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

AG47

spadoosh wrote: »

Ive just worked out to get the same wealth creation ill need to be in a £3.7 million house in 20 years.

This just shows that unless wages go up that much and everything else along with the rises, then property will have o correct.

Maybe everything else will go up the same amount so that min wage is over £100 an hour and a loaf of bread costs £20 or somesome. A pint of milk casts a tenner.

Either every5ing else catch’s up with property inflation or property has to correct, the discrepancy can’t continue.

spadoosh

Kentish_Dave wrote: »

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.

The person used averages for every other metric and then used an anecdotal example of a cheap house to show that houses can be affordable. Its disingenuous.

OK lets do it your way.

Cheapest 3 bed property i can find in milton keynes that looks like it will be mortgageable is about £200k. So that should be for the lowest wages right so minimum wage.... Thats not affordable for a couple working bot working full time (thinking families here). They might be able to through the odd lender stretch to that amount of borrowing. But the majority wont be able to.

Average house in MK, sells for £288k. An average wage in milton keynes about £28k.... so not affordable. They might on joint incomes be able to afford the cheaper property.

So its only really high earners that can afford to buy a property in milton keynes.

Yet here in preston, if you earn minimum wage as a single person, you can afford to buy a property. As a couple on minimum wage, ft, its borderline whether you can afford the average house in the area.

As wage inflation continues to stagnate, a shortage of properties being built driving house prices up, its going to mean less people can afford houses. The main victims of this will be those who dont already have property who are typically, younger folk.

MobileSaver

Jitter wrote: »

We bought our first house in 1990,

spadoosh wrote: »

As usual with old people youre fudging your numbers or forgetting things. Why not use the average house price which is £243,639?

The fundamental flaw with your dig at "old people" is that First Time Buyers don't generally buy an "average" house; they buy a smaller, cheaper house, the same way we all did when we were twenty-something.

spadoosh

MobileSaver wrote: »

The fundamental flaw with your dig at "old people" is that First Time Buyers don't generally buy an "average" house; they buy a smaller, cheaper house, the same way we all did when we were twenty-something.

There isnt a flaw in the dig. You cant portray affordability by using averages and then for whatever reason using anecdotal evidence regarding the main thing youre talking about, its disingenuous.

Its a weird aregument you put forward. I ask is a house an investment or a home? Because if its an investment you might plan to 'move up the ladder' but if its a home, surely youd be best to buy the most appropriate for your plans. Im absolutely certain the advice going about on here when i bought was something along the lines of 'a house is a home not an investment' and 'to make money on property you should be staying in it for a while'.

Its almost like we live in two completely different times. Where doing as you did when younger is widely considered to be ineffective nowadays. Im sure in your day you tried your hardest to move up the ladder as quick as possible and that was the correct course of action at the time, in todays climate with a few percent inflation on property, costs and fees involved, you really need to be staying in the property to get any kind of financial return from it.

I love the ideals and arguments put forward. Societal judgement at its finest.

Id love to know the categories you assign to people....

So what should i have bought as an accounts clerk on just above min wage with a partner in retail management on about average wage? Because and heres the crux of the matter, its vastly different if they live in Preston or if they live in Milton Keynes yet their wages do not reflect this.

It really shouldnt matter too much where in the country you are, i mean im not in rush to go and live in milton keynes, in terms of services and amenities, what exactly is the addition house cost getting me? A degree or so warmer? A shelf filler should be able to get the equivalent house all over the country unless there are clear and obvious benefits of living in a specific areaand these shouldnt be personal benefits like living close to family, im talking commuting benefits, health benefits, pay benefits etc.

spadoosh

MobileSaver wrote: »

The fundamental flaw with your dig at "old people" is that First Time Buyers don't generally buy an "average" house; they buy a smaller, cheaper house, the same way we all did when we were twenty-something.

https://www.economicshelp.org/blog/5568/housing/uk-house-price-affordability/

Tell me how young folk are doing things differently today? I was under the impression houses are getting smaller in size and the prevalence of flats is on the increase. Its very clear its harder to buy a property today than it was in 1990. If it wasnt as hard, more people would buy them. You can put it down to wasting a few percent of their disposable income on avocados and coffee if you want but the fact there has been a massive increase in the house price to income ratios and a decline in the number of owner occupiers very clearly suggests an issue with houses.... across the country.... being affordable.

worried_jim

Jitter wrote: »

I think that the view that houses are for making money came at about the same time as the new millenium with a rising market and the popularity of "Location, Location" etc.

I always saw a house as a "home" and a welcome change from some dire rented properties rather than an "investment".

We bought our first house in 1990 for £40k, sold it in 1998 for £38k, average inflation in that time just over 4% and it took us 18 months to sell.

But that was all proportional and the price of the house we moved into (still here now) had dropped as well.

The value has gone up since then of course, but unless I sell up and move to a cheaper area there's no extra cash in my pocket.

I bought my first house in 1998 (3 bed semi) for £50k, rented it out making about £40pm, sold it in 2003 for £100k. Wish I'd bought more!

lisyloo

spadoosh wrote: »

Tell me how young folk are doing things differently today?

When I was growing up credit cards weren’t widely available.
So people would save for things or “make do and mend”.
I remember things changing and I believe it was around 1980.

Many people when they started out would have everything second hand or manage without until they could afford it.

