To disagree with my work colleagues in thinking that the cost of living is a potentially serious social problem?

[Livingtothefull]

I was having a discussion with a few work colleagues, they were all 50-60 somethings and own their own properties, only small mortgages left etc. We are based in one of the major cities in the UK.

I said that it was a big problem that a lot of people, despite working hard & having good jobs and/or professional qualifications, couldn't afford to buy property and much of their salary went on rented accommodation which left them very little disposable income….also many jobs were insecure which left them worrying about being able to afford rent or to save.

I have previously talked to a few (mostly younger) people who are in this position. One person who is a police officer in his 30s complained that he had been a police offer for 12 years, been promoted but still couldn't get on the housing ladder.

I suggested to these colleagues that there was something intrinsically wrong when a police officer - doing a difficult, sometimes dangerous and necessary role - couldn't afford to buy himself even a small flat.
They all quite vehemently disagreed with me; their response was, that rather than complain about the cost of living, people should just go wherever the work and job security is and where housing is more affordable, and if that means moving away to a cheaper area then so be it (one or two of them pointed out that they had had to do this when they were starting out).

I was really quite surprised at their response: is it just me who thinks this way? How are people with personal/family ties to where they live supposed to just up & move? What about essential workers like nurses/police officers who are needed everywhere, not just in affordable areas?

I do feel that the 50-60s are a luckier generation (I belong to it btw) & I was surprised at their response, some of them have DCs? I do feel things are tougher for the younger generation & it can be difficult to get ahead, I think I have quite a lot of anecdotal evidence from them (no massive student loans in my day either). I just felt that the colleagues I spoke to weren't aware of how much the world has changed - but would be interested to know what others thought about this.

For anywhere outside of London I'd completely agree with you. I think it's important for communities outside of London to have affordable housing for young people to live and work nearby and I don't think they should be driven out by retirees or buy-to-lets. As far as London is concerned, however, I have always had real issues with people complaining that they can't live in London. It just wouldn't occur to them to move out of London and commute. It's not lovely but it's life. The ONLY people who need to live in London and should be supported to do so as far as I'm concerned are those working in the public services.

I'm not sure why people are bringing Brexit on to this thread.

Many of my friends either stuck through difficult marriages or paid careful attention to who they are marrying.

In the area i live house prices have just soared in certain places. Houses that aren’t really worth that amount are only that price because of where they are (outside London.) It’s ridiculous. 20 years ago you could buy a 3 bed detached house with a fairy good size garden for £100k whereas now the same house is around the 4/5 k mark. Wages haven’t risen that much so houses like that which were accessible to an average earning couple 20 years ago are only now affordable to people in the upper tax bracket or with a lot of capital behind them.

Not everyone from that generation is sitting in a massive mortgage free house having stopped work at 50 and whinging at the younger generation who should just try a bit harder.

Not all of us voted for Brexit either.

This ^ and the majority of my class (95%) did not go to university, but straight out to work.

I am 60. Police used to have accommodation provided for them I remember police houses, apartments, etc. This is no longer the case. It is extremely difficult to buy your own home but when we bought a derelict house in 1981 we were the only ones in our family to buy their own house. People rented, normally from the local council. We went without holidays and we certainly didnt travel like the younger generation do now. My young relatives get on planes and think nothing of attending weddings, stag weekends, parties etc on the other side of the world. All of which cost money. It is a question of priorities. They can however get 35 year mortgages if they wish. I think the young just live differently now. Not all of them but a significant proportion.

I get so cross about the 'move to where the jobs and the money are' line. And then secretly hope that the people who make those comments find their local library closing down, or their local school unable to get staff, or find they can't get a doctor's appointment because the clinic is understaffed.

Well, not really because those are all bad things, but I don't think it's very realistic to say that you move where the jobs are because sometimes local areas need people on not sky high wages too. Plus it simply isn't realistic for a lot of people - if you're divorced and have child custody arrangements, if you rely on family support for childcare, if you work in certain fields and would have to retrain or take a massive salary step back, if you have caring responsibilities beyond children etc etc.

