Will the plan work to turn generation rent into buy?

[JuanCarlosFandango]

Agree about useless degrees.

[Oakey]

These threads are always the same; boomers saying they lived in an old boot at the side of the road, ate discarded scraps they found in bins and walked 20 miles to work each day (and it was all uphill by the way, both there and back!)

[NRS]

budgie smuggler said:

Maybe a little but I think the real issue is this:

Yeap, it's very clear there is a big difference in real wage growth versus house prices, which often gets selectively ignored. It's also the reason so many are very against an annual tax on house value, as for many many people their wages were low, and so they'd never afford the cost of a tax on their current house price given their lifetime earnings. That "magic" money increase has to have come from somewhere.

Northernboy said:

Greg_D said:

Yet more excuses.

Fine, it’s impossible, can’t be done!!!!!

Except it can, and is being by those not full of their own self worth.

Why go to uni and get a load of student debt unless it is going to end up in a dead set career in something that pays very well and absolutely requires that particular qualification (like medicine/law)

This is a a very good point, there are thousands of degree courses that have next to no academic rigor and that add nothing to a person’s CV, all full subscribed and all turning out graduates who then expect to walk into a great career afterwards.

The list of excuses and moans on this thread has pretty much put paid to any sympathy that I may have felt for people who say that they struggle; they all appear to simply not be willing to make any sacrifice at all to get into a nice home.

It’s fine. They can enjoy their avocado toast in a rented flat for forty years then live in a caravan; it’s their freely made choice, and they need to stop banging on about it being unfair.

Point out where the excuses are? There is one person who has said they PCP their car etc. The rest is saying there is an issue, which that statistics show too.

You're ignoring even for a good degree in England you'll start working with £27 000 in debt from just tuition fees, which needs to be paid off while also paying rent and saving. Also many jobs now require you to have degrees for something that wouldn't have needed it before. If you want a decent job it typically needs a Masters or PhD in addition now. So you can choose not to do a degree, but it will also limit your job possibilities far more than it did back in the day, since companies can be choosy as there is so many graduates now. Instead of paying for an apprentice they can employ someone who paid for their own education - saving time and money.

Again, this is not some moaner who has done nothing. But as someone who is earning well above the national average, who never ran a car for a number of years and now owns the cheapest of the cheap one, learn do to a lot of maintenance on it myself etc, and who got onto the ladder. I don't work any harder than many of those who are on the national average, or below it, yet when I see how tricky it is for me I appreciate there is a problem, not just tell them to worker harder etc.

Many of those moaning about young people moaning bought at a far reduced price (relative to their salary compared to today's values), it typically was done on one person's salary, there was real wage growth on average until the 70s/80s after which it has died, there was also huge inflation which was difficult to survive paying down the mortgage, but if you did then you were "paying off" 15% of the house a year without doing anything. And the company you work for takes the risk on your pension, so not so much need to pay it off there. Far fewer jobs required degrees, and typically it would have been free if you did.

Now you have no real wage growth, you need to pay a lot for a degree with less job security at the end, you need to pay your own pension with all the associated risks, you need a couple typically for a house price purchase, the house is larger multiples of your salary, and there is no inflation to help get rid of the debt. If inflation does appear then it will likely wipe out most young home owners as the price of the house is so much higher and rates are so low (so if it changes from say 2 to 4% you double the interest payment - which is on a far higher value to start with).

This is not to say "oh, woe is us". It wasn't always easy for the older generations too. But to say it's all avocado toast and there is no reason to complain is ignoring a lot of the facts of how through a lifetime a generation or two has got very wealthy, and which is not repeatable by those following after. And that's from economists, not just some upset jealous young person (in theory I'd benefit from increases, although of course in reality it costs more to move up the ladder if it continues).

[JuanCarlosFandango]

Oakey said:

These threads are always the same; boomers saying they lived in an old boot at the side of the road, ate fdiscarded scraps they found in bins and walked 20 miles to work each day (and it was all uphill by the way, both there and back!)

I used to dream of an old boot....

[Greg_D]

Crudeoink said:

, houses are almost twice as expensive now as they used to be (relatively), something that keeps getting ignored on this thread.

I don’t accept that to be true... not when you factor in dual incomes. 3.5 times a couple earning £20+25k can get a mortgage of £160k plus a 15k deposit.

