Are things harder for millennials?

[squidwid]

Many of my friends don't own houses and they're in their 30s. They did everything that society asked of them and still they're not making headway.

I know so many elderly people that live in 4 bedroom homes worth £400k plus. Obviously there is nothing wrong with that but families should be able to afford those houses so things can move on. No one can afford to buy them...

Renting I meant to say. But she was in a very basic job and was able to do so was my point.

Ah yes rental prices are beyond a joke

I stopped house sharing by the time I was 25

Renting then was much cheaper than mortgage - it took years for rents to become "pay someone's mortgage and give them an income "

You seem to be a bit hard of comprehension.

It would take a lot longer for the same single children to save a deposit because house prices have gone up far in excess of wage growth.

Gen Z here. We have a deposit for a very modest 200k property where we could put down roots. Deposit is not the issue. The colossal, eye watering repayments are due to the interest rates. I don’t know that I can justify £1100 a month on a combined income of just under 4k. It seems so much, we’re pre kids and obviously in our 20s being Gen Z but I am really scratching my head. Sure rent is ‘dead money’ but so is interest payable to the bank.

We could afford it on our lifestyle now but it would leave zero wiggle room to drop working hours after future maternity leave, would make things so very tight if a big bill comes up or we realise we need more than 2 days a week childcare. I don’t want to feel like our lovely ‘owned’ home is a prison- working so hard, you’d expect to at least have a bit of free cash to play with

Things are harder for millennials and Gen Z than ever before, I don’t know the solution but I hope to God there is one otherwise what’s the point?!

We know. That's the problem.

30-50k is the deposit you need these days. Unless you live in Grantham apparently. In most of the country you need a deposit of about 30k though.

The issue isn't interest rates which hit 15% in the 70s

It's the fact that the interest is on a home that in relative terms is on average twice or three times as expensive as they were in the 70s

• you are paying in real terms even before interest twice what people did in the past

The people I know who managed to buy had family help either with cheaper rent on a family rental or an injection of money for a deposit/refurbishment/get started money.

With 100% mortgages, you could. I saved £1000 in 1986 and bought a three bedroom house for £22k. The same house is now £120'000 and you'd need £2k for legal fees and then deposit etc. That's a near impossible on min wage today.

I brought my flat when I was 22 (in the mid 90’s) for £31k, I was earning about £9k inc bonuses at the time working in retail. Got mortgage on my own no problems.

That flat is now selling for £140k and the wage for my old job is about £21k

So the wages have just over doubled but the flat price has risen by almost 5 times

even on 100% mortgages you would fail all affordability tests on most properties

You still had to meet the "house no more than 2.5 times your salary" - you got 3 times if you had a deposit

In general people on the lowest salaries could not buy

Everyone could not buy ever
What had happened is that the proportion of the current generation that can afford to buy is less than in the past and as a whole people are spending a much bigger portion of their income on housing
( but a smaller share on food , white goods and holidays for example )

Ah yes rental prices are beyond a joke

We're starting to feel a bit cluttered in our two bed, I had a quick look on rightmove - nothing under £1500 a month for 3 beds.
I've signed up to do a nearly new sale instead 😆

Cant comment on the UK but it is near impossible for millennials to get on the house ladder when I am (Vancouver), unless you have access to inter generational wealth.

Converting amounts into sterling for reference.

The average 2 bedroom apartment is ~£2,200 per month to rent. The average monthly salary is ~£3,100 so, if you’re renting, you can expect to pay more than two-thirds of your monthly income on rent alone. Saving is not realistic, Netflix or no Netflix.

If you want to buy, even a small (800 sq ft) flat will cost you around £400,000. For an actual house (even a small one), you’re almost certainly looking at north of a million.

Prices have more than tripled in the last 20 years, while wages remain largely stagnant. Most people who owned a home more than 20 years ago are now millionaires.

DP and I have a combined income equivalent to £120,000 p/a but even then were living in a cockroach-infested 1 bedroom apartment (as in, you’d see 50-100 roaches per day) until our mid 30s and, even then, we needed family to contribute about a third of our downpayment for a modest home, 1 hr outside of the city.

@llamazoo2 I would say definitely go for it. We bought our house for a similar price a few years back on similar take-home incomes, admittedly a couple of hundred quid a month less due to interest rate differences but we could have managed that if we had to.