Less did go to Uni, and those that didn’t had 4 years leg up on jobs. But the uni degree helped a bit when companies downsized or the market fell.
Personally I believe outsourcing all the jobs to emerging countries has been a massive mistake.

I also don’t think it is just the cost of housing that is a problem but the high cost of utilities, insurance and the generally high cost of living. Some older people are quite tight and if they have sustantial savings could help the younger ones out.

Having said that, I do think the previous generation did have to deal with a lot that the younger generation don't. Not so much 'we worked harder' as 'not all of were the lucky ones'. My boomer aunt and I have the same MH condition with a lot of the same symptoms. I got put on atypical anti-psychotics in my twenties, I work, I have a husband, a family. She was put into a mental hospital at the same age as there weren't meds which worked for her and stayed there until she was kicked out into care in the community in the early 1990s, at which point she was horribly institutionalised and struggled massively. She had zero chance of buying a house.

Not to mention non-white, non-Christian people - my father tells the story of going for a job and being told 'well, you've got every qualification, but I'm sorry, we just don't hire Jews'. Yeah, it was easier for white straight healthy boomers from middle class families, but for a lot of people it was dramatically harder to make your way in the world back then.

Communities all go through cycles the thing is the cycles are longer than our lifespan so 120 years I figure. Older communities get run down and cheep then get redeveloped, this is normal.

Not an expert in banking so hoping someone who is will come along and explain why banks can’t give mortgages based on someone’s proven record of paying a high rent over the last few years.
For example, my dd has been paying 600 a month in rent for the last two years, has been in stable employment for last 3years. Paying only £500in mortgage would allow her to buy the terrace house she rents, as she has the deposit, but her wage of £20,000 means she will never be considered for for a mortgage. She doesn’t earn enough apparently after outgoings yet she does manage to pay a rent that is £100 dearer.
Surely, with the changing housing market, your rental history should be relevant when assessing your ability to pay a mortgage.
It breaks my heart to see the bind she is in. At her age, in the early 80s, I was a single woman with a bog standard job and a 10% deposit and had no problem buying my own house.
Isn’t it time the banks tackled this problem or are bankers all into buy to let to ensure they can retire early. Council rent here in the Midlands for a terrace runs about £350 where private rents for the same property are £600. Was daydreaming the other day that when lLabour gets back in maybe Jeremy could bring in a law that private landlords can only charge the same as similar council properties, seeing as there’s not enough to go round for those that need them but hey, poor private landlords wouldn’t make enough, loads of houses would go back on the market, house prices would then fall making them more affordable for average earners to get on the housing market. ..........

But then the banks get into trouble for irresponsible lending... so, either way, they can't win

Littlepleasures - they tried that just before the crash and got in a lot of trouble for it.

I agree with you entirely. I'm a solicitor. These days trainee and newly qualified solicitors can't afford to buy anything in a decent area or at all unless they have massive parental help. It's the same situation for young Doctor's.
It's the start of social anarchy. It destroys aspiration and gives no reason to work hard and life was very different even 15 years ago.

I suppose with the lending you have to prove you can pay off the amount you’re borrowing within 25 years or however long the mortgage term is. So if you borrow say 100k with an interest rate of 2.5 percent, of your earnings are 25k you’re borrowing 4 x your salary and have to prove you can pay that off in a 25/30 year term.

It is odd that someone paying double what a mortgage could be can’t buy a house though and it all needs a big shake up.

YANBU OP, I have the same conversations with MIL and work colleagues of a similar age. Sometimes it feels like we live in a parallel universe.

MIL has never worked a day but lives very comfortably. She just can’t understand what it’s like to be stressed about work or money. She just can’t understand why we don’t get a new car or get a bigger house.

Work colleagues of this age are just as bad, they live in a bubble of financial comfort - mortgage free, debt free, houses that have shot up in value. They have buy to let’s, several holidays abroad & savings. The comments they make about Brexit and young people make me really mad. They simply do not realise how close to the financial edge many, many people are.