If you can’t get a workable house for that, you’ve got to move areas or set your sights lower. That’s a neat and tidy, extended 3 bed semi with a drive round here...

[anonymous-user]

Greg_D said:

Crudeoink said:

, houses are almost twice as expensive now as they used to be (relatively), something that keeps getting ignored on this thread.

I don’t accept that to be true... not when you factor in dual incomes. 3.5 times a couple earning £20+25k can get a mortgage of £160k plus a 15k deposit.

If you can’t get a workable house for that, you’ve got to move areas or set your sights lower. That’s a neat and tidy, extended 3 bed semi with a drive round here...

But what if you live in the South East? Are you suggesting that these people move to Yorkshire away from their families, friends and jobs so they can buy a house?

I can seriously see more and more youngsters thinking "what is the point" and just living with their parents forever and not even bothering to work. The other option is to come out of university with £50K of debt, get a stressful job where the company expect their pound of flesh and save up for years so you can get a 35 year mortgage on some ex council flat on a sink estate.

Unless your parents are wealthy and can afford to give you a six figure leg up what is the point?

[Oakey]

JuanCarlosFandango said:

I used to dream of an old boot....

If you'd spent more time working harder instead of dreaming you could have had that old boot...

[Challo]

Greg_D said:

Crudeoink said:

, houses are almost twice as expensive now as they used to be (relatively), something that keeps getting ignored on this thread.

I don’t accept that to be true... not when you factor in dual incomes. 3.5 times a couple earning £20+25k can get a mortgage of £160k plus a 15k deposit.

If you can’t get a workable house for that, you’ve got to move areas or set your sights lower. That’s a neat and tidy, extended 3 bed semi with a drive round here...

Can I ask where that is?

Where I am in Reading (Berkshire) 3 bed Terrace in a ropey area is £235k, for a semi you need to be spending £300k+ and thats not in a good area.

Edited by Challo on Tuesday 6th April 11:08

[Glosphil]

I was married (age 22 - close to 23) in 1969, when in the last year of an apprenticeship. We rented a basement flat & shared a 1964 Mini 850. We than moved to a first floor flat and changed to a 1968 Escort 1100 with a 1 year Bank loan.
After 4 years saving what we could with Nationwide we managed to convince NW to give us a 100% mortgage of 2-1/2x my salary + half my wife's salary to buy a new-build outside Bristol for £5,750. Interest rate was 10%. At that time house prices were increasing rapidly (6 months previously the same houses were selling for under £5k).
After 15 months I moved to a better job in Cheltenham & we sold the house for £9,750. Bought a house in Cheltenham for £12,500.
During our first 4 years we spent little, rarely had a night out & drank half pints of beer when we did.
2 more house moves, 2 years renting & now at 74 years of age we have a 4-bed house with a double-garage that cost £510k in a nice small town. Our cars are 11 years & 3 years old. Partly due to recent inheritances we have ample savings and can easily live off our pensions.
However, after a life time of being careful with money we still spend little on non-essentials & have helped both daughters buy houses.

Speaking to a friend's 24 year old son who has a new car on PCP, a new iPhone every 18 months and (in normal times) is out at least 4 times a week, he was complaining he & his long-time girl friend can't afford to buy their own place (they both live with parents).

If young people want to buy a house than that needs to be given priority over other spending.

[Crudeoink]

Greg_D said:

I don’t accept that to be true... not when you factor in dual incomes. 3.5 times a couple earning £20+25k can get a mortgage of £160k plus a 15k deposit.

If you can’t get a workable house for that, you’ve got to move areas or set your sights lower. That’s a neat and tidy, extended 3 bed semi with a drive round here...

Moving up north would be an option if I could do my job up there (cant) and if I wasn't a part of a family support (care) structure that is often needed at a moments notice. Not possible with a 2-3hr drive each way. While I could mortgage myself up to the eyeballs I want to be able to have enough money left over to carry out home improvements and increase the value of the property (sorry if that doesn't fit the thread theme that all 1st time buyers want a new build with a shiny new kitchen)

[Northernboy]

Oakey said:

These threads are always the same; boomers saying they lived in an old boot at the side of the road, ate discarded scraps they found in bins and walked 20 miles to work each day (and it was all uphill by the way, both there and back!)

I’m definitely not a boomer but that was normal for me too. I left university in the late nineties with (as you’d expect) not a bean to my name, and owning only some clothes and an old motorbike.

