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?

So some of the areas that I rented in in London that were incredibly rough and where most people would have never considered buying, are now full of newly built detached "executive" homes. You can't compare the prices in an area of London to what they were 20 years ago. Lots of areas have changed out of all recognition.

Yes, Greenwinter.

We rented a one bed flat, bathroom on the landing, with a padlock, in NottingHill in the 60's. It was known for Teddy Boys fighting with bike chains, Rachman and race riots - not Hugh Grant, in those days. But gentrification is good for an area, providing there are pockets of social housing.

There used to be accommodation for low-paid workers until Right to Buy. Some lovely flats behind Tate Modern, now highpriced rentals. Then people were forced into private rental, subsidised by Housing Benefit. Now there's a cap, and they can't afford the extra. No social housing available. Families are being shipped to Birmingham because it's cheaper for councils to put them up there than in B&B's. God knows what the job situation is like in Birmingham and how they'll cope without their family network for childcare. And I remember the Govt saying the cap would force down rents. Oh yeah. A one-bed Victorian conversion in Brixton has gone up from £1,200 pm to £1,700 p.m. in a year. Not that it would be rented to HB recipients anyway.

Just heard on LBC, that up till Thatcher, we were building 250-300,000 homes a year. She stopped council house building. It's now barely 100,000.

More homes and rent controls - that's what the Govt needs to do.

maria, you really are incredibly patronising and don't have a clue about the real world.

Where the fuck do you think a young person will find the 20 or 25% deposit to buy a BTL?

All this 'jam tomorrow' bollocks is tiresome.

Many people are not living the high life now and still have no hope of buying a house in an area even outside of London.

Way back in the thread you proved the massive whole in your stance by showing someone a flat they could buy which was actually a shared ownership property, not an outright purchase.

I haven't noticed you find an actual workable suggestion for that poster or suggest a way of a young couple with children who do not have professional salaries or handouts, to buy a property in outer London.

nikki, that's interesting about your deposit. I'd not really thought about a situation like yours, ie getting half your deposit from each set of parents but having to pay one half back.

I can see that people already have to or are going to have to take any options offered to them but I'd never pondered how that would affect other things.

Doesn't it create a weird atmosphere with you and your parents/ DH that you are busting a gut to pay his Dad back whilst your parents won't get anything back?

I commented on this way up thread (it's grown considerably!) and have done a name change. I put a question in chat and wondered what your thoughts were. I've already had the 'move somewhere cheaper!' answer so any other helpful advice/experience is appreciated. Hope it's ok to re post:

I'm 32 and wondering when the best time to try for a family is.

DH and I are saving money, hopefully for a house. By my reckoning it's going to take five years min based on current financial situation.

So where should we fit children in? If our incomes go up we may be able to save a little if we had a DC in childcare. But with nurseries costing at least £1,200 here and the need for a bigger flat so higher rent, we may not. (Two beds where we are £1,400+ and rising)

I fear we will never buy if we don't do it before having a family, especially as a bank would take into account childcare fees etc into how much we could afford. I know it's not the be all and end all but it is something we would like to do.

Does anyone have similar experience and can share any words of wisdom?

I'm another person who was only able to buy due to a 25k handout from my parents. My husband's parents are millionaires but wouldn't have given him any help with a deposit. I don't really understand the mentality of baby boomers who are preparing to pay massive IHT bills on their estates when they die but won't help their children onto the property ladder. I know it's their money and they can do what they want with it but who really likes the government more than their own children?

Would you not consider moving? Im pregnant with 3rd and the new baby will be going in to childcare to. My first 2 are in 4 days but I get both mine in childcare for 4 days and my mortgage for 1200.

It all depends on how broody you are, and how much you want children. Here at age 32 that would be getting on a bit for the age of a first time mum so most people wouldnt be delaying than I know.

I don't understand that mentality either. My parents don't have much money, but they help out my sister loads buying stuff for their grandchildren as she is pretty poor.

Oh sorry saw you dont want the move somewhere cheaper answer. Unfortunately then it looks like waiting until 37 and only having 1 child. Thats ok as long as you are not particularly maternal as only you know what you want more

It is almost possible to advise you velvet, because there are so many what ifs. You might delay having children, buy your house and give birth to great kids. You might delay having a family, and then find your fertility is not great, and you may struggle to conceive, or may never conceive.

