Are home owners happy that prices rise and price out young

ruggedtoast

CreditCrunchie wrote: »

My student loan isn't on my credit file, is anyone else's?

Nope.

....

ViolaLass

CreditCrunchie wrote: »

I'd like to point out that first time buyers aren't always young. We are in our early 30's and wanting to start a family. One bed flat would not suit us in any way, shape, or form. The complication for us, and which makes housebuying currently too expensive for us s that with limited credit history (me), we would need a very high deposit. With the cost of renting now at astronomical levels, plus trying to pay for a wedding next year and start a family before it's too late.. who has that kind of money for a high deposit?? We can do it and we WILL do it, but we both have very good salaries. Those who are just leaving university with 20k of debt behind them and no credit history are stuffed!

If you're talking about student loans, I don't see how that would seriously impact on a person's ability to save a deposit. Mine costs me about £70 a month, which isn't much in the grand scheme of things.

marlot

Its easy to think that the past was so easy - yes prices were lower relative to earnings, but interest rates were horrible.

I sunk all my money into my first house (needed two incomes even then), only to see it drop in value by 33% when we needed to sell to relocate. At the peak we were paying 12% interest, and 100% of my income was going on the mortgage.

My wife was a teacher. WHen there was a teacher's strike planned we had a real dilemma - she felt she should be on strike with her colleagues, but we would would have had to not eat for several days if she did.

We bought in 1989.

Every payrise I got, and every bonus, and every scrap of savings we could make went off the mortgage. We had a cheap TV, but no video recorder. 12-year old car which I maintained myself. No new clothes, no eating out, none of the activities that many of my younger work colleagues now deem 'essential'.

We continued this approach to life even when we were fortunate enough for me to get a new job (it was in a much more expensive area).

When I was made redundant a year ago, the best job I could find involves a 5.5 hour daily commute. That's the price I pay for keeping my family afloat. Our 'pay off our debt as quickly as we can' approach meant that we cleared our mortgage a few years ago. But instead of living 'the high life' like many of our neighbours, we put the money into pensions.

So I don't think its all been easy for people of my generation. I've helped a couple of 20-somethings at work to rework their finances in the way that we did in our early days and its been an eye-opener for them. Even cutting out their expensive coffees and mobile phone plans makes a huge contribution to saving that deposit. Even now, I'm the one who brings in sandwiches from home whilst they go out and spend £5 on their lunch and complain they can't find the money for a deposit!

Where I do have huge sympathy is on university loans. I think that was a mistake and should not have been done. If I had a child coming up to university age at the moment I would seriously think about relocating the family to Scotland.

floridaman

^ v good post.

I do agree many young people are so used to having everything now or fancy mobile phones, sky subs etc that they would struggle to do with out

zagfles

wotsthat wrote: »

The chances are that when you pop off your kids will have houses that are bought and paid for and, unless there's a particularly large spread of ages, will have suffered or gained from HPI equally.

Kids, yes, the idea is that the grandkids gets the benefit of HPI on my house as they'll likely get screwed by HPI when they have to buy. This isn't intended to differentiate between the trivial difference between kids (unless as you say there's a big gap), but between the kids and grandkids.

No matter how you sell it your kids are going to see it as favouritism towards the youngest probably and they will have only suffered because they've had less compounding years.

My kids are a bit more intelligent than that.

Trying to right the wrongs of HPI from beyond the grave will just ensure your kids get to argue about house prices and which index is the best etc. It'll have a good chance of damaging their relationship.

It would all be nailed down, like I said. Nothing to argue over.

[You wouldn't need to have a complicated will by the way. You do the calculations in excel with dates of purchase and reference your preferred HPI index and then in the will you'd have something very simple like ...

Child one 8%
Child two 10%
Child three 9%
Grandchildren equal shares of remaining estate

The way I'd do it in the example I gave, 3 kids who all own and 4 grandkids who don't. I'd estimate the approx value of the house when the kids bought and divide by 3, and these numbers would be in the will. This wouldn't be exact, for instance if they all bought in the mid 90's I'd look up the price then, using local indices, sold prices etc and set a value, say £90,000.

Rather than specify inflation in the will I'd probably just up this by inflation to the date of making the will and add a bit to account for a few years more, say £180,000. Review every 5 years or so.

Divide by 3, so each kid gets £60,000 from the value of the house. The remaining house value would be split equally between the grandkids.

Anything else in the estate gets split according to who I like best

CLAPTON

zagfles wrote: »

Kids, yes, the idea is that the grandkids gets the benefit of HPI on my house as they'll likely get screwed by HPI when they have to buy. This isn't intended to differentiate between the trivial difference between kids (unless as you say there's a big gap), but between the kids and grandkids. My kids are a bit more intelligent than that.

It would all be nailed down, like I said. Nothing to argue over.


The way I'd do it in the example I gave, 3 kids who all own and 4 grandkids who don't. I'd estimate the approx value of the house when the kids bought and divide by 3, and these numbers would be in the will. This wouldn't be exact, for instance if they all bought in the mid 90's I'd look up the price then, using local indices, sold prices etc and set a value, say £90,000.

Rather than specify inflation in the will I'd probably just up this by inflation to the date of making the will and add a bit to account for a few years more, say £180,000. Review every 5 years or so.

Divide by 3, so each kid gets £60,000 from the value of the house. The remaining house value would be split equally between the grandkids.

