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.

We couldn't afford now the house we have lived in for 25 years. We're in our mid-60s, and still working but the combination of inflation and very low interest rates has pushed the "value" of our home well above the means of people like us in 1997. We were lucky to buy well at the right moment, and we have been able to afford the improvements that keep the house contemporary. And when we sell it, because another part of the UK is where we want to be, closer to friends and family, we shall be able to buy something smaller for two people, not three and to help the third person get started.

It's pretty wild, I was looking at a house for sale yesterday that last sold in 2019. They want £200k more than what it sold for in 2019, no work done, some standard decorating.

Looking at the previous sales before that, it took 15 years for it to increase £200k on the value previously...not 3 years.

There is no way house prices are declining or even slowing, at least in the areas I'm looking at. Yet higher interest rates are supposed to mean prices slow. Demand is clearly surpassing it.

I am still on lower mortgage interest rates, so selling and taking on 5x the monthly mortgage for one extra bedroom in a slightly better area seems crazy...

https://www.msn.com/en-us/health/other/falling-local-birth-rate-could-force-north-london-maternity-services-to-close/ar-AA1ls2Ya

https://www.msn.com/en-gb/news/newslondon/four-hackney-schools-to-close-due-to-significant-decline-in-number-of-school-aged-children/ar-AA1lokHJ

We sold our place in Sept 18 for 910k, it’s just resold in April for £1.2m. They painted the kitchen and hall, changed 2 carpets 😮

Asking prices dont mean much, sold prices are all that count, they can ask for 400k more, doesnt mean they will get it.

Our house hasn't changed ownership for 27 years, the house next door has been lived in by the same people for 30 years, and the only comparable house changed hands about three years ago because our neighbours inherited another house to live in and realised the equity. The three houses are very different, but are all on big plots and have beautiful views over an estuary in an AONB. But 25 years ago, that really didn't carry as much of a premium as it does now. As and when we sell up, the person/people who buy it are much more likely to be leaving a city and bringing big money from the sale of their London flat or terraced house to buy a family home, and then they too will stay for 20-25 years. No longer because the garden is very hard work when you get old!

House prices in London and SE are crazy. My friend and her husband with 3 young children bought a 3 bedroom terraced house in London in 2009 for £320,000. They sold it for £850,000 in 2018. People buying their first family home/property 9 years on would struggle hugely to afford £850,000 and get on the housing ladder. I really feel for young people today living in London, SE and other expensive areas trying to get on the housing ladder. I live in the midlands where prices haven’t risen as steeply.

My parents have a 4 bed house and from that era but they had low wage jobs and just about got that house. They tell me times and I do remember where they could only afford one portion of chips and they fed us instead of themselves. Yes we did go away mostly UK trips with packed lunches but they were cheap trips. Rarely went abroad, think we did coach trips to France cos the bus company my dad worked for put them on cheap for employees.

They didn't have money to renovate they have been in the house for almost 40 yes and only last yr ripped out the original kitchen and replaced it. Are you prepared to do that?

They also didn't have additional costs of all technology we have today and spend on. Internet, mobile phone contracts per adult, streaming services tv or music. It all adds up.

Maybe u don't subscribe to them but still the point is different time, different expenses.

Clearly your parents earned more than mine so maybe they were an exception than the norm for I remember at school most kids weren't well off and going on lots of holidays

The data shows clearly that building more housing leads to more affordable housing.

Good summary of the evidence if you can access the Financial Times article:
https://www.ft.com/content/86836af4-6b52-49e8-a8f0-8aec6181dbc5?shareType=nongift

Example from NZ
https://www.strongtowns.org/journal/2023/8/21/new-zealands-legalization-of-incremental-housing-is-bearing-fruit?utm_content=buffercb60b&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

Example from Tokyo (Note: Japan’s population has declined, but the decline is almost entirely in rural areas and small towns, while the population of Tokyo itself has grown over 20 years, so no, it’s not a case of “housing costs have held steady in Tokyo due to a declining population). https://jamesjgleeson.wordpress.com/2018/02/19/how-tokyo-built-its-way-to-abundant-housing/

More discussion here with no paywall:
https://www.marketurbanist.com/blog/the-great-urban-myth-cities-cant-build-their-way-to-affordable-housing

The UK needs to build more. If it doesn’t want to build on meadows, it will need to get serious about building fantastic apartments and terraces that people will want to live in on brownfield sites, densifying existing suburbs, and building on space currently used for housing cars by shifting towards public transportation to reduce the number of two-car households.

I agree! I feel like I made such bad choices and I will never recover from it. I became a teacher and my husband is a uni lecturer. We did everything’right’- I’ve got 5 post grad level qualifications, have slaved 12-15 hour days my whole life, not only in my full time job but also in my community with voluntary work etc. I’m in my 50’s and we live in a flat, no garden, no car, no holidays, no hobbies or things like gym memberships. Now I have two almost adult kids about to go to uni and because my salary is so good, the most they can loan for living expenses is £4000 per year but some halls are £7000 and we have to pay for everything! But we still have a huge mortgage that runs until we are 73 and even on interest only it’s near £3000 a month! So we are facing oblivion. Either we don’t let our kids go to uni (they are straight A students who have worked their socks off) or we have to move into a bed sit and rent our flat, live on the cheapest food, maybe try to get a night job to do after work. I’m so depressed. What was it all for? All my friends are inheriting but I’m from a council house so my parents didn’t leave me anything. Life is bloody hard.

