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?

The baby boomers are now using their easy-earned cash (tongue in cheek) to subside their offspring though. Apparently a lot of my parents' friends are subsidising their kids' rent.

OP's mum kind of has a point but obviously not having gadgets wouldn't actually make the whole difference but the point she is making about younger generations being spendthrift on material things is true.

When I bought my first flat I had to aim very very low to find anything in my budget and bought a one-room flat in a scuzzy tower block on the edge of a quite eventful estate (lots of drug dealing and the occasional sound of gun fire, often police around). At the point I moved in I had one piece of furniture which was a futon a friend gave me. It was a month before I had a fridge which was the first thing I bought, followed at roughly 6–8 weekly intervals by a cooker, bed, bookshelves, wardrobe. The satisfaction as I bought each bit of furniture was immense! I don't know of many people who are willing to live like this and I have known people furnish their house with all brand new expensive furniture bought on finance when they move into their first rental.

I do think I'm part of a generation of people whose first port of call is to buy new everything, massive TV, expensive phone contracts, and if you can't afford it buy it on finance. I include myself with that now as I have got into the habit of putting purchases on my credit card whereas previous generations tended to only buy things when they had the money to do so.

Hmm, whilst I certainly don't agree with your mum I think a lot of posters are underestimating how difficult it was to buy back in the day. Wife's salary didn't count towards the loan for a start, much higher interest rates etc

to be fair, my nephew moans about not being able to afford a deposit to buy his own home.

The fact he goes to every single welsh rugby game and welsh football game at Cardiff (he lives in midlands) and also several Concerts a month at up to £70 a pop is apparently NOT the reason he can't afford it..

But while wages may have been higher, in the 70s homeowners were dealing with 15-17% interest rates as opposed to the 0.5 we have now

They were also getting 2 pay rises a year of significant amounts, whereas there are many people today who haven't had a payrise this decade.

If you work through the monthly payment amounts, mortgage sizes, and income multiples, 15% interest on a £5k mortgage in the 1970s isnt necessarily harder to get and service than a £300k mortgage today, whcih wouldn't buy a family house in a large part of the country.

My parents bought 2 houses in the 1970s. Once cost £2k and the other cost around £7-8k. The same houses today are worth £100-200k. Salaries haven't increased by a factory of 30-50x.

Really Wayfare?
I agree the BBs have no idea how lucky they had things but I'm stunned you cannot afford anything within 75miles of work with a 30k deposit.
If you live in London You can get at least 1bed, sometimes 2bed in Luton for under 100k. Fast train into Town.

Gillybean yes interest rates were 15% but average house was 35k, so 15% on a, say, £20k loan is far far more serviceable than 3% on the £150k you'd need to borrow to even think about buying anything in the south east.

It's not iPhones and BT infinity as such, but some people spend a lot on going out and "lifestyle" which makes buying unaffordable. Part of the "lifestyle" is a refusal to commute more than 15 mins to work in central London and a preference for "creative" type jobs that pay nowt. Yes it would be LOVELY to walk to work from Fitzrovia but welcome to the real world if you want to own your own property. It's not fair but we are where we are. All you can do it reset your expectations and cut your cloth accordingly.

I knownof a girl who "north shored" herself; sacked off London, got a job earning the same in Manchester and now rather living in a Dickensian houseshare has a lovely flat to herself and a fantastic quality of life.

It's true that house prices have inflated out of all proportion to wages - my parents bought a house in 1976 for £8,000 - KT1 postcode - that house would now be worth over a million. I know, I've looked it up.

My grandparents bought a "war-damaged" house in Blackheath for £1000 in the late 40's. That house would be worth several million now.

My DH and and I bought a house in 1997 worth £60k. We sold it a year later for £80K. It sold again in 2006 for £260K.

So, I think, you mother can FTFO House prices are beyond ludicrous now.

Yanbu

My parents struggled to buy a house 40 years ago but it was possible to scrimp and afford it on 2 modest salaries. Now it just isn't.

And the baby boomers who did the best are helping their children (of course) which unfortunately supports ridiculously high house prices because people do pay because they have parental support

Social mobility is less now than in any time for decades, because of the expectation of parents helping adult children. So if your parents can't/won't help, you're at a massive disadvantage (not saying people don't do well for themselves without help but its so much harder). Everyone I know who has bought a house had some kind of help from parents, whether directly with deposit or indirectly allowing them to stay at home rent free to save.

