To be so sad about my slide in living standards?

[ColdNow]

I grew up in a not so nice area, but my parents had a big house with a huge garden that they bought on two fairly modest salaries when they were younger than I am now. My mum took years out of work when I was born and although things like holidays and eating out weren't a regular occurrence, my parents admit they were never really stressed about money despite having several children and easily paid off their mortgage.

Fast forward to now, where I did my very best to do the 'right' things. I got a good degree, decent and stable job, married and bought a property before TTC. I'm now pregnant and feeling so sad about our financial situation. We purposely went for a modest property with a tiny garden to give ourselves a buffer, but now with the huge increase in our mortgage repayments and other expenses we're struggling to keep afloat. I would love to work part time when I go back but it's now looking very unlikely that we'll be able to make it work without being extremely stretched. I'm always worried about money and already buy all my clothes second hand, shop at budget supermarkets etc. The main cost is housing though, because we live in an expensive city, but this is the city I grew up in and where all my family and friends are, and moving away would be a very difficult choice to make and remove us from all our support networks.

I just feel so sad that within a generation the things my parents were able to offer me (space, time) I'm not able to offer my child, despite me earning far more comparatively than they did. I'm also the youngest in my family and the older siblings are much better off than me, again just because of time - they got onto the property market much earlier before prices sky-rocketed and now although I don't earn a lot less than them, I'm only just scraping by. I notice this at work too, I have colleagues at the same level of seniority and pay to me but a decade or more older, and the houses and lifestyle they sustain far exceed mine.

I don't know what the purpose of this thread is except to just say that it makes me sad that this is the situation I'm in, and people younger than me (I'm in my early 30s) are even worse off.

Honestly think we are more entitled in the 2020s and made to want/seek/need more these days. The world is very materialistic and we are all led to believe we need this latest smart phone/tv/posh car or that we are entitled to holidays abroad etc. Growing up I think my parents cut their cloth, meaning if they didn’t have the money they didn’t buy it. Today we are bombarded with stuff we are made to believe we can’t live without , every child has a phone, a laptop, etc. These things cost so much money. We are expected to have perfect houses and top of the range cars/clothes. Where is that money coming from? Yes, things cost more at the moment but we are also made to believe we need more, bigger, better and more expensive. We didn’t have a TV growing up, or a holiday abroad ever, that seemed the ultimate luxury, now it’s very common place and Mumsnet is full of people on threads complaining they can no longer afford to go abroad! I didn’t know anyone growing up that holidayed abroad. Not one person.

I had to move hundreds of miles from the NE to London to get work so made that choice to move away from "support networks" so nothing to stops this poster doing the same (just as my ancestors similarly moved away from all support networks to move to NE England when the coal fields were booming in the 1800s and just as over 1.2m people a year come to the UK for education/work etc).

I have never worked part time even with tiny babies so I don't really see why the poster thinks she might be able to do that.

However no one is saying life is easy.

YANBU. We moved to a cheaper suburb so we could afford to buy a bigger house, and we bought a 4 bed on a nice road 10 years ago. Prices have absolutely rocketed round here, and our house would now be worth over twice what we paid (as it is we’ve extended it, so it is worth over 3 times what we paid).

That’s great for us, but we couldn’t afford to buy it now, and we have a v good joint income for the part of the country we live in.

So where will my DDs be able to afford, assuming they won’t be as lucky in their career as I have been (I could pretend it was hard work, but luck has played a massive part in my success)? They probably won’t be able to stay in what was, 10 years ago, an “affordable” area.

Anyone 10 years younger than me (the age we bought this place) must look on in despair, I can only hope prices either stagnate or fall before my DDs need to buy somewhere.

OK I've read that post now. I was a Civil Servant in 1975 and it wasn't the case then so I've no idea why that poster's mother was forced to leave in 1978. The Civil Servuce was an equal opportunity employer in the 70s even with equal pay which was better than private sector employers.

I know women had to leave work on marriage or when pregnant in previous decades but it wasn't standard in the 70s. Many, if not most, chose to do so but they weren't forced.

Can you explain how a new graduate in London, early 20s, today on - say - £25k pa do what I did 25 years ago and buy a HOUSE IN LONDON for 2.5 times my salary, using a £7k deposit? How does not buying a new phone help you persuade a bank to lend you 16 times your salary on a 1% deposit, and how does not buying a new phone mean you can afford to pay that hypothetical mortgage?

There was a very sweet spot circa 1995 to 2000, and 2000 to 2003 or 2004 wasn't utterly insane, but since then property prices have been insane.

I don't know how because, as a mature student graduate, I had to move 200 miles North of London to have a chance of buying a property in 1987.

