How will the next generation buy?

dsab

The current situation might actually help people as the trend to work from home will enable  more young people and families to move away from the expensive urban areas into areas that offer them more value for money.

I see that at my work as several of my colleagues living in the expensive London belt due to work have already moved or are looking to move into areas further out, some as far away as the Northeast or Northern Ireland. Our company have made it clear already that WFH will remain an option for people who enjoy it, even post Covid. And there are many other companies like that.

RHF2020

It's very very difficult. My partner and I are about to buy our first home. We earn £80k p.a. between us and live in a relatively small flat to help us save. 10% deposits are out at the moment, so we've had to save for 15% which has only been possible because of the pandemic (this year we've been able to save about £15k). We're outside of London; in London it would be impossible. it also would have been near impossible as a singleton. It's no surprise young people are spending a bit of money on enjoying themselves because the reality of getting on the property ladder looks like a pipe dream in your 20s, even if you are on a decent career starting salary.

Government schemes can only ever be a plaster over a bigger issue. We need to build more homes and then prices will come down and be affordable. As somebody about to be a homeowner, I'd be left out of pocket by a fall in prices but this doesn't concern me if it benefits society. Otherwise, those who can rely upon bank of Mum & Dad or inherit homes will have a huge advantage over the rest.

getmore4less

90% LTV market is coming back, rates are a bit premium but for some  they will be able to bridge the gap quicker and cheaper than they are while  renting.

BikingBud

RelievedSheff said:

For there to be a house price crash there has to be some major upset in the economy that forces house prices down. This means economic misery for most people. Are you really suggesting this would be a good thing?

Despite what people think there are large swathes of the country away from the south east where housing really is very affordable for first time buyers and for people moving up the property ladder.

I work with most of the major house builders in my line of work. There is no way that we can currently build 200-300k homes a year in this country. The local authorities and water authorities are just not geared up to get the highways and drainage approvals through on that scale. It just couldn't happen as things currently stand and without major investment these figures for house building are just pie in the sky figures.

So scrap HS2 and reinvest. Build a white elephant that will make little if any difference to the vast majority of the UK or commit to a major housebuilding programme and investment in something that improves quality of life and standard of living for many people for many years to come.

Seems like a no brainer for me.

BikingBud

MovingForwards said:

robinsonad86 said:

MovingForwards said:

I understand that, but it still comes back to not expecting to afford somewhere where the job or family is.

Accepting a commute will be part of daily life, could be the difference between a studio / one bed flat or a 2 / 3 bed flat / house and still work out cheaper when commute costs are added in. 

I posted up not long after my purchase went through that my commute costs until retirement with my mortgage costs, still made a huge saving compared to buying an almost like for like property in the city I did used to rent in. 

How far is reasonable? 30 minute commute? 2 hours? How far away from
family and the place you grew up is worth the upheaval?

I live in the Midlands and already seeing the prospect of HS2 and a 40 min commute into London driving up house price as people from the South look for more bang for their buck. Not a problem with that using your logic as people from my town can just move further North but being an island it’s only a finite amount of time before people can’t go any further North, East or West

That's personal choice, if someone wants to buy.

I moved away from my family / near where I grew up nearly 5 years ago, for me it wasn't a big deal, same as when I first left the family house. For me it was worth the upheaval. 

A few years before that, I moved away for a job. Before that job I was living out of a suitcase in various hotels for months.

Some of the Midlands has been expensive for quite a while, other parts rediculously priced for decades. Several managers in my one job used to live there, but commute to London. Again though, move a bit further out and prices are more reasonable.

Well done @movingforwards, you're a great role model.

So people don't need to live in where their job is. So who does those jobs? How much does it cost to commute 30 miles each way per day in time and money and cost of cars or fares. Is that fair and reasonable? 

We already see HMOs where worker gangs from overseas "live" crammed into houses to reduce their accommodation costs and send money home, let's go the whole hog and re-establish the work house and the poor house! I mean if we can resolve their housing needs totally it must be good for someone's profit.

MaryNB

When my parents bought the house I grew up in in Dublin in 1989 it cost approximately 4 times average salary. Now it would go for about 12 times average salary. I think this increase from 4x to 12x was in line with the general increase in Dublin house prices from 1990 to the peak of the celtic tiger in 2007 (across the country peaked at about 9x on average). While in general property prices in Ireland haven't bounced back to pre 2008 levels, my parents' suburb has, and may have increased even further. At the moment the salary multiplier in Ireland for most people is capped at 3.5 and interest rates are higher than in the UK. 

Anyway, no chance I can afford to buy in Dublin so sticking with the relatively cheap SW of England. My mother managed to buy alone in Dublin when she was 25 in the 80s with a much lower paying career than I have. I had a 17% deposit by the time I bought so wasn't exactly blowing all my cash on holidays and brunch. Only pre-mortgage debt I've ever had is on my credit card, which I pay off every month, and my phone contract. I will admit to taking advantage of the bank of mam and dad for my house purchase. Told my dad I'd return the favour with a top notch nursing home when he's old and senile, probably not in Dublin though... 

