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

It makes me so angry. Years ago, you could buy a house where we live for the equivalent of a year's salary. For the same house now, you would need 20 year's average salary. So the house price to salary ratio has gone up 20 times!!!

It isn't necessarily good financial sense to buy small and move up anyway. Purchasing and moving costs thousands each time, and there's often stamp duty too. There is the concept of the ladder but it doesn't necessarily exist everywhere. I'm in a pretty cheap area, but even so, flats and 2 beds for significantly cheaper than the 3 bedder DH and I got as FTBs aren't a thing.

I bought a two bed at 27 in Tottenham for 165k. It was 2008, on 100% mortgage. I'm lucky I kept my job through the recession. The flat is worth 400-420k.

Gentrification is pushing prices even further up

I'm confident my DD will have enough saved for a deposit when she wants to buy. Now I know she lives at home and goes to Uni but her (lucrative) part time work nets more income than she spends on anything - she simply doesn't spend much at all. We don't charge her rent but she does contribute to food and pays for anything she needs eg car, insurance, phone, competition entries - she keeps the winnings and usually more or less breaks even, but it does mean she doesn't have a maintenance loan for Uni. Nor does she do holidays, nights out, clothes spend is minimal, doesn't wear make up, nor drink loads of alcohol etc etc.
She will leave Uni with more in her bank account than she started Uni with (£9K), and provided she nets an averagely paid job even if she has to go and rent a room I could quite see her saving £1K/month (she will retain some of her part time work as it pays so well). Won't take her much more than a couple of years to save £35-50K deposit for a £250K property not too far from here or wherever she ends up working.

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

Yes, so you'll get £1000 on top of your £4000, each year, and there's no £12,000 limit, you can pay in until you're 50 years old, I think the limit on what house you can buy is higher than the HTB ISA as well.