to feel screwed over by our society, can't afford a home, can't afford children, can't afford car

[Lauranda]

I'm in my early 30s, had a great up bringing, do a job I like and got married last year. I do feel very lucky.

However where we live in the south east, all we can afford to rent is a badly converted 1 bed flat with a damp problem. Can't really save much and are very economical with our money so can't see ever affording anything bigger and could never bring up a child here.

My parents managed to get a large 4 bed Edwardian house on one sallery when I was growing up and dads job level was about the same as dh. No way could with double sallarys afford anything near that lifestyle.

Parents keep saying my time will come, but looking at the statistics that seams very wishful thinking. Parents have kindly offered 15k to help get a house but to be any use would need much more than that and to pray interest rates never rose much.

Am I alone in just being unable to afford children even though we both work full time?

Lucky thing train! In-house is so much better than pp, especially U.S. pp!

Loving the idea that £6500 a month is a "mid-range job"

soverylucky. I am not even sure that what you did then is currently doable in the current housing climate? Could be wrong as I only have limited knowledge of certain geographical areas.

I also have to add never believe a lawyer's salary unless you see their paycheque in black and white I know some heads of workstreams/department at some of the global banks who are not getting £100,000. Or maybe I have just not seen my friends paycheques!!!!! The right job must surely pay well. The market has a massive glut of very qualified lawyers desperate for jobs, so perhaps those looking for jobs now have to take a lower paycheck.

I think that it is doable if say you work for certain government jobs such as teaching, nursing etc.
Or have a job that is needed all over the country such as care workers for example.

I am of the generation which has "done really well".....

I moved 700 miles away from home, lived in a scabby rented bedsit for 5 years whilst studying and working nights, got married and lived in a rented 1 bed mildew factory flat for 4 years (spending half our income on rent), bought an "apartment" (spending half our income on mortgage) - was smaller than our rented flat... think back to scabby bedsit... begged and borrowed furniture .... traded up to a 1 bed flat, then a 2 bed house, now a 3 bed house....

I think our generation feels hard done by too... we had to relocate, endure years in a crappy box to end up eventually in a house we want to live in, and everyone says what a great life we have, how "lucky" we were.

I'm in the same boat only I have children even though I can't afford them. We are married both work full time and all we can afford is to rent at the bottom end of the market. The cost of childcare for my 2 dc s is putting me into debt every month because my salary doesn't cover it quite. Welcome to london!!

I like the idea that £6500 is mid range too traininthedistance ! I get nothing like that at the moment (even though I am a senior in house lawyer at a very big global organisation). But I had a long time off work (years not months) as I was seriously ill.

OP may have to think out of the box and I think an overseas move before she has kids would be do-able and the most efficient way to save (as no school fees - once those hit for international schools it would be hard). It has to be a little long term to be worth it I think - 3 years minimum. But with 2 people working, say for the sake of argument, saving £2000 every month between them, if not more. Discount the first 6 months - 1 year for moving expenses. They are making a LOT over 3 years and would be able to have a very nice deposit.Living overseas and leaving friends and family 0 even if temporarily is not for everyone and maybe OP and her DH does not have the right profession to consider this. I wish them lots of luck whatever they do and really feel for OP.

I know what "real interest rate" and "negative real interest rate" is thank you. That doesn't explain Fraidycats point that the "cost of interest" is similar now for mortgage borrowers as it was in 1991.

Haven't checked my previous posts to see if I still think they make sense, but here is a hopefully simpler attempt at the really quite simple point I was originally trying to make.

Let's say we are talking about an interest only loan of £100,000, and compare the position at the end of the first year. We need to take into account that a pound at the end of the year is not the same thing as a pound at the start of the year, so the currency for comparison will be start-of-the-year-pounds.

A person who borrows £100,000 at 12% when inflation is 10% pays £12,000 in interest, but because of inflation the £100,000 loan balance is then only £90,000 when expressed in start-of-the-year-pounds. So in reality having the loan has cost £12000 - £10000 = £2000 start-of-the-year pounds.

If interest rate was 4% and inflation 2%, then the loan would cost £4000 - £2000 = £2000 start-of-the-year pounds.

So having an interest rate of 4% instead of 12% doesn't necessarily mean now is a better time to borrow money.

