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.

Well, the Tories are pretty mainstream and they took us out of eurpe despite knowing it would make us all much poorer, simply to placate angry racists (I know, not all brexiteers were racist, but brexit didn;t happen because 10% or 20% of the population had particular well thought through issues with the EU, it happened because 30% to 40% of the country are noisy people who don;t like foreigners.

Very strange and insane things happen when you push the population far enough (eg by having massive inter-generation inequality, or mass immigration without investing in housing or services for the extra numbers) and they start lashing out.

Why would developers flood the market and devalue their product? We need a political solution.

Brexit happened because a campaign was run that was riddled with lies and, after six years of austerity, a lot of people wanted to give Cameron a bloody nose. It’s in no way comparable to the ridiculous idea of a tenfold increase in council tax for under occupied houses which no sane political party would even think about.

@orangegato definitely replied to the wrong post 🙈

Higher interest rates and a good old fashioned recession should fix this, many BTL and AirBnB types are heavily leveraged, they should be feeling the pain pretty soon I think and a fair few properties will be hitting the market at knock down prices.

The market is already flooded, there is loads of new-build "executive" dross in London for example that will never sell now, unless it is to HA`s at knock down prices or offsetting tax or some other deal.

If you can just hold out 4-5 years when your child is in full time school, things will be different. No childcare fees and may not need quite as much of a support network around you. My partner and I lived in an expensive city, a real tourist/second home hotspot. We sold our 4 bed house and moved an hour further north, for the same price we sold our house for, we bought a 5 bed that was over half as big again with a huge garden on the edge of a forest. You don’t need to go as far as an hour away, just get out the city centre.

What we seem to gained from is buying new builds, they need only decoration nothing structural, any faults are for the builder to rectify, boilers are covered for 2 years, windows for 10. Put in some decent flooring, fitted wardrobes and finish the garden off and their value jumps considerably. I’ve had 3 new builds, the first I made 40k in 3 years (2 bed semi) so 20% increase. Second one we made 100k in 4 years, 25% increase. Valuation shows our current house has increased 40k in 18 months.

@CrashyTime if the market was flooded with housing, it would be cheaper. We don't have enough being built.

Is this not tied up with cladding issues? Where are these empty flats?

Not unreasonable, the cost of living crisis is shattering lots of people's dreams. I'm older than you. I tell myself 'this too shall pass'. Most things have passed that I've been worried / depressed about.

The UK has one of the lowest vacancy rates in the world.

There. Is. Not. Enough. Supply.

The very wealthy have properties sitting empty all or lots of the time. They buy them as over time it’s one of the best ways to accrue money. Russian oligarchs went through a phase of buying up London property for this reason for example. Lots of those with enough wealth but to the let as Airb&b.

The more property and assets you own, the more wealth you accrue and the more you can buy. You get wealthier and wealthier. Meanwhile those without wealth face higher rents, can’t save a deposit, can’t afford house prices.

It’s not a case of just building new houses if they then don’t become house people can buy. Recently four houses were built near to us. Fairly affordable. Three are on airb&b with no one in them most of the time.

Taxing wealth more rather than taxing income more would be a good starting point IMO.

I never said they should move - where was that in post? I live in a nice 4 bed detached that no doubt I will also be sentimentally attached to and not want to leave. But I'm also very pro-housing - currently the older generation in my area have it both ways - hogging all the larger family housing as couples or singles AND strongly protesting against any new housing. The cohort who first bought in the 60s and 70s benefitted from a massive house building programme both private and social that was almost double our current house building. But round here they tend to oppose any vaguely significant efforts to increase supply which would benefit the next generation.

I don't know - lots of councils already have an empty homes premium - once the number of renters and people struggling to buy suitable housing outnumbers the 'haves' then it wouldn't be surprising to see these sorts of policies. Labour have definitely been courting the 'renters' vote in recent years. As the 'housing deficient' voting cohort eventually outnumbers the 'housing surplus' cohort then those are the sorts of policies that possibly will come in. Maybe not 10x tho!

