To wonder where the money is coming from to buy houses?

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So, if houses used to be (say) 4-5x average annual salary back in the olden days of the boomers.

And now house prices are 10 X average salary... Bit they're still being bought, and people want to buy...

Where is this money coming from?

Are boomer parents artificially inflating house prices by giving huge sums of money by releasing equity etc?

Who is buying the expensive houses??

@Seashor

My son has just bought a house with his girlfriend. 70 thousand deposit. They worked their arses off, didn’t spend on false nails, hair, etc. They lived at home and they didn’t decide to have children and then bleat on about how the ‘Boomers’ had it so easy. They didn’t! They were also prepared to move to a cheaper area.

Have you got any idea how many manicures and haircuts you have to go without to arrive at 70K? This is such an unhelpful comment. Anyone with the most basic grasp of economics can see that it is harder to buy a house now than it was 25 years ago, and even more so 50 years ago.

@LuckySantangelo35

I’m not sure really…I do think twenty-somethings now do have a higher standard of living when it comes to ‘treats’ and seem to have more of a sense of entitlement around this. All the twenty somethings I know will buy makeup like Charlotte tilbury whereas when I’ll have bought brands like Rimell and Maybelline at their age. Stuff like meals out, hair extensions, botox/fillers, holidays abroad etc all seem pretty common place for today’s younger adults so it’s no wonder some cannot afford a mortgage. I think as well house sharing seems to have gone out of the window. Young adults seem to either live with their parents, rent alone or with a partner or buys. Sharing with friends or a house share a la Spareroom.com doesn’t seem to be as much of a thing any more?

How much money do you think people would be saving if they bought a £5 lipstick rather than a £15 lipstick, once a month? You really think that's the difference between having a deposit or not having one?

The reason people spend their disposable income rather than saving it, when they occasionally do that, is because they know they won't ever be able to afford a decent house, so there's no point in trying.

All the stats around shared housing would completely disprove your statement. Everyone I know in London shared a house for at least three or four years, most of them are still sharing.

@LuckySantangelo35

I’m not sure really…I do think twenty-somethings now do have a higher standard of living when it comes to ‘treats’ and seem to have more of a sense of entitlement around this. All the twenty somethings I know will buy makeup like Charlotte tilbury whereas when I’ll have bought brands like Rimell and Maybelline at their age. Stuff like meals out, hair extensions, botox/fillers, holidays abroad etc all seem pretty common place for today’s younger adults so it’s no wonder some cannot afford a mortgage. I think as well house sharing seems to have gone out of the window. Young adults seem to either live with their parents, rent alone or with a partner or buys. Sharing with friends or a house share a la Spareroom.com doesn’t seem to be as much of a thing any more?

Your first paragraph reads like a parody of an older person who has a totally warped/outdated sense of personal finance and how it related to buying power.

No, it’s not because young people are buying hair extensions that they can’t afford houses.

Two incomes, both decent salaries. Saving.

In answer to the OP, in my case it was that both my grandparents died and my parents very generously forwent their inheritance and passed it directly on to me and my siblings. I also got a significant advance for my first book deal, which was about a year/ eighteen month's salary in one chunk. I was in a long term relationship so could share the mortgage. So that's three incredibly privileged things which needed to happen for me to buy a two bed flat. Honestly I don't know how other people in London and major cities do it.

@LittleGwyneth
That’s good. I think sometimes the whole ‘renting is money down the drain’ trope can put young people off and they end up staying at home with their parents for years when actually renting to live with friends in a grotty house share has its downsides but can be lots of fun

@luckysantangelo35 fun, but paying large of money to someone who doens't maintain the property properly can feel pretty galling. I spent £43,000 on renting between 2013 and 2019, which I don't feel especially perky about.

@ManicPixie
Obviously I know there are other factors but I do stand by what I said about young adults accessing luxury brands etc spending on meals out etc more than what same age young people would have done 10 years ago.