Struggling to pay rent (often to baby boomer buy to let landlords) that is more than the monthly cost of a mortgage would be, makes it nigh on impossible to save.

Your mother sounds exactly like mine. Both of them can fuck off

At the risk of getting flamed, I think SOME people, not all, are not prepared to accept a drop in lifestyle to save for a deposit. I have certainly met people who claim to be desperate to buy but not willing to forgoe holidays, tech, cars and stuff in order to do it.

This ^
My Mum and Dad are so called 'baby boomer' generation.
The value of their house rose dramatically in the '70s and '90s but
they really struggled to buy a house in the first place. We had a lovely big home in a very nice area but had 2nd hand furniture, didn't go abroad, the house was never decorated and we only had a car in later years. There was very little disposable income. Mum made all of her clothes and ours.
A lot of young people nowadays have a LOT of material wealth (cars etc) go on holidays and eat/drink out weekly. Designer clothes/shoes/ makeup/ gadgets etc.
I wonder how much all of that adds up to each month?

(Just to add, house prices are ridiculous as well).

It is a lot harder for people to get on the property ladder these days. No doubt about that.

However, it is also true that in some cases, people's expectations can be too high. Eg a young couple on average wages may well not be able to afford a nice new build starter home in a nice area. However, with some scrimping and saving they might be able to buy a one bedroom flat in a more grotty area, which they could eventually trade up to something better. Especially if they are willing to buy a property in need of renovation and gradually improve it.

I'm worried about the next generation where their parents won't have any means to support their kids with house deposits because everyone I know in their 30s/40s now just make ends meet with their earnings and won't have spare cash to help their kids. But the house prices will have continued to rise. Where as I think for most people in their thirties now, with some compromises on location and standards of living, getting on the property ladder is just about possible, in twenty years time it just won't be possible at all for 99% of 30 or 40 somethings to get on the property ladder.

Some will find this a controversial opinion, but I think that one thing that's done no-one any favours is to take the wife's earnings into account when approving mortgages.

If mortgages were approved on one salary only (it can be the wife, husband, dog, next door's goldfish, it doesn't matter, just one declared salary that is the breadwinner for a particular household, and ignore anything else for the purposes of calculating income multiples for mortgage approval purposes) then income multiples would not have got out of hand and house prices would not have spiraled out of control.

Some households do have 2 reliable salaries for decades, but many don't because people get made redundant or go on parental leave, get sick or spend the majority of their salary on childcare, or start their own business or whatever.

So say that we will approve the mortgage based on the best salary of one of the applicants only. That naturally limits the amount lent and thus naturally limits house prices, which most people will be happy with because if they are making money by selling one house, most people are spending that money and more by buying a bigger house.

And if we are not in an environment where buying the biggest most expensive house you can afford and get approval for is what everyone wants to do, people won't aim to stretch themselves and people won't get stuck in a self fulfilling prophecy.

dammit if I was reading a library book and DH was watching freeview we could have bought a flat

Yeah I've heard that one..

nevermind that people born in the 80s, on average, are the first generation since the war to earn LESS than their parents did!

Fucks me off, seriously, my older relatives really talk down to us and "advise" us to save for a bigger house - as if that would be fucking possible on our salaries in our area even if we lived on one slice of toast a day!

things were very different though even 20 yrs ago , i had a mortgage at 26 [albeit in the northwest] on a staff nurses salary i only put down about £1500 deposit too circumstances and bad luck also being crap with money means i,m now in a council house [which i love btw] but had i up graded as i should have done we would be living in a nice semi by now.

Another one I never understood is when people are struggling to save for a deposit and then have a big wedding. Each to their own though and if it makes them happy. We had a registry office as would have been all our savings which are now being pooled into attic conversion.

There's no incentive to save for security if security is forever out of your reach.

It's not just buying a house - it's other stuff too. Like having 3 months salary put away for a rainy day - that used to be a rule of thumb. how can you do that if your rent is half your salary and your bills another huge chunk? You could put away £25 a week by taking leftovers to work instead of going to Pret. So in a year you have £230 (allowing for 5 weeks AL and bank holidays when you're not in the office). Yay. When your landlord evicts you for no reason, that barely covers the fees from your new letting agent to be checked and allowed to be considered to live in one of their flats.

I can see the temptation to think like this because I too find young people superficially self indulgent. But when you think about how little they could gain by putting themselves out to save a tenner here and a tenner there, I don't blame them for yolo-ing. Their problems are thousands.

