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.

Indeed. I remember a friend buying a small one bedroom flat in an insalubrious part of London, sleeping in the living room and renting out the bedroom. It was never that easy.

Nor me, I wouldn't want to be a burden to others.

It's because it's all we have left. We don't make anything any more. Successive government's have done everything they can to boost house prices because it gives the impression that the economy is flourishing.
See George Osborne's help to buy scheme and the recent stamp duty holiday which just drove the market into a frenzy.

We are the same. A series of decisions led us to not get on the property ladder in time and now we never will. Also dh salary has gone down steadily since we met, it is driving me insane that he is paid down year on year and our living standards keep slipping. We are now at a worse point financially than ever before and I worry non stop.

I had a good career 14 years ago but have been home raising our family and it’s really difficult to get back to work now. I wish I didn’t have to say this to you OP but try to get back to work within the next couple of years, don’t leave it as long as I did. It’s not possible to live off one salary any more, unfortunately

I feel the same. Worked so hard yet live in a tiny flat with my baby and no chance of anywhere bigger unless we move miles away from our city and support system, unless I work work work and spend no time with him (and still would have to save up for a couple of years for the stamp duty cost of moving). I also wanted to send my children to private school but no hope

And not just the Royal Family. It's the aristocracy too.
The Duke of Westminster is 32. In 2016 he inherited 9 billion and didn't pay a penny in inheritance tax. He owns huge swathes of London.
It's feudal.

Back in the early 2000s when we bought our first home, we had to have 20% deposit, which took years of hard slog and working over time to save. When we moved and bought another house, we were able to get in on 5% deposit. That's at least one positive change that makes it easier, even if the mortgages are higher as a result.

I'd suggest taking off your rosy-tinted glasses and being a bit more realistic about your childhood. I'm sure that, growing up in the 80s and 90s things weren't always great. There was a massive recession in 1981: I graduated into it. Interest rates in the 80s were up and down like a yo-yo: 16%+ in 1980 and I graduated into a major recession. At the end of the 80s there was another huge blip which destroyed my parents' retirement plans. It was regular boom and bust. Google Black Monday 1987. Loads of people lost their homes

So either your father was earning more than the modest salary you allude to or there was money available from another source. By the 90s most ordinary people needed a second full-time salary to support a family. Your parents were probably far better off than you imagine. Maybe someone else in the family was helping them out?

You're at the stage in life when you're most stretched. Starting out with a new home and a family is never easy. In 10 years' time there'll be people 10 years younger looking at you enviously and thinking how easy you have it. You'll both probably inherit from your parents and that will help, too. And you'll both approach your 60s with solid pensions behind you — which frankly many people didn't have in the 80s and 90s.

Very true, we've lost our manufacturing base and as a result we don't create the wealth we need to fund our public services.

Absolutely. We’re a service economy that produces nothing except pixels on screens.

But we've gone to the other extreme. OP has no choice but to work. The increased cost of living means that the choice of staying at home has been removed for the majority.

In the SE at least, families have been dependent on two salaries since the 80s. I started work in 1982 and didn't know any women under the age of 50 who didn't work at least part-time. In my 30s all my contemporary mums were working FT except the occasional traustafarian-type who gave up work once she had children. My mum worked part-time to supplement the family income in the 60s and by the 70s was working FT. She worked until she was 64. I was able to buy a small flat in a grim bit of London on my own in 1987, but I nearly lost it twice in the following years as interest rates went through the roof. I went without heating and hot water, lived on baked beans and worked in a supermarket at the weekend to pay the bills. My guess is that it wasn't easy for the OP's parents, it just seemed easy to her at the time.

The reality is that while resources remain constant population grows considerably.

This can only result in one thing and that is fewer resources per person.

If you repeat what the previous generation did you will not achieve the same outcome. Everyone has slipped a rung down the ladder.

My father paid for a big detached house in a very good area, 3 children at private school, funded my mom to stay at home to look after the kids and retired just past 50. He did this on a single salary from a professional job. To replicate that nowadays would require an income of about 250k.

Houses on my parents road are now owned either by single older people who have lost their partners or by families with 2 x £100k+ salaries. It would be almost impossible for a single earner to move there unless they inherited significant amounts.

It’s getting to the stage where inherited wealth is almost more of a factor that dictates your lifestyle than your salary is.

Thanks everyone for your comments, it's actually reassuring (and sad!) that others can relate. A few clarifications:
-Some people have commented that I'm looking back and thinking things were easier than they were. I mentioned in my first post that my parents were the ones who've told me they did not struggle for money, at least not for the basics like housing and food. We didn't have a lavish lifestyle, not many holidays and they drove an old car, but they were not worried about their primary cost of housing.
-Some people have said I'll 'catch up' to older siblings and colleagues. My point is, when they were my age and earning the same salary they were already able to afford a much better property and lifestyle than I am. Their money went a lot further, and unless I get a huge salary increase (unlikely in my profession) I'll never 'catch up'. Just yesterday I was talking to a colleague who is about 15-20 years older than me but at the same level of seniority. He bought a 'starter home' at this salary when he was my age, which is a huge detached house with 4 bedrooms in a lovely area. I couldn't even buy a 2 bedroom apartment in that area on my salary now, though we are actually doing the same role.

Just yesterday I was talking to a colleague who is about 15-20 years older than me but at the same level of seniority. He bought a 'starter home' at this salary when he was my age
I think this is the thing - less clear with DP's - your df had a degree but (you said) had a low paid job - but I suspect what you see as low paid was actually good salary at the time.
Imv It's more the surge in prices in the last 20 years, and no movement in pay unless you are a CEO.
According to Angela Rayner - she wants her legacy to be building council houses. If that comes about private price houses should fall (unless immigration continues at this pace) as demand drops - so there is hope.

