To wonder how the next generation will afford a house?

(952 Posts)
Housepricewoes Mon 21-Apr-14 11:19:02

DH and I want to move to what will hopefully be our family home, in 2 years. Work commitments means we can't do it sooner but I'm stressing about how much house prices might rise in that time.

That got me thinking about how today's children will ever be able to buy a home.

I know it's a very British thing to aspire to home ownership but rightly or wrongly it is the norm.

Many of my friends and extended family have only been able to get on the property ladder with a significant hand out from the bank of mum and dad, but unless their circumstances drastically change, they are not going to be in a position to do the same for their children.

What do you think will happen about houses with the next generation?

sarinka Mon 21-Apr-14 11:25:06

Message withdrawn at poster's request.

Lioninthesun Mon 21-Apr-14 11:28:27

I have had to decide whether to remortgage and send DD private (prob not pay off mortgage as am a LP) or just to keep it so she has some inheritance. I've decided she will appreciate an inheritance more, esp if having a family. I don't want her to have to rely on a man so I feel this is important.

I don't know how the next generation will afford it without inheritance sadly.

Housepricewoes Mon 21-Apr-14 11:30:43

You might think 'getting on the property ladder' is BS sarinka but it is a uniquely British way of life so can't just be dismissed.

SleepySuitcaseSheepie Mon 21-Apr-14 11:30:48

Im seriously struggling right now - I'm still at home with my family because I work away so much it's not practical for me to rent. Equally I never saved when I first got my first full time job , I'm getting there slowly but it's ever so frustrating when I see all my friends who have moved out way before me.

I think majority of people will rent till they get enough money together to buy - normally from a inheritance though, I can't see how many people will manage to do it -" unless they live at home until their 30's ?

As Sarinka says, I think the culture will change from one of home ownership to renting, I think it's more like that in other European countries...tbh with the high proportion of interest only mortgages, many people are effectively renting anyway - the advantage/disadvantage is that you bear the cost of maintaining/improving and insuring the property as you wish.

Objection Mon 21-Apr-14 11:39:36

sarinka Why is wanting to get on the property ladder bullshit?
For many people rent is the largest outgoing - owning a property is the only way of working towards not having to pay that particular outgoing. So, technical, if you were to buy just one house to live in forever, in 25 years you would be mortgage free. Massively reducing your monthly outgoings.

You're also creating an asset for yourself, investing a proportion of your outgoings into something that is unlikely to significantly depreciate in value.
You are in more control of your own housing situation and not giving money to someone else for a temporary accommodation solution with the risk of being turfed out.

I see nothing bullshit about owning a home at all.
IMO renting is pretty much dead money and is an unfortunate reality for a while for most of us - but a stepping stone to freer living.

My grandparents, for example, don't own their own home so now have to find that extra money from their pitiful state pension. My OHs grandparents, however, do own their own home so pay maybe £650 less a month and have the security of knowing they won't have to leave their own home and will be passing on an asset to their children.

I'm genuinely interested to hear why you think this is all bullshit?

The culture of home ownership is a relatively new phenomenon in the UK. 100 years ago it was a very small percentage that owned. I believe it reached its high point of 70%+ in Mrs Thatcher's time with the right to buy and has been slipping back since.
(Sorry on phone so can't link). I think the IFS had a report on this.

Perhaps we need to address the myth that home ownership is the usual way and look again at the rights of tenants (I say that as a landlord).

To clarify on the rights of tenants. Tenants in Europe are better protected than the UK and often tenancies are longer so they can plan for years rather than 6 months. The UK is not tenant friendly by comparison.

jasminemai Mon 21-Apr-14 11:44:18

I want my children to save like I/we did. They already have savings accounts now and will want them saving large amounts from their first jobs onwards.

tiggytape Mon 21-Apr-14 11:45:50

I know it's a very British thing to aspire to home ownership but rightly or wrongly it is the norm.

It is the norm because renting in the UK is so awful.
Other countries allow tenants to feel like home owners not very poorly treated house-sitters who pay a fortune for the privilidge.

Tenants in Europe have secure tenancies. They cannot be given notice on a whim. They cannot be forced to move area and move school and move house every 6 months. The rents they pay are protected in advance so they cannot suddenly increase in a year. They can have pets. They can put up shelves and mirrors and buy new carpets and generally live a full life in the home they pay for. Renting here is just so awful that many people are desperate to buy.

catsmother Mon 21-Apr-14 11:46:27

I think probably the main reason people are "so attached" to the property ladder idea is that the alternative - private renting - is so unappealing for most. Like most things, if you have money to burn renting probably isn't too dreadful a proposition because even if you share the same lack of security, having to find somewhere new if asked to leave is always going to be easier if you can absorb moving costs and you will inevitably have more choice with more money to spend. It's a very different story for people on low or even so called average wages who are often reliant on HB to make up rent, and who will therefore be restricted to (comparatively rare, and often less desirable) HB properties, as well as all the additional costs that are pretty inevitable when you move - which could, if they're unlucky, be every year. Having no choice but to make an expensive move - with all the potential impact on schooling, jobs, childcare etc - is exactly why most Brits want to have the security of their own place. I know this isn't necessarily the norm in Europe and I have very little knowledge of rent laws there but the impression I get of countries such as Germany is that tenants are far more protected from both arbitrary rent increases and being asked to vacate after only a short let. It makes sense that (for example) Germans are less bothered about becoming owners if their rental system is fair and reliable.

