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?

The £40k is what my daughters have earned at the same stage in my profession. I was in that job 30 years ago. Their father was head of dept in a school 30 years ago in his 20s. (I am not sure what head of depts get in outer London fee paying schools these days - might be their pay has not kept up as well as my profession but I suspect it has) I am saying those few of us then and now in those kinds of jobs could then and now buy properties. Those on average wages always struggled and still struggle even in outer London.

I suppose this makes it all the more important we ensure our daughters pick careers which will enable them to buy a home which was the case 30 years ago and remains very much the case today.

I have never said it was easy then or now. If you are both on £20k not £40k then you will need to buy the £100k one bed flat in Luton etc and commute to work.

Slightly flaw in your logic: if we all make sure our children pick careers that enable them to buy a home, then unless action is taken to increase supply, prices will only increase still further as purchasing power goes up. That's how inflation works.

If you're both on £20k, then a 1 bed in Luton is about all you can get (and I'd question if even that is possible, given the lack of jobs in Luton and the cost of commuting to London from there). Given the average age for a first time buyer is now 39, this means either more families renting in the private sector, or bringing up children in 1 bedroom flats.

Quite simply, home ownership is getting harder to achieve - unless more is done to increase supply, that's only going to get worse for future generations.

If this thread has taught me anything it's that there is little correlation between intelligence and home ownership.

It's all luck really, isn't it.

At the moment it is hard but it's been as hard if not harder in the past.

Iseenyou the two incomes argument is valid but only to show that increased availability of money is what drives house prices.

The lack of supply argument fails because there is plenty of housing stock, it just isn't in areas where there are jobs. The logical conclusion of the lack of supply argument is that a million homes are built around London so we can all move and find work there. Are they going to build thousands of new homes in Liverpool? Probably not. HS2 is just a way of annexing Birmingham to London.

If people simply COULDN'T afford to buy, businesses would simply move out of London to areas where housing is cheaper. The only reason that hasn't happened is because the purse is getting endlessly bigger.

Boris Johnson hasn't helped in this regard by bigging up London as a world centre for all things aspirational.

I suppose this makes it all the more important we ensure our daughters pick careers which will enable them to buy a home which was the case 30 years ago and remains very much the case today.

This is a worthy objective - we all want our kids to do well and obtain a secure home.

However - and I've said this many a time on different threads - it simply isn't possible for everyone to pick a "good" career (i.e. in the context of this thread, one which will enable them to buy a home). This is partly circumstantial - clearly not everyone possesses the skills and attributes required to forge a "good" career, and then there are those who, for example, have caring responsibilities of one sort of another whose career options are therefore restricted or others whose particular disability may also mean their opportunity to have a "good" career is limited. But it is also economical ...... even, as if by magic, "everyone" suddenly became extremely well qualified there simply wouldn't be enough "good" careers for all those who wanted them. Indeed, this is happening right now, with 1000s of graduates (but it also applies to unemployed people with lots of skills and experience) unable to get started on that "good" career they worked so hard for and ending up, if they're lucky, doing the sort of role for which a couple of GCSEs would have probably sufficed.

I think it's fair to say that sometimes, "working hard" just isn't enough. And while diligent study and hard work should be encouraged, what about all those who don't manage to grab one of the comparatively few (compared to all those chasing) "good" jobs ? Not to mention all those categories of people I mentioned before, who have no chance - ever - of getting one ?

Which begs the question yet again ? ...... should a basic secure home be considered a privilege, or should it be a basic right in a so-called civilised country ? What if you can't get one, and will never get one - in spite of working as hard as you can (and being frugal, being prepared to compromise etc etc blah blah blah) ? Are "those sort of people" just supposed to be thrown to the dogs ? Time and again, I'm reading stuff on this thread which seems to imply that if you can't afford to buy (which, at the moment, seems to be the only way of getting a secure home - would be very different if the tenancy system was overhauled) it must somehow be your fault ..... you don't work hard enough, you won't compromise, you eat too much. Much like all the benefits bashing that goes on, it feels as if the concern which a decent society should show towards all its citizens, can be "legitimately" swept under the carpet so long as it can be "proven" that people are doing nothing to help themselves. I refuse to accept that the majority of full time working adults (or those who can't work FT for a variety of justifiable reasons) unable to buy are lazy and/or feckless. I feel hugely distressed at what the future may hold for my children but strangely enough, I also care very much indeed about the dreadful position so many others also find themselves in. This issue should be a concern to all of us - and those of you who display this "I'm alright Jack" attitude (... because you quite obviously worked so much harder than everyone else, and you encouraged your kids to do well) really should feel very ashamed about your lack of compassion.

