The reason young people can't afford to buy houses

[GrabtharsHammer]

Is because they all have iPhones and Sky telly.

So sayeth my mother.

Nothing at all to do with the ridiculous house prices then? They are baby boomers and bought their first house for a few thousand quid on my dads modest salary.

Apparently the youth of today just need to get rid of their gadgets and telly subscriptions and then they will easily afford a deposit and mortgage.

Are everyone's parents this judgemental and out of touch or am I just particularly lucky?

(Fairly lighthearted) AIBU?

When I bought (2000) I bought the the cheapest place I could find in my whole town. 60k for a tiny 2 up 2 down mess that needed 20k work.

The cheapest place in our town is 110. Tiny one bed flat.

First steps on to the property ladder are different

It amazes me that people think having a phone contract ( £20 a month? )
And not having gadgets (one off cost of £300?) will in any way make a dent in the 10s of 1000s needed for a deposit!
Not having take aways and not having sky ain't gonna do it (unless they cost you £15k a year)

My DH and I bought a house just over 3 years ago in summer 2013. It was a wreck of a bungalow that was barely liveable for 245k and we spent 40k over 2 years extending it and doing it up. It is now a lovely family home in a popular SE city and was recently valued around 400k. We are very lucky to be able to have afforded to buy this house but it was a compromise on our original ideas.

The only way we afforded it was as such: DH went abroad to work for a year where his salary was very low tax and accommodation/food provided. He saved 30k which was pretty much his entire salary - the place he worked had little in terms of social life. I spent this year living with my parents and training for my profession.
For the extension and work we were gifted 20k from his parents and grandmother, and his grandfather loaned us 20k which we are paying back slowly.
There is no way this would have been achievable by cutting back coffee and mobile phones. We relied on a difficult year of being physically apart to save money, plus generous donations and loans from his family.

One thing that is amazing now is the brilliant standard of life you can have now for next to no money ... I'm thinking in terms of how little a Netflix subscription costs vs how much you would have spent going to Blockbuster 20 years a go to see a fraction of the amount of films a month. My phone costs me less monthly than my first phone did. And that phone did nothing whereas this phone can keep me entertained for hours with no extra cost. I can read newspapers and stream live news now for free - in the past I would have relied on the 6pm news and buying relatively expensive newspapers to read news a day out of date.

I don't think the iPhone is going to make the difference between buying a home or not, obviously, (and also as I've said above ... it's worth how much it costs for how much it saves you) but yes people do spend too much. People have it in their heads that a deposit is unobtainable so they might as well not even bother. I bought my flat with a 5% deposit and yes that took years to save but you'd think that would be doable for a lot of people still. When I started working in London I walked an hour to and from work every day to save the few £s in oyster fares. I've always been somewhat obsessed with saving and the amount I save on travel or on shopping around for better utility bills just direct debits out of my account into savings each month. It does add up, and the flat I live in now is testament to that.

I know people who have had to start paying childcare costs in recent years and it's been tough but they have managed to find the £1k + a month required. The same people were previously not saving anything and complaining that they'd never be able to afford to buy as the deposit was impossible. Well clearly they were actually able to save 1k a month this whole time! That there, in a few years is your 5-10% deposit on a starter home or flat.

A point no one, I don't think, has touched on is advice given to kids when they're 14-18 with regard to education choices. I did my A levels in 2005 at a 6th form college. I remember there was a huge push to get every kid to go to uni. "I don't know what to do" "just do whatever you enjoy and you can decide later" - this was at a time when fees were 'Only' £1,100 a year or so.

Looking back, what the fuck sort of advice was that?!! I remember there were a lot of my peers off to do all sorts of odd courses with no clear career path defined. I'm so thankful that my mum insisted I did a surveying course that was accredited for the RICS - and I'm also grateful I managed to get a job in the field in 2008, and gratefuly employer didn't sack all the grads (like some of the stuffier partnerships did - how short sighted). My point is the earning potential I had/have now is directly informed by the uni course I took.

