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?

Peggy You're right. London needs to be treated as a special case and any policy changes scrutinised with that in mind, not simply rolled out nationally.

Help to Buy was a good thing for the provinces, but just made things worse in London. Prices immediately shot up as more people were able to buy an already limited number of properties.

I know a couple who, within a fortnight, had been totally priced out of the area they needed to be in, close enough to gp's for them to do childcare.
They're still living with gp's in a 3 bed bungalow, saving £2,600 p.m. on rent and childcare, but, after a year, are no further forward in being able to buy their own place.

I think my generation has had to seroiusly readjust our expectations from what we grew up with. I grew up in a 5 bedroom detached house, my mum was a SAHM to 4 children, private schools, expensive holidays. DH and I have had to accept that on a combined income of 80k the best we could afford is a 3 bed semi in a cheap area, 1 child, both will have to work full time and private school is unlikely.

And reading of other peoples situations on here makes me see we are the lucky ones

I think its important to remember that situations change and what is normal now may be completely different 10 years down the line.
There is lots of doom and gloom atm but it will change again and a different set of people will benefit.

I was discussing this just the other day with DH. Where we live, there is alarge volume of nice houses costing anywhere between £400k-£1m. These are the kinds of houses in which DH and I, and pretty much everyone we knew, grew up. The vast majority of these houses are still owned by our parents' generation.

For example, my parents bought our family home for £14k in the 70s. The sold it in the late 90s (to move abroad) for £250k. The same house was on the market last year for £400k - and that's not even in the nicest area of the city.

It's all very well, however, for the baby boomers to be hanging onto these houses with their increasing value but to what end? At the moment these houses go up for sale at a regular but unalarming pace as some choose to downsize or sell due to sad circumstances and these do tend to be sold to younger families lucky enough to be in high earning brackets but surely, as that generation gets older - and given the obvious volume of people in that generational bracket, there will come a time when the start migrating to retirement homes, or indeed dying, en masse there simply will not be sufficient buyers to take on these houses at their current and future value. Indeed if a house is only worth what people are willing to pay for it then these current values of £400K+ must be fairly irrelevant as the prices will surely fall in order to make a sale?

DH says I am wrong but didn't seem to offer any further contribution to the thought process so I am looking for the expertise of wise mumsnetters to help me out here.

it means signing up to a lifetime of debt where you have to keep working

What's the alternative? The magically free rental properties? Rented or owned you still have to pay for your accommodation, at least with a mortgage you will eventually get to stop paying.

I left school at 16, worked two job and probably worked near 13hrs per day and that's including weekends. Bought my first house at 18...12 years on I own a small holding with 8 acres and no mortgage. It can be done but I was lucky when I bought as the market was lower and where I live the market is much cheaper than London etc.

As for my DCs i hope we will be allowed to build On our land for them or will happily sell up, share the money for us all to have a house each.

When we bought our second property the mortgage was 8 times our income but now 8 years later its only 2 and a half as you keep working and it goes down as you get older.

Remember that the average UK salary is only £26.5k DMirror so net household income will be a lot less than many folk here are saying they have.

4 out of 5 new full-time jobs are for below £17k.
These folk can work as hard as they want, but house purchase doesn't look practical.
Much better to accept most folk will rent and then legislate sensibly for security of tenure, but fair to both sides, like in other EU countries.

My first job with a pre requisite for a degree offered 13500. I was lucky to even get a job too. And employers know it so can offer fuck all and people will fall over themselves for it.

If interest rates increase then rent will increase. So we're all in the same boat, better to be owning your life raft

Oh and this was in 2011.

3 times my salary is 39K. Despite the rhetoric that people better than me love to ram down my throat I do actually work hard for this. I find suggestions that I haven't even considered hare work offensive.

On top of working I study full time involving placements of 40 hr per week plus independent study. If this pans out 3 times my salary will be 6th, still not enough to get a mortgage.

I realise I don't and will never earn as much as proper human beings but please don't think I don't work hard it's offensive and incredibly hurtful.

