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?

OP, you do not say and it is none of our business what the age of your children is.

Apart from the things mentioned earlier which amount to careful spending, I think that not going to university might be an option for some well paying careers. No large debt, start earning a full time salary three years earlier, and learning all the skills the world of work needs sooner.

The baby boomers are beginning to die off, give it another 5 years and many of the first half of the baby boomers will have died or gone into homes.

The big question is what will happen to their property wealth. If it’s passed to their dcs (older millennials and youngest gen x), will that generation continue to keep up house prices, or if they are sold to pay for care homes/pay off their children’s mortgages/their DCs invest the money in something other than property, will there be enough of the younger generations with money to keep prices up.

The oldest of the baby boomers are 78, the youngest 61, give it 20 years and the property market may be very different, following them leaving the market one way or another.

My DS works in a cafe all weekend but for only £7 an hour - this still gives him nearly £400 a month which just goes into his savings. He can't got 'out out' yet as he's only 17 (and no fake ID!) and is at work all weekend anyway. He's racking up his savings much to the jealousy of his brother!

Going forward we will need to be less focused on what the next generation will inherit, and so wealth will be used currently, not tied up

How old are the children? They already sound pretty lucky to me.

I've been thinking about a bit recently. I've concluded that although we will hopefully be in the very lucky position to help them significantly, the way things are going it still wouldn't be "enough" to save them from struggling. But, I concluded that maybe that's not the aim, letting them grow up thinking they will be looked after and not expected to struggle at all for what they want like most people have to would do them a massive disservice.

So, we are going to try and give them the confidence of a 'safety net', in as much as they always have a home with us and can ask and we'd never see them on the breadline, but never allow them to actually expect a house deposit. When it comes to it we will help them, but hopefully by then they will have learned to help themselves too. Also, I really think teaching financial literacy and sense is really important. I talk to my teen about e.g. interest rates as news stores emerge (not lengthy lectures, I'm not that cruel!), drip feed info on the real cost of stuff in relation to average earnings, share outrage on how much it would cost to auto renew the car insurance rather than shopping around etc. The younger one gets more age appropriate exposure - no we are not buying the £400 Lego set for you today or ever - but admittedly he seems to be struggling more and is more naturally an "in the moment" kind of chap, so I might be talking bullshit after all! But I figure I can only do my best 🤷‍♀️

I agree with this. These are good options and young people need to be aware of them early on.

My DC are 10 and 12, and I don't foresee us being able to give them a lot of financial help. We're not likely to inherit anything much and neither DH or I will have huge pensions. However, we have a largish house in a northern city and dc are welcome to stay living here as young adults (easy to say now!).

Personally I was never bothered about home ownership in my 20s as freedom was more important to me, and I moved around and lived abroad until I was 30, then bought a house aged 33 with DH. This honestly suited me but quite rare among my friends who were all keen to buy in their 20s - and most of them are better off than me at this stage (I'm 48). I can't say I regret it because it's what I wanted and I was lucky to be able to travel and do what I wanted - but obviously it has repercussions. Some of my friends made a packet by buying property early and now have money to give their kids.

The main thing is making young people aware of the options by the time they are thinking about careers, where to live etc.

Realistically, I think the best thing you can do is to discourage them from living in the south of England and encourage them to think about careers that pay well, ideally have a WFH element, and which won’t be adversely affected too much by A.I.

They need to start saving from as soon as they start earning. If they put a couple of hundred away from their pay packet each month, then they won’t miss it. As their salary goes up, then put more away. I admit though, if you’re renting that’s harder to do, but if you’re living at home with minimal expenditure, it shouldn't be so bad.

In our family, those that have brought have spent around £180000 and depending on location, have brought one bedroom flats to two bed terrace. So starting off small, but getting on the property ladder.

Op get a grip! Buying a damn house is not the be and end all. This obsession with the property ladder is ridiculous. I rent and will probably always rent and DD might have the same fate (the horror). Yes, I have invested in her name and have a savings to help when she studies (no longer live in the UK, which means that her education won’t be exorbitant).

I consider myself and DD to be very fortunate and the bestie can do for her is teaching her to live within her means, save and invest.

I think you are confusing ‘The South’ with London.

As a Southerner, when I have worked for large organisations I have earned the same as those living in Doncaster, Sheffield, etc. In fact when I purchased my first home (a two bed semi for £45k, my colleagues purchasing the equivalent in Sheffield and Nottingham area paid £10k, (yes, it was a very long time ago). They couldn’t understand why I hadn’t got a new car or that I didn’t go away twice a year, as they all managed to do.

Add to that higher travel cost, my local large town (not city) has a parking rate of £8.00 an hour in many of its car parks. Higher food costs, there was a discussion on here about the price of fish and chips and takeaways a few months ago, much cheaper in ‘The North’. I have travelled extensively to Northern towns and cities, and feel very at home there. If it wasn’t for caring duties that kept us down here we would have moved North to find something cheaper, and had a much easier life financially.

A friend of mine has recently moved to the Nottingham area to be near grandchildren. They have purchased a similar house for £180k less. Neither of them have had the benefit of London salaries, they have both worked for the NHS (not Doctor or Consultant levels) so would have been earning the same as everyone else in the UK.

I've got 3 and won't be able to give them much more than 10k each I shouldn't think.

I will be able to let them live at home rent free which is a massive help though.