This issue is what will decide my vote at the next election though right now I despair at all of the parties' approach. It is scandalous that so many are denied a secure home. And I bloody well don't care what living conditions were like 100 years ago - we are supposed to have moved on since then. All this previous generations had it tough too so put up and shut up is incredibly insulting. It wasn't so long ago that women still didn't get equal pay for doing the same job as men - at around a time which has been quoted by some of you as evidence to show how "hard" it's always been to buy (not that I agree). Not a single one of you would suggest women should go back to getting 1/2 to 2/3 of what men get paid so why should the housing debacle be readily "accepted" ?

In an article on the new affordability rules:

"additional questions would be focused on imminent changes to their lives that can be backed up with evidence. For example, this could relate to someone planning to cut back on their working hours or take out a loan."

... or thinking of getting pregnant ... or having a viable womb...

Posted this on the 'buying in London - share your stories' thread but you might be interested:

I saw someone on FB link to this earlier.

1,000 new homes in SE14, targeted at the Chinese complete with translations. www.hamptons-asia.com/en-asia/New-Developments/Aberfeldy-Village-E14/

The video is laughable. As if any or that would appeal to any young Londoner.

Looks like it's from the end of last year.

I posted that very same one upthread - it really sums up the issue. There are few homes being built at all, and those that are, are being snapped up by investors (either domestic buy to let, or overseas) who have no intention of living in them (and in many cases, not even letting them out, but just keeping them as investments)

You might think that just affects London, but that's not the case - with classic BTL investors (eg those buying a single flat as a pension investment) priced out of London, they're increasingly looking at other cities with high levels of renters, such as university cities like Manchester and Leeds. While at the same time forcing potential owner occupiers to look further and further afield.

Similarly, as more and more foreign money pours into central London, people who might previously have looked in zone 2 are pushed into zone 3, and so on. So the effects ripple outwards.

Another big issue is how much demographics have changed. Only a generation ago people would settle down in their early 20s, probably buying a first property around the same time, and trading up to a bigger one. The combination of increased prices and considerably later marriage means people are now not doing this until their 30s, by which time that one-bed in Luton is little good as they're on a tight deadline to start a family.

It's not that people are greedy and want their forever house right away, but with the average age of a first-time buyer in London now 39, biology dictates they either already have kids, or need to start thinking about it very soon.

I think the reason those of us with longer memories go on about past hardship is the subtext that, as Merry said yesterday, there are peaks and troughs over a lifetime of house-buying.

It's very difficult to buy now in London, and to sell in N.Ireland, but it won't necessarily be the same forever. This could be a sea change, but the chances are it won't be.

I can remember when a lot of btl landlords who bought off-plan in city centres in the North found themselves in negative equity when the market crashed. And plenty of people found themselves in negative equity in London during the 90's. I can also remember a time, late 70's?, when a lot of property in Central London was bought up by foreign investors, mainly Arabs.

Even doing things later isn't new. My parents, who met when they were 14, were unable to afford to move out of their respective family homes and marry till they were late 20's. Couldn't afford to buy till their early 40's.

What's different is the longer life span and later retirement. But childbearing years are the same, so possibly more couples will be starting families in rented accommodation? But that's just speculation. None of us has a crystal ball.

jessicamary, have you just named changed from mariajenny?

Both posters have:-

A ridiculous obsession with buying a house for £275k in zone 5

Daughters who have followed the same professional career as them

Two female names as their user name

A deluded opinion that everyone with a half decent job earns £40k

An insistence that you can live in Luton on not much more than minimum wage and commute to Central London (despite the £400 a month train ticket)

And most annoyingly - a complete inability to comprehend that earning multiples mean fuck all nowadays as they insist every couple can still get a mortgage for 3 times their joint salary.

If you aren't the same person then at least you can both be happy in the knowledge that there are 2 of you living on your planet.

Just started a new thread about this but thought I'd post it here too:

"At Labour's local and European election campaign launch tomorrow, he (Miliband) will pledge to cap rent rises and to extend the standard tenancy period from six months to three years. As well as this, he will commit to banning letting agent fees, promising to save the average new household £350."

www.newstatesman.com/politics/2014/04/milibands-pledge-cap-rent-rises-smart-politics

Is he reading this thread? :)

That's excellent news.

Just for the record.

New Cross is not, was not and never will be a prime location. Selected streets are reasonably OK (mostly those that fall within catchment of Haberdashers), and a good night is to be had if you qualify for entry to Goldsmith's student union but most of it is unrelentingly grim. This is evidenced by the absence of High street banking facilities.

No native Brit would pay the prices the developers are asking of the Chinese because those flats are located in New Cross! You got that kind of money and any knowledge of London you can afford to buy somewhere so much nicer.

It does demonstrate the point I made about introducing higher taxation for foreign purchasers in London & the SE rather neatly though.

Iseenyou - yes, a young couple, with toddler, whose house-buying travails I have been following, would have been offered x5 in the autumn, but for the fact that one of them had a minor blip in his credit record. But they've got x4. Joint salary of £60,000.

