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?

Some of us boomers know how lucky we are and were and have every sympathy for young people who now have such a struggle. Quite why we are vilified, even hated, for responding to the conditions that prevailed during our youth I do not know. These days I help my children out when possible, I volunteer for a charity and in a hospital. I also rent a property to a local housing association for social housing tenants. Simply by being born before the right date I received a state pension at 61. What should I do? Turn it down? I am appalled at the movement of goalposts with regard to pension age.

So, Yorkie, are your parents boomers? If not, would you hate them too for an accident of birth?

Fadingmemory is certainly not personal. It's just sad that things should improve for every generation and it won't for this one, I genuinely worry for my kids

I am also appalled by the moving of goal posts with pensions, it's disgusting. I don't think anyone expects you to turn anything down, nor do I think that anyone despises you or thinks you don't deserve it.

The issue is that there are some people who utterly REFUSE to see that there's an issue an genuinely think it's someone's fault they can't get a mortgage because it's just because they are lazy. If they moved/stopped eating out/having children/whatever strawbthey can cling to.

A simple, yes it is very hard how awful for you goes a long way. It's so infuriating when people keep on again and again insisting that it's possible to save for a mortgage in a couple of years if you just trim off some fat.

It's always been hard to get a mortgage, life has always been hard and people have always had to make sacrifices, it doesn't need to be us against them.

I have been on marches against the pension age change it's totally screwed a lot of amazing women who I adore, everyone affected has my utmost sympathy and I'll do everything I can to fight the injustice.
The things aren't related though, it's not one or the other it can be both.

What I find amazing is the outlook that one should have a mortgage at any cost. The advice that accompanies this is ridiculous:

Can't afford to buy down south? Just move up North stupid...uproot your entire existence as in Toxteth, Paisley or Moss side the houses are dirt cheap. Or if you must live down South live in a cheap area...never mind that the schools may be shite and the crime rate high.

Stop buying Costas and other luxuries, cut back on everything and live on beans on toast and no central heating for 2 years as it's soooo worth it. And if you drink or smoke then well...no wonder you can't afford to by.

No holidays at all.

Choose a well paying job. If you are choosing the Arts as a career rather than management or banking then what can you expect? Never mind if you love Art and got good grades in it.

Don't have children before you buy. Who cares if you are nearly 50 and need IVF?

Ask mummy and daddy to help. Or live with them (even if they irritate the fuck out of you or vice versa)

It just makes me feel that baby boomer home owners are massively out of touch as they had to scrimp and save (for about 2 years rather then 10 years.)

It is also highlights an outdated view that if you work hard and save you can buy. What people don't realise that in many cases you can work hard and yet earn very little so you need to scrimp just to survive let alone save.

I cook from scratch, go without new clothes and furniture, holidays, keep heating off etc and yet still cannot save. I just about get by and this is on a full time job.

Malificent7, the house I linked to in Middleton Gr Manchester was 3beds, very affordable and in the catchment for both an outstanding primary and an outstanding secondary. And my parents updated us twice when we were all school age due to shortage of work and redundancy. I would have no hesitation at doing the same if it meant financial security for my family.

Re IVF at 50. We met at university but didn't have children until late 30s as we spent all that time saving and never going out or having holidays to then be able to afford to buy somewhere crappy. I totally accept that it is far harder today to get together a deposit, without doubt. The difference between wages and prices, esp in the SE has grown to be ridiculous.

However, as I said earlier in the thread, the young people I work with have far, far higher expectations than we had 15yrs ago both in terms of area and what the house offers such as large kitchen diner to have friends round etc.

Uprooted us not updated.

Carly, sorry, but I don't recognise you from any thread other than this one. I think you may have me confused with another poster.

Malificent, I agree. Much of the housing crisis should be dealt with by making renting better, not encouraging everyone to buy.

