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 reminds me of people in my neighbourhood who didn’t move when the pits closed .
They stayed because of family, friends etc expecting jobs to be handed to them.

If you want something then you have to do things that you might not want to do to achieve it.

40+ years ago lot of us moved for work as there was no future in where we were. We wanted a roof over our heads and the ability to work. If you are going to berate a generation of home owners then be prepared to do what they did
You can’t have it all and not have to do anything you don’t really want to do.

Was this before or after the government decided to penalise landlords

I agree there were some lovely places to rent for a time at relatively reasonable rents before the meddling began

The poster you were quoting was talking about people moving from London (and the Southeast). You know, the place where most of the jobs are.

Can you honestly not see the difference between "moving away from an economically non-viable decaying rural area, because there are no jobs" and "moving away from an economically vibrant area full of jobs, because the housing supply has been artificially strangled"?

I remember looking out of the window on my last visit to London. Again and again, I kept seeing areas right next to Tube stations, which were covered in dear little two-storey houses and even bungalows. In a city that has an excrutiating housing crisis. Areas like that need to be absolutely bloody carpeted in flats!

Someone said retail jobs are 'entry level' and those in them still live at home, no they aren't. The whole demographic is in retail. The only common denominator is the low pay. You look at the big Supermarkets profits, yep, huge, but their employees unless they are kids need state top up to survive. Any firm over a certain size that doesn't pay enough, so that's its employees need support, should be taxed an additional punitive 'welfare' tax to encourage them to pay properly.

I looked up some financial predictions - which obviously may not happen - in next decades for house market - they all seem to suggest that rents and house prices will continue to increase well above inflation.

Fewer rental properties will likely increase rents - and after short term up lift in proprieties to buy that quickly goes away - and rent rises make it harder for those in rental sector to save deposits.

Also downsizing - hard to do if your adult kids can't leave home - plus when we move we will likely downsize but to an area that will likely cost more. Plus many find when they do downsize due to moving cost or unexpected work in new property it frequently doesn't free up as much as expected.

As many now go to Uni often means they move away from where they grew up - and insecure job market so not sure a multi generational mortgage would be anything but a mill stone.

They also think UK population will continue to rise - though mainly due to immigration - we need workers but they need places to live - so demand likely won't drop despite lower birth rates.

Plus many of the affordable pockets left - like we found - get less so every year and in fewer locations.

The big difference will be if Labour manage to increase supply ie build either HA housing or private that will affect prices.

A PP mention Portugal my IL mentioned some of their friends now look for cheap flights as their skilled adult children have moved out there - and they look unlikely to return. Also heard some demographers say looking at emigration and immigration figures alone could mean we miss a brain drain happening - we export our well educated youth and import less well educated replacements.

I do think posters saying a inheritance divide may well open up - at least till tax catches up - may have a point. Though fewer kids also means fewer in family to divide wealth with.

This. This thread is so London and SE centric it’s ridiculous.

Another to second third this 💯% agree, for what it's worth I come from a small ex mill town in the north and unlike the OP, I only know one person who managed to buy a property on their own from their own back before they were 35 and I'm in my 50s.

The housing crisis is national. It's just that it shows up in different ways in different parts of the country. York is one of the most un affordable places to buy actually and that's up north.

We need to prevent non-uk nationals from buying property unless they have lived here for at least a year already, intend living full time in the property and have a job earning over a minimum (e.g. earn over £30k). we need to decrease the number if empty homes / second homes. We need to build accommodation as purely holiday apartments and ban second homes and airB&B.

How old were you when you bought your first home and how much did you pay for it?
I could have afforded to buy myself a small flat in a cheap area of London on what was a pretty crappy salary 25yrs ago. Things have changed beyond all recognition.

The poster you were quoting was talking about people moving from London (and the Southeast)*.
Where did they say that? It was about moving away from expensive areas in general not just the SE.

You know, the place where most of the jobs are.
Yet more ridiculous hyperbole, life exists outside of the South East.

Can you honestly not see the difference between "moving away from an economically non-viable decaying rural area, because there are no jobs" and "moving away from an economically vibrant area full of jobs, because the housing supply has been artificially strangled"?
Again, other towns and cities exist in this country which are economically viable and vibrant which are far more affordable than London.

I'm actually from the north of England, believe it or not. But the reality is that the SE is by far the weathiest part of the country; indeed, it's effectively paying for most of the rest of the country through huge fiscal transfers. The fact that people who want to live there increasingly can't is going to cause enormous economic damage to the country as a whole.

@another1bitestheduck 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.
*

This comment assumes no immigration. The projection is increased population in the UK. And on that front, I agree with pp saying there needs to be some regulation against people buying houses here as investment from abroad and never living here - with appropriate closing of loop holes e.g. people coming in for vacation for three days and claiming they live here. Tory government was hopeless to introduce this as it goes against their being, but hopeful Labour might do something...

If 80% of all housing is in the hands of two generations, what do you want people to do? House prices are high because the other generations are clamouring for the remaining 20%.
The housing benefits bill is £35 BILLION 88% of the government's housing spending goes towards housing benefits, while only 12% goes towards building or improving homes. There will not be a house-building boom by the government because they are allocating these funds to housing benefit.
Data also shows that individuals aged 50 to 64 are the largest group of landlords in the UK, holding £679 billion in housing equity within the private rented sector. Additionally, landlords over the age of 65, many of whom may be starting to sell their properties as they approach retirement, still possess housing investments worth £405 billion.
In contrast to those figures in 1976, 95% of the government's housing spending went towards new buildings, compared to 12% in 2022.

