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

itwasntme001

BikingBud wrote: »

There's that phrase many again:)

Usually? Show me the figures as I can just as easily state "but they usually can't afford to then have kids as so much of their income is going towards housing costs!" State the source of, or figures supporting your opinion.

Cash in hand! Unlicensed? Uninsured? Incompetent? Not paying tax?

And I could just add if we want to throw in opinions, if houses were more affordable fewer people would be living with their parents into late 20s, early 30s and then finding that by the time they can afford and they decide they want kids its too late.

The proof is in the houses prices - they have gone up a lot and are still affordable. If they were not they would be not at levels they are now. People in their 20s and early 30s can chose to rent or live with their parents to save up to buy. there is nothing wrong with that. Just because they are buying later does not make prices not affordable. This generation of workers today are starting work a good 4-5 years later then their parents because now going to university is the norm. Add in a gap year or two, and you have a whole generation who on average start work later and so everything else gets pushed further down time.

BikingBud

@itwasntme001

Did you even bother reading the report? Nothing like a closed mind to ensure we all understand the real problem eh!

Last year the number of London-based first-time buyers quitting the city to buy their first home hit a record high. Research by estate agency Hamptons International for The Telegraph found that just six in 10 of those who went from renting or living with parents in the capital to buying a home decided to stay put there.

The desertion of Britain’s capital by aspiring homeowners has been a gradual process, as potential buyers find themselves increasingly priced out.

This has meant that between 2010 and 2018, the number of London residents abandoning the city to purchase their first home almost doubled.

So for at least 40% of FTB that are departing London it would appear at best not to be VFM and at worst unaffordable.

GreatApe

Zero_Sum wrote: »

Youve been listening to Great Ape havent you?

Most wont inherit anything until theyre in their 50's or 60's. Very few people in their 20's or early 30's would benefit when theyd be wanting it for a deposit.

If the parent are already well off, they could pass it to grandkids. But chances are if theyre well off then kids would do alright without help (statisticially anyway)

That great ape knows a thing or two :beer:

There is a lot of gifting and inherited money. ~£200 billion each year

it goes to all age groups.
I have known 3 kids in the late 20s early 30s to be gifted significant sums often when they get married. Two got a house outright no mortgage and one got about a 50% deposit. People dont talk about this stuff in real life because its not polite conversation


Also the model I use (not perfect but so much better than the typical nonsense of average wage = average house) is to say FTBs should be able to afford the bottom 1/3rd of properties. Which they can as per the fact that FTBs make up about 1/3rd of all the purchases.

SecondTimeBuyers should be able to afford the middle 1/3rd of properties which they get with ~20 years of equity in their main home + a new mortgage or inherited/gifted wealth.

And the rich can afford the top 1/3rd of properties. If you model the market like that it looks a lot like the real world and correlates fairly well

GreatApe

chucknorris wrote: »

For investors it only matters when you sell, and property is a long term investment, I don't think that there has never been 25 year period where property is worth less, even if you look either side of that 25 year period, and compare peak to trough values. But why sell in a trough?

For home owners it only matters if you are selling to downsize, or want to switch mortgage deals, so you are talking about a tiny percentage of the population. Otherwise it is just a notional meaningless paper loss, that only you, crashy and others like you seem to care about. We had a good attitude back in 2008 when our property value dipped by about £1m, we bought another London house, taking advantage of the lower prices.

Average property transacts about once every 22 years

Not buying is an expensive risky gamble. 2% mortgage or 5% rent it adds up quickly
Over a 5 year fixed mortgage you need prices to crash 15% in nominal terms just to break even. That would be about a 25% real term crash. That is almost impossible in a country where the population is increasing by 500,000 a year and where demographic changes mean there is more and more demand for single occupancy housing

In fact one of my earliest posts on hpc was to explain to the crash cheerleaders that if they took on a 95% mortgage there was really no downside for them. Buy with 5% down and if prices are higher in two years time great you made a wise decision. Buy with 5% down and if the 50% Armageddon crash really does happen just hand the keys back you have only lost 5%

None listed
My advise was spot on
Property prices went up
Even if someone took that advise the month before the financial recession they still would have been up because their mortgages crashed from 5-6% to 2-3%
The national 10% decrease in house prices were recovered in 3 years of lower mortgage vs rent payments. But as we know prices after the crash recovered fairly quickly and in London prices are twice what they were in 2007


Really I wish I could figure out a way to sell house price crash insurance
Charge something like 1% of the value of the house
Insurance would cover any crash that was in excess of 5% of the difference between price paid and price sold over a 5 year period (with a limit of national average house price crash % to stop people faking purchase/sale prices)

So it would only pay out in the event prices are more than 5% lower in 5 years time than today and only if the person wants to sell the property and go through the hassle of moving and paying all the costs of doing that. Those condiitons would more or less never come about and even when they do very few people would call upon the insurance as they wouldnt want to move. Maybe I could swindle oh I mean sell.. 50,000 such insurance buyers each year it would give me £100 million a year in revenue minus tiny overheads. Would have saved some house price crash cheerleaders form their own stupidity

Fear of a house price crash would go away. Just pay 1% for house price crash insurance.... and the likes of crashy and co could go live their lives rather than spend 10,000 hours of their lives becoming 'crash experts'

westernpromise

GreatApe wrote: »

Really I wish I could figure out a way to sell house price crash insurance

As someone on here has already pointed out, this already exists, and it's called "rent".

GreatApe

westernpromise wrote: »

As someone on here has already pointed out, this already exists, and it's called "rent".

That insurance product costs 3% a year !!!
And I thought I was ripping people off with a one off 1% for house price crash insurance
Perhaps I should charge 3%.....

Actually its really amusing. I bet if such a product existed. 3% to guard against a hpc the house price crash cheerleaders would cry murder about how much of a rip off it is...while they pay it year in year out without even realizing it !!

triathlon

GreatApe wrote: »

That insurance product costs 3% a year !!!
And I thought I was ripping people off with a one off 1% for house price crash insurance
Perhaps I should charge 3%.....

Actually its really amusing. I bet if such a product existed. 3% to guard against a hpc the house price crash cheerleaders would cry murder about how much of a rip off it is...while they pay it year in year out without even realizing it !!

Are you pretending to be a nasty ruthless landlord in order to give them a bad image?

westernpromise

GreatApe wrote: »

That insurance product costs 3% a year !!!
And I thought I was ripping people off with a one off 1% for house price crash insurance
Perhaps I should charge 3%.....

Actually its really amusing. I bet if such a product existed. 3% to guard against a hpc the house price crash cheerleaders would cry murder about how much of a rip off it is...while they pay it year in year out without even realizing it !!

Your product doesn't include accommodation, whereas rent does.

However, rent is actually not that great an insurance policy against house price crashes, because when they do the rent goes up (obviously). Of course in a way this does make it similar to most insurance policies, in that as soon as you use them the premiums go through the roof.

AG47

The next generation will easily be able to buy their own homes,

Certainly easier than at the moment

andrewf75

AG47 wrote: »

The next generation will easily be able to buy their own homes,

Certainly easier than at the moment

Why do you think that?