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?

Higher interest rates might have an effect in some areas - it would make mortgages less affordable, but would exert a downwards pressure on house prices, making the mortgage you can afford more of a factor in affordability than the deposit you can afford (if that make sense). Wouldn't help everyone, but would help those with decent incomes currently trapped by prices rising faster than they can save.
Probably wouldn't have much affect in areas where ftb are competing with cash buyers though, and would cause a lot of pain for those who just got on the ladder, and who are stretched already (although at least the new affordability rules will help to mitigate against this).

What would it take to save?

A house price stabilization?

Am I a millennial? I'm 31.

Most of my friends have bought flats/.houses. The ones in London have all done so with help from parents. The ones up North have managed on their own.

None of my friends had issues getting 'good' jobs but then they wee mainly pretty high achieving at uni.

I do think without parents able to release some cash to you it is possible to get on the London housing ladder at this stage. My friend bought a flat in 2012 with a big deposit from his parents. It has since gone up in value by MORE than his annual salary.

I think things are harder for the current crop of grads - I was the last year to pay £1k / your tuition fees. The year below was £3k. Now it is £9k plus. That is a SERIOUS amount of debt.

Ok...
The google search is a "citation" you have used. In addition to two articles which are not wholly relevant to the U.K.

TBH it's not realistic for millennials to own on the whole. Just had this conversation with DM (70s) about the average wage when they were buying and the average wage now and house prices. It's not as simple as wanting experiences over wanting a house. It's the being able to get a mortgage, my mortgage is far lower than it is to rent in the area like half as much so it wouldn't make sense to not own in some ways.

This is the most ridiculous thread I've seen in a while! DP and I are in our thirties, as are the majority of our friends. Most of us own now, but that's only thanks to sizeable inheritances from our parents. Even with decent salaries, we'd have no hope of owning in our area without such support and no amount of "marketing" would help as it's not about convincing us "saving is cool", more making it possible to save whilst paying hefty rent costs.

Hahaha uhhhhhh having the disposable income not blown on rent to retain at the end of a month!?

I am millennial.

Everyone in my peer group is either cannot afford to save, is saving to buy or has just bought.

We are currently saving, but it will take about 4 years to get the amount we need on our current salary with our current rent.

What would it take for you to save?

Please fuck off with your goady threads...

There's not much point in saving up to eventually buy a house when house prices are increasing so much more quickly than salaries. You're obviously never going to manage to do it by saving alone if the gap between what you earn and what you need keeps widening exponentially.

I don't think I know any single people in London under the age of about 45 who own their own place. You need two incomes, a sizable deposit, and lots of time to view properties as soon as they come to marker and be able to make an offer the same day to have any chance of buying.

Many of my friends who still live down south have about £50 disposable income left a month after rent and basic bills. What's the point of saving that if house prices locally start at about £200k? It'd take you about 20 years to save up a 5% deposit!

I moved north to an area where the house price to salary ratio was more reasonable purely because it was obvious that staying down south would make it impossible to buy a house. Even on a salary double what some of my skilled peers earn locally it has taken me a long time to save up enough.

House prices in comparison to incomes are far, far too high in this country at the moment, and investment in rental property should not be encouraged. There'd be riots in the streets if baby boomers were buying up all the food in the supermarkets and then selling it on to young people at a higher price; I can't understand how hoarding and renting out housing is seen any differently.

We are choosing to continue renting in London (rather than buying now) because

• we are fortunate to be able to rent and save (to put this in context my dh earns 150k so many will not be able to do this), so we plan to have enough to buy outside London in the future, hopefully a small house in a nice Northern area (near family) in the 250k range, outright or near outright.
• we don't want to take on a huge mortgage debt for a rubbish house, or somewhere in a dodgy area, or a terrible commute. We don't trust that there won't be a crash, and we don't want to be lumbered with a big mortgage for something we can't sell. We don't want to put all our savings into the property market, it scares me, it feels unpredictable and out of control. I'm not interested in making a profit out of property, I just don't want to lose money, or get stuck
• we value flexibility - not sure what will happen to my dh's job post Brexit, we may need to relocate. Also we can move for schools, if the local area changes, without spending 30k in legal expenses and stamp duty
• we like our flat, nice area, good schools, quiet area. It's quite scruffy, 2 bed, can hear the neighbours, so I wouldn't want to live here long term, but it suits us now. Saw a similar one advertised in estate agents for 800k. For a 2 bed flat. Bonkers.

