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?

If people from the south move up north that would put prices up I the north, wouldn't it?

So the people sitting up there now won't be happy that their kids are being priced out of where they grew up (just like in SE now). And any drop in London prices would encourage people to buy there.

1. Wages for the lower paid have stagnated -although to be fair to the Tories the increase in the minimum wage now is the biggest pay increase to the low paid for 21 years or something like that. Certainly in general in the UK and US since about 2008 pay has not increased much and although we don't have huge inflation either people definitely have less money in their pocket. That makes it hard. Many people even my age who have paid a mortgage for 30 years know that is so. We have children. We are not out of touch. We know exactly what it's like and we sympathise.

1. Practical suggestions to help younger people are sensible. In life it tends to be better to look at what you can do to improve your own situation rather than just sitting around saying it's all very hard. So we older ones or younger ones who have bought certainly have valuable advice which I sometimes thing some people don't like to hear because they just come up with lots of reasons things can't be done. Eg I sent my children details of how to ba guardian of a property - that is a way to live cheaply - there was a fire station in Central London you could live in for example. This is for people buying before they have chidlren.

1. Also I was not saying put off babies to age 50 and need IVF (it is hard to get pregnant after 40) but my parents were married 10 years and only had me in their 30s. My older children have all bought in their 20s before babies come.

1. I agree there was a period when it was easier to buy. That did not apply to my relatives before that period about whom I posted before who had a truly awful time - live in servants, on the streets, 1929 crash etc etc. My parents couldn't buy in the 1950s either. They worked very hard, both of them full time for a decade before they could afford to buy in the 60s. It cost an arm and a leg and they used every last penny to buy the place. Then they were hit by 1970s hyper inflation - 60% inflation within 3 years and you can bet your bottom dollar wages did not go up 60% over tha tparent and then a 1970s property crash. My father worked full time until 77 by the way - no early retirement at 60. I iwll work until I die and my state pension kicks in at age 67

1. I don't agree that moving for work or housing is bad. My ancestors all had to move. I moved frmo the NE. Just about everyone I went to school with is still there in the NE and it's not fair to say they live in hell holes. You can get some lovely cheap (compared to London) properties. The BBC people who have moved to Salford have found the same.

1. In terms of practical advice to our teenagers of course tell them the nation needs low paid workers and how wonderful carers are BUT on a personal level if the teenager wants a chance to buy a house they need to go for a better paid job. That was the case in the 1980s and the 1950s and earlier.

1. What are basic human rights are things that law students spend a year studying sometimes. It's a fascinating issue - where do the rights come from, what should they be etc etc. Most of us think it is kinder if most people have shelter, warmth in cold climates, water and food.

Are areas so standard? If you go five miles east of here prices are £100k for 2 beds, big family houses for around £200k but two miles west and there is nothing for less than £300k and lots of houses costing £1-3 million. We are mid range. So you wouldn't need to move that far. Not sure what other areas are like.

Anyone who thinks there's no issue is crackers

We're just about to buy a 2 bed flat in the south east. A new 25 year mortgage.

We have to put down £30,000 for stamp duty and solicitors, buy at 5 times salary (the actual flat without the deposit is 8 times salary) and put down a deposit of £180,000!

To buy somewhere that will save us £500 every month in rental. That 500 is ALL of our other bills, it's a huge amount.

There's no way anyone starting out could do that! We can only do that because we've benefitted from 14 years of price rises.

I don't think people should have to move to get housing.

People have a right to space - the same as they have a right to clean air, clean water. A healthy place requires a mix of people - you won't find any place is pleasant for long without cleaners, postal workers, bin people, service workers. The kind of evacuation of the poor that is happening in places like central London is a crying shame.

Markets are not natural or Godlike - they are an artificial creation, shaped by government policy. We can intervene in all kinds of ways to shape and mould them. We ought to be doing so to control the cost of housing and guide development in the right direction. I would like to see large taxes on unoccupied homes (hitting the global alpha wealthy who are using property as an investment for mobile capital), a 100% tax on betterment, measures against land banking, a proper programme of social housebuilding, and some ambitious measures like creating new garden cities in areas in high demand (e.g. Cambridgeshire).

Good point olderthanyouthink. So for an individual, moving out of the south east may be the answer - but if large numbers did it that would create its own issues for the other regions ( rather like btl, in fact). In fact that is precisely what happens in micro areas at the moment - parts of london suddenly shooting up in price for instance. Though there is often a reason for that like improvements in public transport.
Anyway, basic problem is house prices in some areas of the uk are a much higher salary multiple these days. Why, is an interesting question. Low interest rates, lenders being prepared to lend high salary multiples, buy to leave, buy to let, inheritance, the increase in the number of families who can provide adult dcs with large sums for deposits - all means more money chasing available property. Tax changes could have a powerful effect on that, and new buy to let may be made harder by changes in mortgage rules. The other factors don't look particularly like to change, and inheritance inequalities are in fact likely to grow!

