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 disagree. I’m open to being told I am wrong about Europe now but when I worked there people were on much more secure tenancies, similar to my parents when they had a council house. The British private rental market is very insecure - I know quite a few people who had to move out when landlords wanted the property bank. Very difficult struggling to sort out schools and nurseries in that situation.

OP, my son and GF bought a 3 bedroom semi at 24. They bought in a safe area but they couldn’t afford where either set of parents are. The kitchen is very old and family pitched in to replace rotted cupboard backs etc (thank you FIL) and clean and paint and do some basic work in the overgrown garden. I think many folks would have turned their noses up at it, but it’s a good sized 30s house and can be extended in the future. Both sets of parents helped a bit but they put most of the £25k deposit down. They both earn £32-35k more or less straight out of uni which helps.

So it can be done with some compromise and careful budgeting. And yes, some parental help but not much money from us, to be honest.

My friend & DH downsized in retirement from a huge family home over an hours drive from the city to a penthouse flat 20 mins in the bus from the same city. It has immaculate grounds & a large balcony with beautiful views. They have loads of options for a good social life at weekends. They love flat life. It's certainly given my DH & I lots of food for thought in the near future.

I think a lot of things changed when people started choosing to live together, rather than get married. It seems to be linked to the attitude of I want it all, and I want it NOW! In years gone by, the pattern used to be, you left school, got a job, found someone that you wanted to marry, and at that point, you started to save up for a home of your own, but stayed living with parents until you had enough for a deposit. These days, people decide that they want to live with a partner, and because they don't want to wait, they rent. Once you're in the rental market, as everyone is now seeing, it's VERY hard to get out of it, unless you go home to live with parents, and save up for that elusive deposit. So I think it's going to go back to staying at home with parents until you've saved up a deposit. Also, with so many more people attending university now, they get used to living away from home, and being able to come and go as they wish. They then don't like the idea of going back to live with parents, where they can save up, but fall into the rental trap, because they don't want to live by their parents rules. I think attitudes will need to change before people can get back to buying their own homes, rather than renting.

Older people need to told more about the benefits of downsizing and releasing money for family (if they choose to). So many cling on to oversized expensive to run homes, which is impractical. You can't force people put, but open, honest dialogue from the government's about their options would be good. My parents are the same. Massive 5 bed house but only two if them. They actually recently talked about needing to spend more money do they wouldn't be taxed. Had to bite my tongue on that one.

I think everyone, not just old people, should get used to living in flats, aa people across the world do. I have lived ij one all my life, nearly.

100%

What utter rubbish, sorry.

Living at home until you get married hasn't been the norm in the West for many decades; it certainly was not the norm in the 80s and 90s. The current unaffordability of property is something that has come about mostly since about 2000. Young people are now far more likely to live at home for years on end than they were in the 80s and 90s, yet they are less able to afford property than ever.

People are not able to afford homes primarily because they are currently, on average, nine times the average salary, whereas in the 80s and 90s they were only three times annual salary. They have become LESS AFFORDABLE.

In those days education tended to stop at sixteen - eighteen for some and 21 for even fewer.

Moving into a job at 16 meant that you had 8 years of a job behind you and opportunity to save for that time if you moved with your parents. Marrying at 21 wasn’t unusual because of the faster move through life stages.

Now education is often 21 minimum, with many moving in to masters degrees and finishing later. They can’t even contemplate saving until they finish education and start work. They’re meeting and marrying a lot later, so they actually want these things later in life that earlier generations - it’s just you have less time to get there if you want a secure place for your family because the one thing that hadn’t changed is a biological clock.

@GreenTeaLikesMe I explained earlier (about 9.30) how house prices have got where they are, you should read it. There's no point shouting that houses are unaffordable, they obviously are affordable to some people or they would not be selling. It's called the housing market for a reason, market rules apply.

What you mean is that you can't afford the kind of house you would like in the place you would like.

This situation is being massively exacerbated by parents being guilted into handing over fat deposits.

Sorry guys, but I don't want to be educated into the benefits of living in a flat in or near a city. I live in a house near a city, but rurally, surrounded by countryside. Ideal. You are not going to convince me to give up my large, lovely garden, surrounded by fields, with excellent walking opportunities on my doorstep.

Actually most of Europe, with the exception of a few countries (Switzerland, Germany, and maybe Austria) have a much higher rate of home ownership than us.

Exactly. It's amazing how there is such a lack of understanding of basic maths (property price to income ratios) here and sociological facts such as the fact that more young people live longer with their parents now.

