Do you fear for your financial future as Mr & Mrs Average.

Callie22

FatVonD wrote: »

On the subject of mortgages (I'll probably get flamed for this :eek:), I know things have changed since I was young (less social housing though single people weren't top of the list for it then anyway and still rented privately) but there does tend to be a sense of entitlement to home ownership nowadays. When I bought my first flat (in 1981?) it was pretty unheard of in my social circle and things were really tough, (I was always having my phone cut off :eek:) I borrowed the deposit from my dad and worked 2 jobs for years to keep up the repayments but most people in those days rented and nobody was outraged if they couldn't get on the housing ladder and maybe things are going full circle.

I don't think there's a sense of entitlement amongst young people, but I do think that there are lots of young people who are realising that they're unlikely to ever own a home - it's incredibly depressing to feel that you'll be renting for the rest of your life, with little security, privacy or control over your surroundings.

There is something of an attitude amongst 'older' homeowners (i.e. those who were able to buy before house prices went insane) that young people just can't afford a home because they're spending all of their income on consumer goods, booze, mobile phone contracts, flash cars and designer clothes, and if they just cut back and saved, then they'd be able to afford a home. I think that this is unfair and unrealistic - most of the young people I know (and I'm older than my username would suggest) don't live like that, and have no chance of getting on the housing ladder without significant help from their parents/families to get the kinds of deposit you need nowadays. It's galling when people who were able to take advantage of 95-100% mortgages, lower prices overall and low deposits criticise young people today, and suggest that if you just didn't have that iphone (which I don't have, btw), then home ownership could easily be attained.

The reality is that 10 years ago, my OH and I would have been able to get a mortgage pretty easily, on my wage and OHs earnings (he's self employed). Nowadays, that's pretty much impossible. So we save and we wait - but saving is hard when you rent. Every time you move it costs you a couple of thousand pounds, when it's all added up, and when you're moving every year or so, as we've had to due to combination of bad luck and bad judgement when it comes to landlords, it's very hard to build up savings. If we hadn't had to move, we'd probably have pretty good deposit by now. We live very frugally, I cook, freeze, buy in bulk etc. We are careful with the heating, we don't have a tv, or sky - our luxury is an internet connection. We don't have contract phones and all of our furniture, bar our bed, is second-hand. That's the reality of how we live, and sadly nowadays that's not enough to get you a home.

I don't have the option to live with my parents and save - my parents live in a very rural area, and are self employed. If I moved there, the only work open to me would be seasonal work in catering or hospitality, on minimum wage, so saving much would be unlikely anyway.

I'm not expecting a house to drop into my lap, nor am I expecting it to be made easy when/if I do ever get a home. When you get a house, it's hard no matter what. But I do think that sometimes those who own homes forget that if they were young/er now, they probably wouldn't be able to get on the housing ladder either, no matter how they lived.

JodyBPM

Dunroamin wrote: »

Although this is all very laudable and MSE I couldn't and wouldn't live like this. Suppose (heaven forbid!) that something had happened to one of you and you had to look back on all those wasted years which could have been filled with pleasure and happiness as opposed to rhubarb and sprouts.

I'm all for being non consumerist but life is for living and not just for saving for the future.

Absolutely, its not for everyone. Very much a short term pain long term gain situation, and the thought me might step under a bus and never enjoy the fruits of our labour definitely had occured to us. But the mortgage was small enough and we young enough for it to be worthwhile and have a long time to enjoy the gains.

We started out with £100K mortgage for those that asked. We bought the house for £180K back in late 2002, but I had equity to put in from a flat that I bought back in the mid nineties.

Fortunately I will never have to eat brussell sprout curry again. Still love rhubarb though:)

FATBALLZ

I agree with other that "Mr and Mrs average' is a completely misleading way of looking at things. There are certain demographics that have things very easy, and some that have things very hard. Post #32 explains this very well.

Quite simply if you bought a house pre 2003 (ish) and are not sat on 100k+ of equity, or are not virtually mortgage-free, you are a buffoon. Pretty much everybody who hasn't had a dire change in circumstances from the group should still be very comfortable. This rubbish about rising fuel prices is total guff. I have to pay more on my student loan than most of these people pay to buy petrol.

Young people are the ones who will get all the pain from the financial crisis. They don't have £100ks of unearned housing wealth to support them in their future old age, almost all of them have been blocked from joining decent pension schemes, they have little prospect of home ownership (other than hoping to inherit), have to suffer unregulated and highly expensive private rentals and due to been the guinea pigs of Labours failed education policies have a lifetime of an extra 9% tax band taking away what little disposable income they might have.

FatVonD

Callie22 wrote: »

I don't think there's a sense of entitlement amongst young people, but I do think that there are lots of youung people who are realising that they're unlikely to ever own a home - it's incredibly depressing to feel that you'll be renting for the rest of your life, with little security, privacy or control over your surroundings.