@LittleGwyneth
Same situation here, paid thousands on rent in my twenties for really shitty shared housing. But I do think it was preferable to have done that rather than living with parents for those years. Plus I had to move around for my training/job a lot and had I been fixated on buying a house early on I wouldn’t have been able to do that and wouldn’t have the career I have now

@Seashor

My son has just bought a house with his girlfriend. 70 thousand deposit. They worked their arses off, didn’t spend on false nails, hair, etc. They lived at home and they didn’t decide to have children and then bleat on about how the ‘Boomers’ had it so easy. They didn’t! They were also prepared to move to a cheaper area.

Yep this. An 18 year old who isn't even interested in a career and has a minimum wage job will be bringing over a grand a month home. Even after paying parents some rent they can well afford to save £250 a month. That's 18k by the time they are 23. Easily enough for a deposit on a small flat.

@DoubleFunMum

We just bought for 350Kish. Asking price was £275K. Was the 3rd house we went for and we weren't prepared to lose another one. BUT the house we sold went up by 83% in value in the 8 years we lived there. So deposit was all equity.

83%!!!!! 😮

83%!!!!! 😮

Ours has gone up 450% in 20 years. 🤷‍♀️ It’s fairy money because every other comparable house has too. I expect the care home will appreciate it though.

@swissmummy12345

Because the baby boomer generation are beginning to die? In the next 10-15 years there will be the greatest transfer of wealth in history. Up to £5.5 trillion in the UK alone will transfer from those born between 1945 - 1965 down to younger generations. 2035 is predicted to be the peak year.

So you think house prices will go up again as a result? Urgh!

@LuckySantangelo35

I’m not sure really…I do think twenty-somethings now do have a higher standard of living when it comes to ‘treats’ and seem to have more of a sense of entitlement around this. All the twenty somethings I know will buy makeup like Charlotte tilbury whereas when I’ll have bought brands like Rimell and Maybelline at their age. Stuff like meals out, hair extensions, botox/fillers, holidays abroad etc all seem pretty common place for today’s younger adults so it’s no wonder some cannot afford a mortgage. I think as well house sharing seems to have gone out of the window. Young adults seem to either live with their parents, rent alone or with a partner or buys. Sharing with friends or a house share a la Spareroom.com doesn’t seem to be as much of a thing any more?

It's not that buying a lipstick won't make much difference, there's plenty spending tons every month on phone contracts, car finance, expensive clothes, nights out....Imagine telling your average twenty something to stay in and buy their clothes from Sainsbury's so they could save for their future. They'd be straight on their phones laughing to their mates

It’s simply wonderful how many posters seem to miss the point that people can save for deposits because they live with their parents…, it’s not rocket science!!

@joydivisionovengloves71 well they won’t be able to afford a house then and that will be their look out won’t it. I wouldn’t have laughed if I’d have been told that in my twenties because I already knew that I would have to be careful with money , cut my cloth accordingly etc

@LuckySantangelo35

I’m not sure really…I do think twenty-somethings now do have a higher standard of living when it comes to ‘treats’ and seem to have more of a sense of entitlement around this. All the twenty somethings I know will buy makeup like Charlotte tilbury whereas when I’ll have bought brands like Rimell and Maybelline at their age. Stuff like meals out, hair extensions, botox/fillers, holidays abroad etc all seem pretty common place for today’s younger adults so it’s no wonder some cannot afford a mortgage. I think as well house sharing seems to have gone out of the window. Young adults seem to either live with their parents, rent alone or with a partner or buys. Sharing with friends or a house share a la Spareroom.com doesn’t seem to be as much of a thing any more?

I completely agree with you. I saved the first 5k of my deposit between the age of 16 and 18 by working evenings/weekends/holidays while I was still at school doing A-levels.

I would still spend some money going out with friends and having fun, but I wasn't spending £££ on clothes, luxury makeup, treatments, meals out etc that people seem to do these days.

I disagree with people saying that these things don't make a difference - they do really add up over a few years. As a teenager, I could easily have pissed that money up the wall, but it wouldn't even have occurred to me to do that.

