Is it really that hard?

Samsonite1

ringo_24601 wrote: »

What I'm saying is that it isn't impossible. I'm sure I would have got on the ladder if born 10 years later - BUT, there are consequences of it being harder.

I would have spent longer renting in a shared house. I would have had to take on more initial mortgage debt. I would have delayed pension contributions, a delayed family..

These are all going to have social consequences.

That is pretty much spot on - I do not think we are disputing it is one way or the other here.

Story time...

It is definitely harder now than it was - I gave the illustration that my parents' old home in the 80s cost 1.9x my dad's salary of £25k, now the same house last sold for over 10x £60k - so that highlights at least an extreme problem in that area. My parents were about 30 years old with 4 children when they bought that house. Would a 30 year old couple with 4 children be able to buy a £630k house today? Not a chance!

So the problems are real. But I know many people who are making the sacrifices - you could say "getting on with it". This is the best thing people can do. Too many people are not getting on with it - perhaps the problem is that too many people do not realise they can sort things out for themselves - education? Free advice? What is needed to help these people?

I know a couple who I met at university, so they come from a similar background to myself - had the same chances - both had jobs. They rented for years and made some savings - sounds good so far? The wife gets made redundant, gets a bit of money for that. The husband decides to take a sabbatical (or unpaid leave) for a year and they spend their savings travelling the world - this is aged 27 or so. They come back after a year long holiday visiting every country they ever wanted to. The husband could not get his job back - it seems that travelling the world for a year when you are in your 20s does not give you much of an advantage in finding work in the competitive job market .

They ended up having to move in with one of their parents - they can count themselves lucky that they could do that I suppose.

This is not an isolated case - I recently had a single male friend doing the same thing and he is now unemployed.

So I feel the balanced view is that the problems are there and in society (which is evenly replicated through my own social group) there are those that make sensible decisions around money and those who do not.

lisyloo

BUT, there are consequences of it being harder

There are massive consequences in terms of pension.
No-one seems particularly worried about it because it won't be a problem for 20+years, but coupled with longer life expectancies and fewer gold plated pensions it's what I'd call a timebomb, but it's too far away for anyone to care at the moment.

[Deleted User]

We've also got to accept that while it becomes 'harder' for some people earning OK/good salaries - it will become impossible for others who may have, once in the past, been able to buy a home. They'll become trapped in a rent/no deposit situation.

The cheaper part of the housing market has been progressively bought up by BTL landlords also.

lisyloo is right - the consequences aren't going to be apparent for 20-30 years, but they'll probably be in the form of the NHS being crushed under the weight of a poor, large, old population. Then again, we're not exactly far from a giant NHS funding black hole. I'm sure we'll just borrow our way out of it, until China/Iran/Saudi Arabia owns most of the country.

Maybe 1984 was 50 years too early, and we'll be airstrip one of Eastasia

Samsonite1

LisyLoo does make a very good point. I must say that I have had to sacrifice almost a decade of pension contributions to get the house I want - I am now putting quite a lot in to play catch-up but I can imagine that I will have to compromise in retired life. I am actually more likely to be able to buy cheaper properties to rent out than anything else and that will probably screw everyone else up somehow!

Graham_Devon

Samsonite1 wrote: »

Too many people are not getting on with it - perhaps the problem is that too many people do not realise they can sort things out for themselves - education? Free advice? What is needed to help these people?

Truth be told, a lot of people have simply given up.

Cutting out a mobile phone contract is cutting off your nose to spite your face in this day and age. So you can save £200 a year by having a simple contract instead of a higher end smart phone.

But let's just put that into perspective. £200 a year is a mere drop in the ocean compared to the reality of the saving achievements needed.

So people ARE getting on with it.... They are just getting on with living. They are not getting on with barely havnig an existence.

Many have given up the hope and instead are getting on with life. You are here once. House prices are out of your control. What's the point in living like a monk for 10 years to shave 6 months off your savings goals?

Now, I'm in no way saying they are not frivilous spenders, there are, and the points made about them is fair, if they are then whinging about house prices - but personally I've yet to meet this stereotype. Most that moan about house prices are not splurging money left right and centre. They simply do not see any attraction in putting their life, family etc on hold for 10 years or more.

Once we understand this.... once we understand the house / life balance, we can move on to what people could genuinely do to help themselves. But there has to be a realistic viewpoint here that people are not goign to go to work and sit in a darkened room in their leisure time for 10 years in order to buy a shoebox 6 months quicker than they otherwise would.

We have to understand that the iphone, the smartphone can bring so much to someone for very little outlay considering the tools that phone brings. It's a bit like suggesting someone should turn down a job that will bring them an extra £500 a month because they will have to outlay £150 a month on a car.

I'm nto defending the iphone. I am defending younger people having access to a device which can help them so much in life. Just because you have a smartphone it does not mean you are paying out £50+ a month. Mine costs me £12.50 a month.

Samsonite1

I was more using the iPhone as to where it starts - teenagers have them - it must be a huge proportion of their money (or is it their parents'?).

Leasing cars is a huge expense that can be comparable to mortgage payments. My first car was worth £100 and I spent £45 on repairs.

You are right - putting life on hold for up to 10 years is depressing. I suppose some people can deal with that and the earlier they did, are in a better position today.

There is no escaping some hardship from global economic issues - as I say, my pension is certainly not what it should be as of today and I need to sort that out or suffer later.

wotsthat

If people have given up on saving then they'll never buy.

Graham_Devon

wotsthat wrote: »

If people have given up on saving then they'll never buy.

That's clearly not what I said.

ukcarper

Samsonite1 wrote: »

I was more using the iPhone as to where it starts - teenagers have them - it must be a huge proportion of their money (or is it their parents'?).

Leasing cars is a huge expense that can be comparable to mortgage payments. My first car was worth £100 and I spent £45 on repairs.

You are right - putting life on hold for up to 10 years is depressing. I suppose some people can deal with that and the earlier they did, are in a better position today.

There is no escaping some hardship from global economic issues - as I say, my pension is certainly not what it should be as of today and I need to sort that out or suffer later.

Assuming you earn enough (which I think is a bigger problem than saving deposit) would it take 5 years. Some one I know stopped renting a house and moved into a house share and saved hard he managed to buy in a couple of years. Where I am you could easily save £500 a month just on the rent.

Samsonite1

ukcarper wrote: »

Assuming you earn enough (which I think is a bigger problem than saving deposit) would it take 5 years. Some one I know stopped renting a house and moved into a house share and saved hard he managed to buy in a couple of years. Where I am you could easily save £500 a month just on the rent.

That was how I gained money - 4 people sharing a 2 bed apartment. Only paying £250 a month on a £1000 per month flat. Helped a lot on the savings front.