to worry how average people in the next generation will ever afford a pension or home

[pettywitchinlondon]

www.dailymail.co.uk/news/article-3108441/Generation-Y-left-pick-6trillion-tab-Report-warns-children-born-1980-2000-face-apocalyptic-levels-debt-Government-spending.html

I'm not quite sure its apocalyptic , but certainly its worrying. Life will still function, but for the majority owning a home or ever retiring looks unlikely.

My dad was a blue collar worker in the north, working on a production line. He retired at 60, with 45k lump sum and 14k a year pension for the rest of his life. This job was enough to support a family on one income and pension only cost 20-30 a week when he was earning. I doubt anyone doing the job these days could afford a lifestyle anywhere near the same, especially as there are less of these types of jobs.

I'm ok, but only because I was born and didn't have to pay tuition fees, graduated and there were plenty of jobs and am a high earner. But even for people like me its got a lot harder in the last decade.

Living standards look like they will start to fall.

I'm astounded by the ignorance sometimes.

Ironic coming from someone who think affordability issues are confined to London and the South East.

That would only be true if the market was solely comprised of owner occupiers, or possibly if the state weren't subsidiaing BTL through tax breaks and housing benefit.

If houses prices are so high that landlords can't make a profit then they will stop buying.

Jassy I didn't say that. There are plenty of expensive places outside of the SE. But they are probably all less than 30mins to an hour away from an affordable area.

Average First time buyers can't buy in the expensive parts of cities, so you compromise and live a bit further out.

There are plenty of expensive places outside of the SE. But they are probably all less than 30mins to an hour away from an affordable area.

I'm not sure the data backs up that assertion in places like the SW. I'm doing bedtime now but dig it out later. I think it's important though to draw a distinction between 'expensive' and 'affordable/unaffordable' - the latter implies a relationship between local incomes.

If houses prices are so high that landlords can't make a profit then they will stop buying.

Which, as I said, might be true if there weren't state subsidies for renters helping to pay off the mortgages of property investors, or evidence that renters feel they have no other options so will spend a huge amount of their incomes on rent - taking money out of the economy elsewhere - and living in overcrowded situations. There's quite a few studies on this, and there isn't much evidence that rents that stretch the bounds of affordability have had a stabilising effect on house prices.

You talked earlier about historical rates of home ownership - this is a really interesting document that charts the rise (and recent fall) in owner occupation in Britain. Basically the equalisation happened in 1971 after a rapid increase after the war; the peak years were 1991-2001, with a decline in 2011.

The other interesting stat is that renting privately doubled between 2001 - 2011.

I never had a problem and I don't expect my kids to. No-one gave me a hand up and I don't expect to give them one. We have a nice life, a nice house and are not high earners, in fact my DH earns well below half of the national average wage and came from a council property. I don't know who these people are who have so much trouble affording a home but the only ones I know like that in real life are one's who never aspired to much, they don't have less, they just spend what they have on things they don't need like all the latest tech and tat/smoking and drinking rather than putting it into holidays/a mortgage/car etc. To each their own.

Jassy I've just looked at Bath and Bristol, the often mentioned unaffordable SW places. There are places in both under 100k, and if you look 20miles outwith the city, places are for sale for buttons.

But don't let facts interfere with your idea I'm ignorant and clueless.

You talked earlier about historical rates of home ownership - this is a really interesting document that charts the rise (and recent fall) in owner occupation in Britain. Basically the equalisation happened in 1971 after a rapid increase after the war; the peak years were 1991-2001, with a decline in 2011.

Yes, I have seen that. The equalisation may have happened overall in the UK in 1971 but I think that in London and the South East people may have been more likely to rent then own. Most of my friends in the SouthEast lived in council houses and considered those who didn't to be quite well off.

Which, as I said, might be true if there weren't state subsidies for renters helping to pay off the mortgages of property investors, or evidence that renters feel they have no other options so will spend a huge amount of their incomes on rent - taking money out of the economy elsewhere - and living in overcrowded situations. There's quite a few studies on this, and there isn't much evidence that rents that stretch the bounds of affordability have had a stabilising effect on house prices.

There is a limit to state subsidies for renters so that will limit profit that Landlords can make. If rents go beyond affordability renters will move to cheaper areas and landlords in those areas will no longer make a profit. They can't go up and up everywhere in the county until nobody can afford to buy.

It'll be interesting (and potentially horrifying) to see how it plays out. I don't think disconnecting people from their communities to places where housing costs are lower (and employment rates and opportunities may also be lower) is necessarily a good thing, particularly if it entrenches an economic divide.

However we've not yet seen a negative impact on house prices where rents are no longer objectively affordable; instead you've seen an increase in other negatives (the Resolution Foundation and Shelter have good reports on this).

As you've obliquely referred to, the other really big change since the 70s has been the huge decline of social renting and the corresponding rise in private renting. Which is an interesting shift away from security of tenure to much less secure housing.

Aye, as I've said a number of times actual data is a bit more useful than 'I've just done a rightmove search'. Which is why I said I'd come back when I've had time to research it properly and see if there are statistics; work I was doing about a decade ago on affordable housing in rural areas showed some pretty stark things then but I want to find something more recent.