Anything else in the estate gets split according to who I like best

I will leave everything equally to my children and allow them to decide what to pass on to their own children as I trust them
and this allows me to give what I like to my favourite

LydiaJ

My brothers, who are all quite a lot older than me, all bought in the late 80s when I was still at school, whereas up until a few years ago, I had been in rented, in tied housing with my then-husband's job, and in rented again while separated from him. While I know that my parents have helped each of us out in different ways (not all connected with housing) while they've been alive - and I've no wish to know who's had how much help, or who's had more help than the others - I certainly would never have wanted them to change their wills to say anything other than they've said all along - an equal split between the four of us. Although I fiercely defend the fact that while either of them is still alive, it's their money to do with what they like, not our "future inheritance", and when they're dead it's their choice how to leave it.

BobQ

marlot wrote: »

Its easy to think that the past was so easy - yes prices were lower relative to earnings, but interest rates were horrible.

I sunk all my money into my first house (needed two incomes even then), only to see it drop in value by 33% when we needed to sell to relocate. At the peak we were paying 12% interest, and 100% of my income was going on the mortgage.

My wife was a teacher. WHen there was a teacher's strike planned we had a real dilemma - she felt she should be on strike with her colleagues, but we would would have had to not eat for several days if she did.

We bought in 1989.

Every payrise I got, and every bonus, and every scrap of savings we could make went off the mortgage. We had a cheap TV, but no video recorder. 12-year old car which I maintained myself. No new clothes, no eating out, none of the activities that many of my younger work colleagues now deem 'essential'.

We continued this approach to life even when we were fortunate enough for me to get a new job (it was in a much more expensive area).

When I was made redundant a year ago, the best job I could find involves a 5.5 hour daily commute. That's the price I pay for keeping my family afloat. Our 'pay off our debt as quickly as we can' approach meant that we cleared our mortgage a few years ago. But instead of living 'the high life' like many of our neighbours, we put the money into pensions.

So I don't think its all been easy for people of my generation. I've helped a couple of 20-somethings at work to rework their finances in the way that we did in our early days and its been an eye-opener for them. Even cutting out their expensive coffees and mobile phone plans makes a huge contribution to saving that deposit. Even now, I'm the one who brings in sandwiches from home whilst they go out and spend £5 on their lunch and complain they can't find the money for a deposit!

Where I do have huge sympathy is on university loans. I think that was a mistake and should not have been done. If I had a child coming up to university age at the moment I would seriously think about relocating the family to Scotland.

An excellent post.

It is sometimes difficult for some of us in or near the boomer generation to appreciate the problems of first time buyers. However. as you illustrate, the "spend now" attitude is commonplace these days. Even though I can now afford to waste money on expensive lattes, I never do. Saving is a state of mind and it is possible to accumulate savings if you try. That said the consumer advertising does make frugality more difficult.

But if you want to buy a house, you need to make the sacrifices to do so.

ukcarper

marlot wrote: »

Its easy to think that the past was so easy - yes prices were lower relative to earnings, but interest rates were horrible.

I sunk all my money into my first house (needed two incomes even then), only to see it drop in value by 33% when we needed to sell to relocate. At the peak we were paying 12% interest, and 100% of my income was going on the mortgage.

My wife was a teacher. WHen there was a teacher's strike planned we had a real dilemma - she felt she should be on strike with her colleagues, but we would would have had to not eat for several days if she did.

We bought in 1989.

Every payrise I got, and every bonus, and every scrap of savings we could make went off the mortgage. We had a cheap TV, but no video recorder. 12-year old car which I maintained myself. No new clothes, no eating out, none of the activities that many of my younger work colleagues now deem 'essential'.

We continued this approach to life even when we were fortunate enough for me to get a new job (it was in a much more expensive area).

When I was made redundant a year ago, the best job I could find involves a 5.5 hour daily commute. That's the price I pay for keeping my family afloat. Our 'pay off our debt as quickly as we can' approach meant that we cleared our mortgage a few years ago. But instead of living 'the high life' like many of our neighbours, we put the money into pensions.

So I don't think its all been easy for people of my generation. I've helped a couple of 20-somethings at work to rework their finances in the way that we did in our early days and its been an eye-opener for them. Even cutting out their expensive coffees and mobile phone plans makes a huge contribution to saving that deposit. Even now, I'm the one who brings in sandwiches from home whilst they go out and spend £5 on their lunch and complain they can't find the money for a deposit!

Where I do have huge sympathy is on university loans. I think that was a mistake and should not have been done. If I had a child coming up to university age at the moment I would seriously think about relocating the family to Scotland.

I don't think that university fees are the problem they are often made out to be they are and I wonder how many people will actually pay them off. The problem is that there doesn't seem to be enough well paid jobs for all the people getting degrees and jobs that would have been available to people without degree now require a degree.

zagfles

ukcarper wrote: »

I don't think that university fees are the problem they are often made out to be they are and I wonder how many people will actually pay them off. The problem is that there doesn't seem to be enough well paid jobs for all the people getting degrees and jobs that would have been available to people without degree now require a degree.

Yes, when I started work I had no uni fees to pay back, but the basic rate of income tax rate was 29%. Now income tax is 20%, but students have to pay 9% back in uni fees, so not a lot of difference. NI is higher now than it was, but there again the 9% fee payback threshold is much higher than the personal allowance.