Millennials in the house - what will entice you to save up for a house?

[AteRiri]

I read that millennials are all about experiences and not accumulating/owning things.

I'm curious...how can you be enticed to save up for a house?

And the concept of 'owning a home' is a fallacy - unless you have paid off your mortgage it doesn't belong to you yet.

I'm a millennial and don't own. In fact, hardly any of my same age friends own their own home, but all want to. I'm not paid enough to save enough for a deposit any time soon, although am making very slow progress. It's really depressing. I hate the uncertainty of renting.

I'm 32. My husband and I bought our first house in 2008, moving in around 3 weeks before the crash on a 95% mortgage. The deposit at the time was "only" 6k. Prices were on their way down so it was achievable but of course we were then in negative equity for about 4 years.

The only "marketing" tactic would be to offer mortgage products that make the size of the deposit achievable to save for while paying rent, but offering huge mortgages to high risk customers causes economical issues.

Mymothersdaughter
I'm not offended. It just read very much like "I managed do other people could if they really wanted to".
Me and DH are renting and almost have our deposit. It's doable for us. But that is in part to do with our jobs, low ish rent & lowish house prices.

My sister earns half what I do and is single. She won't be buying anytime soon because she has £100 after bills each month. No savings.

Because I expect there to be a time in my life when I can't work/can't work much, and am thus on a lower income, and I don't trust that suitable housing will be available to me at that point if I can't pay for it. Whereas if I already own it, the expenses associated with that are likely to be lower than continuing to pay rent.

Doesn't mean I like the mortgage system much, and I certainly don't like the way in which those of us not smart enough to be born at the right time get absolutely rinsed for housing whether buying or renting. Just seems like the least shittest option.

That was to lilacspatula but we cross posted!

I get you, totally. But the government will have to address it and the housing situation simply has to be addressed because so so so many people will be in a position where they cannot own their own homes. I'm opting out for now and we will see what happens. Still saving but hoping me and DH can buy outright one day.

I just don't have any faith in any good sense being exercised lilac, not when the can could just be kicked further down the road instead. Successive administrations have chosen to exacerbate this issue, not deal with it. Leave the turd to fester a bit longer and hopefully someone else will have to clean it up.

Certainly sympathise with your desire to buy outright though! It's just that most of us couldn't do that on top of paying rent too. If I could I would!

Lilac Spatula - because for lots of people (depending on a lot of variables) the difference between paying a mortgage and renting is still less than the mortgage interest rates.

E.g I pay £312 p/m. The house opposite me, exactly the same design, number of bedrooms etc, rented last week for £675.

25 years of 12x363 = £108,900. Whereas the mortgage interest I will pay is about £30k. So I am already 80k better off buying the house, even assuming rents won't go up over those 25 years, which they obviously will.

Same with someone in a more expensive area - mortgage of £150,000 over 25 years at 3% is £711 p/m repayment and £63k interest. But renting at £1200p/m is £150k more.

Plus, at the end of those 25 years it is very likely I will have an asset worth at least the amount I've paid, and very possibly the amount I've paid plus the interest rates, and even more, which I could then do whatever I wanted with. Whereas if I'd been renting I'd be left with nothing.

Not saying that everyone should want to buy a house - of course everyone has different circumstances. But it's a bit odd suggesting it's financially unsound for everybody.

Also I think people congratulate first time buyers because usually they have saved for the deposit, so its an acknowledgement of that, plus recognition of them achieving a goal. It doesn't mean that goal is one that everyone should aim for, but it's one that they wanted, and have successfully achieved.

I congratulate friends on getting new jobs, new partners, or having another baby. Doesn't mean I personally want those things or even that I privately think it's the best thing for that person, but it would be churlish to say so.

I'm a millennial and I bought my own home in London a few years ago without any assistance.

Other millennials who are also full-time young professionals should be able to do the same. There are of course people who cannot achieve their full earnings potential due to disability and there are people who have low paid jobs who have to be in London because we have a need for that sort of work to be carried out and you can't exactly relocate all the NMW-earners to zone 6 or they wouldn't be able to do the hours. Home ownership is clearly a struggle for some people and it's hard to know what the resolution is.

However, a large chunk of millennials have cushy graduate jobs and those millennials should be able to buy. If they can't, it's because they've focused on other priorities. Which is fine, but does mean they shouldn't complain so much. We graduated just in time to set ourselves up before the next big recession hit - we aren't the ones who deserve sympathy.

I spent ten years living in a grotty house share to save up. I know plenty of people with a similar age, education and career who haven't bought anywhere because they've always insisted on a minimum standard of living which has included renting a gorgeous new-build flat bigger than their basic day-to-day needs because they've thought that's where they should be living. They have no savings and it's easy to see why.

It has always been the case that to buy somewhere, you have to make sacrifices and compromises. Not everyone wants to do that, and it's become a whole lot easier in recent years to blame property prices rather than your own attitude to saving.

We are in our early thirties, we chose to have children rather than save for a deposit because I don't want to wait around, probably for 10+ years while saving and then be an older parent.
Sadly it does mean we will probably never own a house unless the housing market dramatically changes.
We are still planning on saving up once the kids are a bit older but realistically we will be in our 40s before we could afford a mortgage.
The only people I know who own in our group of friends are people who have been given pretty much a whole deposit by their parents. Otherwise they would be in the same boat as us.

not everyone wants to do that, and it's become a whole lot easier in recent years to blame property prices rather than your own attitude to saving.

Dear me. It must be my attitude to saving that means I can afford to buy a family house up north but someone elsewhere in the country on the teacher income as me can't buy a flat near their jobs.

