To think we simply can’t compete?

[Molehillminnie]

Mid 50s colleague selling house. On the market for close to £1M. Bought for 1/5 of that 30 years ago. Always going on about how the younger generation should save and be like her.

We’re 15 years younger, have pretty decent jobs etc but there is no way we’ll be able to benefit from property price increases in the same way. The huge jumps between 2000-2008 will never be replicated. Nothing more to say really, just having a rant!

The boomer generation lived through record unemployment, under a government that thought high unemployment was “a price worth paying” to reduce inflation. Today there is a chronic shortage of labour in many sectors.

I hate boomers who think they got everything they had from working hard and saving.. without recognising they were also incredibly privileged and fortunate.

Absolutely.

My parents (76 now) bought a flat as an investment in 1997, for £95k. They sold it ten years later in 2007 for a whopping £375,000. Even after paying the cgt they made a packet. Add my dad said at the time: ”it sure beats working for a living”. They are both on excellent public service pensions (teaching and nhs), their mortgage on their current 5-bed house is long paid off (they built it for £45k about 30 years ago, current value close to £400 🤷‍♀️). It didn’t cost them anything to put my sister and i through Uni - we got grants and had our full fees paid.

IDK. I try not to talk to them about this stuff much. My mum feels they ‘deserve’ their comfortable lifestyle as they ‘worked hard’ and didn’t live a ‘flashy’ way and all the usual bollocks 🙄.

Colleague is a twat, I'm about to buy a £1m house and it's partly because we have benefitted from two huge jumps in value from our old houses .

I am trying to keep it hush because I have lots of friends who work minimum wage and can't afford to feed their kids ..

I don't want anyone to hate me !

Me and DH are in our 20s, both earn averagely between us yet can’t afford to buy anything suitable because of the interest rates - well we could but we would be waving goodbye to pretty much all our rainy day fund which is a vulnerable position to put ourselves into before TTC, reduced earnings with mat leave etc. Our rent for our two bed is literally 600-700 cheaper than a mortgage on this very same house would be. Even if we stretched to do it, we would have to shell out for legal fees and related moving costs which might be a bad idea given the talk of house prices falling and our small deposit, we could be in negative equity and what then when we have to upsize

It was never the plan to start our family in our rental but we have had to reevaluate and will look again when rates are closer to 3.5-4% which they think they will be in a couple of years. Something will have to be done otherwise there’s going to be droves of people in their teens/20s and older, unable to buy a house and put down roots. Where are all these people going to live? It’s going to affect all sorts, like family size too. And it will only affect those who earn just enough to not get any help as always!

Admit that while you undoubtedly had struggles, boomers collectively owning 75% of the housing wealth is a bit unfair

I'm interested in this statistic about Boomers owning 75% of housing wealth. Do you have any links for it?

I'm interested in how that is calculated. Does 'housing wealth' refer to the total value of housing stock in the UK (both mortgaged and unmortgaged), or does it refer to the total value of housing stock which is unmortgaged. I'm assuming the latter which surely just largely reflects the fact that boomers have reached the age where their mortgages are paid off. i.e. they own 75% simply by dint of having been alive longer and, in turn, Gen X, Gen Y/Millennials, and Gen Z will occupy that position as they get older. but perhaps I'm missing something.

There are more people trying to live in London than there were 40 years ago, according to population statistics.

The more we grow the human population, the more competition there is for finite resources. Competition drives up prices.

I was thinking about this the other day. I bought my first house at 18 years old ! It cost £26,250 in 1983.

Our deposit was 5% = £1,312 😮

I was earning £5,500 a year with the Prudential and partner then £8,000 as a carpenter.

I remember the car insurance on my first car was £700 at 17.
My car cost £1750 and I sold it to pay the deposit! It was literally that easy.

So the cost of one years new driver insurance on a Fiesta was half our house deposit back then.

Same house now goes for £300,000. 5% deposit would now be £15,000
No way is a first years car insurance half of that costing £7,500. Its absolutely bizarre how house prices have risen.