Even with £20,000 from parents and saving £30,000 on rent and childcare by living with them for a year, they've had to downgrade expectations from 2 bed terrace to 2 bed ex council flat, at £300,000, further than they wanted to be from the providers of free childcare. Still waiting to see whether the sale goes through. Vendor hasn't yet found anywhere to move to.

bochead - I'm afraid I have to agree about New Cross. And however nice Brockley and Ladywell are and however good the transport links, Lewisham town centre needs massive regeneration. Every time a shop closes, it's replaced with chicken and chips or pound shops. Noticeable decline over the last 5 years.

jessicamary, have you just named changed from mariajenny? hmm

You're also on the London Property thread as JaneinReading, with all your daughters and their huge mortgages in London and similarly helpful advice.

High flying professional with unlimited earnings. Tick. Multiple daughters doing the same. Tick. Teacher ex-husband you had to pay off. Tick. Lack of empathy. Tick.

You've sneaked back in haven't you Xenia?

(Houseprice, yes name change, but nothing to do with this thread.)

(Houseprice, yes name change, but nothing to do with this thread.)

PMSL laughing- so you really are the only person with those views. At least with your alter ego it looked like you had a cyber ally!

Don't you see how self centred and narrow minded your views are because not everyone can achieve what you and your daughters have.

I thought we had a very interesting debate on this thread and it can continue.

Below is from the Times today - very interesting article on this topic:

Average house price will hit £1m after quadrupling in a generation

Demand has already pushed prices beyond the reach of many young people

"The average price of a house in England will quadruple in a generation to nearly £1 million unless steps are taken to tackle a critical housing shortage, according to a report released today.

The research from KPMG and Shelter shows that house prices are poised to double in ten years to about £446,000 and may quadruple to more than £900,000 by 2034.

It also reveals that more than half of 20-34 year olds may be living with their parents by 2040 after being priced out of either buying or renting.

With only half the required homes being built each year, demand has already pushed prices beyond the reach of many young people.

Most young adults find it impossible to raise the deposit, which can often be more than a year’s salary. Even when they can get on to the government’s Help to Buy scheme, where deposits can be as low as 5 per cent, the mortgage payments are often unaffordable. Private renting may also be out of reach because rent levels have soared in the past ten years as home ownership has shrunk.

Instead the “mum and dad bank” has become the main source of finance, lending or giving £2 billion a year to first-time buyers. In 2011 nearly two thirds of such buyers needed help from their parents, up from a third in 2005.

Figures from the Land Registry yesterday showed that house prices went up 5.6 per cent annually across the country in the year to March — the fastest increase in four years. London prices rose by 12.4 per cent, with the average house costing £414,490.

The report sets out a plan to boost housing within five years through penalties for those sitting on landbanks and increased powers for town halls to build New Homes Zones. “Our chronic shortage of affordable homes means that a generation face a future of living in their childhood bedrooms,” said Campbell Robb, Shelter’s chief executive. Since 1996 the number of 20-34 year olds living with their parents has grown by 25 per cent, reaching 3.35 million — a quarter of young adults.

“Government-backed mortgages like Help to Buy or tweaks to planning rules will only be sticking plaster solutions that risk making the problem worse,” Mr Campbell Robb said. “But this report proves that the next government can turn the tide on housing within a parliament.

The study indicates that property prices increased by 4,268 per cent between 1971 and 2012. If food and wages had increased at the same rate, a weekly shop would cost £450 as against the average of £56, and earnings would be £29,344 higher than the current average of £26,500. The suggested New Homes Zones would be able to develop between 200 and 500 homes which could attract tax reliefs.

Marianne Fallon, head of corporate affairs at KPMG, said: “What is clear from our report is just how big and messy our housing problem is.

“For many people, particularly those in their twenties, the aspiration of owning their own ‘castle’ is fast becoming a fairy tale.”

‘Better a home than a degree’

Richard Hill, 28, still lives at home with his mother, stepfather and 18-year-old brother in a small semi-detached house in Brentwood, Essex. He works right across the other side of London as a college development officer for the University of Roehampton, but his £30,000 salary is not enough to buy a home or even rent a place of his own.

“It’s a long commute to work, a good hour and a half, and it’s £300 a month travel. But it’s the only option at the moment. My parents don’t want me there. I don’t want to be there. But it’s purely because I don’t have any choice,” Mr Hill said.

He said that many of his friends locally were in the same position, with none able to afford either to rent or buy a home.

Mr Hill said that he and his girlfriend were trying to save to get a deposit for a house but, in reality, this was unlikely to happen soon.

“There is no way I can afford anywhere round where I work or even round here,” he said.

“As a single person it would be impossible, but even with my girlfriend we don’t have enough cash. The only people I know who have managed to get themselves sorted are those who have received an inheritance, people who have lived up north or people who didn’t go to university and started earning years ago. I’d much rather have a house than a degree.”"

JessicaMary and EnglishRose on another forum?

I agree that there have been sone very interesting posts on this thread JM/MJ and I have to say the article you've just posted has flummoxed me as it concurs with everyone else's opinion except yours?

Have you seen the light ?