Can Millenials Buy A House?

brentcloning

You're completely ignoring a large amount of people are on minimum wage, and not everyone can just go back home and live with their parents.

The problem is, back when my parents were buying a house, they had a 95% mortgage and a £1,600 deposit to pay. (That's £6500 in today's GBP). They had that money saved easily and then went down to the bank who literally threw them a mortgage (took them about a week to sort it out) and job's a good 'en.

To buy my house, I had to pay a £30k deposit, which involved a number of years of saving and moving back in with my parents, and also buying with my wife to ensure we could afford it. When my dad bought his with my mum, he was an apprentice and she was a part time carer.


Obviously it's not impossible to buy a house now, but it's a lot harder than it should be and all current government research is in agreement with this.

westernpromise

ibizafan wrote: »

My son and his best friend from university bought a flat in Clapham, South London, in 2008 when they were both 26 for £315,000. My son was on £26,000 at the time, and although they had a good deposit, he found it very hard for a couple of years, so didn’t go out much as he couldn’t afford to. Over the years, he got promotions, better jobs etc and is now on £100,000. His friend moved out to get married a few years ago, and my son bought him out and can easily afford the mortgage on his own. Meanwhile, the flat has gone up in value to approximately £650,000. It was the best thing he ever did in my opinion. All I’m saying is that it can be done, but means sacrifices, and also trying very hard to improve your employment situation.

Bingo. And that, usually, is the problem.

Strebor123

brentcloning wrote: »

You're completely ignoring a large amount of people are on minimum wage, and not everyone can just go back home and live with their parents.

The problem is, back when my parents were buying a house, they had a 95% mortgage and a £1,600 deposit to pay. (That's £6500 in today's GBP). They had that money saved easily and then went down to the bank who literally threw them a mortgage (took them about a week to sort it out) and job's a good 'en.

To buy my house, I had to pay a £30k deposit, which involved a number of years of saving and moving back in with my parents, and also buying with my wife to ensure we could afford it. When my dad bought his with my mum, he was an apprentice and she was a part time carer.


Obviously it's not impossible to buy a house now, but it's a lot harder than it should be and all current government research is in agreement with this.

Minimum wage with a full-time job works out at around £1000 a month net (What you actually receive) It IS doable. Live in a house share rather than having a studio flat, house etc. In a lot of places except London you can find somewhere for about £400 a month, if you get a small room that could even include bills. £30 a week for food, £10 a month for your phone. Throw in a few extras, toiletries, couple of treats, whatever. You can still save £250 a month. When I was on £14K a year I could save around £320 a month - I went camping instead of flying abroad, I cut down on everything I didn't need etc.

Now this would still take several years to scrape together a deposit but hopefully you don't stay working for minimum wage for more than a year or so and can save more.

My point is. It's doable, it just depends how much you want it. For some it's not worth it and therefore they proclaim that it's not possible.

The main exception is if you live in London. In which case all I can say is - work hard and get a really good job (hopefully get a lucky break), leave London, or give up on being a homeowner there.

westernpromise

brentcloning wrote: »

You're completely ignoring a large amount of people are on minimum wage, and not everyone can just go back home and live with their parents.

The problem is, back when my parents were buying a house, they had a 95% mortgage and a £1,600 deposit to pay. (That's £6500 in today's GBP). They had that money saved easily and then went down to the bank who literally threw them a mortgage (took them about a week to sort it out) and job's a good 'en.

To buy my house, I had to pay a £30k deposit, which involved a number of years of saving and moving back in with my parents, and also buying with my wife to ensure we could afford it. When my dad bought his with my mum, he was an apprentice and she was a part time carer.


Obviously it's not impossible to buy a house now, but it's a lot harder than it should be and all current government research is in agreement with this.

It's not new that people on minimum wage type jobs can't buy. They never could, whether 50 years ago, 20 years ago, or any other time.