(I don't know if real interest rates are unchanged, once you average out short-term fluctuations, I just think that should be the default assumption unless there's evidence to the contrary.)

We haven't yet had the mega houseprice crash that the US and much of Europe had. Prices dipped a bit in 2008 then the gooobermint started manipulating the market by fair means and foul - that doesn't mean the crash won't hit eventually as the economic fundamentals of Kickthecanistan are not sound.

Eventually the gooobermint will notice the schools in London have no teachers, the bins aren't being collected and hospital wards are closed - only then will they sort out the affordable housing issue there. The current lot aren't the brightest bless em, so that moment is probably at least a decade away.

Had life gone to plan, I'd have been in a house in London by now. Instead I haven't been able to work for 3 years due to my son's disability, so had to leave the capital or face repossession at some point. Still we are in the process of buying in a VERY cheap part of the country, and at least I'll have the security of the roof over my head, come what may.

However I'm more content this way as I honestly predict more civil unrest in London over the next few years as people will not be content to sofa surf and sleep in sheds forever + the food bank queues keep lengthening. It's happened elsewhere in Europe and will eventually happen here. My child will be well out of the way of all that!

There's something to be said for learning to be happy with what you can have OP. You can buy your own home - just not on your parents doorstep. London isn't that attractive to many pensioners - my Mums more impressed with the community education classes and public libraries where we are!

Fraidycat- I still don't see how it applies to the affordability of the loan though. For the loan to be more affordable in the way you have expressed, wages would have to go up by 10%, not inflation. If only inflation is 10% and not wages, house prices would have been even less affordable. Anyway, I'm not sure that the difference in inflation between now and 20 years ago is as you suggest.

I don't know if it's age , exactly, more timing/luck.

The thing is, I could have bought a BTL in my early twenties in my hometown, when I lived and worked in London in the late 90's/00's. I could have, at that point, and even on my low wages, been approved for a 100% mortgage, and bought a house that would have been £40k, and would now be £160k.
But I didn't, because it wouldn't have occurred to me. Who knew what madness was going to occur, and that not getting on the property ladder by any means necessary would leave you stranded on the wrong side of the divide? I always thought that getting a mortgage was for when you settled down permanently. It was about having a Home.
So, I moved abroad, and when I came back in 2006, all bets were off.
Homes have been replaced by Property, and London is becoming a place where you are only allowed to stay if you are rich (or have clung onto a council flat you got way back when). I never wanted to make money from property, or be a landlord. Just wanted to be able to settle down when the time was right.
Like traininthedistance I am astounded that these days houses that were basically built as slums are only affordable to people on salaries of over £100k.
And people are saying, desperately, to each other "move to Kent! It's still bit cheap, in places.! Move to Scotland! Norfolk! Just accept that you can't be near your family when you have children, that you must leave your friends, your career (because I don't know whether some of you know it, but Hull or Sheffield are not awash with highly paid work) and run for the hills!"
Is this really OK? That the best and brightest young people in the South East are having to escape, like refugees, out of London because of insane rents, un-obtainable mortgages on hovels, and bank-breaking childcare costs?
We certainly don't want them up here pushing the house prices up!

Something has got to give here, but the government don't want it to. Our whole economy is based on property prices, hence the Help to Buy scheme. Osborne and co want the bubble to continue, and if people earning under £100k can't stay in the South East-Good! George'nDave'nBoris don't want you! Fuck off then, there's a dear.
and we must all tug our forelock and say "thank you, we'll be off then" as we shuffle off to Wakefield (only a short 2 hour commute to London!).

IfNotNow bravo, yes exactly. I think that those who are already "in" the property market (pre-2001) simply don't get the yawning chasm between current salaries and prices. It's become normal for those people that they've acquired a chunk of free equity which, when they want to move, they just swap between houses (so the prices don't seem so crazy). E.g. A colleague only a few years older than me bought a small starter house for 140k with her boyfriend when they were new graduates in 1999. She sold it last year for 550k and moved to a new house worth 700k. Essentially the bubble gave them a "free" 400k to spend. To put it in perspective, that's ten years of a good professional gross income! or twenty years' entire net income at local median wage!

