Home Ownership

[Gin96]

Article in the Guardian about home ownership being out of reach to most young people, it makes me very sad, poor families struggling, our generation were lucky, i’m not saying we didn’t have it hard but owning our property was within our reach, now it just seems impossible.

www.theguardian.com/money/2019/jul/31/young-britons-believe-dream-of-owning-home-is-over-survey-says

I live on the south coast and have my adult sons still at home as they are saving to buy houses. A small two bed terrace will start at around £230k and a one bed flat £150k. My youngest is 21 and earns just over £21k pa. he hopes to increase this with his next job change to around £25/26k and is trying to save around £8 to £10k a year so he can look to buy a two bed by 25.
He could now buy a small studio but would rather save for the house.

When I was his age I did buy the studio. It was a dump and needed a new bathroom, kitchen and the living area was small with sloping ceilings. I lost money when I sold it as even though I had done all the work to update it the housing market had crashed but what I lost I gained on my next purchase which was a two bed maisonette.

Plenty of studio flats around my way but hardly anyone buys them as a starter home ( even my own son is not interested) and they are mostly bought by landlords as buy to let’s for students.

Alothough property is a lot more expensive than when I bought it is not unreachable for most if they have the option to stay at home and save. Plus they have the benefit of large income multiples for mortgages and artificially lower interest rates which is not going to change anytime soon.

@Asta19
I have a 5 year plan for complete refurb.
I do get the 13 years! 😂 There is ALWAYS something to do on a house.

My DC will never be able to buy a home where they grew up and have family and friends.

Even if they had a partner to buy with, a one bed flat costs minimum £250k, this would be ex local authority, meaning a £25k deposit and then jobs which enable a £225k mortgage.

If they wanted a family home, then a bog standard three bed semi in safe/family area would be around £700k.

How is cutting back on Costa going to help with these sums??

On the other hand, had we rented, we could have had extortionate holidays, big cars, and safe in the knowledge that the same level of care in the same care home will be paid for by the state.

@IAskTooManyQuestions hahahahahahaha

@iAsktomanyquestions how on earth do you work that out? The lady rents next door to us pays £1500 per month, our mortgage is £500 a month

I was only discussing this with my grandad the other day as we are looking at buying our current rental soon (owned by a family member who is happy for us to buy).

My grandad bought his home for £3000. His salary was £2000, so the house price wasn't even 2x his salary. Interest rate was 10% so £300 a year.

Nowadays, take a £120,000 house as an example, which is a very moderate price in the climate. For someone earning a salary of £30,000, the house price is 4x their salary. If the interest rate is 3%, that's £3600.

It does irk me when people say "well their interest rates are so low, ours were 10%!" Well yes but it's all relative isn't it.

It is difficult. It's not impossible but it is a lot more difficult nowadays than it would have been in the past.

I bought last year on my own. I had to love area with the kids. And got a 3 bed house for 85k. It's not classed as a desirable area. But has a very low crime rate and is very quiet and lovely. I can see the very expensive village, where most of my friends live, that is next to us from my window. That village has a much higher crime rate than where I live.

Well worth it. Mortgage is far less than rent and I dont have to keep money in an account if the landlord decides to sell.

I also drive a very old car.

In my area, its is possible to buy. But many people dont want to. In my circle of friends lots of have council houses and prefer spending their savings on other things. Nothing wrong with that. Some people wont buy because they have a council property in the next village over and it's expensive and nice . They wont buy and move over the river to buy a cheap house because they like where they live. It takes me less than 10 minutes to walk into the village from my house.

I would have loved to have lived on the middle of that village. I couldnt afford it.

Around here, people could buy, but choose not to. Not being able to buy isnt impossible for everyone.

Just like it's not possible for everyone either.

