Will the next generation be able to buy their own house?

AG47

The generation in school at the moment, will they be able to buy a house with a normal job and normal income?

The generation in their 40s or 50s could buy a house when they left school with a normal job.

A normal job let’s just say is min wage x 40 hrs or thereabouts.

Last few generations the ratio of house prices to normal jobs, a single income could get a mortgage and buy an average house.

The disconnect has gotten so large you now need both the man and woman in the work place, and even then an average job in a supermarket something is still not enough to buy an average house.

ScottishSaver14

Who in your eyes are 'the next generation'? Those not born yet? Those currently in primary or secondary school?

Any manner of things could happen in one, five,ten years. It would depend on where those people are born and where they choose to buy, if they do.

'the next generation' buying their own house might be as much of a cultural shift as a financial and political one.

People will always buy houses, and just like the people buying now- results and success may vary.

System

AG47 wrote: »

A normal job let’s just say is min wage x 40 hrs or thereabouts.

Minimum wage is not a normal job, it's a low-paid job.
The lowest paid have never been able to buy houses.


I think you must mean an average job, which by definition pays more than minimum wage.

Jitter

We bought our first house in 1990, £40k, interest rate 13%, monthly payment (interest only) £433, average wage at that time was £13.760 a year, we earned about £15k between us.

Same house today £177k, interest rate 2%, monthly interest £295, average wage £25,014.

I appreciate the 5% deposit has risen from £2000 to £8000 but wages have increased.

I also appreciate that interest rates may not stay at this low rate, and that the capital sum has to be paid off, but easy forget the lower wages and higher interest rates in the past.

For us there were no foreign holidays, if you wanted a hot drink when you left home you took a flask etc. etc.

PasturesNew

Jitter wrote: »

We bought our first house in 1990, £40k, interest rate 13%, monthly payment (interest only) £433, average wage at that time was £13.760 a year, we earned about £15k between us.

In 1990 I was earning £15k alone. A studio flat on a council estate 8 miles out of town was £52k.

Mortgages were 3x salary, so I'd have needed £7k deposit - which was out of the question.

westernpromise

AG47 wrote: »

you now need both the man and woman in the work place, and even then an average job in a supermarket something is still not enough to buy an average house.

And once again, and wholly reliably, you're got it exactly backwards.

You don't need two incomes because house prices are high. House prices are high because households have two incomes. See how that works?

mayonnaise

AG47 wrote: »

Will the next generation be able to buy their own house?

If they're not dependent on benefits....

AG47 wrote: »

It’s crazy if my benefits are capped to £500

....don't end up with a DRO...

AG47 wrote: »

they keep harassing me even after the dro has been approved?

....and don't waste money on shiny stuff....

AG47 wrote: »

There is nothing I want that I can’t have, I’m content. I buy at least one ounce of silver every week, sometimes two.

....there is no reason whatsoever that the next generation won't be able to buy a house.

spadoosh

Jitter wrote: »

We bought our first house in 1990, £40k, interest rate 13%, monthly payment (interest only) £433, average wage at that time was £13.760 a year, we earned about £15k between us.

Same house today £177k, interest rate 2%, monthly interest £295, average wage £25,014.

I appreciate the 5% deposit has risen from £2000 to £8000 but wages have increased.

I also appreciate that interest rates may not stay at this low rate, and that the capital sum has to be paid off, but easy forget the lower wages and higher interest rates in the past.

For us there were no foreign holidays, if you wanted a hot drink when you left home you took a flask etc. etc.

As usual with old people youre fudging your numbers or forgetting things.

Youre using an actual house for comparison. Why not use the average house price which is £243,639? On that value youre looking at interest only of £546, a 5% deposit of £12k.

Old people like to complain about high interest rates a lot. Its a bit odd. I dream of having such high interest rates. See, the thing with high interest rates is that its a sign of a booming economy. If interest rates are 13%, it more or less plays out to 13% growth year on year. So wage inflation at the time was actually around 11%.

I mean weve got it easy, my interest rate is only 2.09%. My house cost £104k and required £10k deposit. I overpay so should be mortgage free by 40ish i just wish that wage growth over the entirety of my working life so far would get passed the barrier that is inflation because at the moment, my working life has only ever seen declines in real earnings.

lisyloo

AG47 wrote: »

The disconnect has gotten so large you now need both the man and woman in the work place, and even then an average job in a supermarket something is still not enough to buy an average house.

Your language is not very inclusive - you need a couple.

Supermarket jobs are not average.
The bottom 30% of the population has never been able to buy.

There has been a significant shift for women which you seem to have missed. Women are now expected to fully partake in the workplace thy don’t generally take decades off to raise a family. This is not just a social change but a political and economic one (it’s not that long ago that wives were a line on their husbands tax return).
So yes 2 people make up the economic unit now and not just 1.
That’s a fact.
Prices have (unsurprisingly) risen in line with what people can afford.

So yes people will still be able to buy houses but the required household size is 2 (inclusive of all genders).

spadoosh

Wage growth is pretty low. Real wage growth cant be far away from declining.

Theres undersupply so expect property to increase in price as high demand forces prices up further. With stagnant real wage growth and what looks like increasing prices id expect the number of people being able to afford a property to decrease. That said there will always be people who can afford to buy a property. I was one of the younger ones in my generation to buy and did so with low income. Largely because i live in an area with relatively low house prices and started saving for a deposit with my paper round money after watching too much homes under the hammer.

The trend for home ownership is heading towards ownership in later life.And the trend for people owning their own homes at all is in decline.

Jitter

spadoosh wrote: »

As usual with old people youre fudging your numbers or forgetting things.

Youre using an actual house for comparison. Why not use the average house price which is £243,639? On that value youre looking at interest only of £546, a 5% deposit of £12k.

Old people like to complain about high interest rates a lot. Its a bit odd. I dream of having such high interest rates. See, the thing with high interest rates is that its a sign of a booming economy. If interest rates are 13%, it more or less plays out to 13% growth year on year. So wage inflation at the time was actually around 11%.

I mean weve got it easy, my interest rate is only 2.09%. My house cost £104k and required £10k deposit. I overpay so should be mortgage free by 40ish i just wish that wage growth over the entirety of my working life so far would get passed the barrier that is inflation because at the moment, my working life has only ever seen declines in real earnings.

I'm only 52, still to a youngster like like you I suppose that would be considered "old" :rotfl:

The problem with average prices is that they include the SE bubble, I used a "real life" example to compare like with like on the same property. Having said that so do the average wages referred to in my original post, but out of interest one of my kids has just graduated and started work for the NHS on a salary 2.7 x times that of my wife when she started at a similar grade 30 years ago (I appreciate the pension now is not what is was then).

I didn't "complain" about high interest rates and take your point about their relation to the economy as a whole again I was comparing then with now to give a real life illustration of affordability.