To worry that leading Economists say house prices will hit 15 times earnings

[Ijustwantaquietlife]

This seems like such a frightening prospect. I bought mine when it was 5 times my earnings and even that seemed like I was being a bit risky. How on earth will the next generation ever afford these along with paying back 60k tuition fees and saving enough into a pension to ensure they have enough to not be miserable in retirement?

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House prices, at least in some parts of the UK, are just ridiculous. I just don't know how first time buyers are able to buy unless they get help from parents.

I know in other countries people are more likely to rent than buy but rents are ridiculous here too. They are often much higher than a mortgage would be. I have friends who both work but not in very well paid jobs. They have two young children and rent a 3 bed terraced house. It is £1,200 a month. They don't get any housing benefit although they do get working tax credit. They can't get a mortgage even though they have been paying rent for 9 years with no problem and a mortgage would be substantially less.

The reason my house value has shot up is a permanent local feature.

It's really worrying, my son and his girlfriend are buying a flat together - they can just afford it after saving for 10 years and all I can think about is how fucked he will be if they split up.
It's just about affordable for couples with good jobs but if any children come along or someone is single they have no hope at all.
They have decided they would rather have their own home than children. I can see this becoming a trend if things don't change.

It's not the case across the whole county however.

In my area there are plenty 2 bedroomed homes with gardens for £120K.

The house price increases aren't universal though and averages mask massive differences, particularly between north and south.

This... the UK is not just the south east. My DP bought the house we live in at the height of the market in 2008 for 110k and we're struggling to sell it now for 25k less than that. Perfectly nice starter home in a not totally hideous area.

Yes the market in the south east is ridiculous but that is not reflected in the entirety of the country. I could get a fairly decent 2/3 bed house on 4 times my nursing salary here.

Retirement? Haahahaahaahaaaa.

Since when did economists or any other experts make accurate predictions?
Since never that's when
This is bullshit no one knows what's going to happen.

I seem to remember in the 70s that the assumption was that in the digital age, everyone would have vast amounts of leisure time.

How totally wrong they were!

annandale I agree that society needs to change perspective on the whole area of relationships and marriage, but I don't think the housing market is a valid reason for that.

Christ we need to make it easier to get out of toxic relationships
not more difficult
If he or she is a bastard you need to be able to leave them so that you can go on and lead a full life as a productive member of society

From what I understand about the problem, I thought it was a mix of stagnant income/wages plus an overall increase in the price of housing that would give this figure. It's not just the price of houses, but the actual income my generation is earning. Holding prices as constant (meaning putting what the 1970s income is to 2017 income, with a change in currency rate/inflation), people in my generation earn less than our parents and grandparents. Even though we're more educated and actually healthier. The financial crisis hit us the hardest, and combining this with increasing University fees and economic policies that usually continue to benefit those who are older, like our parents, this analysis rings true to me. But then, I'm a trained economist, and we can get things wrong.

@ibbleobbleblackbubble

Yes, misogynist housing market!

@TopKittyKat actually there had been a decline in drinking, not an increase. The current crop of 18-25s drink less

Intergenerational mortgage just like in Japan.

People can't afford to rent and save for a deposit anymore. Our rent for 2 bed was £30 a week including bills in the 90's. We both earned about £180 a week each. Easy to save for starter home which was £45k. If we'd have had DC first we would have taken longer for a deposit but would still have bought eventually.

I think we're going to see increased inequality. The existing wealth tied up in housing will get passed down through inheritance, and those who miss out on that will be increasingly priced out of the market.
I don't think any of us should be relying on inheritance for anything. My grandmother is paying £1000 a week for residential care. Any inheritance is being swallowed up pretty rapidly- which is something I am happy with, someone has to pay for her care, so either those using it should or the workers/tax payers are going to be taxed more to pay for the care, so either way I would loose. (I was also furious to be told that the reason a friends grandparents are still living 'independently' (despite not coping, falling often and generally struggling) is because they can't afford to go into care, despite owning a house worth around £250k- basically the family are protecting the inheritance, which I think is awful).

Yes, 18-25 are drinking less but 25-40 are drinking a lot more!

Plus obesity etc. Ticking time bomb.

I would love to retire in my 50s! To me working until my current retirement age is a horrible thought. Sadly early retirement isn't likely to happen 😢

'When do we decide that it is socially important to accept that the person you married is not going to be a saint all their lives and it is worth putting up with a lot for the sake of the country?'

The 1950s called, it wants its attitude back. Why on Earth should people stay in some relationship they cannot abide for the sake of 'teh country'?! WTAF?

If you want to understand how crazy housing is, my MIL recently told me how much they spent on their current home in the mid-1980s. They bought their 5 bedroom semi detached house in London for £35,000 in the 1980s. It needed work and they did this over time. In fact, they received help from the council to make the changes needed in their home, as they were able to get a loan from the council to do changes in their home, even though it wasn't council owned.

But it was more than liveable for them while they did the work needed and their two sons. It's now worth £1.7mil. They recently put it on the market, got multiple offers, but removed the house from the market because they realised they actually didn't want to move! This was also after Brexit. Do I think anyone in my generation will have this opportunity, without significant help from their family or the government? Nope. Even my wealthiest friends don't have the guarantee of such an inheritance that would allow this. My in laws also benefit from very generous pensions, which my husband and I will never have, and a hefty savings due to such a low mortgage when they earned most of their money (in the 1990s). They worked for it, definitely. But they even acknowledge that the situation is unsustainable and that young people will be shafted when they try to buy homes, have families, travel, and retire.

Why would retiring in your 50s be awful?

Don't you have hobbies or interests to do? I like my work at times, but I won't miss the reapplying for existing positions, Woking with people that take credit for my work, every 3 months a review and new targets set etc.

Very different to my dad that had a easier job for life without much hassle and finished early on fridays and a pension I can only dream of.

"TheEmojiFormerlyKnownAsPrince

I seem to remember in the 70s that the assumption was that in the digital age, everyone would have vast amounts of leisure time.

How totally wrong they were!"

Yes, I remember one of our teachers waxing lyrical about the 'Leisure Age' in the seventies when Hewlett Packard opened offices in Winnersh and electronic technology had us all agog. When she talked about us only needing to work 3 days in a week I realised some teachers were as naïve as newborns!

*Why would retiring in your 50s be awful?

Don't you have hobbies or interests to do? I like my work at times, but I won't miss the reapplying for existing positions, Woking with people that take credit for my work, every 3 months a review and new targets set etc.*
I am excited by what I do.

I am self employed and my business is taking off big time, It's a crazy ride. I love it.

Well that's great. But I do imagine you are in a minority that love their work. Retirement means time to do the things you love, and if that's your work that's brilliant.