I'm late 30s, and have been incredibly lucky with the property market. I just put my household income (£40k) and deposit (£40k) from 2009 into a calculator. It says I could borrow £180k with a repayment of £1170.

Today, £180k round here buys a studio flat. In 2009 it bought us a 3 bed mid terrace. I'm sure the mortgage was around £600pm. In 2018 I sold the house for double what it was bought for, and used the equity towards a 6 bed house. That house has gone up £150k in 4 years, and today I wouldn't be able to buy it.

House prices are absolutely ridiculous. We are in the process of putting our current house in a trust for the kids as we expect to receive a few properties in the next 5-10 years through inheritance. If trends continue I can't imagine how my children would possibly get their own house otherwise. My plan for them is to live in it and let out the other rooms in the house for additional income once they've finished university, then sell it when they are ready for their own deposits.

There are loads of articles on this if you search. Yes the housing wealth is partly that more boomers have paid off their mortgage, but consider that about 75% of over 65s own a house outright while only about 40% of under 65s even own with a mortgage. Back in the early 90s, they were both the same % but the ownership gap has only grown year on year. About 1/3 millenials expect never to be able to own.

https://www.theguardian.com/money/2020/feb/10/home-ownership-ons-rent

Every generation has twats who can't understand that the world changes.

It's unfortunate that, since the boomers and older Gen Xers were young, the world has changed so very much. It magnifies the ignorance and twattery from that particular age group to an unfair level, beyond how it manifests in the others.

Death, taxes and slagging off young people.

We started looking to buy a house 4/5 years ago. Average 3 bed semi was around £250k. So we've spent 5years saving the £25k for a deposit, finally have it but now those houses a worth £350k. So now need to save another 10k by which point they will probably be worth 400+ and even with a deposit we wont be able to get mortgage for that amount as my public sector wage hasn't risen by 40% in those 5years either.

I've advised dd to buy within 6months of graduating, even just a shitty one bed flat, get on the ladder as soon as possible

I was very lucky bought First property in 1999. Own a 4 bed detached house now with a mortgage of 105k

Impossible now

Your points about washing machines and so on are just silly. I can't stand when people use these arguments. Living standards have risen, and things that used to be expensive luxuries are now commonplace and expected and most importantly, cheap.

You can get household appliances for pennies now. My microwave was £50 from Argos. Freezer was second hand on Facebook marketplace for £20. I need broadband for work and practically everything else in life, and it's £20 a month. All this is a drop in the ocean given that I needed over £40K for my flat deposit (a deposit I had to save up while renting at £1000+ a month) and have to pay £1000+ a month on the mortgage. The problem isn't the little things, it's the big things. You can handwash your clothes and live without a freezer all you like - it's not going to get you any closer to buying a property if you're not a high earner.

You didn't have "one piece of luck", for crying out loud. You had it so easy compared to millennials. It doesn't sound like you had a particularly impressive career, and yet you could afford to rent a flat, have a family, and buy a house, which you admit yourself has doubled in value since you bought it. Wages haven't doubled, have they? I very much doubt that someone with a similar career could do what you did today.

You're so incredibly out of touch.

Your points about washing machines and so on are just silly. I can't stand when people use these arguments. Living standards have risen, and things that used to be expensive luxuries are now commonplace and expected and most importantly, cheap.
It's funny how the affordable things get pushed to one side with an airy "living standards have risen". Perhaps it's because living has been so cheap recently that the money has gone into housing costs instead, pushing up prices.

@StillPerplexed I also wonder how the demise of the Boomer generation is going to affect property prices. The older Boomers are well into their 70’s so may need to move to sheltered housing, etc. in the next decade.

As the UK population has been below replacement level since 1973 ( did a quick Google and that date surprised me), surely there’ll be some sort of market correction? I hope so.

If you believe house prices have skyrocketed because washing machines got cheaper, the next thing I'd like to sell to you is a bridge.

