Is it really that hard?

BobQ

I agree it is difficult for the young to get on the property ladder but I do not think that is the problem.

When I was young I was brought up to be frugal. I did not waste money on things I did not need. Credit was not something I thought about, in fact the first loan I ever had was my first mortgage. Thinking back, while I saw this as being responsible and prudent, my parents, who could remember what it was like to be poor, still thought I was being wasteful with money! These days I am still frugal even though my disposable income enables me to spend money on things I do not need were I to choose to do so.

But during the 1980s and 1990s relative affluence made people increasingly reliant on credit and increasingly keen to buy things they did not need. Their children now have expectations that mean that many are incapable of making the short term sacrifices to benefit in the long term. Some in their generation know how to do this and do afford to buy a house, but many others just cannot resist, foreign holidays, lattes, and the latest phones. They want to live in better areas, with better furniture.

Another issue is that young people fail to learn the basic life skills as teenagers which would save them money throughout their life.

I am amazed how few people seem to be capable of doing basic tasks like sewing.

http://www.dailymail.co.uk/news/article-2213723/Young-adults-useless-basic-tasks.html

or cooking....

http://www.dailymail.co.uk/news/article-2208795/One-university-students-boil-egg-quite-happily-set-broadband.html

The death of DIY is in part due to more people renting than buying, but the younger generation would save a fortune when they manage to buy and be able to choose less pristine properties if they learned such skills as teenagers instead of being glued to their computers and mobiles.

CLAPTON

HAMISH_MCTAVISH wrote: »

Quite....

Here's historical FTB mortgage payments as a percentage of income.

Current position is around the long term average.

yes indeed it shows the percent for FTB
sadly it doesn't show the percentage for people who want to be FTB

sofarbehind

Affording the mortgage payments isn't the problem for a lot of people! I am making a lot of sacrifices to save. I have re-trained to up my income, relocated for work seven times, my family are hundreds of miles away, I have no TV, no car and live in a rented room with strangers. Whatever it takes. If I was in a position to have a family I wouldn't be able to do any of this and I wouldn't be able to put off having kids any longer. Biology. Large deposits mean that people are buying later, often with kids and for those people a one bed flat isn't suitable.

Pobby

No it is not about chips on shoulders. 66 year old baby boomer, and yes, it was a question of scraping a bit to buy a home but now, no matter how a lot of people make do, it will never be enough to get a decent place in a good bit of the country.

All this with a base rate of 0.5% and various schemes that just promote hpi. What if interest rates go back to the norm? Carnage and don`t say it will never happen. Many of us were surprised at 5%, I cannot remember that low.

Oh and the youngsters need to think about pensions. Another burden. We had it good and I am grateful but be mindfull of others who are finding this a big strain.

ukcarper

CLAPTON wrote: »

yes indeed it shows the percent for FTB
sadly it doesn't show the percentage for people who want to be FTB

For most of the 80s mortgage rates were about 3x what they are now while the house price to average earnings ratio varied between 3.3x and 5x compared to 6x now so I don't find it that graph that surprising.

ukcarper

Pobby wrote: »

No it is not about chips on shoulders. 66 year old baby boomer, and yes, it was a question of scraping a bit to buy a home but now, no matter how a lot of people make do, it will never be enough to get a decent place in a good bit of the country.

All this with a base rate of 0.5% and various schemes that just promote hpi. What if interest rates go back to the norm? Carnage and don`t say it will never happen. Many of us were surprised at 5%, I cannot remember that low.

Oh and the youngsters need to think about pensions. Another burden. We had it good and I am grateful but be mindfull of others who are finding this a big strain.

I'm not sure when you first bought but I had to do more than scrap a bit together as I have said many times when I bought the average house price was 5x average earnings compared to 6x now and you couldn't borrow as much. Saying that I did manage to borrow over 3x our joint income.

ukcarper

sofarbehind wrote: »

Affording the mortgage payments isn't the problem for a lot of people! I am making a lot of sacrifices to save. I have re-trained to up my income, relocated for work seven times, my family are hundreds of miles away, I have no TV, no car and live in a rented room with strangers. Whatever it takes. If I was in a position to have a family I wouldn't be able to do any of this and I wouldn't be able to put off having kids any longer. Biology. Large deposits mean that people are buying later, often with kids and for those people a one bed flat isn't suitable.

I do agree that affording mortgage payments wouldn't be the problem, I'm not convinced saving the deposit would be any harder than it was in the 70s, I think getting a big enough mortgage is just as big a problem.

The trouble is that people keep trying to compare now with the 70s and you can't really compare. I left school at 16 lived with my parents until I got married at 22 I was not unusual. That obviously made it easier to save. For various reason people reach their full earning potential, get married and have children later. The recent price rises in London and the south east has certainly made it very difficult to buy and priced more people out but as bob pointed out people's expectations have change and that has compounded the problem.

