Bank of mum and dad

[squidwid]

To think it's very hard to have it all, house, kids without the help of bank of mum and dad nowadays?

Yes, there is affordable housing down the whole of the west coast of Scotland and similar in many similar cheaper areas of the uk. It might in many cases be characterless boxes, the weather is crap but there is a strong sense of community. My nieces 4 bed, terraced box cost around £100k. No idea what other nieces flat cost but just checked get area and they come in around £190k (which would buy my 3 bed detached which is 30 min drive to Glasgow off peak!)

My parents are not originally from this area but took the option available to everyone to move to where they could afford to raise a family and it is our home now. I couldnt afford many places in the UK so I don't expect to buy there.

That's great for you and your family. But many people have reasons why they cannot just go and live somewhere else: they need to be where they are for work, or to care for family, etc.

My point was that you can't hold up your unusual situation of living somewhere with unusually cheap property and pretend it's easy for young people to buy one. Your situation is not the norm.

Average first time buyer purchase in London now is almost £500k. For the UK as a whole excluding London it is £250k, so given some areas like yours are cheaper which brings the average down, for many people they will need £300k-£400k, for a first and modest home. The average age of a first time buyer in the UK is now 33. So don't present the very lucky situation in your area as the norm, that's all I am saying.

Also extortionate stamp duty!! I made this mistake, bought a smaller home with my ex-H as our first house. Then just a few years later we had to move for work. Then a few years after that we separated and sold up and I bought my current house. So in less than a decade I had spent £35,000 on stamp duty. It makes far more sense to stretch to buy a bigger property and not move, in many cases, now that stamp duty is so punitive even on smaller homes in more expensive areas.

Agreed I've had 2 cars both £500 . One car lasted 5 years with nothing major going wrong ,the only reason it was scrapped was because the cost to to put through the mot £180ish. I wouldnt of gained anything by fixing it then selling it . I already had a 2nd car so I took the lazy route and scrapped it

I have run secondhand cars for the past 11 years.

The FULL cost - petrol, purchase, insurance, repairs, tax, aa membership etc - is £55/month. Be super generous and add a £25/month "my car broke down and I needed to get a taxi instead fund" (this has happened maybe three times in 11 years), and it's still £80/month.

And my current car still has years left in it, so that average will keep going down. It's my third car.

I do wish people wouldn't keep perpetuating the idea that secondhand cars aren't cheaper than lease cars. I think it scares young people off from dealing with repairs etc in an adult way, selling them the dream that for £200/month (not including petrol), you don't need to worry

Which is cheaper depends entirely on the circumstances. You have been extremely lucky if the full cost of running any car has been only £80 per month! Many people have to spend two to four times that in petrol alone, depending on commute distance. And insurance - my insurance alone increased £30 this year with no change in underlying facts (full NCD discount and never had an accident), so how £80 could cover all car costs including repairs, tax, servicing, insurance, fuel is baffling to me, but lucky you!

I always bought cars roughly 5 years old outright until recently. Over the years I have had to pay out nearly £20k to fix major faults, repair electrics, air conditioning, random warning lights popping up on the dashboard, wheel re-alignment, etc. All for supposedly sensible and reliable, well-made cars. 🤔

I made a spreadsheet and worked out the true costs. Leasing a brand new one with better fuel efficiency, no need to MOT, any faults covered under warranty so not for me to pay for, lower insurance costs... it worked out cheaper to lease a brand new car. So that is what I do now. And even better, the costs are fixed and entirely predictable and spread out, rather than getting slammed with a £2.5k bill unexpectedly because something is wrong with the electrics.

£20k for faults over the years is £138 per month average. Servicing and MOT and general maintenance, new tyres etc works out £45 per month average. Then the depreciation between buying at 5 years old and selling at 10 years old was an average of £65 per month, across various "sensible" second hand vehicles during my ownership. That's £248 cost per month already.