My parents who married in 1964 initially lived with their parents when they got married to save up.

So there was a difference in people saving up instead of using credit and also not expecting to buy everything new or have everything straight away sometimes just going without.

That’s not having a dig at anyone of any generation, it’s just credit cards simply weren’t a available.

spadoosh

lisyloo wrote: »

When I was growing up credit cards weren’t widely available.
So people would save for things or “make do and mend”.
I remember things changing and I believe it was around 1980.

Many people when they started out would have everything second hand or manage without until they could afford it.

My parents who married in 1964 initially lived with their parents when they got married to save up.

So there was a difference in people saving up instead of using credit and also not expecting to buy everything new or have everything straight away.

That’s not having a dig at anyone of any generation, it’s just credit cards simply weren’t a available.

Its an excuse. Average credit card debt is £8000 per person. That obviously includes a considerable amount of people who own homes. There has been an increase in property prices since 1990 of 310% (to 2018). Cumulative inflation is 122% and cumulative wage inflation is 100%. So house prices have risen in cost close to 3 times more than, more or less everything else. Standard inflation has been higher than wage inflation which means even though people are earning more today the things they are buying are costing more.

Could you save your way out of that? Youre earning £100 and houses cost £1000. In a year youll be earning £200 but the house you want to buy now costs £3100. Its ok youve got more to save this year. So next year youre earning £300. Now the house you want costs £9610.

Thats the simple formula of housing for the last 30 years or so. Its a huge problem with or without people using credit cards. To put it into perspective in the example well add a proportionate amount of credit card debt, its £28.91 of the £1000 house. It makes no discernible difference.


Ill add that i, a millenial, spent a year with my OH and i living at my parents house in order to save our deposit. Ive already mentioned my 8 year old sofa inherited from my paretns. Ive never had a new car, most expensive i bought this week and it cost £4k. Bought my house at 24 and all going well should be mortgage free at 40. White good where all clearance bargains, so my fridge has a massive dent in it. We decorated when e moved in because it was quite dated, didnt spend huge sums, it was mainly wall paper and paint. Its not been done since. Our tv is pretty good, its was bought as a bargain second hand. We shop at aldi, we bought some value pasta from Morrisons the other week and it was quite shocking to see the quality difference an extra 20p can get you. And then ive got thigns like a third of my wage going directly to pay for childcare, and then trying to be prudent and save, whilst trying to maximise pension contributions so i can y'know retire at some point. Im not for one second complaining. My life is super easy. Largely i suspect because of the things i do to make it such. But i dont know what you want someone who cant afford a house to do. Yes there will always be those who dont spend wisely. Im not the only frugal person among my peers. Copious amounts of experts in the industry suggest there is an issue with the housing market as opposed to peoples spending habits but every time the discussion comes up its because millennials are more likely to choose avocado than haveacardo.

chucknorris

spadoosh wrote: »

Ive already mentioned my 8 year old sofa inherited from my paretns. Ive never had a new car,

I've been quite wealthy for a while now (over 25 years). I've never bought a new car, we bought a car a couple of months ago trading in our 11 year old (multi dented) Zafira for a 15 month old Toyota Verso. We just moved house last Summer, so we dumped out 13 year old sofas and bought new ones from DFS.

You make it sound as if new cars and renewing sofas regularly are an entitlement, or that you are having to make do with something undesirable.

I think the housing market is very unfortunate for those priced out, but moaning about it on forums, isn't the going to solve the problem.

EDIT: I don't think that I will ever buy a new car, it is much better value to buy a second hand one. I also didn't get my first credit card until I was in my late 40's.

spadoosh

chucknorris wrote: »

I've been quite wealthy for a while now (over 25 years). I've never bought a new car, we bought a car a couple of months ago trading in our 11 year old (multi dented) Zafira for a 15 month old Toyota Verso. We just moved house last Summer, so we dumped out 13 year old sofas and bought new ones from DFS.

You make it sound as if new cars and renewing sofas regularly are an entitlement, or that you are having to make do with something undesirable.

I think the housing market is very unfortunate for those priced out, but moaning about it on forums, isn't the going to solve the problem.

EDIT: I don't think that I will ever buy a new car, it is much better value to buy a second hand one. I also didn't get my first credit card until I was in my late 40's.

What are you on about entitlement? Im not complaining. Im highlighting that what others are highlighting as sacrifices ive also done (for what its worth the sofa was inherited second hand, my parents bought it in property 3 so 2002) which is suggested isnt done. Im very happy with my second hand sofa, second hand cars and my only debt being that of my mortgage.

Im not moaning about not having a house either, mianly because ive got one. Bought it at 24 and as mentioned several times will be mortgage free at 40 this from a household income of about £40k per year.

It always gets drawn in these tit for tat arguments about who has it worse. And everyone always completely glosses over the gross disparity between house price inflation and wage inflation. House price inflation has shot up due, according to widely published reports and more or less everybody with even a modicum of knowledge in housing, to a massive under supply of housing.

Thats it, thats what ive said all along. There will always be those who cant afford or are not motivated to buy a house. However in a period of increasing demand and under supply theres only one way house prices will go. If wages dont match that inflation, fewer people will be able to afford to buy a house, whether they want to or not.


Ive never had the desire for a new car, its not financially prudent. The sofa regularly causes arguments with my OH, who is also a millennial. She had a new car when we met, i soon put a stop to that.