MovingForwards

BikingBud said:

MovingForwards said:

robinsonad86 said:

MovingForwards said:

I understand that, but it still comes back to not expecting to afford somewhere where the job or family is.

Accepting a commute will be part of daily life, could be the difference between a studio / one bed flat or a 2 / 3 bed flat / house and still work out cheaper when commute costs are added in. 

I posted up not long after my purchase went through that my commute costs until retirement with my mortgage costs, still made a huge saving compared to buying an almost like for like property in the city I did used to rent in. 

How far is reasonable? 30 minute commute? 2 hours? How far away from
family and the place you grew up is worth the upheaval?

I live in the Midlands and already seeing the prospect of HS2 and a 40 min commute into London driving up house price as people from the South look for more bang for their buck. Not a problem with that using your logic as people from my town can just move further North but being an island it’s only a finite amount of time before people can’t go any further North, East or West

That's personal choice, if someone wants to buy.

I moved away from my family / near where I grew up nearly 5 years ago, for me it wasn't a big deal, same as when I first left the family house. For me it was worth the upheaval. 

A few years before that, I moved away for a job. Before that job I was living out of a suitcase in various hotels for months.

Some of the Midlands has been expensive for quite a while, other parts rediculously priced for decades. Several managers in my one job used to live there, but commute to London. Again though, move a bit further out and prices are more reasonable.

Well done @movingforwards, you're a great role model.

So people don't need to live in where their job is. So who does those jobs? How much does it cost to commute 30 miles each way per day in time and money and cost of cars or fares. Is that fair and reasonable? 

We already see HMOs where worker gangs from overseas "live" crammed into houses to reduce their accommodation costs and send money home, let's go the whole hog and re-establish the work house and the poor house! I mean if we can resolve their housing needs totally it must be good for someone's profit.

What's wrong with living in a different area / county to where the job is?

Not many people have jobs on their doorstep and within walking distance. Most people drive, cycle or use public transport to get to their job. What's the difference in moving further out if it's saving a lot more? 

As I said, the commute cost, frequency and reliability was what I took into account when buying my home.
Do I feel annoyed at the world my income didn't stretch to buying near where I work? No, it's one of them things I knew would happen when buying, I managed my own expectations.

When I'm back in the office it will cost me just over £140 a month for two bus passes or over £238 for a train and bus pass, 90 - 120 minutes each way. Cheaper and quicker by car but the trade off is trying to get my hours changed again so I get a parking space and avoid traffic.

I do think it's fair and reasonable, why would I think differently? The commute will cost me more than my last rental, but at the same time my mortgage is cheaper than the rent was, even with me making overpayments.

What on earth are you on about with bringing back workhouses and poor houses. Times have changed a lot since then. 

Getting_greyer

In the end I guess they'll just get a mortgage.

lindsay54v3

It all depends on the individual, as someone in their early twenties I make the most of a Lifetime ISA to help me save towards buying a home. Being on part-time minimum wage is hard, student funding helps quite a bit. It's all about deciding priorities. The current lockdown situation has actually had a negative impact on my spending due to the boredom of being on furlough which I'm actively trying to get a grip on. When able to go to work I pick up any extra shifts or hours possible, I haven't gone on a night out drinking with friends in about 2 years which has saved me a huge amount, and I switched from cigarettes to vaping which is a fraction of the cost. Also have to say, my intense phobia of flying has probably saved me thousands over the years as I don't do vacations, staying in the house or going for a meal is more than enough for me 

I know people in their 30s who have no savings and live at home, and people my age or younger that have moved out or have a large sum in their savings.

The cost of housing is definitely a concern, but even being more realistic about affordable housing options makes a difference. I think social media influencers have had both a positive and negative impact. Many graft hard to get where they are, but also young audiences don't see all of the hard work that goes into internet 'fame' and believe they can have the same lifestyle with minimum effort. I think schools and parents could have a huge positive influence if they talk about money and savings earlier, kids don't know the cost of living until they're on the verge of moving out unless they are unfortunately in a low income situation where they're taught the importance of money.

csgohan4

Life is full of sacrifices and hard work, this won't change whatever generation. It's the perception that changes, that some generations have it easier.

Prioritization will also become a key as well, easier life later in life, or a short term gain now?

I knew people who didn't have a fancy wedding, just a registrar and a few witnesses, job done, down to pizza hut. No shame in that.  Save later for a better house later down the line.

Then there are others who spent their life savings and more, 20+k on that 'perfect' wedding. They are still renting and poorer for it in their 30's, 40's. No regrets? Really personal preference

Both are not in the wrong per say, one is more frugal, one wants to live life and have the very best memories. But can you measure happiness in material gain? Again it is personal. Who are we to judge?