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?

This sounds like a good thing, but houses are so small they will make this very challenging. As people become more atomised single apartments are going to be even more common. The elderly will be dealt with by the assisted dying bill.

@Missamyp shame councils are not supportive of it

Good luck with that 😂 Much as I would give my life for my adult children & young Grandchildren the days of living together are over. DH & I do all we can including childcare twice a week but we enjoy our personal space & freedom too much these days to contemplate communal living. I Could be wrong but I'm not sure many would agree with you on this Missamyp

@MotherOfRatios but why should the majority pay for those that can't house themselves? We are very northern you can buy a terrace house local to us for <50k. I begrudge paying more in tax or DS paying more (our kids will be paying off the deficit) to house people in areas they simply can't afford to live or indeed have families they can't afford. DS is an only child as by the time we could afford multiple kids the age gap was too much for us.

A local estate to us (2/3/4 bedroom semis) which the majority of local kids could afford to buy on was bought by a housing association taking it away from them. The local feel on its is uproar and I wouldn't want to be moving in as they won't be welcome.

We've just had to fight with the council over an estate being built next to us that they wanted to be "affordable" it would have ruined the feel of the neighbourhood which is all 4+ bedroom detached houses with families. Luckily it was rejected and the redrawn plans include many family homes with a few semis as starter homes.

If you're going to build more council homes they need to HOMO style properties as a stop gap to get people back on their feet and into the private sector.

As I said we've made plans for DS to be able to jump a few steps on the property ladder but realistically he would need 15k for a 10% deposit.......you would struggle to get a decent car for that.

While I don't think that either quantitative easing or austerity were good things, they did affect everyone equally

There are already more over 65 yr olds than under 15 yr olds so birth rates will likely reduce. I think we will see more younger people emigrating, much if the west will need youth!

Take Portugal which has really concentrated on becoming an attractive place for young skilled workers in the last decade. The government want to continue this & are looking at tax breaks for under 35s both to stop their brain drain & attract others.

The elderly will be dealt with by the assisted dying bill.

The cynic in me agrees.

Your anger is misguided at the wrong people. People moving out of London to the north is causing problems to worsen the more affordable places in the north. I have many friends in Manchester who have all said renting and buying is becoming more unaffordable since Londoners have moved up.

I used to work at the home office in policing we interviewed police officers in London, they all said house prices were a factor they left their wages didn't cover it.

London needs affordable housing just as much as Leeds does. If you remove everyone from London how do you propose people have access to nursery's, hospitals etc? These staff also live in council housing.

having lived in HMOs they ruin your mental health...

Housing both rental and buying isn't affordable and we need affordable homes

@oddandelsewhere I don’t understand your reply to me. QE caused asset inflation which meant those with assets & wealth got richer….

we don't need more council houses that the state funds we need to cut state spending which means people funding themselves.

We need more council housing kept by the state as opposed to paying landlords via the tax system.

@Preppingdonkey nearly every policy will have some positive and some negative effects. The puzzling thing is how you think this affects what people can afford to pay for a house 17 years later. First time buyers now were still in primary school then and probably didn't have many assets.

I don't think it's THAT difficult outside of London and certain areas of the south east.

I'm in my 30s and don't know anyone who hasn't managed to get on the property ladder by 35 (some just in the last couple of years). The key is to start saving as early as possible. I started saving when I was a teenager and worked school holidays etc. It soon adds up.

all the young people that I know who have bought recently have had a big deposit via inheritance so have been often able to jump 2-3 rungs up the ladder

my son had a big inheritance from my parents and hi and his partner were able to buy a three bed 2 bath house that all they had to do was put the tv on the wall
so no expensive renovations We live in an expensive south west popular city full of students

They have a lodger and are using that to over pay the mortgage by 400 a month and his partner just had an inheritance from his grandmother and will be putting a big chunk on the mortgage when they renew it

They reckon they will be mortgage free in 7 years or so and they are 26 and 30

They are two young men so no plans on having a family / kids
but without that inheritance they wouldn’t have stood a chance of getting anything

they have good jobs nhs and airline crew but not high paying

Then that’s their choice and choices have consequences, if they want to live in an expensive area they will have to accept the accommodation that they can afford, just because you have friends and family in an expensive area does not entitle you to a cheap property and other jobs in less expensive areas don’t necessarily pay less either depending on your profession and the company/ organisation you work for.