Decent social housing can be a much more secure option for many people than taking out a mortgage, and that's where much investment should be going.

houses were still unaffordable for the baby boomers. The houses might only have been £500 but their wages were £100. My parents remember their 1 bedroom flat was still 3x their wages & the £3000 family home was only affordable because they saved for 10 years & were skint for the next 12.

houses were still unaffordable for the baby boomers. The houses might only have been £500 but their wages were £100. My parents remember their 1 bedroom flat was still 3x their wages & the £3000 family home was only affordable because they saved for 10 years & were skint for the next 12.

Yet all the historical statistics we have show that this simply wasn't true. Home ownership rose to record historical levels in this country between the 1960s and the 1990s. Inflation, tax offsets and mortgage caps made housing more affordable than at any other point in history.

I think it can get quite confusing because many of us aren't millenials and don't have boomer parents. The boomers are people who are between 50 and 70 now. There is a huge generational wealth divide there.

That seems to be less the case if you are 35 - 49 now so have parents older than seventy. I don't think there's the same clash between generations.

Home ownership was at its highest in 2001. Look at the stats

**figureit perhaps consider the longer term loan but then overpay by the additional amount you are willing to pay per month to bring the overall term down? Most mortgages allow you to overpay by 10%. Presumably it would net out at more or less the same as taking the shorter term loan?

It's clear to me that something needs doing regarding house prices. Removing the tax benefits of BTL was a good first step. The stamp duty rates at present make the market very sticky (at least in the SE). In some countries the first house purchase is stamp duty free and young people reach as high as they can for that purchase (I think Finland is an example). It is something that could be considered. Equally I agree with the suggestions that renting could be made more secure - although I believe in countries such as Sweden where this is the case, it makes the rental market rather sticky and reduces supply (increasing prices) so there are downsides too...

It s obvious that housing is less affordable that it used to be if you are comparing like for like. With regard the original OP, I'm sure that for as many young people who are unwilling to make the sacrifices in the short term to save for a deposit on a property there are those who simply cannot feasibly save the amounts required.

That said, the lack of a saving culture among many people / peers when I came to England always shocked me. My parents had always drilled into me the need to save save save to make sure you have a fall back (let alone buy a property). I think the combination of boom time (this was pre-2008, easy credit and a general welfare state culture (i.e. there being a fall back other than yourself) were probably factors.

Maybe home ownership isn't for everyone. Rent caps should be introduced and renters given more protections. That way people aren't chasing something they can't afford.

When I was younger not everyone felt the need to buy or was expected to buy. Many people were happy to go on the council house waiting list which sadly is no longer an option.

Strangely it was racism which made my parents buy in the 70s (they are older than boomer age). Being a mixed raced couple, getting private rentals wasn't always easy and thus they felt more secure buying their own home which was unusual for working class people in our area. Many non-white people did the same.

Most people I know did stay with their parents into their 20s. I think parents encouraging kids to leave home before they're really financially ready is a very British white working class cultural thing because nearly all of my white friends left home before most of my non-white or non ethnically English friends.

Can't afford to buy down south? Just move up North stupid...uproot your entire existence as in Toxteth, Paisley or Moss side the houses are dirt cheap. Or if you must live down South live in a cheap area...never mind that the schools may be shite and the crime rate high.

Well house prices have increased 4 fold in moss side over the last 15 years and it's schools, whilst not great, are no worse than they are in some other areas of Manchester which have higher house prices. I'm pretty sure that those who bought a house in moss side for £25k around the year 2000 don't think they made a mistake and that they should have Carried on renting in didsbury in order to maintain a bit of postcode snobbery. I'm sure those that bought 3 bed terraces for £4000 in 2000 under the Regeneration scheme that moss side had have even less regrets. Ultimately, if they want to move to a 'better' postcode they will now have a significant amount of equity to do so. And houses in moss side sell pretty quickly, much faster than ex council houses in many supposedly nicer parts of the NW because up North there is a weird stigma about buying a house on a council estate unless you are an investor wanting to rent it out. This is why some people are unable to get on the property ladder despite earning decent money in good areas - buy in Toxteth or Moss side, not a chance!

