To wonder how the next generation will afford houses?

[Ieatcake]

Around where I grew up in the south east many of my parents friends could afford a nice detached 4 bed house on one average wage and take early retirement.

Now even if you have a couple of doctors that work full time they can just about afford a 3 bed ex local authority house. Two people on average wages full time can just about afford a small flat, but thats at their peak earning power - how can they bring up a family?

I know it's cheaper up north, but there are less jobs there and it breaks familys and people apart if they have to move hundreds of miles away from where they have always lived. I've know people move and then regret leaving everyone behind and do want to move back.

Definitely agree that we may need more incentives to companies operating in areas of cheaper housing. Perhaps also to companies willing to allow people to work entirely remotely. I appreciate that's not possible for a lot of jobs, but it is for some. I think this is a better way to think of the problem than 'why should we feel sorry for the south east when they suck everything in'. Avoidable over-centralisation of the UK harms all of us.

Also, it's perfectly reasonable and sensible for people not to want to privately rent, considering how shit it can be here. The comments about Europe never take into account that tenants have more rights in most Western European countries (though even so, homeowning is rising in Germany for example).

They’ll live at home longer and start saving earlier

Houses being sold at auction are almost always unmortgageable, so cash buyers only - and that, in turn, is usually because they're unliveable (not just a bit dated, but not safe or have no bathroom or similar) without major work. Some of those that 'look fine' probably have major structural problems which might cost another 50 or 100k to fix. It's completely unreasonable to take those and then say that's what houses cost and that young people should just buy those. There's a reason that's not how most houses are sold.

That's not the crux of the issue. Yes house prices are silly (including lots of places in the UK, not just the SE) but people's expectations have changed. As other people have said, it is possible to buy without parental help but usually involves scraping by for a while and saving massively (no expensive nights out / expensive phone contracts / cars maybe), possibly buying something tiny in a crappy area, moving to another part of the country away from friends and family and working your way up the property ladder.

That approach is also not necessarily the good idea it used to be.

Because people are buying older, due to student loan repayments and the need to acquire larger sums for deposits, they have a smaller window of time before they need to start thinking about having children, if they want them. A crappy studio as a starter home is one thing when you're 26, quite another at 36. People aren't necessarily acting irrationally by wanting their first purchase to be a property they can live in with a family, not least because it saves the costs of moving.

I suspect we will have to help our children by giving them deposits to buy homes. That's the only way I can see they'll be able to get on the housing ladder.

They may also have to lower their expectations and buy a house before having children /have children later when they are more financially secure .
Not rush into moving in with their boyfriend /girlfriend within a few months of meeting so paying rent when they could still be living at home . Travel less and spend less money on luxuries.
All perfectly reasonable solutions imo

A minority are lucky enough to have a windfall or earn a high enough salary to get on the housing ladder without help, but in most cases children rely on parents to give them money for deposits, either from savings/remortgaging or as an inheritance when they die. Of course that means that property stays in the hands of families who already have it! Those who inherit get a property, and those who don't inherit don't get a property. So social mobility is limited.

Yanbu.

What's more worrying is the govt is not addressing this/the lack of affordable housing.

some people dont and have never lived in the south east not all the jobs are there ,you can get a terrace house here for about £70-80000,my sister boughtahuge fourbed detached house with three reception rooms in a very nice are in the northwest for about £250,000

We have a three bedrooms house outside of Glasgow. No parental help, no windfall. First home dp owned was a one bedroom flat bought in 2003, we part exchanged it in 2012 for a two bedroom new build flat then last year we sold pure flat and bought our house. We are not super high earners (roughly £50k combined per annum). Although my mum and dad bought their first house for £9k in the 80’s and my house cost £170k so you can see the difference.

@Fluffyears if you bought a flat in 2003 then you will have benefited from price rises in subsequent years. People starting from scratch in 2018 probably couldn't afford to buy that flat.

I've always assumed we'll have to help the DC buy their own homes and been lucky enough to be able to save money for them each month as well as saving for their uni fees.

Without help from parents/family I really can't see how most of the children in the current education system will be able to afford their own homes.

What's your household income like relative to people living in your area fluff? Is that flat worth a lot more now or just a little?

I agree that companies need incentives to create employment outside the SE. Besides the housing issue, transport, schools and health services are at breaking point in lots of places. Trying to get anywhere down here is just a total nightmare as roads are at capacity - the M25 is just a big carpark. Things are going to get wven worse as the population is forecast to increase in th SE while many areas outside the SE are facing a decline.

Many won't be able to afford to buy because of low wages compared to house prices. The lucky ones will get help from family.
Pil have said they will help all the grandchildren and when we downsize to retire we will be keeping some money back for house deposit. We're fortunate to have a load of equity some of which we can pass on.

What's more worrying is the govt is not addressing this/the lack of affordable housing ?? You expect the government to build houses to sell them?

