Are young people today worse off than their parents?

Alan_M_2

I think there's a lot of looking through rose tinted spectacles about how good it was, the above post is a fine example, I'm reading that as a good description of the early 50's. - That's two generations ago.

Credit (HP) changed how this country operates, before that existed there was no choice but to save up to pay for something or borrow from your parents.

Are we better off or worse off now? I don't think it's a relevant argument as the social pressures are different, money is easy to borrow which means prices can rise - it's a self feeding spiral.

On a daily basis driving around I will see at least 5 £100,000 plus cars - seeing a Bentley or Ferrari or Porsche now isn't something that people stop in the street and stare at, they are commonplace.

People are now less concerned with ownership outright, leasing and contract hire are now commonplace with vehicles, even at a private level and the same product has snuck into the housing industry.

Interest Only mortgages, these are like a finance arrangement with a balloon payment at the end, when you get there, you part exchange for something better - or downsize to clear the capital repayments.

Renting now has less of a stigma attached to it than it once did, it gives a greater degree of flexibility, but on the downside less continuity.

We are without doubt in a housing boom, that's clear for anyone to see, bulls and bears alike, at the peak of the boom the rich are very rich, the comfortable are very comfortable the poor are struggling like they've never struggled before - for poor read working class - no offence intended:) The economy will ebb and flow, right now we're at high tide, this will drop as inevitably as time marches on, it is after all a cycle.

This entire topic of conversation has been plodding along for centuries, we we're always better off than we are now and it's summed up nicely in an article written for the Chicago Tribune by a journalist called Mary Schmich. This was then famously turned into a number 1 record by Baz Lurhamn.

A lot of people think this is some old load of schmaltz - judge for yourself.

http://www.youtube.com/watch?v=z7zBr96m_VI

mrsc_4

My parents think that we have it harder now than they did (I'm 26 and Hubby 33). Personally I don't know, our mortgage is nearly 8 times what my parents mortgage was when they first brought but equally our salaries are pretty comfortable as well so it balances itself out.

Personally I agree with Livinginhope.

catkins

Moneywise most youngsters seem to be much better off. All the youngsters I know seem to have cars, foreign holidays, go out drinking all the time. Good luck to them but then they moan they are hard up and cannot afford a house. When I was 18/19/20 whatever there was no way I could afford to run a car and holidays were a cheap week in this country or maybe Spain if I were lucky and I had a pretty well paid job.

I know it is not easy to get on the housing ladder but myself and OH certainly struggled before we could buy a house. We literally did not go out for a couple of years and all the furniture we got was secondhand. How many young people would think of having secondhand stuff in their houses? Also seems young people want a three bedroom house straight away - no starting small and working up

Generali

catkins wrote:

no starting small and working up

Much harder to do this due to current Stamp Duty regime.

catkins wrote:

All the youngsters I know seem to have cars, foreign holidays, go out drinking all the time.

Undeniably true. However, the prices of this stuff have fallen significantly over the past 20 years. It's easy to afford to go out and get drunk these days or to buy a DVD. Very hard to afford to buy a house or a private education.

sm9ai

kittie wrote:

The younger ones in other families ie the children seem to get such a lot of material goods and the whole family goes on foreign holidays to places like Florida. They `need` two cars and money for all sorts of extra activities etc

Thats the thing though, Young people have money, more than their parents had at their age. So yes in some ways they are better off.

But to buy something important i.e. shelter, this is out of their reach(and not because they spend money on other things) so they may as well spend their money on something.


I would say younger generation is better off than the older generation but not than the middle generation.

In my view those born in the early 1970's are reasonably well off.

Those born in the 1980's and later are worse off.

zag2me

Yeh I think its about the same too, I remember my dad saying he couldnt get a mortgage as a single bloke because the company just wouldn't lend to him.

Oh how times have changed.

movieman

Young people have money, more than their parents had at their age.

That's because they can't afford to buy a house... so they spend their money on other things instead, and borrow the rest. As others have pointed out, the things they spend money on are either cheaper today in real terms or easy to get on credit.

As for incomes, I've seen graduate jobs advertised recently that paid no more than I got just after leaving university in the late 80s, when my sister and her husband were able to buy a four-bed house for 28,000 pounds (ok, they spent a few thousand more on building work over the next few years, but a house in the same location in a similar state would be 200,000+ these days when salaries in the town are probably not much more than 50% higher).

I think its about the same too, I remember my dad saying he couldnt get a mortgage as a single bloke because the company just wouldn't lend to him.

Could your dad afford to buy his house today? I don't know anyone who bought before 2000 who could do so, and that seems a pretty clear sign to me that kids today are far worse off.

Also seems young people want a three bedroom house straight away - no starting small and working up

Again, I don't know anyone at all who 'started small and worked up'. They just bought three/four bed houses (or flats if they didn't plan to have kids) and most have stayed there for decades since. I don't know anyone who's deliberately 'climbed the housing ladder', because they had no need to.

dianadors

I agree with Daisies. The way that people live their lives today is so very different from when I was starting out on my own - and its not the "fault" of the younger generation - its my generation that have made them this way. Although higher education was free - I wasnt allowed to stay on at school to do A levels as my family needed me to earn an income to help support the rest of the family, so I had to pay board. University was out of the question. When I bought my first house, the cost was very very scary - I was also the first in my family to have bought a house as everyone had a council house. I had no financial help from any where. I had saved from starting work for a deposit by limiting how many times I went drinking with friends (I hated big nights out like hen nights etc as they were just too expensive) I made my own clothes, cooked proper food, grew my own veg, went without holidays and didnt have a car. When I got married, we got married in a church and had the local village hall for buffet and disco (a mate). I worked with lots of young people my age and this was the norm. I recently worked in a call centre as a team leader with lots of University students. They used to take home about £380 per month - for most, this was just drinking money, and it didnt cover the month!. They all had designer label clothes (bought by daddy), most had brand new cars(18th or 21st birthday pressies!) and almost all had holidays abroad with mates (paid for by parents). I see other parents my age indulging their kids to an obscene degree (and it doesnt make for nice kids either). I am increasingly looking for ways to revert back to "old fashioned" better ways. We never mooch around a shopping mall for entertainment - but you will find us on a good long Sunday walk. Holidays now are spent camping and have been the best holidays I have ever had.
I believe you can have "Anything" in life, but you cant have "Everything" - you have to decide what is important to you.

cupid_s

I think my parents were better off. At the age of 20 and 24 respectively my mom and dad bought their first house, a fairly large 3 bed semi, which is now worth about 180k. They did this by putting down only a 10% deposit.

Only my dads salary was accounted for and he wasn't particularly highly paid. The exact job he was doing then would now earn a 24 year old 20k a year.

If I wanted to buy their house now, and had only a 10% deposit I would need a mortgage of 160k plus. Is this possible on a single wage of 20k? Hardly!
We'd need both our wages to be taken into account and even then a 4x joint salary mortgage which some people might think is stretching things a bit and can lead to problems if you need to take time off to have children.

My husband and I instead bought a house much much smaller than my parents and put down 30% deposit (without money from parents). Hopefully in a few years by massively overpaying our mortgage now we can hope to be able to afford something along the lines of my parents home which is actually big enough to raise a family in, unlike our current house. We cannot afford to run one car let alone 2 like my mom and dad did when they bought their first home, and they have told us time and again we live much more frugally than they ever did/could. We are doing all this so at some point we can buy a house that my parents were able to buy without even trying!