Are houses unaffordable?

TrixA

I can't believe that someone would dispute the fact that houses have become less affordable over time, the price to income ratios demonstrate this pretty conclusively.

I also don't think it's terribly relevant to argue that young people have unrealistic expectations on the basis of the fact that they own an iphone or take holidays. The fact is that back in the 1980s (or whatever period the comparison is being drawn with) iphones didn't exist and overseas holidays were not affordable to the masses the way they are today. Technology and living standards change over time. I also think that there are quite a number of younger people who can't see how they will ever be able to afford a home, and in fact data from Shelter etc backs this up, so I'm not surprised if they decide to spend the money on other things.

We bought our first house in a fairly dodgy part of London, about a year ago, for a bit over £400k. The vendor (a single mum) bought it in 1999 and paid £66k. I do find myself resenting that when I look at the size of our mortgage, although we are lucky compared to many who can't afford to buy at all. The area we live in has been an affordable, working class area for its entire history, up to the last 5-10 years. It's pretty clear that the sort of people moving in (us included) have a completely different income profile from the long-term residents. If you don't think that houses have become significantly less affordable in recent years, how do you explain the phenomenon of gentrification? The fact is that the majority of today's FTBs have no hope of buying in the sort of areas they grew up in.

stokesley

ukcarper wrote: »

The difference was in 40s, 50s, 60s, and early 70s. Credit was much more difficult to get.

And, largely, frowned upon.

Pomegranate88

I can't speak for all young people (I'm 27) and I'm not in the South East, however, I do feel like expectations and reality are totally different things amongst my friends. I bought a postage stamp of a flat a few years ago, no holidays for years, no social life, nothing. I made that sacrifice to get onto the property ladder. My friends on the other hand, who are still renting, always give the line of "I'll never afford it" where as in reality I know they earn significantly more than me and could afford it, but aren't interested in making the sacrifices. They all seem to want the big forever family home as their first home, the social life, two to three holidays a year, renting a nice place in an expensive area whilst they save. There seems to be no middle ground. And the ones who have saved a deposit are then taking out what to me sound like insane mortgages to fund these huge houses. I know this doesn't apply to everyone, but I do feel people need to be a tad more realistic in some circumstances

Loanranger

What has also changed over the years is that today it seems to be acceptable to be envious of the older generation while completely forgetting that that generation did not have the holidays, the cars, the gizmos, nor the three year party at university.
Instead they left school at 15 or 16 and saved and sacrificed and some, like me, worked at two jobs for quite a few years. That is a full time job plus a part time job. The holidays, and cars and gizmos came much later.
We rarely had loans and never a handout from mum and dad. We understood that if we wanted something we had to knuckle down and work hard for it.

SaveSomeMore_2

cjdavies wrote: »

Depends on the area, near me easy to get 3 bed terraced under £100k

This.

I'm a young single first time buyer on a lowish income (well below "national average"!) but have been able to afford a solid 3 bed house.

It is a combination of good luck (being able to lodge with parents at a lower cost than renting), sacrifice (putting up with said parents for years , saving and not wasting money*) and the luck of living in a cheaper area (North).

Down South is a completely different kettle of fish and I'd doubt I'd have a house before 40!

I will add though I think the Help To Buy (Phase 1) scheme is a bit of a joke and not really helpful to those genuinely needing of help. In my mind it is of more benefit to the well-off wanting to boost what they can afford (a nice luxury five bed instead of a four!) and building firms. I guess the argument is this frees up lower grade housing stock for buyer's with lower incomes or triggers more homes being built.

*I don't smoke and rarely drink and I think this is a big factor. From observation I think the majority of people in this country spend at least £500 a year on booze. Drinking is an expensive hobby!

Person_one

Loanranger wrote: »

What has also changed over the years is that today it seems to be acceptable to be envious of the older generation while completely forgetting that that generation did not have the holidays, the cars, the gizmos, nor the three year party at university.
Instead they left school at 15 or 16 and saved and sacrificed and some, like me, worked at two jobs for quite a few years. That is a full time job plus a part time job. The holidays, and cars and gizmos came much later.
We rarely had loans and never a handout from mum and dad. We understood that if we wanted something we had to knuckle down and work hard for it.