Here wages have not kept pace with house prices. We are in a 2 bed flat and would love to move to a house with a garden. While we are paying childcare we cannot even think about getting a bigger mortgage as we would fail on affordability. We will have to move to a least 1.5 hours drive commute to afford a house even when we aren't paying childcare. We are both plugging away at our careers but it is still way out of control with a 3 bed terraced going for £250k and over. These are the ex council houses as well in ok ish areas. Nicer areas you are looking at £350k for a 3 bed semi. This is when local wages are about 18-20k for an admin and more skilled roles about 24k

I'm a millenial (mid 20s) looking to buy my first house this time next year and I have to admit, my peers and I have no interest in buying a fixer upper or a 1 bed as a first step. All the properties i've been looking at are a minimum of 2 beds and preferably have been recently refurbished.

I live in London but am well aware that to find something that fits my price range I have to look slightly outside and i'm lucky enough to have a good wage and should be able to save a 10% deposit by next year by being cautious about my spending,for a house about 200k. If you want to buy in zone 2/3 you can find one beds for 160-200k if that's your style.

Just a note, I live at home and actually pay over the odds because my mum needs the help. It's not always cheaper to live at home.

Another millennial here, (26yo). I both agree and disagree with the points made on this thread. As a qualified teacher of Art in FE, I cannot get a job 😂 so working as learning support I earn less than what would be ideal. Regardless of this, I have a good amount of savings because I'm smart with money. I feel those with private sector jobs that are well paid have no excuse not to save.

Thing is, despite having a decent amount saved for a deposit, my salary is not good enough to be granted a decent mortgage.

Help to buy isa is also annoying as you can only put in max 200 a month up to 12 grand, meaning it would take years to benefit from the maximum 3 grand from gov although it is very generous.

Then comes the issue that I am on mat leave meaning my salary is not even gonna be considered as valid until I return to work to mortgage lenders. (Dp does zero hour shift work).

So buy a cheap place and make do? Sorry but I am an entitled millennial and don't feel me and 4 month old ds should move to a rough part of the Midlands for the sake of owning a house 😂

Furthermore, who knows what's gonna happen to house prices?

In conclusion, before ds, I had saved loads from a shit salary and planned to buy cheap but my ds safety and life circumstances matter way more than getting on the ladder. For now we will keep living with dm. 😊

It’s really surprising to me that people won’t consider a doer upper. Why would you pay a premium for someone else’s taste? When I did up my parents’ house to sell, it made a profit of £33k - basically the buyers’ deposit. I’d rather spend less and make it exactly as I want it.

It’s also a dangerous time for a young person to buy, as they might end up stuck with an overvalued house and a huge mortgage, unable to follow the jobs in a post-brexit crash and recession.

I think it varies a lot by region. I am 31 and bought 3 years ago (3 bed terraced). It didn't cripple us, perfectly do-able and affordable. Most of my friends own their own homes. Some of them are now upgrading to larger/better homes with DC in mind. None of us are huge earners - most of my friends and I are teachers. None of us live in or around London though which makes a huge difference.

It does depend on peoples expectations though, I have friends who refuse to commute even forty minutes to gain lower property prices, so they’re stuck in HMOs.

I bought my first flat at 27, I didn’t buy it alone, but I did supply the deposit. I recently bought another flat (ex lives in the other one), it had been trashed by a previous tenant so it was around £45k cheaper than others in the building. It has needed a complete repaint which is cheap, the bathroom and kitchen don’t look great but they are liveable.

A lot of people want to buy their dream home, when they should be realistic.

"It’s really surprising to me that people won’t consider a doer upper."

Lots of risks with do-er uppers - costs spiralling out of control, trusted builders recommended by word of mouth fully booked for months so how do you avoid the less reliable ones, work done badly (see recent threads re building regs problems), and so on. I can understand why in mid 20s you wouldn't feel confident about taking that on. I wouldn't do it now and am much older than that! - I think it's a certain type of personality that is confident with that sort of project, and for the others who tend not to be, it is best avoided!