Very true. I bought in 1998 and prices have been crazy since. The worst of this was 'free' money for borrowing with the low interest rates post 2008. It's pushed asset prices up massively. If you were part of this, great, if not tough.

My first house cost £60k, my base pay about 20k, earnings about 30k including bonus. People don't earn much more now and prices have rocketed.

Yes but that’s exactly my point. Our first house we paid off about 20k in 5 years on top of a deposit of 30k. I can’t remember exactly. But around 50k is what we should have had all things being equal.

But we walked out of that house with 150k of equity. All we had done was a bathroom for 5k. Skimmed a few ceilings. Put in a log burner and done lots of diy work - paint, polyfilla, gardening and a hell of a lot of styling using second hand items. That home was one bodge job from hell from previous occupants. But we polished that turd into something modern yet welcoming. Colourful and characterful. And the next owner saw that. Hell we didn’t even have window dressings 🤣 £2 paper blinds from ikea literally.

We are very close (10 to 30 years if neo-liberalism continues, or outright fascism is even worse for ordinary people) away from being in a position where the absolute norm if you are of working age is that you are a renter, and if you're not a renter you live mortgage free in a lovely house and are a landlord for at least two or three other properties.

These threads are full of extreme examples.

A typical new graduate in London is not earning £25k, it’s more like £35k.

A starter home is not a £800k flat in Islington, it’s a £250k flat in Zone 5-6.

With this in mind, two fresh graduates would need to save a £25k deposit (£250 each for 4 years) and borrow around 4x salary which banks are more than happy to lend.

I’m sorry to be that person, but I think we all know a ‘broke’ graduate who spends £250 or more a month on eating out, clubbing, festival tickets, European city breaks etc.. If they redirected that £250 to savings for a few years, they can get their foot on the property ladder.

It’s not easy, but it’s not impossible either.

There was a late 1980s house price boom followed by bust. I am not saying that it was easy to buy in London 0 AD to 2000, but it was much easier 1960 to 2005 than it is now, and I was lucky that I bought in a particular sweet spot.

I totally agree. It's pointless & toxic to blame individuals (especially our own parents) for societal changes. We all just play the cards we are dealt the best way we can for ourselves and our families.

I hope you do get to buy one day and I don't personally think inheriting is such a grim thought. We all die eventually after all. and as a Gen X who has benefitted from the rise in property prices, it actually makes me feel good to think of my children inheriting my house.

I wonder how many people are staying one and done as an attempt offset this?

I am not far off 40, with a two year old, and the only way I see us having something close to the standard of living that I enjoyed as a child, is by not having a second child.

Source for new grads earning £35k today? My comparison was a tiny house in one of the cheapest bits of London 1998 vs the same thing now.

You do realise that your hypothetical "broke" graduate stopped all eating out / clubbing / festivals / city breaks for 8 years from 2015 to 2023 they would have saved £250 x 12 x 8 equals £24k and would still not have the deposit they would have needed 8 years earlier and would have lived their entire 20s with no fun at all?

Wow I didn't know this! My gran was married and worked full time, born 1929.

She retired in her 50's though 😊

Your parents are obviously extremely bad with money - financially illiterate really - but please don't compare them to "all the older people" as such generalisations aren't helpful.

I'm 57 and my husband is 62. We're fairly good with money and never took out an endowment mortgage & wouldn't touch equity release. We also never blamed the difficulty younger people face with buying a property as being due to too much Netflix or avocado on toast.

It's great to look back with nostalgia about your childhood and what your parents could afford to offer you. However you have to understand that the global economy and society has changed since then - and it was your parents generation that drove the changes. Everything that we now have that they never had is because of their generation, but also so is everything we now can't afford or don't have time for.

It's up to us to try and find the middle point of both and drive society in that direction for our own children's sakes.

I think you have literally described what people are saying - that goal posts have shifted.

My older sibling graduated in 1996ish and bought a flat on their London graduate salary by themselves in zone 1. They were being paid 24k and their flat was 94k. I had a quick look that flat is now 700k.

Now someone will be looking zones 4-6 with a partner to buy their starter home so they have longer commutes, 2 salaries to start out and a slughtly bigger salary but a much bigger mortgage. Plus they have their student loans to pay back.

Its not people cant do things. Of course they can - but people really could buy flats in central london within living memory!

It is all relative and things are different now than is previous generations we have things like broadband and extra subscription based tv either streaming or sky / virgin as well as a whole range of tech from PC's to Smartphones and beyond that are almost seen as essentials. Expensive car lease hire which seems to be very common and many people will have a foreign holiday at least once a year, eating out, concerts and so on. My parents point to these things are all the ways life is better for younger generations and I can see what they mean although apart from broadband, a basic smartphone and computers for work we don't have any of that, not been abroad in years now.