20 miles away is hardly in Bristol or bath. Bus services aren't good and are very expensive.

Here's an interesting stat, for example. For all rural housing in England, the ratio of lower quartile house prices to lower quartile earnings has moved from 4 in 1997 to roughly 8 in 2012. Those ratios are higher than for predominantly urban areas, including London.

Urban affordability changes have pretty much steadily tracked the rural ones, but are reliably 0.5 to 1 lower.

I'm 30 and hhave owned my.own.home for 3 years. We have also just bought our second home. All of my friends have managed to buy also. (Some in London) and most of us have mortgages up to the value of 250k. We all scrimped and saved for years to be in the position we are in...people nowadays just want it all and CBA to save.

This report from the National Housing Federation gives a brilliant breakdown of changes over time.

Going back to the earlier question of what sort of incomes people were borrowing on 30-odd years ago compared today, the table on page 11 shows borrowers' total incomes between 1979 and 2013. Income multiples and deposit %s are on p12, but there's great data throughout.

One I've just learned: On average, home owners with a mortgage spend 20% of their income on paying that mortgage. However, private renters spend 40% on rent while social renters spend 30%.

It'll be interesting (and potentially horrifying) to see how it plays out. I don't think disconnecting people from their communities to places where housing costs are lower (and employment rates and opportunities may also be lower) is necessarily a good thing, particularly if it entrenches an economic divide.

I didn't say it would be a good thing. I am just making the point that house prices can't rise and rise everywhere until a everyone in the UK can't afford them.

Whatever the stats say about house price rises in the UK, the rise has been mainly in London and the South East over the last ten years. For the rest of the UK, houses haven't been getting less affordable and it is not true that everyone in the UK under a certain age won't be able to afford houses in the future.

There is no doubting that London and parts of the South East (it's quite a big and diverse area, you know, but folk north of Watford seem to struggle with that) have had big changes in affordability (yet again, the real issue rather than pure house prices).

However, the stats do tell you about changes that affect real people everywhere. I recognise the stats provide problems for people who don't like having their personal narratives challenged, but those statistics represent real people, their real incomes and their real housing situations that demonstrate a picture slightly more broader and more accurate than the individual bubble in which each of us exists.

This report from the National Housing Federation gives a brilliant breakdown of changes over time.

An as the report says "London is a different World". If you took it out of the equation the facts and figures you quote would be totally different.

However, the stats do tell you about changes that affect real people everywhere. I recognise the stats provide problems for people who don't like having their personal narratives challenged, but those statistics represent real people, their real incomes and their real housing situations that demonstrate a picture slightly more broader and more accurate than the individual bubble in which each of us exists.

I've only briefly glanced at it but the stats you quote seem to be average figures which are heavily skewed by the very large house price rises in London and the South East in recent years.

Yes. No one's denied that he situation is markedly different and extreme in London, have they? Only that the idea that it's confined to London, albeit at a different scale, is demonstrably false.

Can you explain, please and thank you, how taking London out of the equation would have shifted the rural affordability ratio changes, for example? Or the affordability ratios for, say, Cornwall and Dorset in that same report? Or that rents have risen nearly as fast in the West of England and Coventry as they have in London?

But the NHF report also has regional snapshot reports. This links to the one from the SW.

There are plenty of reports that specifically break down the statistics to including and excluding London. I don't think you're actually terribly interested in them though, are you?

Just in case - here you go. An easy breakdown of LAs with worse affordability than the average for London.

JassyRadlett Houses prices haven't gone up to any great extent in many many parts of the UK over the last ten years. Therefore, assuming wages haven't decreased, if they are not affordable for some people now, then they weren't ten years ago either.

Well, it depends on how one defines 'many'. No one is saying it's a universal picture. Simply that portraying it as a 'London and the South East' problem is both factually inaccurate and short-sighted.

And yes, according to the ONS, real wages have dropped in the UK since 2009.

Source

Ok, I will jump in. Myself and DH are part of the millennial generation. We are on our second home in a nice area with decent schools in the Midlands. However, to get to this position;

• PIL gave DH a sizeable chunk of cash as a deposit, alongside his own savings (early inheritance)
• DH s house was bought in a rough area and he had a lodger in to help pay the bills
• We both repeatedly moved or commuted. In my case, from London where I took an immediate wage drop and saw my actual income rise when I no longer had to pay London landlord prices.
• We have both put in overtime and carefully budgeted for luxuries - camping holidays, ebay deals, etc.

Looking around my friends, all but four of them have bought somewhere to live. The exceptions prefer to rent, want to travel or live in London. TBF, most of my friends are university educated (first generation tuition fees), so we mostly earn more than the minimum wage. Some of them had family help, others used help to buy schemes or clubbed together, others part bought/rented on social housing schemes. So it is doable - just not as easy at it might once have been during the great council-house fire-sale.

I am personally worried about the more vulnerable youngsters leaving care or with MH problems. They need security and the private rental sector rarely offers that.