Like I said we are lucky we can rent and save so we have a Plan B, many can't.

I have friends who have bought shared ownership and have found that if they make any improvements, eg new kitchen, the cost of their rent portion goes up! And if they later try to buy a greater share it will cwww.airbnb.co.uk/rooms/11486554?guests=3&adults=2&children=1&infants=1&location=Broadstairs%2C%20United%20Kingdom&check_in=2017-06-11&check_out=2017-06-16&s=1k9eFWu0#neighborhood.

Hmm post fail there (evidence of my selfish Millennial holiday googling....)

I have friends who have bought shared ownership and have found that if they make any improvements, eg new kitchen, the cost of their rent portion goes up! And if they later try to buy a greater share it will be more expensive if their improvements have added to the value of the home. So they pay for all repairs and improvements from their own pocket, then the developer collects more rent from them, and sells their portion for more. Seems like a good deal for the developer!
They were looking forward to making their home 'their own', but whilst they have redecorated a bit, they are keeping the shitty old kitchen and bathroom as they want to own a greater portion first.

Schemes like this aren't that helpful.

In some ways this could be thought of as an extension of the lipstick effect

If a deposit would require saving hard (no eating out, no holidays, no new clothes beyond pants and socks) for two years or even five years, people will buckle down and get on with it.

If saving that hard for ten years still might not be enough, and prices might rise faster than your savings accumulate interest, can you honestly say you wouldn't just say "fuck it" and have a nice dinner out?

This is a weird thread. I agree with ppl it's nothing to do with 'marketing'.

Alot of people I know have given up on the idea of owning, especially in the SE. It's just so far out of reach that they don't consider it.

I know around 3-4 friends who have bought and they all received inheritance money or parental help with the deposit. And they all live in cheapish areas and have stable jobs and partners in most cases which makes a difference.

I think the housing crisis (along with unstable jobs and so on) is also affecting people's decisions on when and whether to have kids.

I'm 29 so I think I count as a millenial. I don't really know anyone who is a really high earner though so that affects things (and I don't know anyone who did one of the prestigious high paying grad schemes you always hear about at uni!)

Trills I agree. If you can borrow 95% it is not that hard to save 2.5% each (if buying in a couple with 2 full time salaries). My son's house last year cost £325k (very end of a tube line). If you need bigger percentages and it might take you 10 years to save that is a lot of time to put your life on hold whilst saving every penny unless you have picked a job with big initial pay rises. My daughters and I are in law and City firm starting salaries once you qualify (it takes about 6 - 7 years to qualify from leaving school) are £70k going to £100k in a few years etc. So 2 people on that have £200k and can save up a 5% and even 10% deposit. People in other jobs find it harder.

I'm a millennial, bought my first house at 23, second at 30.

Timing was key, remember the era of the 100% mortgage?

I was stuck for a while as prices dropped and trapped in negative equity. Then had DC while renting elsewhere and bought again, it was tough. I say that with two good incomes, somewhat slain by childcare costs!!

The cost of housing vs average income now is completely out of balance.

hopelesslydevoted The shared ownership schemes are not good deals for anyone who is low income for those exact reasons. I had a friend who qualified for a scheme in central London by a hospital she worked at. I told her that since she qualifies for HB I'd look to get a council home anywhere outside of London and exchange with someone looking to move out. She got a 1bed with a small garden in bracknell and exchanged it with a one bed by Victoria station. Took her 5 years to do this but now she has her housing sorted. She has a rent which is very reasonable and she has been able to redecorate without any issues. Her financial situation is so much more secure now in that she is saving for retirement and has a safety cushion savings account.

I think shared ownership is going to implode in 20 years when the places are grot boxes and no one wants to buy them. The government should have put their money where their mouth is and build more social housing plus stopped the RTB.

I'm not a millennial (I'm only 25 so I think I'm too young...) but DP is (32...just?!)
We bought a house together last year, just a 3 bed semi. Moderate mortgage.
I guess we did it cus we didn't want to pay someone else's mortgage when we could start paying our own.

Just to point out, but there are people with disabilities who have well-paying jobs. Not everybody with a disability lives on benefits in social housing.