You can get a test that can help give you an idea of your current fertility level, along with a bit of advice as to what it may be in 5 years time. I do know people who have struggled to conceive in their late 30's, and others in their early 40's who have easily conceived. But in general, the older you get, the harder it does become to conceive and give birth to a healthy child.

You may save up and prices may go through a drop, inwhich case you will be able to buy what you want. Or prices may soar and after 5 years you still can't buy what you want.

So sorry, I don't think there are any easy answers.

Thanks jasmine and green I'm feeling quite torn. DH is younger than me so age much less of an issue for him, even more so than it is for most wannabe fathers.

thevelvetunderground, it's not possible to offer any advice without more information such as:-

How much you both earn
How much you can save a month
How much a house/flat in the area is
How practical is moving to another area
What are your short to medium term job prospects like ie, is it likely your salaries will go up

Generally though, if you don't buy before you have children, you will severely limit your ability to buy anything until they are old enough to be out of childcare.

There's another thread over on 'Money' where people have been playing with mortgage calculators today and couldn't even borrow anything like their current mortgage today due to the effect childcare/ school fee costs are having on the affordability calculations.

I just had a wee look on the help to buy site. If I wanted to buy a 2 bed in this area the government would kindly persuade the lenders to lend me more than I would be able to get otherwise. However, once the new affordability criteria and stress tests are introduced, that inflated mortgage isn't going to be affordable. At 4.5% help to buy rate I would be repaying £800 a month, same as I pay in rent. However if the rates go up to 7% or more I would be fucked.
Help to buy is such a fucking stupid solution. Anyway, what do people think the new affordability tests will do to mortgage applications? Surely the problem that help to buy is designed to alleviate, that mortgages for houses are actually unaffordable, will mean that people won't be able to take advantage of it because banks simply won't lend? If this happens, will that impact on house prices?

I have given lots of examples and they don't have holes in them. So let us stick with £100,000. We have a couple both on £20k and the borrow 95% on right to buy. They need to raise a £5000 deposit which is £2500 each over a few years. Most people could manage that sum.

1 bed £80k Luton www.rightmove.co.uk/property-for-sale/property-44685011.html

If they can borrow say 3x joint salaries that is £120,000 which will buy them something in a good few areas in outer London (and lots outside London).

(I have never said those on the full time minimum wage of £13k a year could afford to buy in outer London)

So two people working full time a bit less than the UK average can just about afford a tiny one bed, in a dump of an area, with government help, that is only affordable with the lowest ever interest rates. Thats sustainable.

20k is actually above the UK median income of £17,600.

So this shows that even with government help and a 95% mortgage, it takes two above-average salaries to afford a small one-bed flat in a town with an endemic unemployment problem.

What hope is there for single people, people on below-average salaries, or families who need at least two bedrooms?

And for the record, it really isn't possible to buy a place in outer London for £120.

Estates Gazette compile all the cheapest properties in the capital in a map here. Most are nearer £200k.

www.estatesgazette.com/egi-about/london-residential/market-analysis-2013/affordable-units/?cmpid=ILC|EGIx|EGLSU-2013-1505-lorma|affordpriv&sfid=70120000000e2HQ

The median income in London in 2011, was £27,650.

If they can borrow say 3x joint salaries that is £120,000 which will buy them something in a good few areas in outer London

Don't you understand that income multiples mean fuck all now maria?

Even after 30 pages on this thread- hasn't that sunk in yet?

If the couple have childcare and travel costs they won't be able to borrow anything close to 3 times their joint salary.

Surely someone who had a career in the same field as someone who can now earn £1m+ can comprehend that very basic fact

house prices have doubled / tripled in the last 10 odd years while wages have stayed the same

en.m.wikipedia.org/wiki/Income_in_the_United_Kingdom

Suzie, yes I know. House prices have soared in the last 10 years. It is buy to let that is shoring it up.

I think with more investment and encouragement of the economy outside the southeast, the potential for increasing numbers of jobs to be done remotely and the possibility of using new technology to build environmentally sustainable houses that are suitable for modern families rather than people living 50-100 years ago, it is very possible that our children could buy their own homes or at least have easy access to desirable housing.

Of course all that would require planning beyond the next election.

Green I think its lax regulation and peoples greed that has pushed up prices, your right buy to let is one of these.

that is only affordable with the lowest ever interest rates.

I think that is the key problem.

Interest rates can only go up. A mortgage of £120,000 is c. £1000/month with a 25 year mortgage at 8%.

Also, anybody with wifi can find an affordable house in the uk in about 20 seconds. Finding an affordable house close enough to a job is another matter.