5k might not be much, but even small amounts help when trying to get a deposit together. Unless you're buying in London or some areas of SE, you don't need a massive deposit to get a foot on the ladder.

@LittleGwyneth

The thing about makeup was highlighting perhaps lifestyle choices, not about the one off incidental purchases.

Eg if Person A spends monthly; £20 mascara, £70 phone contract, £20+ TV streaming,£ £15 music streaming £100 eating out, £50 on hot drinks, £350 on car finance etc they're perhaps spending £600+ pcm on "luxuries"

Whereas person B might spend £5 mascara, £10 phone contract, no streaming, £10 on hot drinks, £40 eating out £100 on car finance etc they spending £200

So the difference could perhaps be quite large?

Obviously it's a simplistic view, but perhaps valid?

@joydivisionovengloves71 Even if you remove the laughable part of your hypothesis where someone automatically has the privilege of living at home for five years, 18K as a deposit for a small flat?

The average house price in London is £514K. You'd need to live with your parents until you were nearly 30 at that rate. Not everyone lives in an area where you can buy a small flat for less than 200K. You'd be hard pressed to get one for less than 350K where I live. Which happens to be where my job, family and friends are.

No-one is denying that there is an element of sacrifice in saving for a deposit and always has been, but trying to save £50K is no joke, and isn't achieved by giving up a few lipsticks and holidays.

[quote LuckySantangelo35]@ManicPixie
Obviously I know there are other factors but I do stand by what I said about young adults accessing luxury brands etc spending on meals out etc more than what same age young people would have done 10 years ago.[/quote]
Just bollocks. The fact is that the gap between earnings and affordable housing has massively widened over the past 20/30 years.

Some young people will and will always fritter money away. The difference is that 20 years ago they might have stood a chance of buying a house whereas many, many more these days have no chance at all without the cash coming from somewhere other than their wages.

I completely agree with you. I saved the first 5k of my deposit between the age of 16 and 18 by working evenings/weekends/holidays while I was still at school doing A-levels

It’s comments like this that drive me mad.

It’s great you could do that. I worked evenings, weekends and holidays during my a-levels because my family were living in poverty and I needed to pay for my travel and clothes and some food.

Savings are completely out of reach for some.

[quote 00100001]@LittleGwyneth

The thing about makeup was highlighting perhaps lifestyle choices, not about the one off incidental purchases.

Eg if Person A spends monthly; £20 mascara, £70 phone contract, £20+ TV streaming,£ £15 music streaming £100 eating out, £50 on hot drinks, £350 on car finance etc they're perhaps spending £600+ pcm on "luxuries"

Whereas person B might spend £5 mascara, £10 phone contract, no streaming, £10 on hot drinks, £40 eating out £100 on car finance etc they spending £200

So the difference could perhaps be quite large?

Obviously it's a simplistic view, but perhaps valid?[/quote]
These are terribly realistic figures as a young person's car finance is automatically far more expensive, getting a car for £100 a month doesn't really work, and even then you've got insurance etc for both parties. But putting aside some flaws in the figures, yes it would be quicker for person B to save a deposit. But person B only has an additional £400 a month to put into savings, which means (s)he is going to have to save for 125 months or 10.4 years to have the average house deposit.

I can see why saving for over ten years to be able to buy a small property - arguably too small if you want kids by this point - would be unappealing enough to make you think fuck it, I'll take a decade of nice lipsticks and a decent iPhone over scrimping.

It also ignores the gap between earnings and mortgages

I've saved enough for a deposit but can't borrow enough to buy a house.

That's the same with lots of single people, or people on starter incomes.

And 20 years ago my friend bought her flat. She was earning £22k and her flat was £165k.

Same job (graduate scheme still in operation) pays £26k now. Flat is work £400k.

Things are different and it’s ridiculous to pretend it’s not really hard now.

Another point is that it's really not advisable to spend every last penny on a house and legal fees. I would always advise keeping a little bit back as a redundancy cushion. Young people will not be getting any long service redundancy payouts.