It's not the fault of immigrants that no almost no council houses have been built in this country in the last 40 odd years.
We need to stop blaming each other and blame the people in charge, a lot of whom are landlords/developers on a large scale and have an interest in propping up the housing bubble

I think the UK needs to just build housing of all kinds, not focus on council houses vs every other kind of housing. International statistics suggest that building any kind of housing results in more supply and affordability. And, just repeating here, but contrary to what a lot of people think, the UK already has an unusually high % of its housing stock as council housing.

I mean, I'm fine with council housing becoming part of the mix, but I worry when people only want to talk about council housing and seem nervous or squeamish about private sector development. This kind of mindset often goes hand in hand with nimbyish attitudes in which virtually every type of housing propose gets blocked, amid cries of "greedy developers"--as though there were something inherently dodgy about housing being built for a profit.

It is tougher now. I am divorced so, an element of starting again on the housing front, but on a very good salary. I also support a child at university.

I am about to give up car ownership because money is tight.

Money should not be tight when one has a large salary. But, I think that inflation and interest rates have significantly changed the landscape in the last few years.

What statistics? the amount of housing required to reduce prices is huge.

The stats i can find on social housing mix was from 2007 (when we had more) and the UK isn't high up the European list, middling at best.

Now we have even higher prices and sky high rents, in my area, on local average salaries, even a HMO will take 1/3rd of take home pay, private rent will need two FT salaries.

The emphasis has to shift from open market to council housing, will put more money in peoples pockets, which means more local spend.

Reasonable profit? Yes of course but Persimmon has made billions per year but now its falling dramatically and their response is to build less.... not what we need.

With you on this. Husband and I are on good salaries and bought a nice house, but the way interest rates are going, we’ll be living frugally. Yes to the older generation that say it was worse in whichever decade they choose to favour, but we’re supposed to be a wealthy, progressive country, one where young adults are seen as ambitious and want nice things (homes) to show for their hard work at work, so it’s not helpful when this is thrown in our faces. Why would we want to digress and live like it was during Thatcher’s era? My parents didn’t have highly paid jobs yet paid their mortgage off easily, and that’s because cost of living was less. Houses were less. It’s reasonable to feel down about it.

DH and I are 40 and nearly spent a chunk of money on what would have been our first ever big holiday - to Mexico in 2009.
We didn't book it in the end. We freaked out and felt it was madness to spend a few thousand pounds on a 2 week trip when we were renting.
My word do we thank our lucky stars every day that we made that call.
We kept saving and went on to buy a flat in 2010 for £116k which we sold 4 years later for £155k. We then bought a 2 bed terrace for £189k which we sold 3 years later for £285k.
We did this through doing a tonne of diy and through buying in 'gentrifying' areas (shit holes!) in a trendy city.
Because of all of that equity gained, and because we bought another doer-upper, we're now in a big 4 bed detached house in a pretty market town, with monthly mortgage payments of £500. The sense of freedom from having such a small mortgage is immense. DH has been able to retrain. I'm sick of my job at the moment and know I could jack it in if I want and pick up bar shifts to cover the bills.
Young people won't be able to do this now. Aside from the issue of high house prices and interest rates generally, there aren't many areas left which could still 'gentrify', doer-upoers are no longer priced accordingly, and the price of buying materials for DIY jobs has gone through the roof.

Absolutely. We’re a service economy that produces nothing except pixels on screens.
And the impacts of this shift away from manufacturing are wide reaching.
Many of us (me included) are in bullshit jobs now, staring at a screen, wading through emails, having meetings about meetings and calls about calls, and doing nothing of particular worth. And it's terrible for your mental health.
My parents were in working class jobs (dad is still an HGV driver at 75) and I know how hard those jobs are - it's long hours and it's physical. But you earn an honest day's pay for an honest day's work, which gives a certain kind of satisfaction that is lacking in bullshit jobs.
Sorry, I appreciate that's not what the thread is about.

I recently looked up my childhood home.

Simple smallish mid terrace in the south east/Kent. My parents bought it in '93 for £50k. My dad was a junior civil servant and mum worked part time. We lived in a nice area, on a quiet street, with a good size garden, with transport links to London, good school catchment area, beautiful local library, swimming pool a short drive away, lots of green space and parks. So even without lots of spare cash, we could enjoy free things easily and had a decent standard of living.

The houses on that street are now going for £650k. I have absolutely no chance of ever living in an area like that and I do feel like I let my own children down.

I try not to think about it, but when I do it does make me feel a bit sad.

He bought a 'starter home' at this salary when he was my age, which is a huge detached house with 4 bedrooms in a lovely area

That’s never, ever been a starter home. I’m about your dad’s age and nobody’s first purchase was more than a one or two bed flat or terraced house.

Would moving to a cheaper area be an option ?
Part of the problem with house prices is that their is always someone willing to pay an inflated price to live in the right area particularly in the city - whether that is buying or renting - if everyone refused to pay more then prices would have to drop but the sellers and private landlords particularly in the cities know that there will always be that one person who says I love that house and will pay on or over the asking price - the same with private rentals - a landlord in my area can put a two bed house up for a £1000 a month which would be out of the reach of a minimum wage earning couple with a child because they know a professional singles needing a short commute to the city but also wfh so they need an office room will snap it up because they are on a high salary.