It’s fucking shit, especially when you chuck kids into the mix and not being able to give them the stability they need.
When I fell pregnant unexpectedly I didn’t expect to 10 years later still not be able to afford a home and actually be even further away.
When I escaped an abusive relationship 15 years ago I didn’t expect that to be the last Home I was able to own. I might have accepted the abuse if it meant stability for my kids.

I do think it's interesting though that more people don't move out of London in order to buy rather than rent - was discussing this on another thread, that if you're on national pay scales like teaching and nursing, even without the London weighting, house price/salary multiples will be much lower in some (not all) other parts of the UK.

It does seem that for a significant number of people family/friends/familiarity ties are so strong that they stay in London/SE even though it means they rent long-term rather than buy.
(I'm talking about those with mobile professions like teaching - obviously others are tied to the area by work.) Nothing wrong with that at all - it is one reason though why market forces aren't leading the late 20s/early 30s all to leave London/SE and put downward pressure on house prices there!

Some doer uppers are doable, but even I stepped away from one because it needed a COMPLETE rip out, walls moved, floor was rotten, actually not only floor, it didn't have a central heating... I LOVED the house, but I don't think I would even get a mortgage because I don't believe bank wouldn't class it as habitable. Hence no mortgage. And even if, not with 5% deposit.
I bought something which still needed a lot of work, but was perfectly habitable.

I do still think about that first house though😟 Could have been lovely and it was priced accordingly.

Me and my partner were FTB's a couple of years ago, I was 29, we bought using HTB ISA's, plus the HTB loan scheme as well to buy a 4 bed detached new build. We could have bought an older cheaper house but would have required longer saving for a deposit. I know someone who's bought a wreck and is doing it up before moving out of their parents house, but I also know someone who wouldn't even consider something like that, and wants everything brand new or customised to their tastes from the off.

Me and my partner would have been able to afford a house a lot earlier if we didn't have mountains of debt for shit we never really needed, and I can imagine a lot of young people are like that as well, instant gratification, paid off at a later date, luckily we're changing from that mindset now.

I'm not saying that's a cure for everything, as obviously house prices rise, and wages stagnating don't help.

Help to buy isa is also annoying as you can only put in max 200 a month up to 12 grand, meaning it would take years to benefit from the maximum 3 grand from gov although it is very generous.

Change it to a lifetime ISA, you can pay in £4,000 a year.

My parents only managed to buy a house because of the right to buy in the 80’s. They were in their 50’s. They’d rented a council flat for approx 30 years so the house was dirt cheap. ILs paid about 6K for a house on the edge of London 60 years ago.

I was only able to buy when DH and I pooled our resources in the 90’s and moved close to Ipswich. I can’t see our DDs being able to buy a home unless we win the lottery.

The moving out thing is difficult. We’ve been caught by being an area londoners now commute from - it wasn’t 8 years ago.
The commuter belt is so big now, it’s basingatoke - Chelmsford/ Colchester. It’s luton down. That’s a huge chunk of the country that is suddenly ‘london’ price where £200k flats and £400k houses are the norm.

That’s before you look at family ties, or business ties.

@biker47 will the gov still put 25% towards a house with a lifetime ISA?

We were careful in our 20s and bought a 3 bed terrace -a dump of a house in a good area- for £72,000 sold it 10 years later for £174,000. We then bought a large 3 bed detached on the coast for £310,000, we knocked it about to get some extra rooms and it is worth around £470,000. Our mortgage is about £750 a month, people renting them privately are paying £1,500 a month.

Hmm, I work with a young couple who rent. Both have very expensive cars on finance, they’re off to Dubai (again) in three months, buy lunches every day etc etc. Always moaning.
Compared to another young couple, same age, share a 2008 Micra to work, bring leftovers for lunch and not having a holiday/time off until Novemeber as this is when their new build shared ownership 2 bed flat will be ready. They’ve been saving for 8 years. They are both still under 30.
It is out of reach for many, but many could also do it by living a different lifestyle.
Oh and I’m in the South East, 20 mins from Folkestone.