If everyone takes this attitude public services would collapse, this really isn't the correct attitude

I understand your points but, yes, I think that the whole two salary, lending many multiples of salaries, extending terms, QE, ZIRP, etc, etc has nearly all been caused by deliberate and cynical government and banking policy because they could not 'afford' to have the whole bubble deflate on their watch. It's only got bigger and bigger which means, imo, that the burst, whenever it happens will be worse. I extend that last comment to mean the whole financial economy rather than just the housing market but, unfortunately, in the UK, the housing market has been allowed to become a major part of the economy.
I don't think we can blame most individuals (a minority have clearly massively over leveraged themselves and expect constant bailouts, although even then, you can see why!) because we all exist within a system and within a society. As I said above, there are no good choices unless you have natural advantages. Apart from these points, humans are innately programmed to take, take and take more for ourselves. It's literally part of our survival instincts. Those making the rules are, of course, fully aware of this.

It's definitely easier with 2 incomes. Most of the women I know earn between 12/25K but live with higher earning partners so they get supported in that way. I admit, sometimes I am jealous. I know someone who only works about 10 hours, then gets to spend the rest of the time chilling out and socialising.

It needs to be made easier for single people. They are a fast growing section of society yet we get pushed aside.

LISAs (Lifetime ISAs) are still around and you can use them to save for your first home, OR your retirement. No reason why you can't use a LISA to save extra money for your children as they come of age as you retire and can access funds, OP. That's what I am doing. Opened it before I was 40 and should get £60,000 when I am 60, paying in £4000 a year, which the government tops up to £5000. So a guaranteed 25% on a max of £4000 a year. You must be under 40 to open one though.

Most of my friends' children are in their late 30s-early 40s. Only a couple who have very well paid jobs have been able to buy without help from parents or GPs.

Those who have comfortably off parents/GPs and well paid jobs have been gifted money towards a deposit, the others are mostly stuck in private rentals and have no chance of saving because they're paying out large sums in rent. A couple are in social housing.

We need a massive programme of building homes for both social housing and homes for sale. All the time demand for housing outstrips supply, prices will continue to rise.

It may be ‘rubbish’ but it’s the reality, if you can’t afford to buy a house in an expensive area you have to live elsewhere, no handwringing on here about how unfair it is is going to change the reality, the country’s population is increasing and property prices are only going to go one way.

Of course it still has negative effects on young people. QE has been in place for much of the last 16 years, even more so during the recent pandemic period. It certainly wasn't something that lasted a year or two and then stopped. It's well known that it causes asset price inflation (Osbourne literally admitted it). The Tory government and others judged that this was a price worth paying. Obviously, it was one that benefitted them, their friends, their donors, etc. If wages had caught up, this would be one thing but, instead, we have seen falls in real income for much of the population. The situation wrt wages is likely to get worse soon but I do expect asset prices to fall as a result.

Less difficult in terms of wages relative to prices than London.

I suspect that nearly all/ all your friends either had a generous deposit from the bank of mum and direct, either directly or through paying of Uni fees, allowing adult children to live 'at home' for years, etc. Secondly, they likely have well above average salaries and are probably part of a couple. If you look at the maths here, it simply isn't possible to buy without at least one of these advantages.

Thank you! Why do people trot out this misinformation based on what they've 'heard' when stats are available at a click of a button.
https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate
Most of europe have broadly comparable, or in many cases much higher rates of home ownership (up to 95% in some eastern european countries) than the UK.

OP I wouldn't despair. There are some indications house prices will balance out eventually. People are having fewer children - more people are dying than being born which will eventually reduce demand. It is highly unlikely that there will be such a big 'boom' in what people paid for their houses and what they are now worth over the next few decades as there was in the 80s/90s/00s, because wages haven't increased anything like as much, so there are just not enough people earning enough to afford the many £1million houses in the south east.

People are living longer so longer mortgages or even multi-generational ones could become a thing. Things like rent to buy or the scheme when once you've rented a few years you can buy with 0% deposit might become more common.

Not to mention recent restrictions on renting have made it less attractive to be a landlord, so more houses might become available to buy.

It’s not about attitude it’s about cold, hard reality, so what’s your answer then? What’s your solution that people on minimum wage in London are able to afford to buy a family sized home in London?

It is about your attitude? Those who can stay in London will still require GPs/hospitals, the barista at the coffee shop still needs affordable accommodation etc

We need mass building of council/social homes. A variety of sizes