On the other hand my self and my DH both from working class backgrounds went to university, each got good degrees, various post grad qualifications and an MA between us. worked hard, saved up and our lifestyle is just about on a par with our working class parents at our age. They also worked really had but as young people my generation were sold a myth that with a good degree a person could essentially "go up in the world" that we could aspire to a middle class lifestyle. This hasn't been the case at all.

We still live in the the 2 bed mid terrace in the same working class neighbourhood as my parents, although their house is bigger. We had thought we could get something a bit bigger and semi-detached by now but its unlikely to happen anytime soon. Uni friends who are from middle class backgrounds have often had quite substantial help from their parents often when grandparents have died and left money to the parents who then pass that on to their children. Like most people from working class backgrounds our grandparents had literally nothing to leave anyone and our parents will have little to nothing to leave us. However even when they get help my middle class friends still don't have the same lifestyle their parents did as houses are often smaller, the large old detached homes they grew up in are now sold split into flats, they can't afford to send their kids to private school so instead try to buy in the catchment area of the best state schools in the area and that in turn pushes out the lower middle classes who previously got spaces in those schools. To me they seem to be doing so well but they feel they are letting their kids down, its all relative as I say.

It feels like in all the big things living standards are slipping education, food, transport, housing, utilities and so on are all more expensive, inequality is growing, the middle class is being hollowed out, there is no room there for incomers anymore. Instead we have netflix or disney +, we have eyelash extentions, gel nails, brunch, deliveroo, an iphone, a smart watch, its just bread and circuses to distract us and take our cash while the richest get richer and everyone else gets poorer.

What's the point in comparing?
My 22 yr old son insinuates l had it easier regarding buying a house.
Both my husband and myself had two jobs at the time, something you rarely see now and he was late 20s, l was mid 20s.
We had no furniture, l remember neighbour coming out asking if we wanted him to move his car for removal van. We didn't have one.
We waited 10 years before starting a family , and l went back to work 17 weeks after.
It wasn't as easy as people think.

I don’t disagree that standard of living has dropped - it most certainly has.

I was just pointing out that it was by no means impossible for two graduates to buy a starter flat in London a few years after graduation, if that’s what they wanted.

On a personal level, I didn’t do this as I agree, your 20s are about having a bit of fun as well as saving. Hence it took me 8 years to save my deposit (and that included the Covid years when I had nothing to spend my money so accelerated my savings) instead of 4 years as in my example above.

We've been looking to see if we can stay in London.

There are few flats for £250k that are big enough for two people who work from home for half the week. Of those, the maintenance charges and ground rent would add about £200 to your mortgage costs each month.

Moneyhelper tells me that would be a mortgage of £1450 per month at 6% interest. If the bank don't think those graduates (who will also be paying off their student loans) can afford that - despite their rent being, what, £1800 a month - then they're going to need to save more for their deposit, fees etc. In the meantime, that flat goes up again, and then again. The rent goes up £100 a year, if they're lucky, or they need to move and pay 12 months rent upfront to get a place, wiping out most of their deposit. The graduates are now in their thirties, they may now have a child or be looking to start a family, and that small flat isn't going to be big enough even if they can afford it.

So you can see why the odd flight or dinner out doesn't feel like it makes that much of a difference to people.

I don’t disagree with any of this!

Starter flat in Zone 1 is a pipe dream now, but what has happened is that areas in Zone 3 outwards have become much, much nicer to live in, as the middle classes have been priced out of central areas and into these areas.

My little pocket of Zone 3 is absolutely lovely, and honestly preferable to some Zone 1 areas which are now soulless.

Why be so defensive, this post isn't about your specific situation. In general it is much harder for younger people today to buy a home and being stuck in private rentals can be a massive road block to saving for a deposit as it is often wildly expensive. Even small "starter flats" are often bought up by older people with more money looking to create an income stream from private rentals and as for social housing for most people they will never get a sniff at a council house to rent.

Buying and council tenancy are usually the only ways people can get a secure home so for most working people buying is the only way and many just can't do it. Lots of people work two jobs these days but its often an employed job alongside a doing nails or lashes in the evening, delivering food or running an online business. Its also very difficult to take a second job as most employers demand flexibility from you and write into contracts of employment that you have to have their permission to work elsewhere.

A couple of things to point out:

• Rent need not be £1800 a month, you can rent for a lot less if you live outside Zone 1. I’m in Zone 3 and you can rent a 1 bed for £1100-1200 a month here.
• Student loan repayments will be minimal when you’re earning £35k because you only repay 9% of what you earn above a threshold (which I believe is around £28k?). Banks will be aware of this when they do their affordability assessment.

Again I am not saying it is easy, because it is clearly not easy, but it is also by no means impossible either.