Sadly in these days of 50% of kids going to uni, and £9k ++ a year for fees, reading for a degree and expanding your mind for the sake of it is just not an option for the vast majority. It's really vital now we guide and advise kids coming through now to do something that will lead to a good career.

I saw a tweet - some girl's mum was saying that her daughter didn't want to do physics as she'd be the only girl in the class. So short sighted - if the girl likes physics, being a girl is not a reason not to do it! Engineers starting salaries are £29k; a more 'girly' job like HR starts as £21k. That's a massive gap.

I see 18 year olds opting out of traditional uni and doing apprenticisps and learning on the job etc and it's so inspirational. I know those places are like hens teeth.

Education is so key to social mobility - working smart not just hard. Schools but ultimately parents need to advise well.

Crystal ball gazing suggests that generation rent is here to stay and evolving.

The acceptance of never being able to buy a house is changing economic behaviour in unforeseen ways, as money is no longer saved for a deposit, but spent elsewhere.

I talk to my 11 year old about saving for a house deposit regularly. Most of his Christmas and birthday money goes in his savings, once he is old enough to get a paper round and then later a little job I will expect him to save the majority of his wages. I keep reminding him how much he needs to put in each month in order to have £50,000 saved by the time he is in his late 20's. Just like with pensions the earlier you start the easier you make it for yourself, little bits really do add up.

Badders and others saying economising cannot save enough for a deposit. If you refer to my post upthread, it shows exactly how This is possible. The numbers I suggest are not extreme.

I agree that prices are higher now, and I agree that housing is less affordable, but it s not out of reach if people try.

People have always had to economise and save to buy a property. But I think there is much less willingness to do so these days.

And there is so much narrative that housing is unaffordable that people don't sit down, look at their income and expenditure properly, and work out what they could actually do.

If you add to my above post, the scenario that a couple making those economies upthread are currently renting in the southeast, and both earn the national average salary, then:

Combined income post tax = £42,400
Work travel costs for a year x 2 people maybe = £8,400
Basic shared accommodation costs for a year including bills (e.g. www.rightmove.co.uk/property-to-rent/property-56678257.html ) = £500pm= £6,000
Basic food costs for a year = £50 pw = £2600

Leaves £25,400 available for non-essentials for a couple. I am struggling to see how it is not possible to economise and save for a deposit given the numbers if you really look at them.

I think a difficulty DOES arise for those with children but not yet on the property ladder, because childcare costs to enable both people to earn are hugely problematic.

And actually, I lived in far grottier houseshares than the one referred to above in order to save, and we still save in many ways that others would not consider doing, and it has done a great deal of good for us.

Lostwithinthehills

Are you sure about those figures? I also started in the public sector in the mid 90s and my starting salary was around £7k. We pay people starting on the same grade these days close to £20k. In the mid 90s people on £19k were quite senior, certainly team leader level.

DS is still a teenager on an apprenticeship. He's already started to put something in a savings account for a house deposit. We also have a nice lump sum for him and DD when they are ready buy in a few years. You have to start young, it takes longer to save a deposit. Preferably way before babies come along.
House prices around here are just about affordable for young people with a decent deposit. We know a few ftb mid twenties that have recently bought using a mix of savings and a gift from parents or more rarely inheritance.
None of them are going without holidays/phones etc. If you are still at home and earning you have a potential to save a lot of money without scrimping, especially if there are two of you. £4k x 5 years=£20k x two people = very good two bedroom house deposit here. Definitely doable.

I think house prices are the biggest factor. You just have to look at how much they have increased in comparison to wages to realise that it is a lot harder for millennials.

Yes my generation do spend more on holidays and gadgets but when you live in a rented property that is full of damp, a boiler so old it will officially become illegal in 2018 so the house is constantly freezing, the hall ceiling fell in and the kitchen cupboards are falling off their hinges you want some things to make life a bit enjoyable.

Yes I know some people have lived in those conditions in their own homes in order to be able to afford it but when it's your own home you can't take action to improve things, all we can do is beg our landlord and be shot back.