Respected but your insinuating everyone who does downsize & decides on flat life in or in the outskitrs of a city doesn't live with fields & excellent countryside walks on their doorstep. My friend as explained above has all this and more with a bird's-eye view from her balcony of a beach in the distance & its within walking distance of her flat. It's a choice & one my DH & I will probably make having given it loads of thought.

Actually, the house market has been really struggling in the past couple of years in many areas because of lack of affordability. Far less people can afford to buy so sales have slowed and prices are falling overall. That's likely to get worse rather than better. It's definitely not been a free market either. There's been plenty of interference and goosing from financial institutions, central banks and politicians. If lender terms had remained a max 25 years and lending had been confined to 3 times salaries, house prices would be much lower now. If we hadn't had QE and ZIRO, ditto. Then we had 'help to buy' and various other schemes.
I'm not sure what you mean about parents being 'guilted' into handing over fat deposits. Who is doing the guilting? I take your point that it does push prices higher in many areas, especially London and SE, where people have far more equity and wealth in general.

This situation is being massively exacerbated by parents being guilted into handing over fat deposits.

I put that you are being unreasonable, OP. It is not your job or responsibility to provide your children with a deposit for a house. It is lovely when people can afford to do that, but at the end of the day your offspring must make their own way in life and as adults sort out their own housing.

We live in a very modest three bedroomed semi in the North of England, Not massive by anyone’s standards, with no room for a downstairs bathroom, or even a lavatory. My friend recently bought a small flat, it has lift access, and cost more than her three bed terrace! We only have small pensions, ok when we can pool them, but it’ll be really tight for the survivor when one of us dies. Not all boomers are mega wealthy!

There would have to be real benefits to moving, and buying any flat where we could face increasing leasehold charges could be a real worry financially. We’d need to either be on the ground floor or have a lift. We have no family living locally, so moving into some form of supported retirement living would be the ideal option for several reasons. One being that suitable renting would remove responsibility for costly repairs and maintenance, something that has eaten heavily into the small savings we had, and another would be that it would give our DC peace of mind round our care and safety. They have full time jobs and teenagers!

However, we manage our house and garden perfectly well for now. Only when it becomes medically necessary will we contemplate a move.

I assume we all want to provide for our children and give them the best start in life, it's not a matter of being guilted into doing this. Rather than moaning that our children will never be able to own a home, we actually can help them by releasing equity by downsizing. We didn't need to worry about this in the past when IHT was high, but now it is so low, we are saving them a 40% tax bill and getting them on the housing ladder with a decent deposit. This will give them the security of owning a home.

Flats are not always the answer unless you are on the ground floor or there are working lifts. DH and I in our early 60s and already dread lugging the weekly shop up the back stairs to our first floor flat. The steps are treacherous in winter.
Flats are also noisy if you have people both above and below you. I don't know how we will cope as we get older. Selling the flat( still have a mortgage) will not give us enough to buy a bungalow and we have 2 adults dcs still at home.

It’s worth remembering that downsizing to gift a significant amount to one adult child or more, and from a big house to a smaller one (if you’re in a couple I think it’s fair to say that living in a one bed flat isn’t desirable when you’ve been living in a house with a garden for decades) is something that is beyond the wildest dreams of most people.

Of course, selling your home and downsizing to a smaller place is a big sacrifice to make for your children. The question really is, am I willing to make that sacrifice or is looking after them until they are 18 enough?

We have paid off our mortgage and our now using some of our pension to help DS buy a flat and also pay part of the mortgage.

@rainingsnoring if houses are getting cheaper because fewer people can afford them surely that's a good thing. I find it odd that you say that the situation is getting worse, surely that's better?

I can't recall anyone being forced to borrow more than 3 times their income, nor extend the term of the mortgage, as far as I recall they were all volunteers.

On this forum there has always been name calling (boomers etc) about people who have more than their offspring, and who I'm sure in many cases are made to feel guilty.

We are in the happy position of having a large amount of equity in our house, funded by work rather than inheritance, but have absolutely no need to sub our adult children to buy houses. At 30 they are both able to afford London mortgages through a combination of good education, sensible career choices and hard work.

I put that you are being unreasonable, OP. It is not your job or responsibility to provide your children with a deposit for a house. It is lovely when people can afford to do that, but at the end of the day your offspring must make their own way in life and as adults sort out their own housing.

Trouble is that others are helping their dc

I think attitudes will need to change before people can get back to buying their own homes, rather than renting.

Yes it’s definitely attitude that has impacted home ownership amongst the young 🙄

We paid for our children's education & they left university with no debt. This enabled them with their partners to save & have enough for their own first deposit for a house when they married. DH & I felt this was enough. Our dc wouldn't expect more. They will inherited something when we go.