I worry about the housing crisis, my son is 26 and lives at home, which I love him being here but worry about his future. We didn't have it easy starting out, bought a flat in the early 90s, negative equity of 20%, now things are easier, we've nearly paid off our mortgage but have no savings so will be working until our late 60's but I still think we have it better than the next generation. The government need to do something, homeless people are desperate people which isn't good for anyone as crime rates will go up, because what other option is there, when you're desperate.

Property prices have started to come down and even Central London property prices are falling. It is more difficult to get a sale over the line at the moment and buyers are dropping out of contracts. Some people will have bought at the higher end of the market. I think the problems go deeper than just property prices though, even if you live in an area it doesn’t automatically mean that your child will get a place at a local school for instance. I would also say that my age group have had their pension age raised to 67 despite the fact that many of us started work at 16 and have paid in for our pensions.

I also think there is a huge knock on effect to staying on in education until 18/21/25 and not earning during this time. Instead of graduating with no debt and some savings young people today are finish their education with £60k+ ok debt and no savings.

You have strict income to debt ratios. Here in the US they just increased the ratio to 50% because of recent graduates not being able to afford homes based on the old ratio which maxed out at 43% but was mainly 40%. I don't know the ratios in the U.K. but these ratios is why people can afford the rent for a home they don't qualify to buy. It's a huge problem and I think fixed rate mortgages for the whole life of the loan need to be introduced to help make qualification for a mortgage easier.

Having kids in their 20s, I can see that getting on the housing ladder is a problem for them, but I don't know how much a problem they see of renting vs buying.

For us (mid 50s), when we first bought (1989 - ouch), we struggled. We didn't have a lot of disposable income, and did have too much debt for a few years. However, we got through it, despite going down to one income for over 10 years.

My parents bought their first house when my dad was 40 and it was a major climb up the social ladder, but we really had very little. Any extras we had were from my mum's knitting. But they did very nicely out of the housing market in their mature years (endowments that returned) and were able to live a fairly comfortable life.

Each generation has its plusses and minuses, and we do seem to muddle through. I think things are meant to be hard in your 20s and 30s, and ease off in your 50s. I don't think it is fair to compare two age groups.

The Government will do nothing. All we get from them is austerity which impacts the most on the already vulnerable. Much of the Tory government's core vote is from this generation and they know it, which is why they ensure a really good deal for them.

Certain relatives of mine who have hit 65 get free rail/bus travel, that is more than my severely disabled, wheelchair-bound DS gets. These are people in excellent health, mortgage free, travel the world etc….some of them are honest enough to admit that it is ridiculous to receive this benefit & they don't need it.

Just because you lived in a grotty bedsit at 19 before buying a fixer-upper house at 21

What was that about "straw man arguments" Agustarella? DH was 36 before he could afford to buy (worked in insurance so hardly low earner either), and in the early 70s no-one was giving mortgages to bachelors anyway...

PEOPLE ARE DIFFERENT AND HAVE DIFFERENT EXPERIENCES. Not hard, is it?

When the baby boomers were buying their first property the cost of a home may have been twice their yearly salary...now, especially in London, it could be at least ten times your salary.

Our home had virtually doubled in value in the last five years...wages certainly haven't doubled in that time! That's the crux of the problem... property is rising far faster than wages. It makes saving up feel like a waste of time. I think older generations could save because they saw the benefit in it. Younger generations may as well splash a grand on a mobile phone or a holiday because that thousand quid will go nowhere towards getting on the housing ladder.

Our first mortgage was 15% interest and the top up loan was 18%. It restricted what we could buy. No-one could live with that now.

I think some people can, and do, move to get cheaper housing. Why wouldn't you go to Nottingham or Sheffield if you were a Dr and married to a teacher? No problems living somewhere very nice with good jobs. Huge pension to look forward to as well.

Many older people don't have good pensions. You only have to look at the stats to understand that. They haven't all retired. Early retirement is largely a public sector phenomenon and far less common in the private sector where pensions tend to be lower.
We have every intention of helping our children buy homes. However, we had two incomes when we bought. It makes life so much easier if you do! Very few of our friends bought as individuals. They bought just before they got married. That's a big change in society. There are cheaper towns where people can live in the SE and certainly properties are in reach for couples, such a two police officers, two teachers etc.