Is home owning for young people just a pipe dream?

p00hsticks

AndyT678 wrote: »

Agree. My father and father in law both had fairly ordinary civil service jobs but were able to live, raise children and buy large 4 bed houses on a single wage with (at times) 15%+ mortgage rates.

People seem to look back on those 15% + rates as if it was a bad time for house buyers. But you need to remember that in such periods of high inflation salaries were increasing rapidly, and therefore the amount of your mortgage as a percentage of your income diminished rapidly during this period, whist the equity in the property rose. so financially it was a very good time to be an employed house owner.

System

It is usually a pipe dream for those that think they are only worthy of a house that is good enough for MTV Cribs.


The rest of us have no issues purchasing as we live ordinary lives and chose our housing accordingly.

whakatane

It's not a pipe dream although it is staggering some of the figures banded about for you southerners.

I'm 23, single, my salary is above average for the local area. I'm currently at the searches stage in the hope of completing a purchase on a 3 bed semi in good condition.

Thanks to my wonderful grandparents I had a very chunky deposit (25%) although my friend is buying a slightly cheaper house 20 seconds away with a 95% mortgage and he's in the same boat as me.

I think a lot of people my age moan about money yet they are signing up to ridiculous finance schemes for new cars and going clothes shopping/holidays all the time.

I wouldn't say I've gone without ever, but I have found it relatively easy to save money. I think because my parents were very vocal about only buying things you can afford (ie it was drilled into me that finance on the whole is bad) and also I think I'm happy with relatively simple life choices. My car is modest, my phone is decent although it will last me for a couple of yeaars after my initial contract ends, I always have money available to go the pub or the football, so my social life is good.

I just think people need to be a bit more sensible when they're young and they will reap the rewards then when they want to buy a house.

manatees

I'm 23 and three of my friends have recently bought houses. They did all buy with a partner, but while they all have good, stable jobs, it's nothing particularly out of the ordinary - civil servants, nurses, shop managers etc. They're all fairly financially responsible though, and prioritised saving for a house over other things they might want.

All being well, the boyfriend and I should be in a position to buy within a year or two, though it's not something we're comfortable doing until we're married. We've both worked hard to save a lot, and avoided too much unnecessary spending.

sirmosh

It needs to be looked at as a bit of a longer term goal at an earlier age I think and prioritised more if that's what you want. A lot of people hit 25 or so and suddenly want to buy a house but unless you've been working towards that since you left education it can be difficult unless you've got yourself a very decent job.

Not to mention it's a lot more difficult if you go it alone and many people aren't settled enough with a partner to start working towards a house until they're older.

pinkteapot

The FTB age will naturally go up as more and more people stay in education longer. Back when a lot of our parents were growing up, most people left school at 16. That gave them five years of working and saving before the 21 that a lot of people now enter the workforce at.

ReadingTim

pinkteapot wrote: »

The FTB age will naturally go up as more and more people stay in education longer. Back when a lot of our parents were growing up, most people left school at 16. That gave them five years of working and saving before the 21 that a lot of people now enter the workforce at.

Yes, but by that reasoning then the gap from entering the workforce and buying your first property should remain the same - in your example (5 years) should result in the average age being 26.

But it's not - it's increasing.

• 30 years ago, 12% of income was needed for a deposit. Now it's 82%
• Two thirds of FTB-ers turn to the Bank of Mum and Dad for help
• Average age of a buyer in 1984 was 27. Now it's 29.

Housing is becoming more of a pipe dream for the young, and the sucess stories posted here, while commendable, are the exception not the rule.

kitty_kins

ArthurOnline wrote: »

Has anyone had any experience of the help to buy schemes? Are they easy to use and is the scheme transparent?

We've used Help to Buy to buy ours. Everything has been quite easy to understand and deal with. We weren't initially keen on the scheme due to the "loan" aspect but once we read into it in more detail we felt it was a good decision for us.

Basically, you are loaned 20% of the house value (decreasing the amount you need mortgaged) and pay back 20% when you sell the house or after 25 years. The loan is interest free for the first 5 years and payments after that are interest only.

We used a FA who understood the scheme and he helped us by filling out and submitting all the relevant HTB paperwork to the relevant authorities. Ironically, that was the only stress-free part of our house buying journey!

Overall, we are big fans of the scheme as we have been able to buy a gorgeous little townhouse for ourselves and its brand new! We loved being able to choose our internal options and we feel really lucky

Hope this helps xx

PasturesNew

kitty_kins wrote: »

Basically, you are loaned 20% of the house value (decreasing the amount you need mortgaged) and pay back 20% when you sell the house or after 25 years. The loan is interest free for the first 5 years and payments after that are interest only.

If you want to move to a bigger house in 5 years' time though you might be stuck as there won't be a H2B so you'll be stuck with your current mortgageability.... so you couldn't even buy the house you're sitting in.

The system relies on you either staying put, earning significantly more, or accepting that you can only now buy a smaller house/elsewhere.

lulu_92

I'm 21 and will hopefully be buying my first house next January.

My OH has just turned 30 and he bought our house when he was 22, which was lucky for him. He lived with his parents, had a full time job and went to university full time, managing to save enough for the deposit for his house and a brand new car, as well as enough money to furnish the house.

If if was not for his good timing in buying our house we would be in a different situation now, although we are saving for our next deposit in different ways - I'm putting money aside and should have enough by January and he's making large overpayments on his mortgage to bulk up his equity.

I think the problem with "young people" is, and I will include myself in this, is that we are too focused on right now. When I got paid on Monday I was annoyed that I didn't really have a lot of money for myself for the month (for birthdays and nights out) but once I've seen the figure in my signature grow I realise that a few quiet nights in and tightening the purse strings in the short term will definitely help in the long term.

Plus, on thursdays drinks are 99p in my local nightclub - that saves me a few bob!