Houses are affordable!

ManofLeisure_2

Today many parents are in the enviable position of being able to help their adult children in the financial sense - particularly in assisting with money towards house deposits etc. Back in the 70's (when I bought my first home) this was virtually unheard of - apart from amongst the 'extremely' wealthy members of society. Each generation has different problems to contend with and that will never change.

Cakeguts

sulphate wrote: »

We live near Cambridge, which isn’t London, but it’s still expensive. You can’t get a 2 bed terrace for that price here - we sold our 2 bed terrace (our first home) for £177k in the summer and we lived in a town 15 miles out of Cambridge. I can’t find anything on Rightmove for under £100k within 20 miles of Cambridge, for £120k you can get a 1 bedroom flat. Yes, people can move further away, but that just adds on to their commuting costs.

I’m 30 and my husband 32 so presumably in your target “age range”. I don’t know anyone with an iPhone X. We don’t have gym membership and rarely get takeaways. I assume you mean new car for £199 a month? Our cars are 7 and 10 years old, were bought outright and the only people I know who have cars on finance are work colleagues who are in their 40s, 50s etc and are already established house-wise. Certainly no one I know my age has cars on finance.

We live in a 3 bedroom family house now that we bought for £310k, we are on average salaries, and the only reason we were able to afford this is due to a combination of factors: we lived with my parents for 2 years to save for a deposit for our first home, my parents helped us with the deposit a little, we bought our first home in 2013 and sold it in 2017 for a 40k profit and we inherited a substantial amount of money about 3 years ago. We are very lucky. Many people aren’t!

Of course, we could move to a cheaper area but finding a job in Cambridge (which is a rich city) is difficult enough. Last year when my employer were recruiting for a similar job to mine they had 60 applicants. I got promoted this month but still had to go up against 24 other applicants. My mum always said that “in her day” if you didn’t get one job after an interview, you’d almost certainly get the next one.

In comparison, my mum bought her first flat after she got promoted and she simply saved the difference in her wage for a few years. Her parents were extremely poor and certainly could never have helped. Her flat then quadrupled in value (London) in 3 years so her and my dad were then able to buy a house. My in laws were able to buy their 2 bedroom flat in the 80s under the right to buy scheme, they sold it for double as soon as they could so they could buy their house.

I'm sorry but I do think you are out of touch, yes I pay £30 a month for an iPhone but over 5 years that only adds up to £1800 which isn't a lot in the grand scheme of things. Especially considering most people I know in this area you have to have a deposit of around £30k or more and would need to save £500 a month over 5 years. That amount just isn't doable for a large proportion of 20 somethings living in rented accommodation, even if they live in a shared house - here you are looking at £500-£700 a month for rent.

Yes but you haven't done what a 1950s couple would have done. They wouldn't have had a car between them so would have used public transport to get to work. They would have lived in a shared house as a couple until they got the money for a house or flat.

I am old fashioned. I could easily afford £30 per month for a phone but I can get one for a lot less so I would consider the difference between your phone and mine in cost as a total and complete waste of money. £30 per month is a lot for a phone. So from my point of view you are wasting circa £200 per year on nothing. That is over £1000 for 5 year and it is for nothing. You might as well just flush the money down the loo.

You have a car each. Cars are very expensive even old cars cost more to run than going by bus or walking. The cost of one takeaway is expensive compared to doing your own cooking.

People get drawn into the " in only costs this much a month" and they don't add up all the only costs to find the true sum of all these things they don't actually need.

What people think of as necessary now are what people in the 1950s considered luxuries that they couldn't afford. People didn't have two cars. Most families didn't have one car. Second hand furniture was normal.

Red-Squirrel_2

Here’s the thing though, a lot has changed since the fifties.

I bought my first home in my early twenties, but like Pixie a big part of that was luck as it was 2009. I couldn’t have afforded 2006 prices, or 2017 prices if I were starting from scratch now.

It’s ok to acknowledge luck and accidental good timing. It doesn’t mean you didn’t also work hard.

Scotbot

No one has mentioned interest rates. House to salary ratio may have gone up but rates have gone down dramatically since the 80s. When I bought my first house the base rate was double digits. My mortgage repayment was about 40% of my salary. On todays rates I could still afford to buy a house at a higher house price to income ratio if I has the deposit

parkrunner

I bought my first house in 1970. Without the 100% mortgage it would have been impossible.

BucksLady

juniordoc wrote: »

Despite this it has taken over 6 years of saving since graduating to save a deposit, the public sector pay cap holding my wages below inflation every year of my career to date, astronomical rental costs and letting agents fees I have been unable to avoid as my job forces me to move every year, student debt totalling tens of thousands with repayments eating into my ability to save, and house prices in the south-west putting a property purchase out of reach until now. And after all that what am I able to buy with my partner-also a public sector professional...?
A very modest 2 bed flat with no outdoor space, hardly ideal for starting a family. This situation has prevented us from doing so before now.

Something has to change.

Something will change - eventually as your career progresses, the level of your income will increase substantially. Most people are not in this fortunate position. Imagine living on the minimum wage or the average wage for that matter - that must be really tough. I'm married to a doctor and he earns in excess of £120,000 a year - as do many of his colleagues - a very privileged position indeed. Sorry, but I have very little sympathy for doctors complaining about pay caps.

