To worry how my children will buy a house

[Biggiebiggiecantuc]

I’ve been working in the head office of a large retail bank for the past 10 years.

I’ve worked with a bunch of slightly older colleagues who will blush when we discuss house prices. They mostly started working in the mid/ late 80s, after leaving school at 16/18, and were able to buy a property within 2-3 years of starting work.

Many have multiple BTLs and will head off into retirement in their late 50s with large final salary pensions.

I look at them with envy. I will need to find away to earn till I am in my 60s

However, I am terrified of what future my children will have. I jut don’t see how the will get into the property ladder. They, like me, are average. They won’t get into top city firms and earn £100k 2 years out of uni. Hopefully they will prove me wrong but I just see a future of misery, running just to stand still.

I have managed to save around £10k for them. A housing deposit. Is there anything else I should be doing to help them?

I think there will be a change in how people are housed in the near future with professional 'Halls of Residence', in fact in cities I think this is a thing as people can't even afford to rent flats of their own anymore.

The idea of house ownership being a goal is going to have to change and alternatives found.

Although it is possible to pick up homes under £150k in some areas, they'll just have to modernise them and moving to cheaper areas is easier now with WFH and people having fewer children so not having to worry about schools etc.

They don’t have to live in the area they were born, there are some very lovely places to live in this country where the average earner can buy a home, if they stay in the South East or any expensive city then of course it will be much harder. If your children are “average” they may as well be average where they can buy a property and make a life there.

YADNBU OP. I feel the same. I think something has to give soon as it can’t go on like this for much longer surely.

Aw Op, I agree. I’ve just had to buy a 50% shared ownership as I couldn’t afford to purchase a full property. I’d like to staircase one day but it may not be possible. Everything feels so bleak right now but I’m hopeful it may get better. I think generational living will become more a thing like it was before, and as others said people will have less children so they’ll be less fight for houses and jobs

@Biggiebiggiecantuc Have a look at rent to buy. This is a new scheme whereby you pay a discounted rent for two years, save a deposit and then are eligible for shared ownership.

I haven't looked into the small details but it could be something that would work for you DC.

You could hold of your savings and help your DC at the point of purchase to buy a bigger percentage of the shared ownership property/move in costs.

Hi OP, can I suggest you join the Female Invest app? Tonnes of great material and webinars. Also a great forum where you can post questions etc. It teaches financial literacy and the question you posed, if you ask it in the forum you'll be pointed in the right direction.
I've only recently come across it, after it appeared on my instagram feed and finding it very helpful.

They don't need to. houses are out of most young people reach these days. Only the uk is obsessed with house ownership the rest of Europe is happy to rent and enjoy the flexibility that goes along with that

@Maddy70 Out of interest what is the housing situation for retired people in Europe who rent?

A colleague lives in the Midlands and is prepared to do a very long commute on his in day. He has a London salary also working for a Bank and does well. So benefits from higher salary with 6 days of lower costs, and a much lower mortgage than being in the South East. I appreciate it's not for everyone but shows that there are options out there.

Also isn't there a Government scheme for the under 40's with support for first home purchase. LISA? Something like that, if it's still around.

They don’t have to live in the area they were born, there are some very lovely places to live in this country where the average earner can buy a home

Where?

Southerners forget that salaries are generally lower in the North and the Midlands.

Getting onto the property ladder is a nationwide problem.

Owning your own home is having the security of a roof over your head and that will never change.

They will find a way just as most of us have.

Joint own with a spouse or move to a less expensive part of the country. Buy somewhere rundown and do it up. There are ways. Sometimes it takes lateral thinking and flexibility but it can be done.

Raise them to have a good work ethic and they'll be fine. I'm a single mum on a medium salary in the home counties and I've managed.

Incidentally, I'm in my early 60s. I don't know anyone who has a final salary pension. And in my experience, those who own buy to lets generally don't blush about it.

I think there will be a divide between those who can use family money or inheritance for a deposit and those who can't.

Rent is cheaper and pensions are much higher - and long term lease see people often stay in their homes 40 years. There is no issue.

The reason we're obsessed with ownership is that we have none of these factors in play here

Rents increasing at the whim of the landlord. Properties in a crap state. Can get kicked out if the landlord wants their house back. Not knowing if you have long term stability. Imagine living like that as an older retired person. No way.

No wonder we are "obsessed"!

