FTB's need to save for up to 30 years in order to buy a house

Jack_Johnson_the_acorn

The article doesn't reflect what I or my friends have experienced.

Me 27 (24 whilst saving), Wife 25 (23 whilst saving), Combined income £49,000 ish
Both public sector, both had pay freezes and pension increases.

It took us a year and a couple of months to save £15,000.
This was enough for a 10% deposit and we didn't find it remotely difficult to get a mortgage. We've since married and bought a motorbike and other "big ticket" items.

Not sure why people are being forced into saving a 20% deposit but it wasn't the case with me or my friends. I think a lot of people are too expectant. All it took was a bit of sacrifice.

N1AK

HAMISH_MCTAVISH wrote: »

Seriously though, I have no idea what that data is, but it's not what you think.

Average FTB deposit size in 2007 was 11%, not 18%.

The only thing I can think might cause the disconnect is if this was done on gross value not average % or if it included properties bought outright (and there were considerably more than I expected.

I generally disagree with your position, but can't help but agree with you assertion that those figures don't mean what people seem to think they mean.

dtsazza

Graham_Devon wrote: »

“Despite working hard and saving what they can each month, today’s young people face life-changing choices between starting a family or buying a home of their own. Imagine a 28-year-old couple weighing up their options: they can save for a home now and put off starting a family until they’re 35, or they can start a family now but accept they’ll be renting until their child is a teenager.

Erm, "saving what they can each month"? How much can they save?

Let's go with the 20% deposit that the article mentions, and also assume that we're talking a 4x salary multiple for house prices. Then the deposit is 80% of salary.

Ignoring any interest that might be earned on the savings, if it takes 30 years to save 80% of salary, the poor hard-working young people are only saving 2.67% of their pay towards their deposit. That's a tiny pittance. If they were remotely serious about saving, and put away 10% of their pay (not a huge amount by any means), then they'd have the 20% deposit in 8 years. Or a 10% deposit in 4 years.

Frankly, I'm not surprised that it takes 30 years to save for a house if you only put 2.67% of your pay towards doing so.

WestonDave wrote: »

Nowadays couple feel hard done by if they haven't had enough holidays by the time they get married that the only place left which is special enough for a honeymoon costs an absolute fortune. At least to some degree the deposit money is going on foreign holidays, eating out (for our parents generation an occasional meal in a Harvester was considered extravagent!), flash cars and massive mobile phone contracts. The expectation now is to have all that and still find buying a house affordable - I'm not sure that is realistic - especially in the post boom era!

Jack_Johnson_the_acorn wrote: »

The article doesn't reflect what I or my friends have experienced... I think a lot of people are too expectant. All it took was a bit of sacrifice.

Completely agree with both of these. It's just a matter of sorting your priorities - making choices about what matters to you and using your money on that.

I have no problem with someone choosing to spend 97.3% of their salary on things including foreign holidays, eating out, a dozen pints a week, new iPhone every couple of years etc. It is their money, and they can do that if they want. However, having decided not to save it for a deposit, I don't think they have any grounds to complain about the 30 year wait.