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?

The issue with this is that the McCarthy Stone types will simply carry on with their model of 'villages' or complexes where you can ONLY pay a small fortune & ever increasing standing charge costs to the company owning the complex in order to live there - and when you sell you can ONLY sell back to the company at a loss, OR give them a massive cut (30%) of the sale fee.

What it actually needs is more smaller 1, 2& 3 bed houses built generally NOT 4-6 bed detached 'luxury' properties (which obv is more profitable per sq ft for the developers), but agree with you on a downsizing = no or less stamp duty scale.

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.

@ViciousCurrentBun Nobody I know who’s bought in the past ten years has bought alone. One thing I find concerning is the possibility of a lot of people starting off in shit relationships they know instinctively are wrong, but they carried on with because they needed their partners salary to enable them to get on the property ladder, and then feel trapped because they can’t buy their partner out or have the sane lifestyle on one income. Obviously this has always happened, but with the gap between wages and house prices ever-growing this could be an even bigger mental health issue than what it (possibly is now).

If you are buying a house half the size of your current one, it’s not going to be as expensive as your current house.

And - they don’t need to have management fees. You don’t have to downsize to a specialist retirement village.

I agree that part of resolving the housing crisis is building suitable housing for older people - that is accessible flats.

How much does it cost to commute from Coventry to London?
It's offsetting the cost of travel vs the mortgage vs salary. It's not always cheaper to move further out if you factor it all in.

You are the generation that OP is talking about. Yes, you were fine. Things were different then. Single people on medium salaries are rarely buying houses now and certainly won't be at all in the very near future.

I have no idea how they'll manage - it was a huge issue for us - late 40s.

They have examples to follow - us moving to cheaper areas - my siblings in HA housing after long spell with serious housing problems - or previous generation emigrating.

I have read that for every year from now on the baby boomer generation dying will be a 2% downward trend on house prices - but if they are still going up due to demand and supply not sure it will be huge change. I know some economists in USA are surprised it not had huge effect and talk of hoarding housing but actually what happening is retried people are staying in houses they actually own.

Generally speaking many in european countries prefer to rent, for flexibility. There are also greater rental rights (obviously these vary country to country)

This is certainly the case in the city in which we live. Bungalows are really expensive as are decent sized flats, We wouldn’t realise much if any capital if we sold our three bedroom semi for a bungalow or flat in our current area or an equally nice one.

When these types of questions come up, I often wonder what kind of jobs people do that enable them to afford these huge mortgages. The house prices particularly in the south are astonishing and I can’t get my head around how the average person/family can afford the ridiculously high prices considering the average wage is £35,000k

Tech, finance, law.

the upset for suggesting the baby boomer generation is usual in its wealth levels and it’s not looking like those in their mid-40s are on track to replicate it and so the housing market in 20 years time might be very different.

that’s not wishing them dead, it’s pointing out they are aging and the unusual pattern they’ve created in the housing market is unlikely to still be a factor when those who are small children now reach their late 20s/early 30s. That if their deaths are to settle housing markets, it’s important that all their housing stock doesn’t just pass to their dcs who then keep the houses/flats and rent them out but sell them and make them available to buy.

Yes of course you have to factor that in. It’s probably around £12000 for an annual season ticket now. However, if house prices, council tax, cost of living in London, higher school fees if appropriate, are all factored in it is probably still something to consider. Terraced houses in many parts of London sell for a million or more, you could buy a detached home in a village within striking distance of Coventry station for half of that.

@ssd They bought houses further out which were the same prices as flats closer in, why would inheritance be relevant?

I definitely agree that’s where high salaries can be for sure, but not everyone in those fields earn such high salaries. The two family members I know that are solicitors both rent still - tbf that’s through choice, but they’re in their 40’s so being doing it for many years. One works in criminal law and the other commercial and they’ve both told me that people assume they’re on mega bucks but they aren’t at all. They live hundreds of miles apart too. They could afford to buy but nothing like the amount they’d need to buy say a £500,000k house. Blows my mind.