My parents bought 3 bed semis for 60,000 in nice enough but poor areas. I looked near where I was brought up. Those houses are now over £250,000. But you're right. House prices have nothing to do with it.

I think what you're saying applies in some circumstances cassie but far from all. I'm in similar circs to you - took a graduate job (in law) with a £39,000 starting salary and have no sympathy for colleagues - some now on £80k+ - who bemoan their inability to save/ability to afford something to their liking while spaffing £1500pm or more on designer pads in central London and going on fab holidays.

But - far from all graduates have "graduate jobs". Salaries vary dramatically by industry. And prices are increasing at rates which mean that the lending multiples that banks will consider don't, in some places, put any property at all within reach. And that's before you consider paying back student loans etc.

"Graduate" covers all manner of people, in short.

We bought our house in 2007 with a Together 125% mortgage. Very unpopular and somewhat of a scandal now but they weren't all bad and it worked well for us.

It was the only way we could do it as we'd never have managed to save the deposit whilst renting with the income we had at the time. We also had £18k cash on top of the 100% mortgage which we used to renovate. Spent about 4 years in negative equity before equalising and now, after 10 years, have plenty of equity to put towards our next house as a deposit.

I would honestly welcome a return of this kind of scheme but maybe more carefully monitored/with certain stipulations...such as using the extra cash for approved home renovations meaning negative equity is less likely.

Journo

I'm 36 so end of GenX start of Millennials depending on your definition. My husband and I bought our house 6 months ago after he inherited some money from his grandparents. In fact we bought the house from our landlords. We pay £160 less for our mortgage than we did in rent and we have paid for some repairs that should have been done in the last decade but weren't.

Most of my friends have bought in the last 5 years as they inherited. The ones who bought in their 20s either had big help from family or didn't go to uni and were earning from 18. Some of my friends had Interest Only mortgages in the mid 2000s and having split with their partner at the time were left in a bad way.
We had a baby before we bought. Our savings covered that and then buying a new to us car (8 years old) after our 12 year old car died. Our savings were £8k.
We got our mortgage based only on my husband's salary to allow for the chance of redundancy, interest rates rising etc and so we could afford a second child. He and I both earn around the national average salary.

My sister is an academic, married to an academic. They just moved from a very affordable part of the UK to one of the most expensive as my sister got a permanent position. She couldn't get a mortgage where she lived before as she only had a temp contract. Now she can't get a mortgage as she would need a deposit of around £30k.

NotCarylChurchill London actually, not Jupiter. I did mention it in my post.

MaisyPops As I have stated, I know plenty of millennials with good jobs who throw all their money away on things that they don't need but think they deserve. They cling to the general moan that property is too expensive without looking at what they're spending their money on. When you earn a certain salary, it doesn't matter how expensive something is, you have the means to cut back your non-essential spending and save. It's actually easier to do this in London despite all the complaints - traditional "graduate" jobs like law training contracts come with a cost of living uplift (so there's a financial buffer to play with) and it's common to live in a houseshare (which is considerably cheaper than renting by yourself). Many millennials in this position seem to just complain when they could buy if they really wanted to enough.

EssentialHummus I'm only talking about millennials with traditional "graduate" jobs like law, accountancy and business management. What I haven't mentioned - that probably needs to be acknowleged - is that it's bloody unfair for doctors. They can't put down roots because they get moved from hospital to hospital, they earn peanuts (which is ridiculous considering what they do) and they have more student debt.

Was paying £850 rent while saving. Deposit £11k plus fees. House £230k

That's not possible for everyone though. DH & I are both teachers. We live in the South East but earn the same as if we lived in the North. Our rent is over £1200 a month. The cheapest 2-bed houses in our town are going for £300,000.

The house we live in now is a small 2 up 2 down terrace, with a value of 270k, for us to even be looked at for the box we live in now we need at least a 15% deposit. Despite saving like crazy 40k is a daunting prospect, and after paying ludicrous rent for where we are we can only afford to save £500 per month (with a combined yearly income of 70)

It's shit. No amount of "marketing" will stop it being shit.

Cassie you have rather changed your tune from "people whose earning potential isn't limited by disability" to "oh but I'm only talking about lawyers etc."

Don't know why you feel the right to judge what your friends choose to spend their money on, but your social circle appears pretty elite and frankly sounds a bit out of touch with reality. The average 20-something Londoner is not in a high paying job spunking loads of dosh on fancy holidays.

Hm. Not having to spend over half my monthly income on rent would be a help, I have to say.

I was born mid 80's and buying has been tough.

I don't think I have ever treated myself to anything. Everything I have purchased in the last 10 years has been as required.
It would have also been impossible without DP.

I have younger siblings who don't have partners and have no hope of buying as prices are just continuing to increase faster than they can save.

TabascoToastie I'm sorry if you think that. The point I am trying to make is that there is a large number of millennials who had the opportunities to hit a high earning potential, did so and have frittered their money away.

For me, millennials are late 20s through to late 30s (although I appreciate there is no common definition). The Londoners I know in that age bracket are all on decent enough wages to be able to afford to save. And many of them choose not to.

If someone I know who is in their late 20s is moaning at me about being able to buy a property, that invites the response of, well, why are you living in a 2-bed penthouse and boozing every night? If they're happy to fritter their money and not buy a property, fine, but if they are frittering, they should have no grounds for complaint.

Everyone makes their choices in life.

I'm in my 20's and what makes me not save? Because everytime we would get anywhere near what's needed the house prices have gone up and what we would have isn't enough yet again while living a life of no fun.

I'm all for owning a house but not at the expensive of years of unhappiness from no fun and by fun I'm taking a holiday once a year in the U.K. And not having to live on beans on toast.

Maybe one day we will have enough money to buy but I'm not sacrificing my whole life for it.