Oh no not the 'move to the north brigade'
I live in the north east and I love it, wouldn't want to live anywhere else, but my family is here and this is where I set up my business etc. There is genuine fear amongst young people about job security here. My husband works in European recruitment, my best friend is a scientist who gets European funding and works in collaboration with scientists across Europe and I run a small business that heavily relies on people having a disposable income. I think suggesting people move to the north east is very short sighted when we have zero idea of what is going to happen to the economy here. I know this is true of a lot of the country but there's not as much here to pick up the slack.

"Practical suggestions to help younger people are sensible. In life it tends to be better to look at what you can do to improve your own situation rather than just sitting around saying it's all very hard"

This is very true. But there are two things being mixed up on this thread as if they are in opposition, but actually they are doing very different jobs:

• advice to individuals about how to make the best of their situation

• analysis of the bigger picture which accepts that most particular pieces of advice to individuals cannot be followed by whole populations. the problem remains therefore for some individuals, and (I argue) for too many individuals - and this is why it is a societal problem

eg

"just move"

Logically if everyone moved to a "cheaper" area, it wouldn't be cheaper any more. If you are flexible and clever and resilient, you can be that first buyer who makes 30000% in your time there. But not eveyrone can be and then you end up with no areas that are affordable to part time buyers in some regions

"get a better job"

How do you do this? First of all, have certain marketable personal qualities, partly through luck. Then, work hard, get good qualifications, show dedication, network, get promoted. Or in other words: win the competition. So - someone loses. So someone still can't afford to buy. The issue is not "it is impossible to get a job which will enable me to buy some sort of property". The issue is "there are not enough properties to go round to remain affordable to people on average incomes."

"Organise your life better. Meet your life partner young enough that you have a decade of joint saving without children and still have plenty of time left. Don't pick an abuser and have to leave. Don't get pregnant by mistake. Don't have a slow start at work and take a few years to find your niche. Don't have vocational attractions to public sector work."

Oh come on.

Yes that's a good point maxwell, there is just more work around in the south east - i can see why people would think it's safer to stay there, regardless of the friends and family issue. And of course it can be disastrous to buy if there's then a downturn and you can't sell but need to move away to find work.

But for those in their 20s the price of staying in the south east currently seems to be 'rent for the rest of your life unless you have rich and generous parents, or you earn a lot'. That also has huge costs (insecurity of private rental, who pays the rent when you retire). One answer is to commute i suppose but that is expensive and much harder to combine with childcare.
I don't know the answer! But i do think attempts to boost the economy outside the south east are a Good Idea.

Move ever further north, increase house prices but still commute to the south east. Price us locals out of the market and we'll just move to.... Oh wait we've been priced out full stop.

The idea of moving to a cheaper area and thus gentrifying said area may be good for the house buyer, not so good for the locals. Where so people propose the minimum wage service/health/hospitality workers live?

High taxes should apply to unoccupied second homes. It can easily be done and it would be a vote winner. Foreign ownership should also be stamped on. In addition all developments must by law be at least a third affordable housing or subsidised for key workers.

g I sent my children details of how to ba guardian of a property - that is a way to live cheaply - there was a fire station in Central London you could live in for example. This is for people buying before they have chidlren

Oh well done you! You saw an article in the newspaper and sent it to your children. Why doesn't every do the guardianship and save loads on rent?!? Oh, wait. Yeah it's actually exceedingly over subscribed and extremely difficult to get s place on it. And it is very unstable accommodation so you move extremely frequently. Typically sharing toilet, shower and kitchen facilities between a lot of people. You would need a prettt low stress job to enable you to spend the time searching for new placements.

The idea of moving to a cheaper area and thus gentrifying said area may be good for the house buyer, not so good for the locals. Where so people propose the minimum wage service/health/hospitality workers live

Well obviously they should have found their husband/wife at 18, lived at home, saved for 10 years, bought something at 28 THEN they would be ok. Or not n

If I could afford a house if I gave up TV and Iphones, internet etc.. they would all go. We would need a £36,000 deposit to get a 3-4 bedroomed house if we were buying.

When my mum brought her first house, she paid £20,000 for a 3 bedroomed. Now that wouldn't even cover a deposit.