Maybe an increase in interest rates is one thing that will stabilise / reduce house prices. Whenever there has been drastic falls in house prices it has been due to interest rates rising significantly. Interest rates have been too low for a long time now and whilst it is great for those already paying mortgages it isn't so great for those trying to get onto the housing ladder and seeing prices constantly rise or for those who have savings. An interest rate rise would never be popular though as it leaves those who have already borrowed huge multiples vulnerable to being unable to afford their mortgages. So I feel it is a choice between increasing interest rates and affecting those who have mortgages or keeping interest rates at a historical low and affecting those trying to buy houses.

I think we may be in a transitional period in which btl becomes less economically advantageous (and in many cases it already isnt particularly). The tax changes do seem to be quite significant, and possibly even more so is the tightening up on btl mortgage lending. If that happens, competition from btlers with other buyers may fall.

At the same time there will be quite a lot of housing coming onto the market as older owners downsize or sadly die.
So house prices in london and se may not increase as sharply as they have been doing - and might even fall in real terms over the medium term. But it may be a slow process, which is not much consolation to those who if they had been born 20 yrs earlier could have afforded to buy in their 20s but now have to rent privately.

Lesley1980 my first home in 2001 was 3 times my salary and a three bed semi in a nice area. The price has doubled now, sadly my salary has not.
3 x salary used to be the norm, now 4/5 times is and 30 year mortgages

I am not sure what use it is to compare yourself to others ever, either people your age or people who are older or younger as it never makes people happy. If you can just look at your own situation and do the best you can you tend to be happier. There will always be people better and worse off than most of us.

Yes, we know you're not sure. You make the same clumsy point in pretty much every thread that discusses the IRREFUTABLE FACT that purchasing a property is harder for your children's generation than it was for yours. Usually just before trying to muddy the waters with stories about your Victorian ancestors. Mine lived in bogs and slums, but that's got nothing to do with anything.

But actually, it's extremely important that we name this problem, or compare ourselves to others as you put it, because so many people aren't even aware of it. And it's not specifically an age thing either. There are boomers who understand the generational property shafting that's gone on, and young people who really don't. We are not going to be able to address it until we have an understanding of how toxic it is.

Also, whoever said Moss Side, keep up. It's not been the budget option for ages.

However, as I said earlier in the thread, the young people I work with have far, far higher expectations than we had 15yrs ago both in terms of area and what the house offers such as large kitchen diner to have friends round etc.

And it has been explained in the thread why that may actually be a sound financial approach, given that the ladder concept doesn't exist in the same way it used to.

Also, whoever said Moss Side, keep up. It's not been the budget option for ages

which is why I pointed out to that poster that prices there had increased four fold over the last 15 years.

It seems to me this is not a matter of opinion where you can just throw some anecdotes together about a young person who drives a car and has a phone when they ought to be living off lentil soup and mending their shoes with beer coasters. There is a wealth of data out there about the rise of housing cost in relation to wages. There is a lot of data about house building rates versus population/demand. There is absolutely no question from this that the situation for people now is different from that of the 60s-90s. We are in the grip of a housing shortage and an affordability crisis.

Some numbers here: www.theguardian.com/money/2015/jan/12/the-housing-crisis-in-charts

The 'move' point is an interesting one.
I can see that economically, if you're on a nationally fixed salary like teaching, social work etx, it would make perfect sense to move to where house prices are lower if that is the only way to buy.

When i think about whether i really would have done that in my 20s, leaving friends to go and live somewhere i knew nobody, i am honestly not sure. I suspect yes because the idea of working to pay someone else's mortgage rather than my own would have been very unappealing. As a couple i think it would be a lot easier. That is if you don't have dc and family support though - the economics changes in that position (leaving aside the emotional ties!).
But ultimately we need to 'rebalance' the economy away from the south east if possible (it may not be), which would mean people moving. At the moment apparently there is a 'graduate drain' from north to south - there was an interesting article about it last week somewhere.