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?

But maybe they want to? Maybe they have a secure job they love there, family, friends? Why should young people be forced to find other jobs which will pay less, to fund a house that costs less; in relative terms that is not going to help repay a mortgage anyway.

i think your anxiety has taken over here. This is not something to be terrified over. It’s just housing. They might buy later, they might rent, they might have stellar careers, they might not want to buy, they might marry rich, they might travel the world and settle elsewhere.

this is not a normal thing to be terrified about. Start looking into how to manage this anxiety. This is a normal societal issue. They aren’t in any danger. It will be okay.

Home ownership is going back to where it was when I was a child. Those in good jobs with good salaries were able to buy a house (although I accept that back then it was often on 1 salary). Those on basic wages or slightly above rented/lived in a council house.
What needs to change is the culture around renting in this country. People need reasonable rents and security of tenure (such as council housing used to give many). I'm 60 now, and as I child, many of my school friends lived in council housing. None of them had to stress about being forced to move and change schools. We all grew up in the same community throughout our childhood regardless of our housing status.

It's a luxury to stay where you are born in this economy.

This is an issue that is causing and has caused a lot of distress.
I am still at home. My siblings have only left as they have partners who can support them.
I work but don't earn nearly anywhere near enough to live alone in the London/South east area. I am thinking I will have have to consider moving somewhere cheaper but would be very isolated and as I have chronic illnesses that flare up unexpectedly, I could end up somewhere far away from support. As others have said, it is a nationwide issue now as well.
The only people I know who have bought are those in couples or those who have received an inheritance. My parents are really quite wealthy but their thinking is 'You will be fine once we have passed.' which isn't exactly comforting or helpful.
I am 40 next year and feel deeply depressed because of this. I feel people really judge me for it and that the ones who do it are those who are older or in positions of privilege (Have a wealthy partner or parents who gift them the money etc)
I think about it and worry about it constantly. Most people are still at home in their twenties and even thirties but to still be at home at 40 is very embarrassing and I hate myself for it even though I know it's the state of how things are right now housing and money wise.

Im the generation u mentioned in your post. Started work in 1985 etc. Bought 1st house in 1996 for 25k etc.
However due to divorce & having to sell the house ( i got v little equity whilst ex husband sold the house to his parents and continued to live there rent free for a long time.. i was a single parent to 3 struggling in a council house. ( which i eventually was able to buy down to bloody hard work) .
So although im now ok. And was able to give my DC deposits for their homes.l. at 57 i have lovely new home 2nd marraige but will still have to work until retirment age!

The younger people I know who have bought homes in the last 5 years, in the expensive south east, have all bought as a couple, lived at home for a long time to save up, and are in 2 or 3 bed flats/2 bed terraces.

But they aren't seeing these properties as the first rung on the ladder, but a long term home, as the mortgages are huge. They also have plateaued in their careers so aren't expecting lots of rises, and they have hit chikdcare costs.

By southerners I assume you mean those in the South East? I'm in the South West and we do not benefit from the salaries of the South East. Salaries are low and public transport and indeed road links are poor.

I wish that we could get back to the state where buying a house wasn't seen as a necessity- the old council home system offered low rents, stable tenure, and decent responsive landlord ( certainly when I was young in the north east )

This is exactly how it is among my friends - all on good household incomes.

The first time buyer house is probably the only house - the next ‘rung on the ladder’ would require too much to be realistic for most - and their mortgages are often already several hundred thousand pounds.

The economics of house prices is very simple. Houses cost what people are willing to pay for them.

When lenders would only lend 3.5 times the largest salary that's what houses cost.

When people wanted a bigger or better house than their friends they agitated for both salaries to be counted in the loan amount. Then houses cost 3.5 times two salaries. The minute that some people do that then everyone has to do it because houses cost what people will pay for them.

In the days of very low interest rates people were able to borrow more because the repayments were lower. So houses started to cost 4.5 times two salaries. (Someone mentioned earlier that houses now cost 9 times average salaries, it's actually 4.5 times 2 average salaries.)

When the Bank of Mum and Dad comes in to the equation then that obviously only exacerbates the problem for everyone else who doesn't have access to that as it increases what some people can afford to pay and therefore fuels price inflation.