Housepricewoes I'm in Birmingham - not the centre of the City, but on the outskirts. Oddly, our current house is prob only about 1/2 mile from that first flat I bought, and I like keeping an eye on the local property market mainly because I love nosing round houses. My point is, it's not the same across the board - our last house literallly doubled in price in the 7 years we lived there before moving here, but this thread is about buying your first property, and people have to be realistic about what they can get, how they can get it cheaper than the 'average', how they can add value, different ways they can save if that is what they really want - more than holidays, more than the latest phone, more than buying lunch out or 'going for a coffee' out, more than all the other things that some people spend money on - and I'm not saying that's for everyone, but there is more choice out there than some people are prepared to recognise (reiterating once again that a lot of what people are saying on this thread either applies to London or applies to the rest of the country - I think there are 2 different conversations).

Whenever people say they prefer renting, I always think of dh's Grandfather who live in the same rented house from when he got married in 1943 to when he moved into residential care in 2011. He paid rent for 68 years, instead of a mortgage for 25..... it's a LOT of extra payments, even allowing for certain amount of maintenance (although he did most himself, but then wasn't able to install a downstairs toilet when he needed one in his final years). I'm aware many people don't 'prefer' to rent, but some have said that they do.

Owning a home is great if you can afford it, but financial ruin if you can't. It is a RISK to be assessed just like any other investment.

It's great if you stay put long enough, maintain or increase your income and no disaster befalls the house or you. If you have a secure job with a high income, definitely go for it.

I remember price crashes in the 70s, 80s and 90s, which coincided with downturns in the economy and job losses. Very few people have even 6 months savings to tide them over emergencies. So, thousands of folk got into serious arrears and had to sell at a bad time - they ended up in massive debt from negative equity.
Nowadays, some folk also have to consider flood damage - over a million properties can't get flood insurance due to postcode.

Until you have paid off the mortgage, the property belongs to the bank, not you. You can be evicted if you get into arrears. A renter forced to leave doesn't get slapped with a 100k debt and a ruined credit rating.

BigChocFrenzy has it spot on.

And then Uselessidiot (please don't call yourself that) confirms, very sadly given the way she speaks about herself, that for some, or indeed many people (and that's increasing all the time ATM) simple "hard work" will never be enough to either own their own property - or to rent without the assistance of HB which in turn then restricts you terribly in "choosing" a rental property.

"Hard work" (and I've put in inverted commas because some people still insist on equating hard work with high pay - which is bloody nonsense) is NOT the only factor involved in being able to house yourself adequately and securely. I'm sick to death of the oft-repeated suggestion that if you haven't achieved a basic standard of living then you can't possibly be working hard enough. Simple fact is that many jobs will never pay enough to enable people to afford a decent home - regardless of the fact that many of those jobs are not only essential and involve long hours, stress and responsibility. Do some people not possess the imagination, the empathy or indeed the sympathy to realise that even if we were all suddenly and magically highly experienced and highly qualified there simply aren't enough "well paid" jobs for everyone who needs one ? (in order to buy a property). And as we clearly aren't all going to get a magic wand waved over us any time soon, can people not accept that not everyone is capable of either doing and/or getting a "better paid" job, or a second job (because there aren't any). Yes .... in any given situation, there will of course be a fortunate group whose individual circumstances mean they can rise above it - and yes, that might well include hard work and sacrifice, but in order for those people to succeed, there needs to be a whole set of criteria in place to make it possible - including elements of "luck" for want of a better description such as being in the right place at the right time, such as having family support, such as being able to not only find work but being able to access it and so on and so on. And while it's not wrong to feel proud of yourself if you're someone who's managed to "get there" it doesn't automatically follow that everyone else can do the same thing ..... and it certainly doesn't mean the whole rotten housing issue in the UK can be dismissed along the lines that if people wanted it "badly" enough they'd find a way.

Look how Uselessidiot feels about herself - she describes herself as someone who isn't a "proper human being" - presumably because she feels bad about her lack of "achievement" if it's measured against her property buying (lack of) power. It's disgusting that she - and many others - are made to feel like that because of circumstances beyond her control.

Similarly, it's not enough these days to count on your mortgage effectively going down as you get older. That may well have been true in the days when annual payrises - and decent ones at that - were commonplace but it's not the case now. How many people have been on pay freezes for several years now - with the general cost of living rising all the while ? And how many have been forced to take pay cuts to keep their jobs making the money in their pocket even less valuable ? (I had to take a 7% cut more than 2 years ago which was bad enough but with the cost of living going up and up I have even less now than I did then IYSWIM). In any case, it's not a question of gambling on future pay rises and promotions to justify taking a big multiple mortgage to get on the ladder any more as those big multiples can't be had.