Old article, but unless a lot of people with loads of spare cash have arrived in the country it must surely be harder to shift them now as interest rates go back to more normal levels?

https://www.theguardian.com/business/2018/jan/26/ghost-towers-half-of-new-build-luxury-london-flats-fail-to-sell

No, I dont think so, you are confusing numerous points here - money laundering, offshoring money by people who want their wealth out of a particular country etc. are different issues to people taking on loads of cheap mortgages and then getting caught in an interest rate shakedown, the average person with multiple BTL/AirBnB mortgages isnt wealthy, they are just a leveraged debtor waiting to go bust.

No, there would just be loads of empty property, that is why the "mass building programs" are never going to happen! You make housing cheaper by limiting how much people can borrow for housing!

Why do house sales keep dropping in that case?

https://www.plumplot.co.uk/London-property-transactions.html

Because there is a lack of economic confidence, probably, and BTL is harder than it used to be due to changes in the laws, but people more familiar with this will need to comment. It's not exclusively about supply, nobody ever claimed that.

The sales volumes are so low as the majority of home owners don't have a mortgage and are not forced sellers into a weak demand market. Demand isn't just about people needing a roof over their head - they are struggling with mortgage costs and raising sufficient deposit. There are circa 270k homeless in UK. Price is influenced by interest rates / lending policy etc but the underlying demand is always there - housing is an essential- demand can't disappear as price goes up, just like food. The only way to satisfy the demand is massive house building or drastic (and probably very unpopular) policies to reduce immigration or force people out of under-occupied housing. Longer term people born here just don't have many kids and as long as no large scale immigration things balance out but that's over 40 years or so.

I live in a large house with a large garden and have done so for the last twenty-five years. I like it. It has enough room for us to have an art studio, an office, a library, a dining room, and two sitting rooms, all of which we use, as well as a conservatory and a large kitchen with utility room. Why should we 'downsize'? No young family could afford to buy it, so it would end up flatted (which it used to be - inconveniently has 4 ring mains). We like living here, all our children and grand-children have bought their homes but we have enough room to accommodate them for parties etc. We worked hard to have the house and garden, we are not hogging a big house, we own it and we want to continue to live in it. To suggest we 'hog' it is the politics of envy.

Again no one is saying you didn't work hard. People are saying that people work equally hard today and have no chance of anything like you have. How's that fair?

Everyone who owns a second home, unless it is being let full time is adding to the problem. Airbnb properties are second houses, if a U.K. person is holidaying in it then their house lies empty. So every Airbnb is reducing available homes - I think they should be taxed hard -at least everyone benefits then.

Life is not fair, for starters. However, compared to the early 70s life is now much fuller of opportunities. Opportunities my generation did not have. When I was 20 the very thought of EVER buying a house - or owning a car - was beyond our imagination, an impossible dream. Only well-off people could buy houses or have cars, or go abroad. By well-off I mean people working in management in private industry, TV stars, hospital consultants, not GPs and certainly not the social strata I came from, nor that of my now DH - my parents lived in rented rooms and flats all their lives, my DH was brought up in rented houses and on a council estate, one known as 'candle town' because of the number of people whose electricity was cut off because they did not/could not pay the bill. Young people now have the opportunity to do many, many things. They can go to university if they wish to. In the 70s it was possible to get a grant but virtually impossible to get a place, only 10% of young people did so. Most people left school at 15 or 16 and started work. We had no chance to have anything such as we now have, except that the world changed and suddenly it was possible to get a mortgage, and then women (even married women) could get a mortgage. A world of possibilities began to open. Those opportunities (despite Thatcher and Blair) are still opening. Young people now have a much greater chance of owning their own house or having a job they like. As for cars and holidays abroad, these are norms, whereas to my generation they were not just luxuries, they were science fiction. This is why my generation sometimes resents words like 'hogging'.

Young people now have a much greater chance of owning their own house

i don’t think the data backs that up…

As for cars and holidays abroad, these are norms, whereas to my generation they were not just luxuries, they were science fiction.

My parents were born before the 70s and owned cars as adults & took planes. I think they are pretty typical.