DH and I are '93 and '94 births, so I think that makes us millenials? We would love to buy our own house in the near future and we will be able to because my parents squeezed themselves to buy a few properties on interest-only mortgages to sell to me and my siblings in the future (north west England). If it weren't for them I have no idea when we would be able to buy a house. Not for a very, very long time, I'd imagine. DH is a 2:1 science graduate and works in a low-wage NHS job. I'm a disabled full-time student on course for a 2:1 in law who also does some part-time minimum wage work on a zero hours contract, I'm about to graduate and will be unemployed. We pay £530 a month to rent a one-bed flat in the east midlands, which I know for people in the south sounds like a dream, but for us is grim knowing that is less than the mortgage of a couple who we're friends with who have recently bought a three-bed house in a village nearby. Renting, especially if you're renting from an off-shore tax-avoiding corporation like we are, feels soo grim. We feel so pissed off that our hard earned cash is going to those bastards.

You are a millennial I think feedmyfacewithbattenburg. It's anyone born from the early/mid 1980s through to the mid/late 1990s (depending on who's definition you use).

FFS so sick of being patronised like this. I'm a millennial saving for a house... all of my friends are millennials saving for houses.

I am lucky to earn enough to put the equivalent to my high London rent into savings every month. I buy second hand clothing, shop at Lidl, never go on foreign holidays, my phone is 7 years old, I do a second job, and I cycle to work. All to enable me to put more money away. None of that is abnormal amongst my circle

What we need is for the generation currently holding all the power to commit to fixing wage stagnation and building a fuck load of affordable houses, instead of just using their wealth to invest in buy to lets.

So 2 people on that have £200k and can save up a 5% and even 10% deposit. People in other jobs find it harder.

Earning £100k puts you in the top 5% of woman earners.

Are we really saying "let kids, aim high, earn in the top 5% of woman, and then you'll be able to afford a cheap house at the end of a tube line (oh, as long as you have a partner to share the cost with)"

Because if so, that is fucking depressing.

We can't save for a house because we can't afford to, we live month to month after high rent, childcare costs and low wages. I'd love nothing more than to own our own home, or at least start saving but it's just not possible at the moment. No amount of 'marketing' is going to change that

I am just describing it how it is and we bought 30 y ears ago very near the end of a tube line on a very similar basis when so high were london house prices even right at the end of that tube line that my children's father's school ( he was head of a department in a school) had to offer school flats to teachers as otherwise they just could not afford to rent./live down here. The idea the past was some very easy nirvanan when people could buy (remember the days when even women could not buy at all without a man - before my time) is not so.

However definitely yes £70k newly qualified city lawyer pay and head of department in a school pay today are unusual people who have done very well. Most people don't earn that and I am not saying they do.

The East Midlands example and rent there is very useful to see as we keep just hearing from people in inner London on RoF. Lots of people are looking elsewhere. I am from the NE originally and there are areas where houses sell for £47k (including the road my mother's mother rented on - that family of course even in the 1920s could never ever have afford to buy ). If you earn 2x the mimum wage say sx £15,600 with over time (assuming you can get a full time job at all) that is £31,200 joint income x 3 is £93k ish so our mythical NE couple could afford that £47k house but would need £4700 deposit plus costs. They could save that if they lived with parents for 4 years before buying.

I am not saying it is easy however and I have given my older children money to help them buy and hope to be able to do the same for the younger ones in due course. That of course makes things unfair on people with mothers who don't work or didn't pick high paid work or couldn't earn a fair bit but then so are other things unfair in life like parents being ill or divorced or people not having a nice home life and damaged by things other than lack of money.

The 3% extra stamp duty on buy to lets is having an impact. In London there is not the rush of buyers either that there was due to uncertainties over Brexit and prices are dropping back a bit.

Our biggest problem has been wages staying very low. I don't mean in minimum wage jobs - no one ever really expects anyone in the bottom 25% to buy a property anyway, but in the next level of jobs up from them. I lived in very high inflation in the 1970s ( we had 60% over 3 years) and obviously wages had to rise too although not enough - it was a very uncertain and difficult time and to top it all we had a property crash too.

I would like to see bank lending criteria relaxed, let local lenders make decisions based on the overall person in front of them not some tick box exercise and secondly many more 95% mortgages available.

(And for people to see how lovely it can be out by the end of tube lines rather than 2-0 minutes from work in Central London. Yes my hour+ commute is a drage but people have had to commute from out here since the 1930s and earlier. It does not kill us. There is no right to live right near work or in cycling distance of work)