A big factor is having a partner - my elder two DC late 20s have both bought with their partners. You’ve got a modest deposit for them; a partner may bring the same.

@Meadowfinch with all due respect, there were more ways to find for the average person to buy a house even 10 years ago let alone 20 or 30 years ago. It’s very different now. The rate of home ownership is slowly decreasing. Home ownership is concentrated in the over 65s and the rate of home ownership is reducing for those in the younger age bracket. People are living at home longer, buying houses later if at all. Society is becoming such that you can’t get buy on hard work alone.

OP - I would explore the lifetime ISA for them definitely. Invest the money you’ve saved if you can. But also make sure you’re not skimping on your own retirement planning.

I think a lot of us need to prepare and accept we'll need to downsize ourselves earlier, swap our big 3 & 4 bedroom homes for little 1 bed flats in our fifties, to give the money to DC for homes of their own.

Also - you can still influence your children's choices about a career. Too many people encourage kids to "follow their dreams" or "have fun" rather than considering which careers have good earning potential. There are careers suited to less academic people where the money is still reasonable.

Put it in one of those government ISAs

look them up on Martin Lewis

That divide is already well in place.

I'm 35, out of all my friends of a similar age, I only know 1 person that got a mortgage off their own back. Every person I know has gotten a mortgage from inheritance or their parents giving them the money. A few others were able to live rent free with their parents for 3-10 years to save up which I do consider the same as parents giving them the money.

For others like myself, from poorer backgrounds, no family money, or had to pay rent to your parents/had to move out & rent at a younger age, have practically no chance.

Moving for cheaper housing isn't realistic for many people- you also need to have decent employment options, not everyone WFH.

Moving into a property that needs doing up is also unrealistic for many. If its just cosmetic then fine, if its things like new flooring, plastering etc, then you do need a big budget as it's common for more issues to be uncovered as you go along. Most people will be lucky to get a mortgage and unlikely these days to have enough to save to do up a house.

I've had a bit of a rant, but basically, housing in the UK is really out of the reach of anyone without family money.

Agree op. I'm in my 40s and still renting after a few issues. I can't see myself being able to buy, ever and it's a scary prospect- to the point that once I get close to retirement I need to think of options as I won't get enough from work or state pensions for rent let alone anything else.

Being single even on a good wage, I still won't get a mortgage for enough locally, especially to be paid off before retirement and at a cost I can afford.

My dc I feel horrendous for, it seems to be very bleak for them. They want to be able to move out and have their own homes etc but I don't know how they will manage.

So ridiculous to think that your situation 30 years ago is comparable to what young people face today. Your post is exactly the point OP is making- people in their 60s could afford to buy a home on very low salaries and are now reaping the benefits in a way young people now never will.

25 years ago, my parents bought a four bed detached home in the South East on my dad's £35k salary and my mum working part time on minimum wage. They sold it 15 years later for almost double what they paid. Good fucking luck managing that these days on the equivalent salaries (real world equivalents, not "adjusted for inflation", as salaries have rarely kept up with actual inflation).

Isn't this also one of the elephants in the room when it comes to the birth rate dropping? If you grew up with your parents as homeowners the prospect of starting your own family in a rental property that you could have to move out of at any time is rather daunting.

My dcs are both in the 6th form and earning £5-600 a month in their jobs. The eldest already has £10k saved as she has no expenses living at home and will have quite a lot more by the time she finishes school - make sure they get jobs as soon as the turn 16 as every penny helps. I have said to bank that in an ISA or LISA before they go to university so they have saved it for house deposit / big expenses and work through uni to pay for that separately.
We can't help in any other way other than to do this (eg house and feed them) but this way they have started adult life with a decent pool of cash and a good work ethic.

I think there will be a divide between those who can use family money or inheritance for a deposit and those who can't.

This already exists. I’m a Londoner & bought with help, lived at home to save & cash gift. Every single one of my friends who are the ladder did similar. The ones helped on younger eg straight after uni &/or with large amounts of cash eg 150k plus are in a better financial position now regardless of what jobs any us do.
I don’t think it is sustainable, not with the lack of growth in the economy, ageing population, starved public services. We will just push more younger people to emigrate, not have dc & exacerbate the situation. I also think the government will come for some of the wealth in the older generation tied up in property even if just by stealth; you need that operation? It’s a 4 yr wait or you need carers in your home? There’s a shortage & no one to help.