There is something of an attitude amongst 'older' homeowners (i.e. those who were able to buy before house prices went insane) that young people just can't afford a home because they're spending all of their income on consumer goods, booze, mobile phone contracts, flash cars and designer clothes, and if they just cut back and saved, then they'd be able to afford home. I think that this is unfair and unrealistic - most of the young people I know (and I'm older than my username would suggest) don't live like that, and have no chance of getting on the housing ladder without significant help from their parents/families to get the kinds of deposit you need nowadays. It's galling when people who were able to take advantage of 95-100% mortgages, lower prices overall and low deposits criticise young people today, and suggest that if you just didn't have that iphone (which I don't have, btw), then home ownership could easily be attained.

The reality is that 10 years ago, my OH and I would have been able to get a mortgage pretty easily, on my wage and OHs earnings (he's self employed). Nowadays, that's pretty much impossible. So we save and we wait - but saving is hard when you rent. Every time you move it costs you a couple of thousand pounds, when it's all added up, and when you're moving every year or so, as we've had to due to combination of bad luck and bad judgement when it comes to landlords, it's very hard to build up savings. If we hadn't had to move, we'd probably have pretty good deposit by now. We live very frugally, I cook, freeze, buy in bulk etc. We are careful with the heating, we don't have a tv, or sky - our luxury is an internet connection. We don't have contract phones and all of our furniture, bar our bed, is second-hand. That's the reality of how we live, and sadly nowadays that's not enough to get you a home.

I don't have the option to live with my parents and save - my parents live in a very rural area, and are self employed. If I moved there, the only work open to me would be seasonal work in catering or hospitality, on minimum wage, so saving much would be unlikely anyway.

I'm not expecting a house to drop into my lap, nor am I expecting it to be made easy when/if I do ever get a home. When you get a house, it's hard no matter what. But I do think that sometimes those who own homes forget that if they were young/er now, they probably wouldn't be able to get on the housing ladder either, no matter how they lived.

The reality for my generation was that in your 20s you lived in a series of house shares/grotty bedsits and if you were able to afford to even just rent a whole flat to yourself then that was the ultimate in sophistication and you were very fortunate! It was exceptionally rare that a single person would even consider they would be able to afford to buy their own property. I wouldn't have been able to save the deposit and wouldn't have been able to buy had my dad not lent me the deposit, (well, half the deposit, my partner at the time borrowed the other half from his employer) and the minimum deposit in those days was 10%.

Itismehonest

Cyril wrote: »

Moaning aside though it does seem that many people are struggling and the normal cycles of life are being cancelled / postponed due to rising costs of living.

ie leave school get job / go to uni

buy first home

meet partner buy bigger home / start family

climb career ladder

retire looking forward to 60's upwards to travel and enjoy life.

All hope of this has gone.

And there are no safety nets for anyone unless you are totally in the benefit system whereby all costs are paid.

Its a case of struggling to become established in a job / house at all and if you do hold on by your finger tips until some other curve ball arrives to take it away ie redundancy, spiraling costs, ill health etc etc.

I am so glad I am not starting out today.

I know moaning about it doesn't help but I do think we are seeing times a lot of us haven't seen before and there's no sign of it abating.

The problem is that nobody has a crystal ball. By the time people actually get to retirement age what may have seemed a very good pension can often look less than great.

25 years ago the average wage was about £13,500 but, then as now, many were earning much less than that. The cost of living doubled between 1987 & 2009 leaving many people permanently fighting to keep up & too many having or choosing to turn to the State to make up the difference.

Many chose to use property as all or part of their pension but that, too, may not have been the wisest move.

I don't see things changing. In 25 years people will still be shocked by how far their savings, pensions & cash don't go. The only difference is that the State, as we're now finding out, won't be able to pay out at anything like the rate it has done in the last decade or so.

We have & are still seriously considering leaving the UK - not so much on cost reasons but more due to what our society has become & the direction it looks set to go in. I'd rather live somewhere poorer in money but where people are less self-centred & have better social values.

Dunroamin

Callie22 wrote: »

I'm not expecting a house to drop into my lap, nor am I expecting it to be made easy when/if I do ever get a home. When you get a house, it's hard no matter what. But I do think that sometimes those who own homes forget that if they were young/er now, they probably wouldn't be able to get on the housing ladder either, no matter how they lived.

The fact that you talk about buying a house as a FTB is indicative of a different attitude these days. For many of my generation, after spending one's twenties in a series of houseshares, if one settled down with someone who was also working, you started off buying a flat and only bought a house if you were buying a wreck that was virtually uninhabitable. (And I don't mean somewhere with a dated kitchen and an avocado bathroom, I mean somewhere without an indoor loo and sometimes even electricity.)

