Can Millenials Buy A House?

Strebor123

brentcloning wrote: »

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.

I don't know. Controversial maybe. But I don't think a couple of years of sacrifice to own your own place is such a big deal. It's harder yes, but maybe it was just too easy back in the day.

The only exception is London, where prices are simply ridiculous. My advice is always the same though, leave. Plenty of nicer places to live in the UK.

ibizafan_2

Further to my earlier post about my son in London, maybe I should have mentioned that to save up his half of the deposit, he lived in a tiny (and I mean tiny) room in an HMO in North London, and worked all hours in a restaurant in Leicester Square, before he was fortunate to get on a graduate scheme and start his career properly. I never bankrolled him either, as I couldn’t afford to, and he wanted to do it all himself.

ibizafan_2

As steampowered said earlier in this thread, even on his salary, he couldn’t buy the same flat now as a ftb. Thank goodness he did it back in 2008 before London prices went even more mad than they were.

Nicosy

brentcloning wrote: »

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.

Correct, and so much of that is to do with Government inaction by not prioritising the provision of homes across the last several decades, particularly in the South East.

Negligently low levels of construction have caused this, with new home builds actually decreasing for decades until very recently. So the answer is to build as many homes as humanly possible until the price/earnings ratio hits the desired level (preferably below the long term average). Once that target is reached, the ongoing level of construction would increase/decrease depending upon whether the price/earnings metric is above or below its target, acting like a thermostat for affordable housing. It could even be used to remove excess housing in depressed areas that have seen significant population decrease, creating much needed employment.

There are enormous political obstacles and vested interests in the way, but it is possible.
It would also provide an opportunity to introduce public sector provision within the marketplace as a regulatory mechanism to counter cartels and monopolisation. Once the market is back to an honest equilibrium, government can pull out to prevent ‘Leviathan’.

Germany already run a similar scheme.

LandyAndy

Strebor123 wrote: »

People also need to stop using the "average house price in ..." thing. If you're buying your first house you shouldn't be expecting to buy a 3 bed semi. If it's out of your reach, buy a 1 bed flat. They're affordable pretty much everywhere except London. Then you pay the mortgage off over a few years and upgrade.

People's expectations for a first home are far too high.

It's nearly 40 years since I bought, at the age of 22, and that is exactly what I bought, as did many of my contemporaries.

HPC_Ghuol_Hunter

I guess the answer to the OP thread is whether or not the millennial is a real man or not. It’s not impossible to buy if you have the get up and go positive attitude.

Strebor123

LandyAndy wrote: »

It's nearly 40 years since I bought, at the age of 22, and that is exactly what I bought, as did many of my contemporaries.

Yes, many years ago perhaps you did. But it irks me that people EXPECT a 3 bed semi in a nice area as their first home. If you're struggling, don't earn much, aren't very good at saving etc. then a flat is a great way to get on the property ladder. You can upgrade later after you've paid the mortgage off a bit.

ukcarper

Where I live a 2 bed house is about £275k so 10% deposite £27.5k and £247.5k mortgage, so need joint income of £60k median full time earnings for area £28.5k. So very difficult where I am in south east.

Where my sister lives you can get a similar property for £100k so £10k deposit and £90k mortgage so need joint income of £22.5k full time on minimum wage about £14k so easily doable.

Herzlos

Where I am, the price difference between a 1 bedroom flat and a 2 bedroom house is neglibable (~£80k Vs £110k), so it's not as if there's much to be saved by starting in the flat, especially if you're going to spent time/£ renovating it before moving up.



In hindsight though, I'm not sure if I made the right call going straight to the house - I've saved the cost of the move (~£5k all in), and the hassle. But it meant my mortgage was much bigger. I'd probably have more equity if I had a £70k mortgage than a £100k mortgage.



It'd be totally different if the price differential was significant, though.

Graham_Devon

capital0ne wrote: »

Where I work new starters (5 o'levels only) salary is £19k which would be about £1,400/month.

So living at home, running a cheap car you could easily save £800/month, which after a year is £10k.
Quick Zoopla brought up a 20 houses/flats, 2 or 3 bed within 15 miles at £100k.

And a 90% mortgage would be about £420/month - far cheaper than renting.

Quick look on the halifax website though shows that you wouldn't actually be able to get a mortgage for £90k though on that salary.

With 19,000, no debts, single person, no children, and a minimal £150 expenses per month, they would lend £71,000.

Just an online calculation, but basis for discussion.

So you'd need to save a deposit of £29,000 for that £100k house.

Good luck on 19,000 a year, pre tax, pension etc.