It’s obviously much harder. The starting salary for my grad scheme was basically the same for over a decade while obviously inflation in everything including houses rose. People in their 20s have much bigger student loans than I did (and mine was pretty chunky for the time).

When we first had our flat we were on interest only with over 100% mortgage and paying less than 1%- the cost was minimal really. You just wouldn’t be able to do that now.

When I went to Jamaica on holiday I was surprised to see manh part built houses with scaffolding/ structures to build left in
Was told the Jamaican way is typically to build one floor at a time, increasing as the home owner gets more money as they get older. I can't see that happening here but it makes sense.

I completely agree it’s more expensive now but the cost of buying in the south east really pushes up the average.

London is horrendous and I certainly couldn’t afford to move back now (I left 20 years ago). Piddly little properties for astronomical prices. Just bonkers.

But elsewhere in the country there are many areas that are eminently more affordable. Even houses, not just flats, are at affordable prices for FTBs. Starting out on something like a shared ownership scheme is another good way to start building equity - I did this when I was 18 (no family money or inheritance and I was earning <£10k full-time in a shitty job).

I also think there was more of an acceptance that we would have to go without. Lots of us bought houses without being able to afford a sofa or TVs etc. There wasn’t the same expectation of the Instagram perfect lifestyle. I think there’s less willingness today for kids to make hefty sacrifices for their first property in the way that many people had to in the past. Social media has a lot to answer for and I don’t think it helps create realistic expectations.

None of that takes away the fact that it is more expensive now. But depending where you are in the country, it might not be as unreachable as some people seem to think.

Surely something will have to give in London though?! The SE market is crazy.

YANBU. It's tough and only getting worse.

Teaching your DC about personal finance is probably going to have more of an impact than a small amount of savings. Also, teaching them to be creative and resilient.

My oldest GD has worked since she was 16, as does her BF and most of their group. She’ll be off to uni next year, (STEM) and has a good career path in mind. She was fortunate to a) get the child ISA that the Blair government introduced; b) to have savings on top; c) to have parents with a good joint income.

My friend’s DGS and his girlfriend, both on average incomes, bought a nice, 3 bedroomed house last year in Yorkshire. They’re early 20s. It needs a bit of work, but that’s fine. My DCs were late 20s/early 30s, and had flat and house shares before getting mortgages almost 20 years ago. It is tougher now, especially in the hot spots, but many, many young people are already buying homes. Totally agree with @SecretSoul that having realistic expectations around what they can afford helps too.

The social contract is broken. Young people are sold a lie. They can “work hard,” “save the pennies” and for what? Two professional salaries only just about get you a one bedroom flat these days in a semi-desirable location in the south east (if you’re commuting into London.) At the tender age of 25 my parents, on one professional salary (dad was a sixth form teacher) bought a 3 bed, semi-detached house in Reigate, Surrey. Mum stayed at home mostly, and raised the kids. She had some part-time jobs here and there, cleaning offices locally and in a shop.

Now take that same circumstance and plonk it in 2024. Would DH and I be able to afford the same quality of housing on one professional salary in that area? Absolutely not. What do young people have to aim for if they know that despite their very best efforts they can’t get themselves on the property ladder which is so much more preferable to renting!

I encouraged my DC to go into high earning professions. One of them took my advice. The other one didnt and is now wishing she had.

A lot to of young people I know are buying or have bought their first home.

They have saved hard, lived at home and have bfs/gfs who have done the same.
A lot are in the trades so have bought tiny grotty flats as FTB’s

I think that outside of working in a bank people are paid a lot more. I too worked in a bank in the early 80s and it goes down as the crappest paying job I have ever done

We recently relocated 300 miles from the south east for this reason. We have 3 teenagers, none are going into highly paid fields and we can't afford to help financially as we have average incomes ourselves (and still haven't bought a house yet!). We wanted them to have the option of staying at home for a few years and saving a deposit, in an area where it's actually possible to buy a home on a normal wage.
It was a huge move and took years of planning, but they were all on board and it seems to be working out well.

A lot of countries in Europe have very tight rent controls and it’s literally impossible to get someone out of a rental and even then you have to prove you need the property for yourself or your child. Could still take a year or longer. None of these measures/laws would be popular in the UK.

also means it’s not as lucrative to be a BTL landlord.

The real inequality is generational. It’s just mind blowing that people in their 60s-70s have had the opportunity to sit on so much equity rise. Not everyone, I’m aware, but the vast majority.

in the village I live we are struggling to buy a family home. Even as little as 20 years ago houses selling for £150-200k are now priced at £900k (we are midlands - not south east!)

my parents bought land for £47k in the 80s in the S east. Now worth millions (it won’t go to me)

my in-laws bought their modest house for £50k in the 90s, now worth £300k and been mortgage free for 30+yrs

it’s incomparable and fucking infuriating.

Just following up on what others have said above: if your children are 18+ and are saving for a house deposit they should really look into a LISA as the government top up any savings by a significant amount: Lifetime ISA

I’ve got no idea how DS will manage it. He’s doing a course at work next year which will earn him a bit more money but it’s still only about £14ph so not great. He’s 21 but I know for a fact he’s got no savings 🤷‍♀️ I can easily see him being with us another 5 plus years (likely more) whereas I was gone at the age of 20.

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

To put it in perspective in 1979 I was paying £60 per month + bills. My banking job paid £80 per month