I'm sure, as with any debate, that there are some moaning about the cost of property whilst making no sacrifices, but again, there are huge numbers sacrificing everything they can to save a deposit and it will take them years assuming they can ever catch up with ever increasing prices. Then you have the next group - who may well work bloody hard - but who can't save (for a deposit, for their retirement etc) because everything they earn - despite being frugal - is eaten up by day to day expense. There's something very wrong with society if, as a full time working adult, you can't afford to house yourself - be it buying somewhere, or renting without HB.

Catsmother - There are still plenty of areas where a lowish waged couple can get a place even in the South. In london no but most other places of course you can.

Where Jasmine? We managed to buy a cheap house in the south east with 80k a year combined income but my BIL and SIL can't on their combined salary of 50k

It really angers me when people talk about 'lifestyle choices'. So what are the nurses, policemen, teachers, binmen of London supposed to do? Is it their poor lifestyle choices that prevent them from finding affordable housing? Absolute nonsense.

Also, dont have figures (will see if I can find them) but the difference in wages in the North compared to London does NOT even out the difference in property prices. Nurses in the NE do not earn that much less than nurses in London. Londiners get London weighting. My London weighting is about 2.5k a year. My mortgage is 800 quid a month and that is very low for most Londoners. Most of my friends who have property are paying 1-2k a month in mortgage on FLATS and if they have kids and are working, they'll br paying a grand a month for a nursery, usually. The cost of living in London is prohibitive, yet a huge chunk of the employment market is here. How do you get around that? No lifestyle choice or clever planning is going to solve the problem that on my old road in Hackney, a 3 bed terrace costs 900k minimum.

There's a demographic time bomb looming in London & the SE. When the baby boomers selling up to downsize/cover care reaches critical mass, as the generations beneath them aren't earning enough to pay current asking prices.

The pound is also too strongly linked to the dollar in the global mindset due to all our recent forays into the sandbox and moutains to engineer regime change in order to help prop up the petro-dollar. The dollar is in the process of being replaced as the global world trade currency, just as the pound stirling was last century. When it goes down and interest rates triple as a result - we will too.

London as a sustainable economic model has begun to eat itself. Eventually immigrants become unhappy at sharing 10 to a room so they can do the unsexy but necessary jobs that keep the city functioning. Nurses/teachers/bin men realise they can have a decent home in other parts of the country and move out.

London is also becoming too crowded, too dirty, too violent and too inefficient to continue to appeal to the global super elite for much longer, as basic services are starting to buckle under their own weight. Sadly civil unrest due to growing economic inequality and poor living conditions for the poorest is becoming a greater threat (lessons weren't learned from 2011 riots !).

I think eventually London will have the crash it should have had in 2008, when overseas property markets took the hit. The provinces at that point will probably hold up OK though.

BTL has already taken the hit and new landlords entering this arena now have to stump up a minimum of 25% - this helps deter the cowboys of the 1990's boom in this area, which can only be a good thing.

I'm a Londoner born and bred, but no way would I want my Grand kids to make their lives there. It'll be physically safer in the now unfashionable provinces by the time they come along. A lot of the money going into the market now isn't from ethical or even legal sources, especially amongst foreign buyers of the prime areas but noone seems willing to admit this.

Elsewhere in the country - property is more affordable, but due partly due to a university debt the boomers didn't have to account for, harder to save a deposit for than previous generations. In Wales/the NE for example you can pick up a 2 bed terrace for £60K. Given that the Internet makes more professions more mobile every day, I can't see why London is still seen as so attractive to so many as a destination. The streets are paved with chewing gum and dog poo - not gold!

Im not in South East but very South and I bought my first property on 12k in 2003 and then with dh in 2006 on 18k combined. We went through a broker and they offered us many multiples. I was offered 8x our current income last month and we earn nearly double that now.

My friend is 27 she has a flat in negative equity but halifax gave her and her dh 155k for a second property and she only put down 20k last dec
They only make 40k between them.

Soverylucky - My first flat was recently on market for 10k more than when I bought. House prices have fell significantly since 06.

Its important to remember that property prices have crashed when priced in Euros. The government seams hell bent on keeping them high at the cost of trashing the value of the pound.

Will probably have the overdue crash after the ge.

And rents will fall, when interest rates rise as more people buy and less demand to rent.

Perhaps where you are Jasmine but not here. Our house is worth 25k more than we paid for it 2 years ago so if we were looking now we wouldn't be able to afford it