Road tax on newer vehicles is cheaper, fuel economy better, and insurance was lower. So altogether I could lease a vehicle for over £300 per month, take less personal risk on depreciation etc, have a brand new car, and spend the same or less in total. And that's before you apply a discount rate for spending the money upfront to buy a second hand car outright whereas payments on a leased car are monthly so don't have to pay it all in advance and have the opportunity cost on that money.

Plus brand new vehicle often comes with breakdown cover included, so save having to pay for that as well.

It used to be common for young people and their families to factor in the need to earn a wage vs continuing into Higher Education, even when there was a full grant.
So things change, but it's always been easier for those with parents you can and do help them, of course

My car is 8 years old. I've had it about 4 or 5 years. Cost me about 7k. Current value on we buy any car and other sites is about 5300.
My breakdown is £32 for the year.
I've just had to buy a new battery about £130 . Think I had 2 new tyres last year. That's all the money I've ever spent on it. Tax is £20 for the year. You won't convince me that paying 200 a month upwards is a better deal. I don't do a lot of miles as I wfh but my husband is in a similar position, his is about 10 years old and only now starting to cost a little in repairs. He does a lot more miles than me.

Yep, stamp duty incurred by repeated moves can add up and will be part of the equation for some people. We know that fiscal drag applies here too.

The reality is that people wanting to buy a bigger home as their first purchase are responding to a very, very different set of incentives to someone who bought their first property years ago and was happy with a small flat.

Lol you made up numbers out of thin air. To get a good quality 2nd hand car that requires minimal garage costs you must pay at least 8-10k. Eg My 2nd hand car was 10k. Over 5 years just the purchase alone would be £166 + insurance is 45/mth. I can get a small 3-5 door run around, new, on lease for £200 and in many cases includes insurance

I think sometimes people don't realise what has happened to the cost of used cars since 2020.

This. @BashirWithTheGoodBeard exactly.

Mate is currently looking at cars and a 7 year old Toyota Yaris, good condition, full service record etc is about 8K. A VW make (they have a reputation!) is about 3-5K more for the same specs././

I didn’t get any help but have helped my son a bit. Not excessively though. I can’t understand some people who lavish money on their kids when they haven’t secured their own financial future.

*My car is 8 years old. I've had it about 4 or 5 years. Cost me about 7k. Current value on we buy any car and other sites is about 5300.
My breakdown is £32 for the year.
I've just had to buy a new battery about £130 . Think I had 2 new tyres last year. That's all the money I've ever spent on it. Tax is £20 for the year. You won't convince me that paying 200 a month upwards is a better deal. I don't do a lot of miles as I wfh but my husband is in a similar position, his is about 10 years old and only now starting to cost a little in repairs. He does a lot more miles than me.

Why would I be trying to convince you? It's great that for you it's worked out cheaper that way. My point was that a previous post was asserting that people are wrong to think a leased, new car is more expensive than buying a second hand one, when this is not always the case. That fact it is cheaper in your particular circumstances doesn't make it cheaper for everyone, in some cases leasing can be cheaper and more predictable and less stressful, as my example demonstrated. The fact is that to work out what is better value people will need to do their own calculations based on their own circumstances.

Yep, stamp duty incurred by repeated moves can add up and will be part of the equation for some people. We know that fiscal drag applies here too.

The reality is that people wanting to buy a bigger home as their first purchase are responding to a very, very different set of incentives to someone who bought their first property years ago and was happy with a small flat.

Yes. The fiscal drag on stamp duty has been brutal, dragging many whom it was never intended to target into very high rates for very normal family homes. And I agree entirely, it's such a different landscape now in many parts of the country that people commenting on what they did even 20 years ago, or what their family are doing now in a cheap area, shows a huge lack of understanding of the costs in many areas now.

I didn't necessarily mean you specifically. I've had cars on the Ford options deal if that's what it's called where you pay monthly and then pay a balloon payment or swap the car etc. Had a few of those but I they were at least 200 a month. If I had a job done on my car and it was 200 I would consider that a lot to pay out now. When I had the other cars I factored that in. I will keep this car until such time as it starts costing me money.