I think house prices have peaked tbh.

If something is so expensive that no-one can buy it, the only choice is to bring the price down. The vast majority of property (85%) is owned by the Boomer generation and much of that is rented out. It's becoming less profitable to rent out houses and many younger people don't want the hassle, so as that property is handed down and there's more property on the market, the prices will come down.

It's also highly dependent on how you work and where you live. We WFH so we can live fairly rurally and our house was not expensive. We are average people and earn average wages. If you need to live in the city that's going to cost a lot more.

My plan is to pay off the mortgage on this house by my early 50s, keep saving, and then when we have enough to retire, go and buy a house somewhere cheap and sunny and give this one to my daughter.

few lenders will give mortgages that go beyond 25 years if you will still be paying it in your 60s. The vast majority of people get 25 year mortgages.

@FancyBiscuitsLevel why do you think that?

As I said…

“Half of all first-time buyers in the UK, and over a quarter of home movers who took out a mortgage in the third quarter of this year opted for a term of more than 30 years,”

And to 70 is quite normal.

My son is 26 and is living with me whilst saving for a deposit to buy his own home....He has a London salary but only needs to be in the office once a fortnight so living with me in Norfolk is fine..Its hard for him as he is single so trying to do it on his own.

DS 17 get around £11.40 ph and he is a local authority employee. They pay well compared to other places . He is already doing well saving up his wages.

When I started work in the mid 70s the interest rate was around 15% and there was practically no rental property outside council housing which I would not qualify for. So the only option was to buy - just like the rest of my friends and co-workers. In order to buy we had to save for deposits and then budget for mortgage payments (50% of my wages at the time). This was done by working overtime, not going on holidays, going out once a week and spending practically nothing and cutting back on all luxuries for at least 7 years.

So where did you magic the deposit from?

Also 15% interest rates of a much lower amount isnt much different to 5% of a higher amount!

Tech, finance, law

even in these jobs plenty don’t earn 100k.

@westisbest1982 I know only one person who has bought alone in the last decade. A friends DS but he got a big discount on a keyworker house on a new build estate. Two houses available with 150 applications. He was incredibly lucky, the discount was 30% I think. He will have to pay some back when he sells but there is no way he would have got a house. He lived at home till he was 25 and did a degree apprenticeship as well so no tuition fees.

I feel sorry for young people that do not get on with their parents or it’s just not physically possible due to space to keep them housed or they have to. I’ve for work.

What's the age cut off for those exposing getting "old" folk out of their large houses?? My group of friends, a mixture of 60/70 are still in their large family houses, with big gardens. None of us are contemplating moving soon. Why would we. Our kids are still 20's, still come home regularly. Some are coupling up and getting towards marriage and children, for which you need to keep your space to accomodate.

I suspect we might move late 70's/80's, but then not to substantially smaller, maybe just different a different area. I would hate to live in a flat in a city, or a retirement complex, full of other old people, how dull.

I worry about this a lot. Recently divorced so my ex and I have been lucky to each get new mortgages but that has meant the savings we were hoping to give them to help buy a home is now hugely reduced. I'll be paying mine off into my late 60s easily, so I also worry I won't be able to help them through uni etc if they go. I know it's not a right that children have but we all want our kids' lives to be less of a struggle than our own.

My mum made me worry a bit less recently though (also a boomer but quite young) - by the time the kids are old enough to consider a house, older (richer) grandparents are likely to pass some money on. Morbid, but true and made me worry a little less.

Don't get me started on pension worries ;-)

Obviously it's nice to stay in the family home forever, but downsizing is an easy way of freeing up equity to help your kids buy a home. If they already have enough money then no need.

Clearly lots thinking about this right now https://www.theguardian.com/lifeandstyle/2024/nov/17/bank-of-mum-and-dad-why-we-all-now-live-in-an-inheritocracy