Harder now for 1st time buyers?

deFoix · 7 March 2016 at 11:35PM

Ok this is a London centric question I guess but do you think it's genuinely harder for (young) people now to get on the housing ladder. I'm in the process of buying my 1st flat and the only reason I could do this is because I spent 5 years in the Middle East saving on a tax free salary. I have a decent professional job now in the uk but I just can't imagine it being possible for someone like me if I hadn't worked abroad.

Maybe I'm wrong to think this but many of my colleagues at work (just a few years older) have multiple houses etc. and have gained hugely in the last 5-10 years on very good mortgage deals now unavailable.

Was it always this hard or is there a generational gap opening? I'm not complaining btw and count myself lucky; I was one of the last new hires to enroll on the finally salary pension before it closed. But say a person in there early 20s now probably is going to struggle more than before, especially in London?

csgohan4 · 7 March 2016 at 11:38PM

It's not hard when like you, you work hard and make some sacrifices.

Others who are born with a silver spoon have it easy.

Or bank of mum and dad

littlegreenfrog_2 · 8 March 2016 at 12:27AM

Yes, of course it is harder. I'm 30 and earn way more than my dad did at my age. But if I wanted to buy the (pretty modest) house he bought when he was 23, I'd need a deposit of £235,000.

deFoix · 8 March 2016 at 1:40AM

It's cant go on like this then. Something has to change. Why for example is a house you live in exempt from capital gains tax. I know the argument against is that people wouldn't sell because thay'd have to pay huge tax payments but I'm not sure hats true. Just thinking out the box here.

Maybe I'm wrong and the younger generations always get screwed over by the older.

Davesnave · 8 March 2016 at 1:55AM

Yes, it's harder now. London was tough years ago, but there's been foreign investment on an unprecedented scale in recent times.

As a youngster, I tried London for a couple of years, and it was fun, but I wasn't prepared to stay and struggle there.

There are other cities.

But the real problem is that building has not kept pace with increases in population, divorce and smaller family units, so all over the country, too many people are chasing too few residential units, whether to rent or buy.

People will tell you the Boomers had it "easy." That's a simplification, but they had things easier.

In my own case I remember selling my first car to buy basic furniture so I could rent, and then being laughed-at for driving a replacement which was well over 20 years old. The house I eventually bought had no heating system, so for a few years I just shivered with paraffin heaters. I even remember 'listening' to the TV, because it had no picture and I didn't want to dip into precious deposit savings to get it fixed! :rotfl:

csgohan4 · 8 March 2016 at 9:05AM

I think London is in its own bubble and artificially raised due to foreign investment/ laundering.

Sure the age at owning has raised but so have house prices. It's all relative.

always_sunny · 8 March 2016 at 9:10AM

it depends a lot of your definition of harder and what you consider buying.
Is it harder for someone on min wage to buy a detached house in Zone 2? Absolutely and it'd be the same in most other major city.

A professional couple in London should be able to bring home £100k combined, there are plenty of 1bed that are less than 4x this amount. Not in Zone 2 but surely in Zone 4+ within 30 min of central London.

Also early 20 now is VERY young to buy property. Most would be barely out of uni and looking for gap years through their tablets...

J_i_m · 8 March 2016 at 9:11AM

I think it's still ultimately down to personal circumstances. On paper it looks like it was easier in previous generations simply because prices were so much lower but there were other factors to consider as well such as smaller salaries, higher mortgage rates etc which may skew the picture.

I know it hasn't been easy for me, a perennially single man in his 30s. I have modest earning potential and have just spent five years under my parents roof saving for a deposit. There is no way I could have achieved this whilst renting.

I'm scheduled to complete on my flat tomorrow and it's not a moment too soon because since my offer was accepted prices have continued to push upwards and the market has moved on.

I'm convinced that if I were still looking now then quite simply I'd be priced out of the market any where near me. Indeed in the last week two neighbouring and very comparable flats to mine have come on the market asking for between 15-25k more than mine did.

My offer was accepted in December. There is no way I'd be able to compete for these other two flats as their asking prices are comfortably beyond my budget.

I'm pretty chuffed though, (not to mention relieved) as I believe that I have the nicer flat, never mind the nicer price.

I'm quite pleased with myself to be honest. When growing up I never imagined that I'd be able to own my own home. But it goes to show that if you put your mind to it, arrange your circumstances to suit then it can be done.

For me it's a good achievement.

DRP · 8 March 2016 at 9:14AM

This topic comes up very regularly.

There is even a dedicated forum for such discussions!!!

http://forums.moneysavingexpert.com/forumdisplay.php?f=149

greensalad · 8 March 2016 at 10:30AM

The stats and data show that it is harder. But even on an anecdotal level it is obviously harder. Shame that young people are just "lazy" and "self-entitled" etc. I was recently told that student debt should exist so kids "learn the value of money" by a man who got his degree for free. That stung a bit...

But yes, it's very difficult unless you have help from parents (whether they gift you cash, or if they let you live with them for free). I know about 10 people my age (25) who own properties and every single one has been helped by family in some way. For those of us who have to rent we don't have the luxury of saving a massive deposit. And then when we do try to buy, we'll find that people like my Dad own four two-bed properties so there is not a lot left to go round.

The interesting thing is that many advisers believe that the lack of house-buying, poorer young people, living in shared accommodation etc is going to seriously affect family formation in the next generation which in turn is going to have a huge impact on the currently wealthy 50-60 age range when they decide to retire.

Pixie5740 · 8 March 2016 at 10:33AM

It doesn't help that the Mayor of London seems more interested in flogging new homes to foreign investors at property expos in Singapore rather than focussing on building homes for Londeners.

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Harder now for 1st time buyers?

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