A lot of the boomer house owners benefitted from Right to Buy and have gratefully voted Tory ever since. They are the ones who had it easier.
I'm a boomer, we have restricted our spending to help with the kids deposits and I've never voted anything but Labour. Dont make assumptions.

They aren't available to working class people now, though, are they?

OP

She's an idiot, but so are you.

People 10 years younger than you would love to be in the position you are.

No you can't compete, the gains won't be anything like the same. Add in wage stagnation, crappy rates for savings & less favourable pensions.

My comment about interest rates was more about them struggling when my brother and I were young, even though they are extremely comfortable now.

people taking out 40 yr mortgages are going to struggle to reach the comfortable stage.

Anyone who bought a house in the 70s or 80s paid through the nose in terms of mortgage repayments

But the rates weren't super high for the whole 2 decades, wages grew big time & there was the mortgage rate relief scheme.

These threads are so middle class.

My immigrant parents bought in a grotty part of London as did my in-laws. 30-40k in the 80s, those properties cost close to 2m today.

I'm not a boomer but I'm a Gen X. I bought my first house in early nineties, a couple more in the mid to late nineties. One in 2007, a few in 2014-2019.

Please note I only own one property at moment. This is my story of buying a house, then selling it to buy the next one and so on. I briefly had two properties at one time but hated being a landlord so went back to one.

The point of the story is I have experienced house buying from the early nineties to quite recently and here is my experience of the differences.

In the early nineties - the country was in recession. I lived in the south east at this time and we stretched ourselves to buy a 2 bed ex council house being sold privately. We were 19 and 23 at the time on average wages. It felt difficult at the time that we could only afford a small ex council house but now I see how lucky we were that at these young ages we could buy in Guildford (very expensive place). Due to a break up I didn't own it long so no gains made. Due to the recession it was very much a buyers market although we were not aware of this being young and probably naive. The house we bought was certaintly reduced but the owners had bought it from the council so I think would still have been making a profit.

My next house buying was during the mid to late nineties in my native Scotland. Outwith the cities properties were not really rented only bought so you were not competing with landlords. The process compared to nowadays felt very easy with lots of choice and when I look back now the prices were laughably cheap. You circled a bunch of properties from the property papers - mostly no pictures just words (3 bed detached, GCH, DG, parking) which seems so little info nowadays to not even know what it looked like when you made the appointment. The agent would send you out a paper brochure which you might get prior to the viewing or you might not. There was a huge selection of houses to choose from and the whole process (compared to now) felt quite civilised and polite. You picked the house, you made an offer, there might be a bit of negotiating but all settled reasonably easily for around what it was advertised for. Prices now for same house around 3 times as much. So it wasn't just the house price that was less back then it was the whole process was much less 'frantic, competitive and lacking choice'

Next house purchase 2007 - sold easily but struggled to find somewhere to buy. This was at the boom before the recession and prices were alot higher and anything good was being snapped up. Bit of a nightmare trying to buy.

Next purchase 2014 - tail end of low prices. Bought tiny run down flat in city but in a nice street. Sold it in 2019 for 60% more than paid. Yip prices were way up again.

2019 - bought outwith city in a more suburban area. Prices felt high compared to a few years before but with hindsight were reasonable compared to the madness of 21-22. Not alot of choice though. Landlords very much a feature of this suburban market compared to back in the nineties when they were not. So much more competition now against landlords and also older people who were over 55 and releasing pension funds to buy properties. Compared to the nineties when only 'house buyers' bought houses todays market is filled with other types of buyers meaning more competition. Difficult to get viewings when properties first came on market (again very different to the nineties) and if you got a viewing you would quite often be getting shown round with other viewers (not a nice feeling) whereas this was unheard of in the nineties.

So from someone who has bought a long time ago (over 30 years ago) to quite recently this has been my experience. The buyers of the nineties were indeed lucky. I look back with much nostalgia at the choice, prices, ease and politeness of the process in the nineties compared to the maniac, stressful, competitive, lack of choice nightmare that it has become.