Yes there's also that! Will be scewing the calculations atm. Can resell old ones for far more than usual because of the lack of supply. So it was a very good time to sell the second hand one I owned and lease one. Second hand values are unlikely to hold up so well in the future, unless whatever Government we have then does bring in the ban on new ICE vehicles from 2030. Although I can't see that happening tbh, given there will not be enough places to charge electric ones or indeed enough electricity capacity in the grid for people to do so at home. 🤦🏻‍♀️

@AlienEgg my point about the phone contract was more about keeping the old one and going sim only when it runs out. Rather than buying another phone outright. I kept my last one for 2 or 3 years after the contract ran out and went right down to a £10 a month or something until the battery gave up and I'm now back to paying 50odd. But I saved loads changing to sim only

In answer to OP, yes, it is very hard. I managed to do it as have lots of friends (self-fund, buy a house etc). I'm a lone parent now paying a mortgage alone a huge childcare. It can be done, but it is not easy and required me spending teens and 20s working extremely hard: working while I did my education and qualifications to self-fund, working very long hours to build a career in my 20s while everyone else was out having fun or on holidays, to get to a point where I could do all of this on one salary and provide a good life for my children alone. I imagine it would be easier with two parents.

It's possible but very much harder than in our parents' generation, and it is grating when you hear them complain when they seem to have little clue that many houses where someone on average wages could sustain a family with a SAHP on one salary in the 80s/ 90s, now cost £3m+ and would be completely out of reach even for a professional couple both working full time. Who will also be slammed with another 9% tax each for student loans when parents got grants, and also have to pay as much as the mortgage again in childcare because no SAHP. And no final salary pensions to look forward to!

Life is very much harder now and a bit of acknowledgement of that from Boomers would go a long way I think.

I'm confused, where did I comment on a phone contract?

I always do those SIM only also, much cheaper than "buying" a phone within a contract.

That's a very different mentality. We view family money as a legacy and the entire point of saving or obtaining assets is to secure future for future generations, and pass these down. Doing so earlier in life gives them a better chance at life, to secure their own financial security and safety and then save to provide for the next generation and so on, as well as passing down what is passed to them. With people living longer, receiving an inheritance in your 50s or 60s is not hugely helpful, people need help to get established in 20s or 30s, so many families design their lives that way so they can get children set up with a home for adult life etc. And can pursue careers without worry about a roof over their heads. The whole point of working hard is to give your children and their children more opportunities and less stress than you had, not to enrich yourself. For what? To lie on a death bed knowing you've a five or six figure sum in the bank while they've been struggling? I can't understand that mentality to money at all. Everything I've done and everything I work for is with a view to enriching my children's - and hopefully in the future granchildren's and great-grandchildren's l- lives long after I'm gone.

Stamp duty is currently on 250k which I think is quite solid. 425k for forat time buyer. Unless I remember numbers wrong

Agreed. I saw a tv programme that claimed to be helping people struggling to sort out their budget. One episode featured a woman who was paying about £350 a month for her car. I waited - in vain - for the presenter to ask about the car payment. I’d just bought my 3 year old fiesta and had taken out a bank loan and was paying £135 for it. To me it was obvious where the pressure on the budget was coming from. There was no reason given for the purchase of a newer, bigger car - no long commute or anything. 4 years on, loan paid off, and my fiesta is still going great.

Yes, it's better than it was. But has by no means kept up with inflation. See the figures I posted above about first time buyer properties. And those who then have a family and need to move to a larger home, now slammed with very high stamp duty on very modest sized properties in many areas. The first time buyer dispensation is quite new (in terms of years), and good. A few years ago even they had to pay the same rates as everyone else so a big whack of stamp duty to pay even on a small flat in many places. It disincentivises moving for work and therefore damages social mobility, too. A very regressive tax.

All tax thresholds should automatically be uprated with inflation. That would solve a lot of problems. But the tax system needs total overhaul as well, in general.

Sorry, this was to @Deadpalm