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?

jasminemai- the only way you could have got a mortgage, at any time, for 8 times your salary is by self certifying, which has been stopped now because people got mortgages they couldn't afford.

There's no chance of borrowing anything close to those multiples now and quite rightly so.

backforgood a 2 bed flat on the outskirts of Birmingham which is only £86k is not going to be in a very nice area. Desirability is a huge factor in house prices and if those flats have only doubled in 24 years they are either in a really rough area or are badly maintained or both.

Can you honestly say that those properties are are desirable now as they were 24 years ago and that they attract the same type of buyer?

As others have said, our generation is having to settle for less in terms of house size, location etc, and pay more for it.

The generation above have the luxury of down sizing to release equity. Our generation is unlikely to be able to do so as we have never up sized so it follows the next generation aren't going to have the luxury of large gifted deposits but will face enormous multiple of salary house prices.

Exactly but many places have gone down and I live in somewhere that has been voted one of the most desirable places in the whole of the uk to live apparently

"The people who found themselves with houses worth significantly more than they paid for them will be the ones helping out the next generations with house buying."
The thing is woowooowl, that won't happen in a lot of cases. My mums house is worth around 250k . It is too big for her, and she is looking to move. However, to move to a 2 bed in a nice area will cost her around what her 4 bed house is currently worth.
Also, people are living longer. I don't expect to inherit anything at all. I imagine all of my parents estate will go on sheltered housing costs etc.
And I don't WANT to be reliant on my parents death to have a roof over my head. The only people i know who have bought in the last 10 years have only done so with significant help from parents.
House prices are too high and wages are woeful. I mean really fucking pitiful. Whoever it was who said when they first bought they had no holidays, no new clothes, no nights out. Well, me either, and I am renting and working 4.5 days a week. And I don't even have what would be considered a low paid job in the North.

No offensive jasminemai but I just don't believe you've recently been offered a mortgage for 8 times your salary.

Lenders are not allowed to be that irresponsible anymore.

There are some very short sighted comments on here. There is no point saying you worked x amount of hours and as a result you were able to purchase a property at a young age 12 years ago.

I was the only person on this thread (I think) that stated how many hours I work - and I bought my first house 6 months ago.

With no help, I saved and worked hard in two jobs (not min wage but just basic admin at less than the average salary) and have bought a house.
Therefore it is possible.

(I don't include London though as many pps have said it is completely different)

Housepricewoes - Have you actual been in the broker in the estate agents? They are sort of like a compare the market thing and they find someone who will do it. Its how my friend has 2 properties only on 40k. I didnt think they would say yes to that situatoion but they did. They just said as they had good credit rating its fine even though negative equity on one property. They did very long terms though but all good as you can overpay as you carry on working.

Not 8 times but last year when we moved we were offered a mortgage of five times my DH's salary, we only wanted 2 times. That was with Barclays, there is no way we could actually afford the repayments for the maximum mortgage they offered and eat.

High Street banks never offer much they offered us 42k!! Crazy thats why brokers are better for low income circumstances imo.

*meant to say often high street banks

Presumably one of your friend's properties is a BTL Jamine?

We have a massive divide in society, which is continually widening:

A small minority (less than 10% ?) are in professions where they can expect to double their income every 10 years or less. Some may also be able to build up savings reserves from large bonuses.

It makes sense for this minority to take mortgages of huge multiples of their joint salaries.

However, many households have not even had increases to keep up with the real inflation in essential goods & services. Some have lost jobs and had to take on lower paid ones.

These folk are working just as hard as the wealthy minority, but globalisation and automation are driving down their wages and the number of jobs (immigration has much less effect than these 2 factors)

Most of this group would have difficulty obtaining a mortgage and it would be a much higher risk for them if they do.

Property ownership is not the risk, it is the mortgage to obtain it.

I worry for my children and I am trying to put a little aside for them and also to overpay the mortgage so we can help them when they are older

It is fears of a more and more polarised world (between homeowners and the rest) that drove me back to work after ds (even though it broke my heart) and will do so again after this maternity leave is over. I try to work part time (compressed hours) but it saddens me that it is crazy house prices that have forced my hand somewhat (dh earns a decent salary and we are not extravagant). Luckily I love my job and have great childcare, but I wish it was possible/sensible to buy a house on one income still

soverylucky - I'm 22. Will be 23 at the end of July. The purchase price was £150,000 (yes, cheap compared to the south - I'm in a nice village in the midlands - but that's the main reason I'm here) and realistically I saved for about 2 years. I left home at 17, went travelling for 6 months and had a few min wage temp jobs before setting my mind on buying.
I can't say how much I saved per month as it fluctuated significantly. At the moment I'm still saving at the same rate and it's perhaps £100 a week? Sometimes more.

Jasminemai brokers in estate agents generally talk shite. The agent wants to sell you the most expensive house possible.

There is no way in hell you'd be able to borrow 8 times your salary if you actually proceeded to an application with a lender.

There are new regulations coming in next week (most lenders have already introduced them) and lending is based on affordability not income multiples. Paying a mortgage on 8 times your salary, even over 40 years, will simply not be deemed affordable and that's before things like childcare costs, pension contributions etc and interest rate increase stress tests which will now be factored into your affordability check

Yanbu op :(

Noarmani - No as the first one is with Northern Rock and they dont let you rent them out for some reason some thing to do with invalidates building insurance I think. Its just empty at the mo.

Housepricewoes - Well how did my friend do it then? Lots of people I know have got large multiples else how would normal couples by properties etc?

Brokers have always been great to me and even nationwide gave me my first at 18 of many multiples but they said I had a stable job so looked at future earnings at that time. Our price range area is like objections so expensive but not too bad. The broker doesnt care as long as they make money.

Seriously jasminemai what parallel universe are you living in

I want to move to a place where someone on £40k can get 2 residential mortgages as it's just not possible on my planet.

There must be something you don't know about as, if neither mortgage is BTL, it just isn't possible to have mortgages on 2 properties unless they are both tiny and in a ghetto.

3 bed townhouse with garage, front back garden and drive they got for 155k. Was built in 2000 so a newish build. They put down 22k mortgage rate is 2.49% on both properties, 40 year termd. They moved as first place 1 bed as too small so bought another and will be looking to sell once they dont have as much negative equity.

they said I had a stable job so looked at future earnings at that time

Lending has changed immeasurably since then and that just won't factor into it now.

In fact it's gone so far the other way I've heard instances where child benefit doesn't count as income as it won't be received for the duration of a 30 year mortgage term yet on the flip side, no salary rises are factored in and things like monthly loan repayments remain valid for the duration of the mortgage even though the duration of the loan might only be a few years.

The broker doesnt care as long as they make money.

The broker has to find a lender before he'll make money and with the MMR regulations he won't find anyone who'll lend 8 times your salary.

How long ago was that jasminemai?

Anything more than 3 months ago and it's just not relevant to any future applications.

Theres is only 6 times income for both properties but I was surprised as would of thought more of a risk with 2 properties

Dec 2013 as I said upthread