...and you all walked to school 10 miles in the snow barefoot over hot coals with only a bowl of gruel once a day etc etc...

Starrystarrynight1

I think I understand what you're getting at, OP. People don't seem to want to get on the ladder via 'starter homes' any more. This, taken into consideration alongside the price increases in many areas, makes houses seem unaffordable. I do think expectations can be unrealistic, or overly ambitious, at times.

counting_stars

ognum wrote: »

I agree housing in the south east for young people especially single ones is unaffordable but it has always been difficult, maybe not as difficult but I was once in your position many years ago and I too could not for a house in the area I wanted to be in.

There is saving and there is saving though. Do you live in a shared house to reduce your costs or rent a flat alone? Living in a shared house will save a few hundred a month.

In the end I moved to a cheaper area away from friends and started again!

Do you own a car or use public transport. Do you own the latest gadgets and gizmos, iPhone rather than android phone etc etc. I used to have an iPhone and it needed up grading, I bought an android which in my opinion is just as good for a quarter of the price.

We all cut our finances as we wish but sometimes there are other things you could do

Good luck with your house buying, with your determination you will get there.

Yes to this. I get so frustrated by people my age, in their twenties saying they can't possibly afford to buy.

I saved for around 8 years, renting the whole time and saved 45k. I still went on some fab holidays, still had luxuries, just in moderation and after prioritising saving.

When I bought I borrowed 10k from family which I am paying back. I could have bought without this, but admittedly I would be a few miles further out. My mortgage was just over 100k on a 20k wage.

I bought alone, in the SE. I had to move out of my desired area and not to a style or size property I would have ideally wanted.

I've been here just over a year, yes I commute a little further, yes I would love a bigger garden. But yes the flat upstairs sold for 10k more then I bought mine for a year later, and yes in a year I have paid off 2k from the mortgage, 1.5k of my debt and 1k over payment for the same amount I would have paid rent for. I have then had money I would have previously saved to spend freely.

I'm around 14k better off in a year from buying.

My friends who cant' possibly afford in the SE all have saved far less then that this year whilst paying high rents. When I have suggested them ways to save and budget such as not getting hair extensions, having the latest phone, not renting in the most central locations etc etc I get told they aren't luxuries they can afford to loose. Bit of a catch 22.

I personally think my generation can't compromise but is great at complaining

counting_stars

TrixA wrote: »

The fact is that the majority of today's FTBs have no hope of buying in the sort of areas they grew up in.

Is this not partially due to there being more people? We can't all live in the same space, so yes people who haven't saved and compromised can't live in their ideal place.

Samsonite1

Pomegranate88 wrote: »

I can't speak for all young people (I'm 27) and I'm not in the South East, however, I do feel like expectations and reality are totally different things amongst my friends. I bought a postage stamp of a flat a few years ago, no holidays for years, no social life, nothing. I made that sacrifice to get onto the property ladder. My friends on the other hand, who are still renting, always give the line of "I'll never afford it" where as in reality I know they earn significantly more than me and could afford it, but aren't interested in making the sacrifices. They all seem to want the big forever family home as their first home, the social life, two to three holidays a year, renting a nice place in an expensive area whilst they save. There seems to be no middle ground. And the ones who have saved a deposit are then taking out what to me sound like insane mortgages to fund these huge houses. I know this doesn't apply to everyone, but I do feel people need to be a tad more realistic in some circumstances

Totally agree with this. I am in my 30s and have friends with a similar view, but one rung up on the ladder. A friend of mine recently said that he wanted to move house, but the only houses he was interested in started at £1.5 million. He is annoyed because his nice house in the same town is not worth anywhere near that. He has a nice house, but it is a "posh housing estate" in the middle of nowhere. He is looking at mansions in the most expensive area and ignoring anything in between. Basically wanting to run before he can walk...