Those figures are shocking.

@GreenTeaLikesMe 'I remember looking out of the window on my last visit to London. Again and again, I kept seeing areas right next to Tube stations, which were covered in dear little two-storey houses and even bungalows. In a city that has an excrutiating housing crisis. Areas like that need to be absolutely bloody carpeted in flats!'

Why should they do that? Established communities with people settled in houses that are generally far better built than the homes we build today. Of course they shouldn't demolish them. Wasteful. shortsighted and bad for the environment.

Damaging the lives of existing inhabitants, demolishing their homes and disrupting their communities to provide space for new arrivals is the fastest way to create hate and division.

The world has moved on. There is now a sizeable proportion of people who can work from home. We no longer need to be so city-centric. Increasingly, public institutions are moving away from London and investing elsewhere giving people the chance to buy at lower prices, and removing the pressure on South East infrastructure like water and power.

I'm surprised there hasn't been a 'Why don't they just flatshare? I slummed it when I was young, why can't they?' post on here yet.
So many posters are out of touch on how much has changed for the worst for young people or those who are single.
I remember back in the early nineties, my aunt at 21 was able to easily afford a 1 bed flat. Now she says she would massively struggle and probably wouldn't be able to do it. This is in the South East.

From the minute you reach adulthood, unless you are born wealthy, you have to work to pay for something be it your education (notwithstanding an initial period of studying where you get into debt) your home, your childcare, your pension etc etc and all to keep the worker ants toiling away to line the pockets of the rich.

Look at the big fuss they made a few years ago when the number of people in employment dipped for a while due to people taking time out/early retirement etc post pandemic.

The system needs most people to work all their lives (until old age anyway although thats getting older and older) and will incentivise us by making basic things like a house the carrot that is dangled before us .

There is a difference between living in London and commuting into London

Infact as a lot of people I work with (in central London) are finding out that going further out can get them not only a place they can afford to buy but gets them into work much more quickly than the tube and whilst it might cost a bit more to travel it means they can buy and pay a mortgage which is less than renting

If you can get a job in another area of the country entirely which would enable you to buy a place, again it could prove a financially beneficial thing to do if you are paying a mortgage instead of rent and eventually might decide to move back to London and have enough deposit to afford something the size you need.

The issue I see time and time again is people as ftb’s want the forever home. They don’t want to start off in the grotty studio in a gritty neighbourhood. They want a 4 bed detached in a leafy suburb with good schools.

Only those with rich parents who helped or had a big inheritance could afford anything like that
Even those who are now quite well off started off by moving far away from where they grew up, worked at least 2 jobs, and either started off in a studio or 1 bed place. When they moved to a 2 bedder the 2nd bedroom was let out to a lodger in order to pay the mortgage.

It wasn’t something they really wanted to do but it was something they had to do in order to progress.

This! All of this.

DSS (21) is obsessed with the 3 bed semi "starter home" as he calls it even though he's chosen a vocational job rather than the job that would set him up with 3 bed house deposit in 5 years if him and his GF play it safe with spending.

His gf is now several months post grad and "only applying for grad roles £60k+"

Both DH and I have told our stories of first homes being our grimy flats that we rented out a room in in the dirtiest part of town and working 2 jobs to pay the bills prior to that.

DSS wants to know how we can "go in" with him on a mortgage but refuses to admit that he has no concept of the cost of a water bill let alone council tax and food and would never be able to afford it.

There are elements of Gen X getting a leg up on equity but we also started from gutter level on the property ladder in most cases

If you let your children live at home and save up it's really not hard at all. If you make them leave and rent for years then it's nearly impossible.

I bought my first house in 2019, the day after my 23rd birthday. I finished school, went to sixth form and worked 20 hours a week at a supermarket. I enjoyed myself, went out a lot, but saved a lot too. I then went to uni locally and worked 2 days a week. I graduated and worked full time for 2 years earning crap money, under £21k, but I still lived my life and saved well.

I lived at home the entire time. Didn't get any monetary handouts from my parents, I just wasn't charged rent over those years as they knew I was saving instead. Eternally grateful to them. My first house was £144,000 and I put down a 5% deposit of £7,200... that's totally doable.
The house won't be perfect but it's a first house, that's kind of the point you improve it over time as and when you have the money.

This still depends on your geography. A studio flat where I live is double the amount you paid for your first house, with no room for a lodger to help cover the rent.

You could buy yourself a park home. Your kids could become English teachers abroad straight out of university. They could look out for opportunities like buying run down properties abroad and do them up. They could buy a 2 bedroom flat together. It’s not going to be easy at all but this is how immigrants think and within 10 years, they become home owners.

@pinkypank You would be lucky to get a shoebox for that price over here.
It's ridiculous to make out that it's easy just because it was for you.

This troubles me too even though they are still young - we were lucky to buy our first house (a 2 up 2 down do-er up-er) in the mid 2000s when 100% mortgages were still offered and we earned less than £45K between us! It wouldn't be possible now let alone in 2040.