It's not some sort of conspiracy which some people seem to feel, and anyone who historically made money from their house did nothing wrong.

Whilst house prices and the situation is dire for young people working in HQ of a large bank will have people that are more financially savvy than most. Hence they bought BTL at the right time.

@usernother I did buy a 2 bed flat in the 1980’s when I was 21 in the SE with my ex. I started working at 13, during A levels I was working 20 hours a week in a supermarket. A militant Labour teacher had used class time to give anti capitalist lectures. He explained the evils of the stock market and got us to fake invest. I remember thinking though risky it’s free money. I would never have known about it otherwise, his lecture had the opposite effect on me.

We have taught DS about money and investing and he has had a LISA for a while. He got a paper round at 13. Now in his final year doing a degree apprenticeship, it’s his fourth job by 23. We will give him some money but haven’t decided how much yet.

It is very different times now, you can be as financially savvy as you like but it is just much harder for young people. My flat cost 34k in a small mansion block conversion. The last time I looked it sold for 250k.

I’m in my late fifties as well as location, career, investments and attitude to spending. Thee is a very obvious divide between my friendship group financially on who has been in a very long term agreeable relationship.

Educate them about relationships. People talk about broken hearts but it often means a broken purse as well. Plus rather alone than sub some parasite, my SIL has done this for years in two relationships.

This is the problem. Leases need to be longer (minium two years) with a six month notice period. Families suffer greatly when they have to keep moving around. Children's lives and education are effected.

The younger generation are being absolutely shafted. It very unfair. Yanbu.

There’s a lot of ‘average’ people working at top city firms earning well in excess of 100k.. trust me..
What reason could they not do this too?
Do they lack confidence or self esteem etc?
How old are they?

My DiL is just buying a house, in a cheaper area than she currently lives, and her mortgage is, slightly, less per month than her rent!
So anyone saying to rent, it doesn't make sense if you can buy!
None of my DC can afford to move back to this area until we die

Also average in the SE here, but DH and I managed to buy 10 years ago with no family help, just from living sensibly (and being lucky with our landlords not putting up the rent in four years!) and saving religiously each month.

But I realise it is much harder now and will be in the future and I am already thinking about this for my own DC who are currently primary-school age.

Which is why we are prioritising saving to pay off our own mortgage (our savings interest is higher than our mortgage interest) over things like extravagant holidays and home renovations. So if all goes to plan, we should be able to pay off our mortgage in 8 years when our fixed term comes to an end (and still have savings left over). We will then have a further £1.1k a month to put into savings.

I'm not saying we will pay (or even have enough to) our DCs' full deposits, but we can hopefully give them a leg up. Also, if they are happy to, by living at home paying minimal rent, they should be able to save a good chunk (as long as we can instill in them the importance of saving!).

Nobody needs to buy a house. What is needed, however, is affordable, secure rental properties that people can live in long-term.

My ds plans to buy a cheap house east mids as HMO investment when he is 21 plus he is already doing bitcoin as a long term investment.

Only 4% of the entire population earn over £100k though.

I’m not convinced it’s worth getting onto the property ladder anymore. If someone needs to go into a care home when they get older, they need to sell their property to fund their care. And once all that money starts to run out and they can’t afford to pay care home fees they get moved to somewhere else which may or may not be a nice place to live. And the level of care might not be as good as it was when the elderly person was paying loads of money for care.

Other older people who haven’t bought their own homes don’t get robbed blind to pay for care home fees but still get care of some kind or another funded by the government.

It’s all a bit shit really.

Because we have all had to do it?

I don't live anywhere near my parents. Neither does anyone I know.

We all move for work.

If your parents live in a small town, you can't expect their to be loads of jobs in that small town.

Many people move for work

Yanbu, my kids are teens are I really worry for them
for their generation unless there is shit loads of family money (unlikely) or they end up hedge fund managers in the city (even more unlikely) house buying will be impossible.

we are in the extremely fortunate position of nearly having paid off our mortgage so now we are saving for them, but it won’t be enough for a deposit the way things are going.

dh and I both stand to inherit a bit (not a lot) and that money will likely need to go straight to them to top the savings.

This. Which is what happens on the continent

Mine won’t. The only inheritance is from my mum (rental) and I live in social housing. DD will most likely be the same.

I am saving up for her, so she can at least have something.