Samsonite1

This sounds like a cop-out and hopefully not too contentious but I do think a lot of it (young people's issues with finding it hard to make sacrifices) is to do with the parents. It certainly accounts for the spending habits and expectations of pretty much everyone in my social group, so I would like to think it applies across many other people.

The 2 sets of friends I mentioned before who got bored with work and spent all their savings on travelling for a year, then struggled to find jobs - in both cases, they had parents who fed them money at university (mum, I need a new PC, a new car, money to socialise - yes dear, here is a blank check). This is not an exaggeration either!

In my case, my parents were middling in terms of finances - they had 4 children by the time they were 26, so that was a big financial strain, but they got the big house in a good neighbourhood - what I have not mentioned is that we did not have a colour TV until the mid-90s, we had free B&W TVs friends threw out. Most of our entertainment equipment was handed down from friends. We had no car until most of us had left home, but we borrowed cars from friends. I think it is fair to say that even though the house was just £48k for a £25k salary (and my mum freelanced which often brought in another £10k), we did not have a life of luxury. I was happy though, I was taught to save my pocket money, do odd jobs, save birthday and Christmas money and buy that £300 playstation (first one). My friends just got it as a present from their parents. My parents spent a maximum of £20 on our presents (80s & 90s). I feel like they taught me the value of money. When I took a gap year and stayed at home (as the work was near there) - my parents charged me rent to stay in my own room! I thank my parents now even if I hated them then!

ukcarper

Samsonite1 wrote: »

This sounds like a cop-out and hopefully not too contentious but I do think a lot of it (young people's issues with finding it hard to make sacrifices) is to do with the parents. It certainly accounts for the spending habits and expectations of pretty much everyone in my social group, so I would like to think it applies across many other people.

The 2 sets of friends I mentioned before who got bored with work and spent all their savings on travelling for a year, then struggled to find jobs - in both cases, they had parents who fed them money at university (mum, I need a new PC, a new car, money to socialise - yes dear, here is a blank check). This is not an exaggeration either!

In my case, my parents were middling in terms of finances - they had 4 children by the time they were 26, so that was a big financial strain, but they got the big house in a good neighbourhood - what I have not mentioned is that we did not have a colour TV until the mid-90s, we had free B&W TVs friends threw out. Most of our entertainment equipment was handed down from friends. We had no car until most of us had left home, but we borrowed cars from friends. I think it is fair to say that even though the house was just £48k for a £25k salary (and my mum freelanced which often brought in another £10k), we did not have a life of luxury. I was happy though, I was taught to save my pocket money, do odd jobs, save birthday and Christmas money and buy that £300 playstation (first one). My friends just got it as a present from their parents. My parents spent a maximum of £20 on our presents (80s & 90s). I feel like they taught me the value of money. When I took a gap year and stayed at home (as the work was near there) - my parents charged me rent to stay in my own room! I thank my parents now even if I hated them then!

I do agree that the parents have to take some of the blame I tried not to spoil my kids and to be honest I wasn't in a position to do so as at the time I was spending almost 50% of my earnings on mortgage repayments.

CLAPTON

Samsonite1 wrote: »

This sounds like a cop-out and hopefully not too contentious but I do think a lot of it (young people's issues with finding it hard to make sacrifices) is to do with the parents. It certainly accounts for the spending habits and expectations of pretty much everyone in my social group, so I would like to think it applies across many other people.

The 2 sets of friends I mentioned before who got bored with work and spent all their savings on travelling for a year, then struggled to find jobs - in both cases, they had parents who fed them money at university (mum, I need a new PC, a new car, money to socialise - yes dear, here is a blank check). This is not an exaggeration either!

In my case, my parents were middling in terms of finances - they had 4 children by the time they were 26, so that was a big financial strain, but they got the big house in a good neighbourhood - what I have not mentioned is that we did not have a colour TV until the mid-90s, we had free B&W TVs friends threw out. Most of our entertainment equipment was handed down from friends. We had no car until most of us had left home, but we borrowed cars from friends. I think it is fair to say that even though the house was just £48k for a £25k salary (and my mum freelanced which often brought in another £10k), we did not have a life of luxury. I was happy though, I was taught to save my pocket money, do odd jobs, save birthday and Christmas money and buy that £300 playstation (first one). My friends just got it as a present from their parents. My parents spent a maximum of £20 on our presents (80s & 90s). I feel like they taught me the value of money. When I took a gap year and stayed at home (as the work was near there) - my parents charged me rent to stay in my own room! I thank my parents now even if I hated them then!

makes no sense as it assumes that all parents are rich