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?

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.

Loads of people need to do this for uni costs though.

And there is an issue that even when younger people do get on the ladder, they are often stuck on it. The concept of climbing it doesn’t really work now.

Absolutely no point comparing what you could do 30 odd years ago as to what young people face now.

Inheritance is the great divider now.

The idea that doing the right thing, studying hard then working hard and then saving hard will get you what you want is not often realistic any more. It’s a huge problem for society.

It’s not that expectations are unrealistic. It’s not that young people are deluded or stupid.

Why bother to do the right thing when it gets you nowhere? We need to look after the young people better. Give them hope

My eldest dc is 24, her and her dp have just bought their first house for 130k. It's a two bed terrace in the north of England. They have saved 5k each over the past two years by living at home and paying a nominal rent. We saved too and are gifting them 3k. My dd earns 23k and her partner earns 28k. Their mortgage will be (roughly) £700 per month. We are working class.

People in poverty can't afford to buy property and this has always been the case. Middle class people can afford property just not the property they want to be able to afford.

100% agree with you OP. I have 2 DC aged 20 and 21 and whilst both are at Uni I do feel their generation have got it really tough. As a single Mum there is no hope of me being able to give them a lump sum, I barely keep my own head above water with mounting living costs.

No family money here but we brought our first house at 25 (10 years ago - 2014). Both partner and I started in professional jobs straight after uni, and we have always been very frugal. Even now days we aren’t great at spending money and like to have a backup. Salaries started around 20k and increased to 25k each by the time we brought our house. First house was 130k and we put down 20k (now days it’s 180k). This is north east so house prices are lower! After 6 years and overpaying our mortgage like crazy we moved to a 4 bed house out of the city in nice suburbs for 300k (had 100k equity by then)

We are reasonably privileged, white middle class. We have large student debts, but had nice home life’s and went to good schools. Never had to worry about food or heating growing up. We both had it drilled into us from a young age about money and how to be sensible.

OP - my point is the other thing you can do is teach them about loans, the value of money. If owning a home is important to them they can make it work. They will have to buy the worst house in the best location possible, learn some DIY and over pay the mortgage as much as possible before having kids. Then once they have a good amount of equity it opens up options.

Its 100% getting harder and harder for people to be able to afford houses, the rent wipes out a lot of people’s ability to save a deposit up. I have opened up saving accounts for our kids with the hope we can help them in some way for a deposit.

I think there already is.

The idea that doing the right thing, studying hard then working hard and then saving hard will get you what you want is not often realistic any more. It’s a huge problem for society.

Wage stagnation is a huge issue, wages are pretty crap for many now.

Also huge lack of council housing now which would have housed many in the past.

It's really hard for young people these days. You can't magic up money you don't have, but you can encourage saving from an early age. If it's possible for them to live at home with you rent free (or for a much lower rent than market rate) that can really help them save a deposit. That's probably the biggest help you can give them.

What a clueless post.

A few facts:

The average price of a home in the 80s was three times the average salary. Now, the average home is NINE times the average salary.

Londoners used to spend 15% of their income on rent in the 80s. They now spend 46% of it.

The last time home prices in the UK were this expensive relative to earnings was 1876 - the year when the bustle went out of fashion.

Start saving for them as soon as they are born, even £10 a month from birth helps. We asked for money as her bday + Christmas presents in her first year and just put them into her savings.
Encourage them to save as soon as they get weekend/holiday jobs.
We will match DD so whatever she has saved for a house deposit we will match it as that's what we've been saving for.

Without parental help it is very hard.

I hear you but just do your best for them. I get anxious about this type of thing and we live below our means to squirrel money into pensions and try to save for the kids. We're lucky that we bought a nice house in a decent area 10 years ago. Still have a reasonable sized mortgage as we've released equity for a few things - again that puts us in a privileged position as that's been as a result of house increases.

We're surrounded by a lot of 'keeping up with the Jones' people who are mortgaging themselves to the absolute moon to get the big house in the right postcode and the big cars. They don't earn any more than us but are obsessed with bricks and mortar and I sometimes wonder what the right thing to do is as everyone has a different take on how to operate in our somewhat niche property market in the country.

I'm 34 and I don't own a house myself, let alone help my DC buy one. Many working class families have always rented!

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.

I'm willing to downsize at some point but my worry is that if DC marry and then split up, I'll be giving half of my house equity to their ex-H.

I’m more concerned there won’t be any future at all tbh ! With climate change etc buying a house could be least
of their worries.

But that’s a risk we all take when me marry I guess, unless they do a prenup

My central London job is found in almost every LA in the country. I live in Greater London as close as we could afford to our jobs and have lived here all my life. Luckily the commute for us is no longer every day but it was 2.5 hours a day. House prices here used to be doable. I could follow all the advice given to FTB and get on the property ladder even if it took a few years. A 2 bed flat is now hard to find under 300k. There are LA's where pay is 10k less including London weighting yet the difference in property prices and rents far outweighs that difference.

It’s the old saying that DC get more expensive as they get older …….. and for both mine to have a chance, if they want to stay local, then we will have to help them, but it’s not just deposit, they have to be earning enough to secure a mortgage.

I think if someone has been renting, paying on time for a period of time, should be eligible for a mortgage providing payments are not more than or similar to rent they’ve been paying, without having to find a big deposit.

You will need to encourage them to save, Op, and work smart and hard. For them - no O.S. holidays, new Smart phones or designer gear. Cook beans and rice from scratch and have a vegie garden.

You could seriously try to expand your own property portfolio, give it all your savings and have the kids invest in the same property portfolio as partners. After thirty years when you have all bought as many properties as you can, negatively gearing, you could split the business and have each one own part of a building, with a mortgage.

You could encourage the kids to become Plumbers, Builders, Electricians and Cabinet Makers and they could buy land, build houses and end up owning their own house.

You could prepare them for renting.

You could encourage them to buy a caravan.

You could encourage them to look abroad and buy a property in Europe or Asia as a holiday home, which they could eventually retire to.

You could steer them to pooling their finances and buying a country property together, then another, then another.

This is my worry too. It might be bleak but its realistic.

What jobs are they doing that earn that much at their age?

What??

£10/month for twenty years would about pay for the solicitors fees and leave you with about a grands deposit, surely?