculous prices I can see why!

I don't agree that the majority of under 30's own their own home. Have you got stats to back that up Jasmine?

I meant in my area. Im just turned 30 and live down south with dh of 10 years and nearly 3 children and our mortgage is about 300 a month. I have a lot of friends with their own places but none are professionals and Im the only one out the lot with a degree. Even those on benefits here have smart phones/holidays/sky/tablets etc so its crazy how some people are so obsessed with London that even though they earn significantly more their lifestyle is significantly worse. I just think its a bit mad.

ifnotnowthenwhen

And paying our 60-something landlord serious coin to live in an OK house in an OK area, spending our "disposable income" (ha ha) on re-plastering the walls, mending the garden fence, painting the walls, re-grouting the shower, because the LL will do fuck all. Because, if I move, another desperate family will grab my crumbling house near a good school with both hands.Because they can't afford to buy either.
And so it goes.

Perfectly put. And exactly our position.

I think inter-generational fighting every gets people anywhere. We all have to live with the circumstances we are in. We can all learn from those before us including our parents but also our children. I said in the car to school to mine yesterday parents can learn as much from their children as vice versa and I meant it.

MIRAS for most of us (tax relief on mortgage interest) was so tiny and withered on the vine it was hardly any benefit at all as it was frozen at minimal levels which bore no relationship to the amounts we had to pay in London 30 years ago.

Jasmine is right that there is a divide between outside London and in it. However even within it as I said in outer London you can get flats for £100k and houses for £275k if you are prepared to commute in as people always have. People even walked in apparently the 15 minutes a day when the underground was first built out my way. Someone on this thread has a husband who cycles in. I have cycled in from zone 5 London (not often) so all the whinging about high tube fares do not have to apply if you get on your bike or are we all too unfit for that these days?

My advice to young people is "buy before you breed" given the new lending criteria; buy as soon as you can wherever you live; if your salary does not justify it live at home or on a friend's floor and buy a buy to let; once you have the place save save save and put all spare money into paying off the capital.

Buy a Buy to Let whilst living at home or on a friend's floor? Are you serious? This thread is about being able to afford to live in a place of your OWN, not in a sleeping bag on a mate's floor for 10 years while you push up both sales and rental prices on your Buy To Let.

Curly, it's my jam tomorrow advice and what just about everyone on the thread who has managed to buy has had to do at some stage of their lives. It is no gain without pain etc etc. I mean before you are married with children of course although loads of young couples move back in with parents plus toddlers to save up for a deposit. We are looking at practice methods to ensure an individual posters gets to buy somewhere rather than sacrificing your future financial well being to "help" the other 60m British citizens (not that I think not buying helps anyone).

Maria you should go live in the real world.

If I didn't spend 100 on a smart phone and 200 a year on a week abroad holiday I still wouldn't be able to spend 10 times my house hold income on a shitty flat.

Baby boomers had it much easier than the generations before and after.

I always remember the single mum I knew 26 years ago in London, who lived in a shared house and shared her bedroom with her 13 year old son. I remember when the landlords told her a tenant was moving out, so there would be a room available to rent for her son. She said she couldn't afford it.

Or my married work colleage who had bought a tiny flat in a rough area, with 1 bedroom where they lived with their 2 year old daughter. They wanted more children, but didn't see how they could manage it. She was a fairly newly qualified teacher, he worked for the council.

There have always been these stories. Yes some things have got worse, but I never knew these halcyon days of buying some here talk about.

Green, there has always been poverty. What we have now is very different.

Most people couldn't even afford their own property if they had to buy it now.

High earners (150k+) now can only afford the scruffy areas that were dirt cheap and filled with poor immigrants 20 years ago, in London.

Yes, there is massive gentrification as the population of London increases. Rich people buy places in poorer areas, pushing up the prices, and the poor have to move further out. This has always happened, but the poor are having to move further and further out.

And maybe in London most people couldnt afford to buy their own property now, I dont think that is true outside of London. Although of course it is true in that I wouldn't now get enough years on a maortgage to buy my property because of my age.