I, on the other hand, am living very frugally - because I have an incentive. I live in a house that I want to keep (was shared with ex who has left) and I can only afford to do so if I cut all my other expenditure right down. That's worth it to me. And I'm lucky I have that option. I am not a better person because I'm not getting myself new clothes and posh little lunches in nice boxes with groovy logos.

I agree, SoftSheen. It's absolutely beyond the reach of many young people. But there is a lot of high expectations these days. We upped and moved away from London and lived in a grotty area then moved back to the SE with a good deposit. We certainly didn't have nice holidays, clothes or cars.

Quite a few of the young people I work with complain about house prices but all have nice cars and clothes and go on nice expensive holidays and they're out every weekend. None would dream of buying second hand anything. There's also a lot of 'well I've got a degree so I should be able to afford what I want' and I think that's just unrealistic.

I absolutely accept that house prices have escalated beyond reason and that getting a deposit together is extremely difficult for some people and indeed impossible for others. But others could live a very tight, frugal life for a couple of years to help them get on the ladder although this is far less achievable in the SE.

A lot of young people nowadays have a LOT of material wealth (cars etc) go on holidays and eat/drink out weekly. Designer clothes/shoes/ makeup/ gadgets etc.
I wonder how much all of that adds up to each month?

Do you not think that maybe those people you're talking about do those things because they've worked out that even if they cut back on those things.. they still wouldn't be able to get on the property ladder?

That's the case for a lot of people, their homes can't be a labour of love because they're stuck with shitty landords in shitty rented homes, so they go on holidays etc to have a little bit of joy in life! If there was any feasable way of buying a home and pouring their energy/love/money into that, they'ld do that instead?

Really annoys me this talk of how we could all afford a house if we only didnt have cars , phones tvs, drinks, holidays etc. How many of us on average salaries have to constantly scrimp on everything just to afford rent, childcare, rising utility bills etc and still not have enough savings for a deposit. If only it was a case of, just scrimping for a few years but its not.

Ludicrous house price rises are not the fault of baby boomers. I worked two jobs - full time teaching and working in a hairdressers at the weekend. DH worked six days a week too. The mortgage rate was 15% at one time.

I provided the deposit for one of my children to buy a property, that she lived in for less than a year. We also part funded a property for the other one. That took care of my lump sum and we now can be classed as JAMs. We are hoping to hang on to the house, so there is something left for the children.

We rarely had holidays when the children were small. We rarely have holidays now. We have no weekends away, shop in cut price supermarkets.

I've done my bit, I've helped my kids, now we're struggling. We're not all living the high life- I wish.

OH and I both worked two jobs each to save for a deposit. Every penny was accounted for, everything that wasn't nailed down sold and nothing spent that didn't absolutely need to be for a couple of years. Fair enough we are in a cheap part of the country and I know that in some parts house prices are horrendous but I see from my friends that sometimes their idea of saving is putting a few pounds aside every now and then.

Saving for a deposit is possible but it doesn't come easily and will require some effort. Can't comment on the previous generation. My Mum tells me how she sat on the stairs crying with worry about meeting their mortgage payment when it went to 17% so I don't think they had it easy.

"even if we lived on one slice of toast a day!"

Yep. Food is the biggest red herring as far as expenditure goes. It is likely to be the cheapest thing you are going to HAVE to pay for and likely to be the only area where you can afford a little luxury. Out of habit I always look to the food bill for areas to pinch but then I think: if I replace that £5 on salmon with a tin of tuna, and cut £1 on cream.... I've saved £5. Yay. Why bother? Well, I'm bothering now because it is that tight for me - but only because I am lucky

I am another one who can see what the OP's parents are getting at, even if the reasons may not be strictly accurate.

As others have mentioned, when we set up home we had lots of second hand/passed down stuff. The house itself was 'in need of modernisation' (no central heating). I didn't drive so we only had one car, no flash holidays (very little holidays at all, tbh). Years of saving which were helped by living at home and not having Uni debt to service either.

I do think that the expectations have changed, I don't know anyone who reduces their lifestyle to save tbh and there are not many people who have lived in a shabby property while gradually doing it up I'm such an old gimmer Also our parents were not wealthy enough to give any financial aid so no choice there!

It does seem a longer process to me, it takes longer to get the (bigger) deposit together.