My ex and I bought our first home, a flat, in 1981 having applied for a 100% mortgage, which turned out to be a 90% mortgage and a personal loan (complete with very expensive and non required insurance) for the 10% deposit.

FATBALLZ

Dunroamin wrote: »

The fact that you talk about buying a house as a FTB is indicative of a different attitude these days. For many of my generation, after spending one's twenties in a series of houseshares, if one settled down with someone who was also working, you started off buying a flat and only bought a house if you were buying a wreck that was virtually uninhabitable. (And I don't mean somewhere with a dated kitchen and an avocado bathroom, I mean somewhere without an indoor loo and sometimes even electricity.)

My ex and I bought our first home, a flat, in 1981 having applied for a 100% mortgage, which turned out to be a 90% mortgage and a personal loan (complete with very expensive and non required insurance) for the 10% deposit.

It's funny, you see house price related threads with two themes.

The first is where the younger posters are unhappy about prices (that have risen 200% in 15 years, if you hadn't noticed), you get the older posters saying 'oh thats nothing, in my day you lived in a hole til you were 60, then bought a shed'.

The second are more general ones about experiences and you see plenty of posts from the older posters saying 'yeah I got my first place when I was 20 and traded up 2 years later'.

Incidentally, my parents were first time buyers in their 20's, my Mum didn't work, and they had 3 kids.

Itismehonest

I think the thing that helped a lot of people get onto the housing market was the old Council Mortgage. In some cases you could even get 100% mortgage - often with retentions for getting necessary work done.

However, at that time most people bought houses with no set intention of moving in the near future. It was more a case of buying a home & then moving as & when/if necessary ......if it was possible.
Many people went through their whole lives living in the same house unless work moved them to a different area.

Things really started to go wrong when the expectation of being able to buy a property cheap, do it up & sell on at a profit within a year or two became fashionable. Property became a get rich quick scheme & not about having a home. I am still to be convinced that mortgages over 100% could in any way be justified. Greed brought us to where we are now.

We're still seeing it now but people seemed to have switched to BTL as a moneyspinner.

Callie22

Dunroamin wrote: »

The fact that you talk about buying a house as a FTB is indicative of a different attitude these days. For many of my generation, after spending one's twenties in a series of houseshares, if one settled down with someone who was also working, you started off buying a flat and only bought a house if you were buying a wreck that was virtually uninhabitable. (And I don't mean somewhere with a dated kitchen and an avocado bathroom, I mean somewhere without an indoor loo and sometimes even electricity.)

My ex and I bought our first home, a flat, in 1981 having applied for a 100% mortgage, which turned out to be a 90% mortgage and a personal loan (complete with very expensive and non required insurance) for the 10% deposit.

Apologies - I used the term 'house' generically, to mean a home. Also, where I live there isn't a great deal of difference, price wise, between your average tatty terrace and your average flat, most of which are new builds and are a lot more expensive. Personally, if I had the cash, I'd always go for house rather than a flat as it seems to me that they are a lot more 'sellable' in the future (i.e. more than likely have outside space, parking (so no permit costs) and potential for future buyers to expand/have a family etc). Seems logical to me.

And to clarify - I'm most definitely not 22 and have done the whole houseshare/grotty flat thing, but unfortunately due to my age and various circumstances I 'missed the boat' with regard to cheap housing. I now live where I do because again, where I live there's an oversupply of tatty vic-wardian terraces and an undersupply of town centre flats, so the former are actually cheaper to rent, generally. If I lived further out of town then I probably could get a flat for less per month but then I'd have to budget between £40 and £70 to get to work each month. Where I am now, I can save that and walk.

FatVonD

FATBALLZ wrote: »

It's funny, you see house price related threads with two themes.

The first is where the younger posters are unhappy about prices (that have risen 200% in 15 years, if you hadn't noticed), you get the older posters saying 'oh thats nothing, in my day you lived in a hole til you were 60, then bought a shed'.

The second are more general ones about experiences and you see plenty of posts from the older posters saying 'yeah I got my first place when I was 20 and traded up 2 years later'.

Incidentally, my parents were first time buyers in their 20's, my Mum didn't work, and they had 3 kids.

My parents didn't buy their own home until I was 12 (so my mum would have been 36 and my dad 41.) They paid £7,500 for a 3 bed house, I paid £23,000 for a 1 bed flat 11 years later which I think is more than a 200% increase.

I think that when younger posters think that the older generation found it easier to get on the housing ladder they have in mind those that took on 95%/100% mortgages forgetting that many, many of those lost their homes to repossession as interest rates went sky high or had to sit out negative equity for years paying a mortgage far in excess of what rental would have cost. As another poster has pointed out, the only ones for whom home ownership was relatively easy were those who bought their council houses at reduced rates which then sparked price rises as they then sold them to move to more desirable areas.