We are buying under shared ownership in the new year and yes it's a new build because I am ever again living in a house I can't afford to heat.

If rental properties were properly managed and rents controlled then it would be very different.

waitingforsomething - I don't know where you are but you can't buy a wreck around here (south east) to do up. They are all owned by house builders with their eye to redeveloping the house or building lots of houses on the land. Some old people locally have already sold to builders and continue to live in the house. Also I was told by one builder that an estate agent owns a great many properties in this town, waiting for the occupants to ship out.

Therefore my point is that trying to buy a do-er upper is no longer possible in many popular places.

I really think in the future wealth is going to be decided by inheritance and non-inheritance. However hard you work, the average person is not going to be able to match house price windfalls of hundreds of thousands of pounds. A friend of mine has recently inherited £1.5m, merely the proceeds from a 4-bed London house.

My first flat cost me £45K in 1997. I was earning £19K at the time.

It has recently sold for £286K (I sold it for just under £60K).

This - both are true.

I remember my mother didn't buy new clothes for herself so many years when I was a child and my parents didn't spend money on themselves for anything other than the absolute basics. We children got a bit more money (we did have toys and new clothes etc) spent on us but nothing compared to what we spend nowadays on our children. Also my maternal grandad (widowed at the time) had some money that he put towards a deposit on the house BUT as a result of that he lived in the
house with us for 25 years as the money he used was money he needed to be able to live IYSWIM, not spare money for a loan.

Not something my dad was always happy about but without my grandad's owning a share in the house and living there my parents would not have been able to afford the house . I am not sure how many people nowadays would consider living with their inlaw for 25 years so that they could buy a house

My dc are all in their 40s and I have nephews/nieces in in their 30s.
None is in rented accommodation. Jobs include plumber, teacher, solicitor, accountant, home security rep. All had maximum £5k help from parents. All have dc. Two live SE (Herts and W Sussex) some in Midlands, some in NE and two abroad.
In each case both members of each couple work and they saved one partners entire salary for one year to raise a deposit. This meant a year of rather grim rentals then they were on the property ladder.
I think it would be almost impossible for a single person.
I am a 'baby boomer' I guess (age 72). We have no mortgage, no savings and decent pensions. All 5 of our dc/dsc went to university married etc.
You only have to prioritise....

I'm lucky in that I moved in with my partner who was already on the property ladder but that's a serious rarity.

When we've gone through rocky patches (we've been together for ages), I've thought about setting up by myself but other than rental, it would be impossible. Yes, I could forgo the holidays that I pay for each year for quite a long time until I'd have a deposit but I've worked hard and I don't want to delay 'rewarding myself' any longer. I scrimped and worked hard throughout my 20s to do my doctorate, often working 3 jobs simultaneously.

Now I'm in my thirties, I love my annual 'exotic' holiday and my autumn mini-break. That may sound completely spoiled but I don't care. I've given myself few treats in my life. If I stop doing the one thing that makes my working life 'worth it', I'm convinced I'll regret it on my deathbed.

I'm with Tinsel all the way through this thread. Yes I scrimped and saved and ate baked beans to get my first step on the property ladder but it was an attainable goal - I only needed to do that for a year or so.

Imagine a couple, who, after rent and and essential bills and eating baked beans, could save £500 per month. To buy a house, they will realistically need £50K (deposit, stamp duty and moving costs).

The choice they have is live on baked beans, no holidays, no evenings out with friends, packed lunch every day, no phone contracts, no movies, no cars, for 8 years (with the uncertainty that even if they manage to save that much, house price increases are likely to have outpaced them over those 8 years)

Or, they can pay for the little things that make life more enjoyable - one takeaway a week, and occasional meal out with their friends, a nice sofa for their otherwise miserable rented flat, a holiday to look forward to, a pint with colleagues on a Friday night.

It's hard to save when the object of your frugality seems so unattainable.