As for the next generation it worries me dreadfully. Chances are that many of us lucky enough to own somewhere will see our equity eaten up by either care home fees, or indeed by downsizing - and then living off the proceeds because our pensions are so crap. Much as we'd like to we may not have anything to pass on as a result. As ever I think in years to come it'll only be the rich and/or the very lucky who own their own homes. It therefore follows that if demand for rental properties increases dramatically, surely that system would have to be improved sooner or later ..... because great swathes of people forced into accepting a shitty system would be a powerful political voice ?

I agree the law on tenancy also needs to change to better protect tenants Chaz.

missymarmite Mon 21-Apr-14 11:47:28

I do think we have an unrealistic view of home ownership, fuelled by the lack of cheap and stable long- term lets for families. Home ownership shouldn't be the norm, but as things stand it is the only way for people to feel secure.

I worry that our kids won't be able to afford even to rent though. It's the rental market that needs reforming, along with a massive build of social housing for young working families.

jasminemai Mon 21-Apr-14 11:48:40

Mortgages are often much cheaper than rents and you have an asset. I cant see any appeal to renting personally.

Changebagsandgladrags Mon 21-Apr-14 11:51:44

We're going to sell this house, buy a flat for us and use the rest for deposits on their places.

They are primary school age now, we should have paid off the mortgage by the time they are in a position to buy. We won't need a house, just somewhere to live.

I hope that sounds sensible?

tiggytape Mon 21-Apr-14 11:52:01

In other countries there are real benefits to renting. The landlord takes care of the property well and the tenants don't have those outgoings. Often this is very regulated and not dependent on the tenant nagging because it is organised on a larger scale (less buy to let people and more corporate type set-ups). The home owner lives in a secure home without the prospect of being turfed out but without any maintenance bills over many years. So there is a definite upside to renting. Even that can be lacking if you rent here.

BearsInMotion Mon 21-Apr-14 11:53:12

I don't see why home ownership shouldn't be the norm - the problem is those that see property as a way to make money either through buy-to-let or the value increasing rather than longterm security for families.

expatinscotland Mon 21-Apr-14 11:53:29

Mine will emigrate.

Ifpigscouldfly Mon 21-Apr-14 11:55:23

Jasmine will your children be able to live with you while they save then ? Most people who rent (like myself) can't afford to save for a house as well. I am now very very lucky in which I have a decent job and might just might be able to get together enough to put down a 5% deposit on a teeny house in the next 5 years.

But the buy to let/investment market has been fuelled by terrible pension prospects, you can't tell people how to invest their money bearsinmotion confused

GrassIsSinging Mon 21-Apr-14 11:56:38

Its a constant worry for every parent I know here in London.

I actually long for the days when social housing was the norm!

I grew up in the 80s in inner London - real mix of social class/levels of wealth etc - and almost everyone we knew lived in social housing. It just wasnt an issue. Then Thatcher sold off all the council housng, and I do mean virtually all of it, bar a few large housing estates. It was such a game changer. I know thats very old news, but the impact has been HUGE here. The flat I grew up in - three bed ex-council flat on a grotty road - is worth £750,000. A three bed ex-council terrace is close to a million. Who can afford that? Young couples? Working families? Who??

We benefited fron the property market, because we were lucky in many respects. My DH was older and had a good salary when we met, I inherited a lump sum of money that I could contribute as a deposit, and we bought in an area of London that was grotty/rough (Hackney), but appreciated massively and rapidly, and sold at the height of the market for a huge profit. So 'we're alrght, Jack'. But I still feel really sad and quite angry that most of my frends are NOT alright, Jack. Many are not on the property ladder at all, yet social housing is over in London. They are renting privately for extortionate sums and are not able to save for their children's futures.

I live in a far out suburb of London, now, and even here a 1 bed flat goes for 250k. Hpw anyone who doesnt have an inheritance or mortgage-free parents helping them out can afford to buy for the first time, I have no idea.

jasminemai Mon 21-Apr-14 11:59:39

If pigs could fly - They will work in some capacity from age 16 and I will take proportion of their money to put in their savings going up and up as they progress. They are welcome to move bfs/dhs in as well for as many years as they like.

gamerwidow Mon 21-Apr-14 12:01:18

I think these new help to buy schemes are fuelling a big unsustainable bubble which along with a rise in interest rates which can't be too far off will see house prices crashing. I feel so sorry for anyone whose just bought a house or who has a big mortgage because there's going to be rough times ahead.

Objection Mon 21-Apr-14 12:02:30

I'm 22 and received no financial help from anyone at all. My education was through state schools.
I moved away from home and supported myself from 17.
I bought my first house in December.
I did this by working two jobs and saving most of my money.
I work in admin (not management, just admin) in the Midlands Mon to Fri and as a Nanny in London at weekends. It's a 60-70 hour week on average.

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