LdnFtB

Cakeguts wrote: »

Yes but you haven't done what a 1950s couple would have done. They wouldn't have had a car between them so would have used public transport to get to work. They would have lived in a shared house as a couple until they got the money for a house or flat.

I am old fashioned. I could easily afford £30 per month for a phone but I can get one for a lot less so I would consider the difference between your phone and mine in cost as a total and complete waste of money. £30 per month is a lot for a phone. So from my point of view you are wasting circa £200 per year on nothing. That is over £1000 for 5 year and it is for nothing. You might as well just flush the money down the loo.

What people think of as necessary now are what people in the 1950s considered luxuries that they couldn't afford. People didn't have two cars. Most families didn't have one car. Second hand furniture was normal.

This is such bunkum and you have no idea how frugal young people are having to be just to get by - not even to save. My friends still live as couples in shared houses, they still use public transport, they don't spend £30 per month on phones. They cook vegetarian dinners from scratch, make double quantities so they can have leftovers for lunch, they use the office kitchen for coffees. Avocado brunches come courtesy of a special offer a Morrisons.

With the median price exceeding 10 times the median income a place of their own without an inheritance is a pipe dream as it's nigh on impossible to save the £100k average London FtB deposit.

No matter how frugal we are, the reason we cannot save is rent. No matter where you live in London, you will pay at least £600 a month in some combination of rent and travel costs for a room in a shared house. It is impossible to club together a reasonable deposit without help, even on professional wages.

It's not our lifestyle which is to blame, it is the wealth extraction by Landlords. You're portraying the victims of the situation as the architects of their own misfortune.

capital0ne

juniordoc wrote: »

Clearly you're out of touch with the reality of today's 20-somethings. Yes some do over-spend but the picture you paint is so far wide of the mark of the average.

Personally I spend nothing like the amount you describe. Have never paid more than £25 a month for a phone, have never owned a new car or bought on PCP, have never in my life bought a takeaway coffee, share a Netflix account with friends (much cheaper than cinema tickets!) and go to the cheapest gym in the city.

Despite this it has taken over 6 years of saving since graduating to save a deposit, the public sector pay cap holding my wages below inflation every year of my career to date, astronomical rental costs and letting agents fees I have been unable to avoid as my job forces me to move every year, student debt totalling tens of thousands with repayments eating into my ability to save, and house prices in the south-west putting a property purchase out of reach until now. And after all that what am I able to buy with my partner-also a public sector professional...?
A very modest 2 bed flat with no outdoor space, hardly ideal for starting a family. This situation has prevented us from doing so before now.

Something has to change.

Let me see now, I can save you loads, phone contract £3.99/month would do most people 2Gb data, 500 mins and unlimited texts should be enough for most people, get an older car, mine is 20yrs old goes fine, dump the gym no matter how cheap, walking, running, swimming (Ilive by the sea) is free, you don't need Netflix.

Two bedroom dwelling is fine, I started a family in one, no garden, what's the problem?

The problem is you need to prioritise, live at home with the 'rents, and have a nice phone and wait till you can afford your four bed family home, or save like hell for a year or two and buy your a small home you can afford, The choice is yours.

capital0ne

LdnFtB wrote: »

With the median price exceeding 10 times the median income a place of their own without an inheritance is a pipe dream as it's nigh on impossible to save the £100k average London FtB deposit.

At your age back in the 1970's I could only dream of buying a property in London. It was way out of my re3ach even as a graduate engineer. I moved out of the London area to an affordable part of north Hertfordshire/Cambridgeshire and commuted - this and my mortgage (5-7%) took over half my salary.

Nothing has changed - just the people willing to blame everyone else but them selves, greedy landloords, the governmenet, their 'rents, the job market, the debt from going to Uni.

Folks you all have a choice, you have more information at your fingertips than us oldies ever had , and you're all very smart now with all the uni education. Who's fault is it in reality, if there is ny fault?

capital0ne

Cakeguts wrote: »

In the 50s lots of people started their married life in rooms in shared accommodation with a shared toilet and bathroom and shared kitchen. Some people had their first child in this type of accommodation. They lived like this in order to save money so already you are proving that you have spent more money on your accommodation if you have rented more that a room in a shared house. You now have a two bed flat so you are doing better than a lot of people were in the 50s and you have spent more money than they did on somewhere to live by choice.

Someone I know of who needed somewhere to live before ww11 had a flat with a mattress in it. That was all they could afford. They gradually saved up to get some furniture and floor coverings. People have much higher expectations and will put up with a lot less than they used to.

My phone costs £7.50 per month. I could afford more but I don't waste money on things I don't need. I don't need a £25 per month phone. I have never been to a gym in my life. You would be better to sell the car and get a cycle and then cycle to work to keep fit that will save the gym fees and the cost of the car. I know someone who never pays more than around £1200 for a car. They last a few years and then get scrapped. Really old second hand cars are the cheapest way to run a car but even this is more expensive than cycling or using public transport.

Most people in the 50s didn't have cars they either walked cycled or used the bus. Young people don't realise how much people went without in order to buy a house. If there was a car there would only be one car. They didn't tend to have a car each.

So start again and do this.

Find out how much you could have saved if you had lived in one room in a shared house all the time you were working. Then how much you could save if you had had one cheap phone, no car had cycled to work and hadn't paid for a gym. The result is how someone managed to buy a house in the 50s and 60s.

Someone who speaks sense - well done