It's been so worth it for us in so many ways, not least being that the rental maket where we live now has gone insane and people renting are really strugging to find anywhere remotely affordable.

Er...that BBC calculator is 3 years old...
I absolutely HATE the idea, as well, of a middle class institution like the BBC publishing a calculator to help worky from home people calculate what parts of the country they can go to and push house prices up...people ought be be able to live in their communities, near their ageing parents, friends built up over years. Saying people can just move is treating people exactly like commodities, not humans with communities and connections. And I say that as a person who spent their 20s travelling, because that was by choice not economic necessity.

And as for the "we lived in our parents front rooms" fantasy, well when was this?? Because my Boomer mum and dad definitely lived together in rented flat before they were married, and definitely didn't wait 3 or 4 years to have kids. They could still buy a house on low salaries (in a major city) and so could all my friends parents (all in their 70s now.)

Isn't possible though that many of those now able to move because of increased WFH are choosing to move closer to ageing parents, closer to the communities where they grew up, because they're no longer tethered to a big city office 5 days a week due to a hyper centralised economic model?

“In other words, the average house price is 65 times higher today than in 1970 but average wages are only 36 times higher.”

At least do a quick Google

Someone explain it to me like I’m 12…

How are people going to be able to buy for the first time if rates continue to rise?! Deposit aside, I feel like that’s less significant…. Are people just going to have to spend a larger percentage of their income on housing?!

yeah but do a few searches on here and you can see that the whole 'millennials can't afford to buy' thing has been trotted out since way before 2020! Even if the figures have now changed from 73% to 69% or whatever.

Nobody is suggesting anyone can afford to buy a home, no matter where they live or how many avocados they give up.

Just that the 'NOBODY UNDER 40 CAN AFFORD TO BUY IN THE UK' narrative is as false as the 'ANYONE COULD AFFORD TO BUY IF THEY JUST STOPPED BUYING STARBUCKS' one.

https://propertyindustryeye.com/what-175-years-of-data-tell-us-about-house-price-affordability-in-the-uk/
The third graph down shows that it's only in the last 50 years when the proportion of owners was higher than renters, and in 2018-2019 we'd only slipped about 6% down from the absolute highest ever level of home ownership (c.2001).

Totally agree with this.

my parents bought their house in 2001 for £145,000. My mum was a teacher and the starting wage for teachers in 2001 was £17001. So their house was worth 8.5x a teachers starting wage.
today their house is worth £450,000. A teachers starting wage is £28,000. So the house is now worth 16.07x a teachers starting wage.

I’m 38, a teacher, and still rent. House prices have tripled yet wages barely doubled. Yes other things may be cheaper - clothes, holidays, electronics etc (although back in 2001 the top of the range latest mobile phone was only around £200), however I think everyone agrees that housing is the biggest monthly expense and that is so out of reach for so many people I know. The only people I know who own had family help

@CouldIHaveThatInEnglishPlease wow, sobering stats there. Mine also bought in 2000 for 130 and their house is worth 450 so similar, really. It’s fantastic for that generation but where does it leaves millennials/Gen Z etc

Do you mind me asking if you have children? We want to start a family later in the year but have been told if you don’t buy before kids you never will buy property. Problem is if we did buy, it would cost so much more than our rent which would make a lifestyle with a child way more financially strained. Catch 22!

I'm not so sure. My sis is a millennial (early 40s) and when I hear my dad talking about his childhood it sounds way harder. Growing up with a WW2 veteran for a father who would get blind drunk to deal with it. Obv every story is different but a hell of a lot of boomers must have been brought up by parents who fought in the war.

I always find these threads interesting because I’m 33 and all my friends own their own homes and none had a cash deposit from their parents (although most lived at home rent free or seriously cheap rent until they bought). Half of them went to university, the other half didn’t and only one has upgraded their house due to an inheritance. All of us bought in our late 20’s.

We are the midlands though so not London house prices and all our houses were relatively shitty inside and needed a fair bit of cosmetic work. We also didn’t really go on holidays in our 20’s apart from camping in wales/Cornwall or the odd family holiday abroad.

I’d say that not living in London, having family support to allow us to save and prioritising getting deposits together over holidays/travelling allowed us to get on the property ladder. I think it’s more or less impossible once you start renting so we’ve been very fortunate in that respect.