I’m trying to understand your situation @Sammycat123 if you are on a such a good salary as you say, and you in your 50’s and live in a flat with 2 adult children, is it a huge rambling flat in an expensive area? From your age and description of your well paid job you can’t be living in a shoe box on a dodgy estate? If you have a huge mortgage until you are 73 have you just moved to this flat?

@Sammycat123 can't your children take a year or two out before uni and work to save up and then go? And work a PT job to help pay their way through uni? That's what I did. And /or They could live at home and go to a local uni or do open university?

Alternatively if they are straight A kids there are some very good apprenticeships around now although competitive.

My household lives like the 70s household though, I remember the bleaker parts of my childhood in the 70s.

My partners income is above average but we are still struggling, I currently can’t work due to my health.

We have no children to support but we still have no holidays never even been abroad together and had five holidays in the uk in 20years, no days out, old cars, only managed to buy our house as it was ex tenanted and needed work we can’t afford the work so have lived in it not fixing it for a few years now, a basic food shop once every ten days, no new clothes, shop for bits in charity shops where I can, I can’t afford to have my hair cut, no takeaways or coffees out. Oh and under the Christmas tree this year we will just have a couple of presents each we’ve not done our usual stocking fillers or Christmas shop, just having standard food.

So life feels very bleak and depressing tbh.

Agree with previous posters, can you give some more details about when you bought the flat, area, how much it is, how many bedrooms? Your kids may need to work through uni or take a year out. I’m not denying your situation sounds hard and unfair, just wondering if posters can suggest some ways for you to make things easier.

I disagree about move from town to country that’s not even possible where I am. We rented in a village for five years, we could not buy there so had to buy a house in a town on a housing estate. I hate it but we can’t move to the countryside, all surrounding villages are double the price of our house.

I know! We bought our flat in 2008 just before financial crisis so we are in negative equity. And it’s got cladding so until that gets done we are stuck. Lots of legal costs around that but it’s another story…

I'm pretty sure that rural houses are, on average, more expensive than urban ones in the UK. The UK is not one of those countries full of ultra-remote impoverished rural areas (and if it was, how would anyone get work there?); villages in the UK are, in most cases, commuting distance from a town and often fulfill similar functions to American exurbs--places to park a family or retire if you have enough money.

Once road pricing is brought in (inevitable at some point in the next decade), I wouldn't want to be poor in a rural area, as all the driving will add to costs.

We live in an average semi, in a suburb of a northern city. Terrace houses and semis mainly, around the £200-£240k mark. They sell easily, lots of older long time residents, plus small, young families on their second property. Two teachers next door with a young DC, another couple with one teenager, they work one full time, one part time, at the university. Easy access to the city and countryside, and plenty of local amenities.

We paid around £150k 19 years ago, so no huge increases here. There are flats for around £100k, affordable on one average salary as a starter home. Friend’s 25 year old son has just bought one in the city centre. He’s a graduate, working remotely. So much depends on where people choose to live.

@user1477391263

I never said more housing wouldn't lower prices, i said "What statistics? the amount of housing required to reduce prices is huge"

We build around 230k houses per year and that number is dropping as profits fall for house builders, so who is going to build the 1 million plus houses we would need to build to reduce prices by such amounts to make them affordable? (we would be looking at a 50% drop in prices)

We don't even have the skilled people available to build the ones we do build, let alone 100s of 1000s more, buildings insurance is higher on new builds such is their low quality

How would you deal with the effects of millions thrown into negative equity? their inability to move & the affects on the consumer economy, which we all rely on?

No, I agree, they can ask what they like but may not get it or even sell at all. Same goes for the house values on sites like Zoopla, an imagined house value is meaningless unless it is actually sold for that. I know that locally the Zoopla values for identical houses in the same row vary wildly depending on what they last sold for.

People would have to be mortgage free to sell. It would prevent some people moving when they want to but it would balance out in the end.

It might impact people like me when we sell though. I'd rather sell my house to a young family who will enjoy the garden. That's what I hope will happen when the time comes. Especially since houses with such gardens are becoming less common. If my house value halved in price though, I could consider (though I'd be disappointed to do so) selling to developers who will stick at least three townhouses on the section. Actually probably at least four if they take out the front garden as well. That's what's happened to a lot of surrounding properties in my area. Real shame though.

They could get a job. Or go to a local uni. Take a gap year and work their socks off. Get a job that is transferable to a uni of choice (Costa, Co-op etc). Most of us don't have the "spare" cash hanging around to fund the whole thing. No inheritance here either. I have 2 at uni at the moment, it is hard, but it is a partnership for their future. You help, they help.

(We saved as much as we could as they were showing academic promise at secondary, they took a gap year and worked their socks off at a transferable job, and one is moving home, post graduate year, to do a teacher qualification locally)

My parents found it a struggle on two wages, although never skimped on food quality. We rarely ate out although Fridays were fish n chip s or Chinese takeaway nights. Mum wasn’t a fashion piece and wasn’t one for finger nails or the like.

Moving forward, comparing my first (incomplete @ married to a builder) home with ensuite with theirs, my standard of living as a first home owner was far superior for a time. Then recession struck, however Dad also lost his job during the early years too.

Swings and roundabouts.

Where I live a deposit of £200k is what my clients are giving their kids. It’s crazy round here.

People would have to be mortgage free to sell. It would prevent some people moving when they want to but it would balance out in the end

Housing is very important to the average Brit, i think a housing price collapse would be an economic disaster.

But i do think there needs to be a correction in price, over time, balance building with supply and moderate prices but not to the extent it ruins peoples finances/uk economy.

Easiest way to do this is via Council house building, though how we would address the lack of construction workers in this country is another matter.