Ownership amongst the young

HornetSaver

In my experience of this forum, the generally held view is that Apple and Starbucks are collectively responsible for 80% of the gap in home ownership between those born in the late 1960s and those born in the late 1980s.

Rich2808

HornetSaver wrote: »

In my experience of this forum, the generally held view is that Apple and Starbucks are collectively responsible for 80% of the gap in home ownership between those born in the late 1960s and those born in the late 1980s.

Exactly. It's quite obvious why people earning £35k can't afford to buy a £350k flat - they spend too much money on iPhones and coffees? Maybe banks will offer ten times salary mortgages to help them.

Cakeguts

Rich2808 wrote: »

Exactly. It's quite obvious why people earning £35k can't afford to buy a £350k flat - they spend too much money on iPhones and coffees? Maybe banks will offer ten times salary mortgages to help them.

They can't afford it because they earn £35k a year but have £399 going out every month on car finance. There are so many new cars being bought on finance that the prices of second hand cars is set to fall. The people who buy the second hand cars are the people who know that a house is more important than a car and so have spent their money differently.

There is nothing that anyone can do about someone who puts a new car as a higher priority than buying
somewhere to live. If you allow them to borrow more for a mortgage they will just buy a more expensive car on finance. So instead of £399 a month they will spend £799 a month. It isn't a finance problem it is a priority problem. If your priority is to spend money on new cars, expensive phones and all the latest gadgets then you are never going to be able to afford a house however much you earn because the priority is to spend money on cars and gadgets rather than to save for a deposit. There is nothing wrong with this anyone can spend their money as they please but they do have to understand that if they want to buy new cars and expensive new iphones then they won't have enough disposable income left over to save for a deposit.

People have to choose which to prioritise. Cars on finance, expensive phones and latest gadgets, eating out, holidays or to buy a home. There is no correct choice but whichever they choose that choice is down to them.

buglawton

GreatApe wrote: »

no I dont think they rent whole properties to themselves to avoid having a family. I think they rent whole properties to themselves because they can afford to rent whole properties for themselves

I think perhaps once they rent a whole property for themselves they then have less contact with the opposite sex and also less pressure from friends and also less pressure generally to share costs of life.

Its just conjecture on my part. Certainly it does not follow that lower prices = more people getting married and having kids.

A Japanese developer had a theory that the poor quality and tiny size of Tokyo apartments was the major factor behind lack of couples getting together and birth rates falling off a cliff:
http://uk.businessinsider.com/tokyo-kontaksu-marriage-hunting-homes-2015-1?r=US&IR=T

He's been proving this theory by designing and selling much more affordable and attractive living space. There's already some proof his theory is correct.
Not likely to happen in the UK though. The last time something like that happened in the UK was the council house and new town building boom of the 1950s/60s.

economic

buglawton wrote: »

A Japanese developer had a theory that the poor quality and tiny size of Tokyo apartments was the major factor behind lack of couples getting together and birth rates falling off a cliff:
http://uk.businessinsider.com/tokyo-kontaksu-marriage-hunting-homes-2015-1?r=US&IR=T

He's been proving this theory by designing and selling much more affordable and attractive living space. There's already some proof his theory is correct.
Not likely to happen in the UK though. The last time something like that happened in the UK was the council house and new town building boom of the 1950s/60s.

wheres the proof his theory is correct? be careful correlation doesn't imply causality.

Cakeguts

buglawton wrote: »

A Japanese developer had a theory that the poor quality and tiny size of Tokyo apartments was the major factor behind lack of couples getting together and birth rates falling off a cliff:
http://uk.businessinsider.com/tokyo-kontaksu-marriage-hunting-homes-2015-1?r=US&IR=T

He's been proving this theory by designing and selling much more affordable and attractive living space. There's already some proof his theory is correct.
Not likely to happen in the UK though. The last time something like that happened in the UK was the council house and new town building boom of the 1950s/60s.

I would have thought that the opposite would have been true. If they did get together they would have to stay that way in a very small apartment?

chucknorris

Cakeguts wrote: »

There is nothing that anyone can do about someone who puts a new car as a higher priority than buying
somewhere to live.

I remember when I was at school, I had a few friends who lived in the local (dire) council estate, and I often wondered why some of the people that lived there had very expensive cars, yet lived there. Even as a child it just looked wrong to me.

Herzlos

Cakeguts wrote: »

They can't afford it because they earn £35k a year but have £399 going out every month on car finance.

£399 a month will get you some pretty nice cars, so the people you're talking about on £35k aren't the same ones with £400 car finance. I'd figure average payments on a lease/PCP deal is probably about £150-200, and isn't necessarily that bad a deal, all in.

Even if the person on £35k can do without a car and travel free, the mortgage multipliers mean they can stretch to £140k, and in a lot of the UK that doesn't get them much at all.

If you can't afford a house yet, do you live in poverty hoping to save enough to offset the house price inflation, or do you spend the money on a nice car instead of driving a banger?

buglawton

Herzlos wrote: »

£399 a month will get you some pretty nice cars, so the people you're talking about on £35k aren't the same ones with £400 car finance. I'd figure average payments on a lease/PCP deal is probably about £150-200, and isn't necessarily that bad a deal, all in.

Even if the person on £35k can do without a car and travel free, the mortgage multipliers mean they can stretch to £140k, and in a lot of the UK that doesn't get them much at all.

If you can't afford a house yet, do you live in poverty hoping to save enough to offset the house price inflation, or do you spend the money on a nice car instead of driving a banger?

Yes, because eventually there'll be a pause in HPI, maybe a mild crash or a decent help to buy scheme, or you may get the chance to relocate to an affordable house price area. The old expression was 'keep your powder dry'.

buglawton

chucknorris wrote: »

I remember when I was at school, I had a few friends who lived in the local (dire) council estate, and I often wondered why some of the people that lived there had very expensive cars, yet lived there. Even as a child it just looked wrong to me.

That hasn't really changed at all. In my mixed council/owned street, all the ageing nondescript vehicles belong to the homeowners. The hefty recent Merc and new car on rotation households in the street are still council owned. I wouldn't mind if it wasn't for whiz-bang ideas like May's new elderly persons property confiscation schemes suddenly popping up.