The "in our day" brigade are out of touch with the availability and cost of housing today. When I married I 1969 we lived in rooms. So did most of our friends. This consisted of a living room, bedroom, scullery and outside toilet. We had one electric point and went to the local baths. We paid £1.50 per week rent from a joint weekly wage of £35.

Nowadays this many rooms would be considered a luxury for some. The rent for a single room and use of kitchen/bath is astronomical. Once we had children we went onto the housing list for a Council House. Heaven knows how you qualify for a house these days.

My DPs were baby boomers and they were certainly not in a position to buy their home in the 80s or any other time . They worked yes but when we DID holiday it was in the UK in a caravan (later years when DM got a better job we did start to rent cottages and ventured abroad more than once) but they worked for what they had and have , ,
The ageism on here from some is well OTT .

It is really awful for young people now but I hate it when they think it was so easy then too. Don't lets forget that there were many people who couldn't afford it even then - anyone would think that no one rented at all by some posts. Minimum wage people can't afford it now obviously, but the equivalent, job then, couldn't afford it either. Having said that I do think youngsters have it harder today.

My first graduate job paid £8900 in 1988. I needed parental help for fees but managed to buy a small, terraced, £38000 house on a 100% mortgage. It was £450 per month with the high interest rates. Compare that to my £8900 annual salary. I needed a lodger for several years to make it manageable. I remember coveting a relatively cheap table lamp for a long time but not being able to justify the expenditure. So yes, it was doable but it certainly wasn't easy. And without parental help it would have been even harder. My parents struggled even more to buy their own place.

Anyway unlike the ops mum I do feel sorry for young people now but I also hate the younger version of the ops mums ignorant thinking, who think the older generations had it really easy. We are reaping the benefits now, but it wasn't easy at the beginning.

A lot of people have mentioned "starter homes" and people lowering their expectations of them. The big problem there is that you risk getting stook in said starter home because while your home was increasing in price, so was the next one up on the ladder. I know quite a few people living in overcrowded houses because they just can't afford the next step up. Me and dp need a bigger house, ours is getting smaller and smaller around us. When we sell we still won't have enough to out towards a bigger house so are.moving in with my in-laws until we can afford it. We are lucky to have this option, I am not looking forward to it but it's a must if we want something bigger.

So imagine a few years of frugality as people have suggested to get that one bed flat then imagine that actually you can't actually loosen the belt because you need to start thinking about the next step. It could quite easily turn into a joyless existence.

^My first flat cost me £45K in 1997. I was earning £19K at the time.

It has recently sold for £286K (I sold it for just under £60K)^

This also illustrates the huge differentials across in price changes the country over the past 10 years.

We also bought in 1997 and paid £32k for a 2 bed terrace in a suburb of a large northern city. We sold that house in 2006 for £96k and it's probably still worth a similar amount or only slightly more, no nowhere near the amount of price inflation.

A property in our area worth £45k in 1997 is probably worth about £150k today. There has been little or no price inflation in our city in the last 10 years, whereas it sounds like in the south, prices have gone up much faster. The house we bought in 2006 cost £110k and it's probably worth £110/120k today, or maybe up to £20k more but only because we have significantly extended it.

Here in Australia we've moved on from phones and big screen TVs being the issue. It's now smashed avocados, I kid you not

Apparently all the feckless young people are spending their money on pricy weekend brunches, with smashed avocados being one of the most popular choices (I'm more of a french toast girl to be honest )

And yes back then there were people that couldn't buy, but they more than likely lived in a council house with a nice secure tenancy. Which they probably bought under right to buy for pittance. But that's another thread.

Basic shared accommodation costs for a year including bills (e.g. www.rightmove.co.uk/property-to-rent/property-56678257.html ) = £500pm= £6,000

Yeah, and this is where your calculations all go wrong. The place you've linked to is a) very unusually cheap for all bills in and b) clearly marked as 'single occupancy only'. It's actually not so easy to find a room in a shared house that is happy to take a couple (and, unsurprisingly, they normally want you to take on a bigger share of the bills - after all you have double the number of showers, unless you eat every single meal together you cook more meals, etc.).