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

BobQ

AG47 wrote: »

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.

A normal job is not minimum wage.

Those who can rent, can afford a mortgage although I accept may not be able to save the deposit. Buying based on two incomes is now normal.

The problem partly depends on where they want to buy. If they are willing to buy in less affluent places it may be possible. Buying a flat first helps. Equally buying a house that needs improvement may make things easier.

Unfortunately too many want a fully modernized home in nice area. I agree that some will struggle but some just have unrealistic expectations. Like buying an average house on a low income.

BobQ

spadoosh wrote: »

And then youve got another friend (couple) which is the one im assuming youre all thinking of.

Works in public services on what is an national average wage, bought a new build house with HTB, stretching their affordability as far as they could. All new furniture from ikea on tick, then theres been the 4 maybe 5 cars theyve had since buying the house about 4/5 years ago. They have a number of holidays a year, nothing particularly lavish but abroad. Theyre doing well on the face of things but i know the debt mountain is climbing. Conversely one of their parents who did more or less exactly the same route theyve taken (public services, home ownership around the same age, children etc), managed to retire early, have an epic pension, a holiday home and new cars as and when they please whilst having no mortgage to pay off now. Ill be amazed and dumbstruck if my friends end up in the same situation as there wealthy parents.

What do you call an epic pension?

BobQ

spadoosh wrote: »

Last time i checked my pension based on minimum contribution from the auto enrolment scheme im due to get about £2.5-3k per year. As mentioned earlier im desperately waiting for the terrible days of high interest rates to come. Its absolutely essential for me to be able to retire.

When you start talking about people on epic pensions or your friend in the public sector. bear in mind that you are choosing to spend your money today rather than invest in a pension. Relying on inflation and high interest rates is not a strategy for a comfortable retirement.

BobQ

spadoosh wrote: »

.


Have pensions that are incredibly affordable and funded, its just they pay sod all out well because there isnt 20% interest rates boosting them or defined benefit schemes knocking around anymore.

h.

A DB pension based on a proportion of final salary typically involved the combined employer and employee contributing 20% 10 years ago. They declined as this percentage continued to rise.

You contribute what? 3% plus a matched 3%? It pays relatively little because you chose to contribute relatively little.

By comparison junior doctor pays about 10% of salary to fund their pension.

Jitter

spadoosh wrote: »

You just talked about snowballing and property, that sounds like an investment to me. /QUOTE]

Being pedantic I didn't talk about snowballing - in fact I had to google what it meant.

I agree that my current property has turned out to be an investment, the point I was trying to make is that as with my first property I didn't buy it as an investment, and did not see as at a particularly bad thing when the value went down as it was purchased as a home, not an investment.

Until recently when I started my own company I've never had a company pension. When I started work I was on the lowest Agricultural Wages Board band, less than £100 a week but put £5 a week into a pension. I only got 10 days holiday a year, I think most jobs these days give more than that.

Kentish_Dave

AG47 wrote: »

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.

A normal job is the job on the minimum the law allows?

No, that’s a pretty poor job, one that you can do with no ambition and no qualifications.

A normal job will pay a good fraction more than the minimum wage, and will likely have overtime available, or career progression.

As long as you stick in at school, don’t turn to crime, and can mange to turn up on time and do your best every day then you should never end up on minimum wage.

Kentish_Dave

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...

Is that a serious question?

If so, the answer is simple, it makes no sense to use the average house price when looking at what low earners can afford. The right price to look at is cheap houses. Low earners, if they can afford a house at all, will be looking at cheap houses.

Average earners look at average houses, higher earners look at more expensive houses.

Zero_Sum

In answer to OP. Yes, but they just need to get over this obsession with moving to London & chasing the lifestyle.

enthusiasticsaver

AG47 wrote: »

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.

I expect that the current generation of school children will be able to buy a property but it depends obviously on their income, their priorities and whereabouts in the country they live.

I agree that a normal job is not minimum wage and no anyone on minimum wage should not be expected to be able to buy a house except in a very cheap area. The average house price is distorted as someone else said by London and the SE. We were professionals but moved out of London 30 years ago as we could not afford to buy the house we wanted in the area we wanted on just one wage as I was at home caring for young children. That has probably got worse over the last 30 years but people have options. Move out of London, both work full time or compromise on area/size/condition of house.


Needing two earners in a household is not unusual or something which is suddenly happening. Even 20 or 30 years ago unless one was a high earner often two incomes were needed in a lot of the country. A job in a supermarket is not an average job. It is a low paid one.


Young people will be able to buy a property but it depends on priorities. Some prioritise cars, holidays, lifestyle over buying a house in their 20s and 30s. Only when they settle down and have kids do they start to think about buying a house. Of course that does mean that saving a deposit takes time unless people are prepared to make sacrifices.

AG47

lisyloo wrote: »

You’ll only get a correction is bad circumstances for a lot of people.

The broken markets are a bad situation for more people.

The best thing all round is to stop the manipulation and go back to free markets.

This always happens anyway, markets naturally correct eventually nothing can stop this.

Even HTB 3, which is a last attempt to help to bubble out of desperation. They will offer 50% of the loan interest free for 6 years with only a 2.5% deposit needed.

Still the free markets will overwhelm the manipulation