Or do you just not know about the new development rules that mean every new development must have a % of affordable homes, houses to be sold to HAs etc? Though how that is supposed to work in reality no one has every really explained. It's like the 1970ss mixed housing experiment has been forgotten... having been one of the 'good' families that had 'bad' families re-housed near us, ostensibly so they could learn to be 'good' families, I know exactly why the larger, executive houses in such developments don't sell! Which means the developers don't like that deal any more....

What should be happening is that the government should be giving financial incentives to developers and HAs to increase the social housing stock, to replace the council housing stock... for rent!

In most other European countries, renting is a very normal thing all the way through adulthood.

No it's not, I wish people would not spreading this myth
en.m.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

An hours train ride to London is hell, espically if you've still got to do half an hour either side of the train journey. So that's almost four hours on a good day. Houses close to train stations are expensive and the season tickets are not far off renting a shitty box room in London.

This ladder is a myth, unless wage keep going up and for most they aren't even keeping up with inflation. You buy a little flat at peak earning potential and the houses above it keep rising in value ever more and are stuck.

The countries where there is less obsession with property ownership have rent control and secure tenancies so there is less advantage to home ownership. Being a private rental tenant in your old age in the UK is a nightmare. You have a very modest income and probably no capacity to increase it, but you have no protection against your rent going up to more than you can afford, or your landlord deciding to sell and you have to go through all the trauma of moving when you might be frail and ill.

Home owners who succeed in paying off their mortgage have unparalleled security in retirement and so this will always be more desirable until there is a way for private tenants to be equally secure.

My aim is to have our mortgage paid off by the time we are about 55, then we will put aside the same sort of monthly amount into savings for DS so that hopefully we can help him get a home when the time comes - but we only have one dc. We would be unlikely to be able to help much if we had more.

I think the housing crisis may begin to ease a little in 20 years or so when the baby boomer generation currently in their 70s are all dying off. Their houses are "technically" worth a bomb but it's all supply and demand and if a whole bunch of them are flooding the market the prices will drop sharply.

FFS - you can do it if you REALLY want to! We've saved a deposit (5% admittedly) once for first house, next for second house (first only just broke even when we sold) so we did it twice in 10 years. Houses are expensive round here too (200k for 2 bed) my single friend has just bought a house on a teacher's wage. It can be done. Stop handwringing and suck it up! No holidays, no new clothes and a strict budget of £50 a week for food for the family makes it doable.

The average house price in the 80s was about 3x the average salary. Now it's 10x (I'm not just throwing those figures out there, I researched it for work). Yes cheap pockets of housing do still exist but they're likely so cheap because they're in deprived areas with little job opportunities or need £££ of work doing to them. The 'giving up luxuries' to save for a deposit is a logical fallacy really because even the annual amount saved by giving up phones, holidays, cars, eating out (phones and cars also essential for some people's jobs) would not be enough for a deposit in many cases and still take those on an average wage 30+ years to save one

I'm wondering about that chart and how they calculate home ownership in countries that have very different ways of accessing a property. In Sweden, for instance, a normal way of getting a nice flat is to buy a share in the association that owns the whole block. Yes, in a sense it is ownership- you can sell that share- but you still have to pay rent and are tied by very strict rules about what you can do with the property in terms of changing it or subletting, so it's hardly owning it outright. But it isn't really renting it either, as you have more security.

Saving for a deposit is much like dieting. It's fine for a week or a month but keep it up for years and it's hard work. But it is doable with the right attitude and many have shown. Even on lower wages.

"I think the housing crisis may begin to ease a little in 20 years or so when the baby boomer generation currently in their 70s are all dying off. Their houses are "technically" worth a bomb but it's all supply and demand and if a whole bunch of them are flooding the market the prices will drop sharply."

This is one of the interesting 'unknowns' I think. Downsizing, selling to move into retirement homes, and as you say probate sales, may all increase over the next 20 years.

But a lot of the money from the probate sales will go straight back into the property market - as the adult inheritors use it to buy more property, thus maintaining house prices.

Not all of the proceeds will go back into the property market though, because of inheritance tax (even with the increased threshold many many houses in London/SE are worth more than the threshold.) So yes, that may be a downward pressure on house prices; yet to see whether it outweighs the other factors.

Agree with pp that what we need is for economic activity to be spread more evenly through the UK. But at the moment employers in London/SE seem to be able to recruit employees despite high housing costs. Only when young people start voting with their feet against high rents and moving out of London/SE will employers have to follow them!

It's a sad world were one of the richest countries in the world expects their children to live at home until their 30s, never travel, wear rags, stay at home not experiencing much just so they can afford some over priced bricks to live in.

With the student debt they may have to stay at home in their childhood bedroom until their 40s.

@Ieatcake not everyone has student debt. I paid my own way through uni paying fees and living costs. Again, i lived within my means and didn't take a loan that I didn't need. I know some people need the loans, but they have to take responsibility for them in the future. It is their decision which will clearly impact in the future