Maudlin that is an interesting point - not enough properties to go round to be affordable to people on average incomes.

There is a poster who points out that there is not an 'absolute' shortage of property - in fact there is still quite a lot of unoccupied or hugely under occupied property even in the south east. One problem is that ftbs and mover uppers on average salaries now face competition from sources that used not really to exist in huge numbers eg btlers, and people who have access to parental money. That is (partly) what has bid prices up to unaffordable levels for average earners.

all means more money chasing available property.

And that I believe is the crux of it. Despite prices being sky high houses in many areas are still selling like hot cakes because some people have the money to buy them. I do believe the only thing that will slow house prices down is an increase in interest base rate.
In the 2000's people blamed lending criteria on the huge house price increases. People said it was the 100% or even 125% mortgages to blame. So after the banking crisis those lending policies were stopped and then the large deposits required became a source of blame - we can't have it both ways.
The fact is banks are prepared to lend 5x people's salaries at a the moment because with base rate at record lows 5x salary is affordable to repay. If base rate rose to 5% they might find that 5x salary isn't affordable for as many people, especially Those with long terms left and so banks won't be prepared to lend 5x salaries anymore meaning that here isn't as much money available to buy houses and j believe prices will fall. But like I said earlier, interest rate rises will not be popular.

My 20 yr old DD lives at home and pays £80 per month towards housekeeping, the other £700 of her salary is spent on phone contract, clothes, make up and takeaways etc. If she was sensible and saved even a portion of that it would soon add up to a substantial amount. I have tried to encourage saving but she won't.

So while I agree house prices are ridiculous I also part agree with OPs mum, teenagers have been raised having pretty much everything (7 year old's getting latest Iphones for birthdays?) and they don't see why they should stop spending so much and save.

Lack of punctuation means my last post makes no sense. Sorry

Again enormoustiger you miss the point, which is that naming the problem isn't doing nothing, its an essential precursor to doing something. It may well be that nothing gets done even after people are aware of it, but it certainly won't if they aren't. The most useful thing you could do in that respect is stop muddying the message. Because really, nobody thinks it was easier for Victorian slum dwellers to buy property than it is now. That's just not an argument requiring refutation.

And yy maudlin. My own view is that the best quality of life is to be had if you can earn reasonably in the regions, but by definition this is only a solution for a minority. Too many frequent contributors to these threads fail to realise that the reason they find their unfashionable corners of Zone 96 and Lancashire so affordable is because others don't want to live there.

Capricorn you could have much higher taxes on all second, third etc homes, not just the unoccupied ones. In other words have very high taxes on btl and second homes.I think that would make a huge difference to house prices in se. Interestingly things are moving in that direction with recent tax changes.
But it is a problem - on mn people have pointed out that a nationwide policy to that effect would cause problems elsewhere outside the se where prices have hardly risen. It could mean recent buyers going into negative equity for instance. So starting from where we are, there are no perfect answers.

Sixisthemagicnumber. It'll be unpopular because lots of people will lose their homes. The IFA regulations say the mortgage advisors have to point out rates can go up but they do not show people figures and say what would you do if that happens, the dimple answer is they would loose everything and nobody wants to hear that.

People living in the south are blt in the midlands and north in order to raise capital gains to put down a deposit on their own home in the south 10 years down the line, that's happening already and will increase. The stock market used to be how people raised the deposit, my ex and I both did that and that was a victimless crime unlike pricing out all the people ooop north.

Six you make perfect sense! Although, banks do already stress test and are only lending if the borrower could repay at higher interest rates, so perhaps a rise in rates would not make so much difference.

The real difference i think would come if it becomes less economically advantageous to own more than one property - and as a pp has said, that can be done very effectively through taxation. But then there is the impact on prices where people have only recently come out of negative equity.

the high interest rates of the 80's caused real misery, especially for the young who had taken out what were massive mortgages at the time. people were stuck with property they couldn't move from as they had negative equity - and that was for quite a few years. And a bit of stress testing isn't going to help that much if the rates go up to really high amounts - 15% is an absolute nightmare. People were losing their homes as they couldn't pay money back, and even if you could pay your mortgage you were broke, unless you were an oldie who had bought years before and had a tiny mortgage

I wish people would see that it's only the banks that win. Whichever way up, low interest rates on larger amounts over longer periods of time, they win, Higher rates on smaller amounts, they still win. The only answer is to throw every single penny at your mortgage and hope you don't die before its paid off.

Jayne where do you live?! Can I come live with you? I'll give you a bit more because that's waaaaay less than my parents charge me and I promise I'll save at least a few hundred per month- possibly more.