Malthusian

capital0ne wrote: »

I've posted this subject in the past and today we had a discussion/argument in the office.
Half of us think a young person can buy a house or flat. The other half said it was too hard!

As home ownership is about 60%, your office is a fairly good representation of the UK population.

The half of your colleagues who think it's possible to buy a house will buy one (or may have bought one already). The half who think it's not possible won't. A few of those who think it's not possible will change their minds and buy one, hence the eventual percentage of your colleagues who will be home-owners will rise from half to around the 60% average.

If your colleagues have already passed house-buying age, largely the same will apply to their children.

Not everyone is suited to buying a house, that's why we have rental properties and social housing. If you are one of your colleagues who goes around saying "I'll never be able to afford a house" then you are probably one of them. At the moment you don't have a house so moping around saying "I'll never be able to buy a house" is merely an abstract problem. If you actually did own a house and you were moping around saying "I'll never be able to get the leaking roof mended" or "I'll never be able to get the damp course fixed" then you would have an actual concrete problem which would be much worse. No responsible person would want you to be put in that position which you aren't mentally able to deal with.

Whether they think they want a house is neither here nor there. If someone asked me whether I would like to own a supercar I would say yes, but even if I had the money I will probably never buy one as it doesn't fit my needs.

AdrianC

Strebor123 wrote: »

Minimum wage with a full-time job works out at around £1000 a month net

About 10-15% more than that.


Just over £1,110/mo, based on 37.5hrs/wk, another £50 for 40hrs.
https://www.moneysavingexpert.com/tax-calculator/

brentcloning

Strebor123 wrote: »

Minimum wage with a full-time job works out at around £1000 a month net (What you actually receive) It IS doable. Live in a house share rather than having a studio flat, house etc. In a lot of places except London you can find somewhere for about £400 a month, if you get a small room that could even include bills. £30 a week for food, £10 a month for your phone. Throw in a few extras, toiletries, couple of treats, whatever. You can still save £250 a month. When I was on £14K a year I could save around £320 a month - I went camping instead of flying abroad, I cut down on everything I didn't need etc.

Now this would still take several years to scrape together a deposit but hopefully you don't stay working for minimum wage for more than a year or so and can save more.

My point is. It's doable, it just depends how much you want it. For some it's not worth it and therefore they proclaim that it's not possible.

The main exception is if you live in London. In which case all I can say is - work hard and get a really good job (hopefully get a lucky break), leave London, or give up on being a homeowner there.

I feel you're taking my comment out of context a little. Yes it is possible, I'm not denying that.



My point is that when my dad bought a house he didn't have to do any of that. He barely needed a deposit (6K in today's GBP) which would be easy to save now. My parents didn't have to move back home and scrimp and save, because the deposit was trivial to save up for. They got their house when they were about 21.


My point is that is was very simple to save up the small deposit and go down to the bank to secure a mortgage.


Now you need to move home or live in a small bedroom. Save everything and live on the bare mimimum for a few years and then you might be lucky enough for the bank to offer you a mortgage.


Like I said before, if you can't see that it's much harder than it should be then nothing will make you change your mind.

steampowered

ibizafan wrote: »

My son and his best friend from university bought a flat in Clapham, South London, in 2008 when they were both 26 for £315,000
...
Meanwhile, the flat has gone up in value to approximately £650,000.

Your son would need a £100,000 salary and a £200,000 deposit to afford the same flat today.

Strebor123

Ah. I did it on the Under 25's rate!

brentcloning

Malthusian wrote: »

As home ownership is about 60%, your office is a fairly good representation of the UK population.

The half of your colleagues who think it's possible to buy a house will buy one (or may have bought one already). The half who think it's not possible won't. A few of those who think it's not possible will change their minds and buy one, hence the eventual percentage of your colleagues who will be home-owners will rise from half to around the 60% average..

Home ownership for a 25 year old is 20%, compared to 46% twenty years ago.