Young people increasingly giving up on buying property

lisyloo

The rich comment is referring to Joeskeppi who claims he saved £330 per week.

Not sure exactly how old he is but it would be nice to know what period he is referring to and what his circs were e.g. was he savings whilst living with parents on low rent.

I graduated in 1990, when it was easy to buy a house (without any deposit in fact) and get a good job as a graduate (one with a decent starting salary and career path).

Graham_Devon

Joeskeppi wrote: »

Has saving £33 a week ever been enough to save a deposit? I saved 10 times that amount per week when I was saving for mine. These people are royally deluded.

I'd suggest it isn't others who are deluded...

lippy1923

What I don't get is why so many young move out as soon as they get a job after school/college.

They could stay at home rent free (or very low rent) and save up a massive % of their income, yet I personally know quite a few who "couldn't wait to get out of the parents house" and find a place to rent for over half their income. Some I know have only moved 3 streets away! Instead of staying at home, they pay £700+ in rent.

Then they have problems trying to save and get out of the rent cycle they willingly put themselves in.

I understand people may move out into rented for job purposes, maybe family trouble means they have to leave etc, but for the average people with no real reason to move out of the family home, why do they do it? Crazy IMO.

Carl31

£33 a week saving, if thats true, is a pretty poor attempt at saving

However, its probably not just the saving thats putting anyone off. House prices are so high that in a lot of places youre going to need a combined income of £60k+ at least to buy somewhere even when you do get a deposit, for some people thats peak earnings that they wont reach until their 40s

if youre 20 - 30, and realise that, then whats the point?

lisyloo

They could stay at home rent free

With parents they hate (possibly abusive?).
Great for you if you have great parents.

I couldn't wait to get out and would honestly have turned to immoral earnings to get away from my parents if I had too. At least I'd be making my own way in the world and that would have been preferable even if it meant hardship and putting myself at risk or becoming a criminal.

lisyloo

£33 a week saving, if thats true, is a pretty poor attempt at saving

Figures please.
Perhaps try someone working in a London supermarket paying £800 per month for shared accomodation.
Tell us how much you think they should save after the basic of food, rent. travel etc.

I'd like to see some real figures rather than just baseless opinions.

I think it's geuninely hard for someone paying rent and certainly harder than in the past.

lippy1923

lisyloo wrote: »

With parents they hate (possibly abusive?).
Great for you if you have great parents.

I couldn't wait to get out and would honestly have turned to immoral earnings to get away from my parents if I had too. At least I'd be making my own way in the world and that would have been preferable even if it meant hardship and putting myself at risk or becoming a criminal.

That's why I said...

"I understand people may move out into rented for job purposes, maybe family trouble means they have to leave etc"

I'm talking about the normal average get on ok with family type.

princeofpounds

average people with no real reason to move out of the family home, why do they do it? Crazy IMO

Because most people of that age don't want dearest mother and father waiting up when they bring their new special friend back from the nightclub, basically.


It's fine if you have a) a huge house with good soundproofing or b) you are happy to live like a monk

lippy1923

princeofpounds wrote: »

Because most people of that age don't want dearest mother and father waiting up when they bring their new special friend back from the nightclub, basically.


It's fine if you have a) a huge house with good soundproofing or b) you are happy to live like a monk

haha good point. :rotfl:

westernpromise

lisyloo wrote: »

I agree, but lots of young people don't have much money left after paying rent.
Let's not get diverted into "they shouldn't have an iphone" - there is a serious issue here.
I don't know your circs but I suspect you had much lower accomodation costs and possibly better opportunities as well. I'm gen X and I walked into a good job after graduating and could easily afford to buy a 3-bed semi with my partner (I'm was just an average grad with a 2:2).
Things are different now and it's not all just about making sacrifices.

But in the days when Gen Xers like you were FTBs, UK property was seriously undervalued. There are two main reasons why this was so.

First, wives' earnings were taxed at their husbands' marginal rate. So if her husband was say a lawyer on the 83% top rate of the 1970s, no working wife had anything to show for going out to work. Deduct the cost of her commute and her work attire from what the taxman left her, and she had literally nothing left - or perhaps even less.

Houses have typically been priced at some multiple of household income. Whether the wife worked or not, very often the only income that amounted to anything was the husband's. So household income meant one income (and this is where those famous building society loan multiples of 3x main salary and 1x second originally came from - after the sexist taxman had done his work, the wife's salary was indeed worth only a fraction of her husband's).

The second thing that was different is that there have only been 20* years since the Bank of England was set up when base rates have been above 10%, and all 20 of them occurred between 1973 to 1993*. This is often lost on crashtrolls who argue "just wait till interest rates go back to normal". They now are normal! So to the extent that interest rates affect house prices, they lowered them exactly when Gen X were FTBing and STBing.

Permanently remove both of those drags on price, as the Tories did between 1988 and 1993, and it sends them nowhere but up.

The huge population rise of 1997 to date has uncorked the bottle again, so my guess is that the next move in prices will be a levelling off followed by a sharp uptick then another levelling off, etc.

I really do struggle to see bear factors for housing at the moment. We're not going back to 1970s sexist taxation principles whatever Ed Miliband or angry HPCers may want; we're already back at long-term normal mortgage rates; and the new population are not going to be deported no matter what Nigel Farage may want.

* - roughly; I may be a year or two out