Their new mortgage isn't much more than their old one, so their salaries don't have much impact on what they can afford to buy - they aren't dependent on income multiples. Now anyone coming up behind looking to buy that small first time buyer terraced house needs to be able to afford 550k, so a hefty household income is required, or a giant amount of cash. They don't have that magic "free" 400k; so where are they going to get it from? They can't earn it (salaries have in no way kept up with that); unless they inherit it (still vanishingly rare to inherit that much). What are they supposed to do? All the other "cheaper ", "starter" properties have increased by similar amounts. Those already "in the game" don't see the problem, because they don't need to bridge that initial gap created by the bubble rise after 2001. They're used to thinking that's just what houses cost. But if they thought enough about the prices relative to actual salaries, they surely should realise prices are crazy amounts compared to wages, really crazy. And it isn't just in the south - there are plenty of northern cities where a house that should historically cost around 75-130k relative to local wages actually costs upwards of 200k - just looks slightly less crazy compared to the south.

I think that people in London and South don't quite get that only people of a certain age in the South have done well out of property prices. Most of the population in the same boat regardless of age. The fact that there are fewer jobs outside London and the South East applies to all of us....

Train should go into politics , wasted here.

Baby boomers were handed 'free housing', says top insurance boss
Nigel Wilson, chief executive of Legal & General, says he and his generations have 'lived for free' because their house price gains far outweigh mortgage interest costs.

www.telegraph.co.uk/finance/personalfinance/houseprices/10804031/Baby-boomers-were-handed-free-housing-says-top-insurance-boss.html

That's coming from the telegraph too.

That's ridiculous 15k is definitely enough for a deposit. Just get 2 bed flat! I live in the south east and I'm certain me and my partner earn a lot less than you but we will buy soon.
You just want a luxury lifestyle and you can only afford a normal one. What would you need a 4 bed house for ?

whatever but that just isn't true, in my experience. The cutoff seems to be about 40 years old at the moment, eg, bought before 2001. Those who did might not be as rich as the older boomers in the south east who lucked out big time (eg those irritating people who bought a flat in noting hill in the 70s for peanuts and sold it for a million in 2007 - yes I have met some of these disgustingly lucky sods ), but there is a difference between "okay but not rich" and "in an impossible, financially dire situation simply because you didn't buy before 2001" which is what the younger people on the thread are trying to tell you.

Just look at rents, for example. Another colleague owns a house, small terrace, bought in 2000 for 137k. Her mortgage is 300 a month. Identical houses in the street rent for 1200/pcm. They are tiny weeny (again, 3-room 19thc workers' cottages, lean-to kitchen, downstairs shower room, no upstairs full bathroom). Not suitable for a family beyond 1 small baby. But if you're paying 1200 PCM in rent how on earth do you save for a deposit or pay childcare? Which again is about 1200 PCM for a full-time nursery place where I live. So that's 2400 gone for a family with one child before bills and council tax, commuting costs, food.... Imagine you have a (generous) household income of 3400/month, but you're still struggling amd budgeting and saving or buying is a fantasy because you can't possibly get a mortgage to pay 350-400k for the house you rent at its current "value". But the person next door who bought it in 2000 is fine; her housing costs are a quarter of yours. And she doesn't have to earn loads or feel rich, she just lucked out in when she bought a house.

Lauranda - thank you! Actually I have considered it but with one small demanding DD no time at the moment to pound the doorsteps going canvassing etc. - maybe in a few years' time! The fair housing costs party (shame none of our major parties have had the courage to address this yet, and Labour yes I am looking at you )

The op is being given enough for a deposit. They don't need to save. They can buy!

Obviously wait until after buying to have a child.

traininthedistance -It may not be true in your experience but that is clearly because you live in the South of England. The house I bought in 2004 has not increased in price in the last 9 years. The house I bought on 1999 for £110,000 (in a different part of the UK) is now worth £210,000 which is obviously more but not really massively more considering wage increases during that time. I could still buy the house I bought in 1999 today (for £210,000) on my current salary (same job).

Just don't get shared ownership - very bad idea. We were stuck for 10 years in negative equity in a small 2 bed flat in Hertfordshire. We HAD to move becauseI had a third child (accidental!) . Luckily housing was on the up at that point ,but we still had to move to Yorkshire to get a house. We are not that much better off (11 Years later) but there is never a right time to have children. All mine were happy accidents really ! Poor but happy!( most of the time!)