It seems quite a recent phenomenon, this idea that home owning is out of reach, and one limited to only a small part of the country. Anyone in a full-time job in the UK can afford to buy a decent place to live if they stop insisting that it has to have three bedrooms and be close to London.

[Oakey]

I doubt many people are getting a new iPhone every 18 months. A lot of contracts are 3 years now and we've reached the point where there's little point in upgrading until a couple of new revisions have passed.

[JuanCarlosFandango]

I think the degrees will become an absolute bloody scandal.

You can blame millenials for wanting to study nonsense but remember most of them sign up when they're barely adults and are perhaps only just starting to realise that they know nothing.

They're encouraged to by teachers, parents and government who tell them that this is the way to a good life.

[anonymous-user]

I have effectively been a first time buyer twice, once in 2000 and again in 2020. To give you an idea of how different it was.

1)House was £145K, went to look at it on a whim and didn't have a mortgage in place. Offered on the property, got approved on the mortgage the next day and put the 5% (£7.5K) deposit on my credit card ("I didn't hear that" said the mortgage advisor). I also ran a brand new Subaru Impreza turbo at the time.

2)House was £525K, both of us saved hard for 3 years to get the 20% deposit. Currently run a shed.

House 1 would be roughly worth what house 2 is worth today.

The point I am making is I needed £7.5K in 2000 as the deposit, today I needed £100K+

[Pegscratch]

No, but not because the funding or mechanisms employed are useless.

Today's generation of youth are very disinterested in "owning" a place to call their own; having somewhere they can take someone back to shag their brains out after a night out, or to have a few mates over in the garden for a barbecue - before turning it into a starter family home for them and their partner, and maybe eventually a child or seventeen. They're all about the latest and greatest phone (on tick), the most chintzy car (on tick) and the latest games consoles (on tick). The prospect of putting hundreds of pounds away a month when they're living at home and can partake in a never-ending game of one-upmanship with their mates instead is preposterous, and then the parents get some balls and start making their life uncomfortable so they move out. They have no money, so they go renting.

Instead of renting what they need, having been turfed out of mummy and daddy's four bed detached with double garage and driveway parking, they need to rent somewhere for most of a grand a month. With a friend or two, because they can't afford that and their designer lifestyle on the money they earn. They then realise they can't go on doing this forever, so they start putting £50 a month away towards a deposit in the hope that it'll buy them a house. Microny and Sosoft release new consoles, and they decide they've not really made a dent on that deposit anyway so they use the £1000 they put away over the last couple of years to buy themselves the console, and then there's only a few hundred quid left anyway so will we go for a holiday as we've not really been anywhere as we've been saving so hard?

Then they come back, cry about how hard it is to save for a house and how they don't have any money while they post their pictures on their latest Strawberry uPhone Y from a beach in Mexico before going home to drive their PCPed N-Sport convertible they needed to have to get to work.

It's a mentality thing, not a capability thing, in a vast proportion of the population.

Edited by Pegscratch on Tuesday 6th April 11:27

[JuanCarlosFandango]

Oakey said:

If you'd spent more time working harder instead of dreaming you could have had that old boot...

It was that coffee I bought in 1996. My life has been going downhill ever since, an orgy of debt fueled profligacy.

[okgo]

Pegscratch said:

No, but not because the funding or mechanisms employed are useless.

Today's generation of youth are very disinterested in "owning" a place to call their own; having somewhere they can take someone back to shag their brains out after a night out, or to have a few mates over in the garden for a barbecue - before turning it into a starter family home for them and their partner, and maybe eventually a child or seventeen. They're all about the latest and greatest phone (on tick), the most chintzy car (on tick) and the latest games consoles (on tick). The prospect of putting hundreds of pounds away a month when they're living at home and can partake in a never-ending game of one-upmanship with their mates instead is preposterous, and then the parents get some balls and start making their life uncomfortable so they move out. They have no money, so they go renting.

Instead of renting what they need, having been turfed out of mummy and daddy's four bed detached with double garage and driveway parking, they need to rent somewhere for most of a grand a month. With a friend or two, because they can't afford that and their designer lifestyle on the money they earn. They then realise they can't go on doing this forever, so they start putting £50 a month away towards a deposit in the hope that it'll buy them a house. Microny and Sosoft release new consoles, and they decide they've not really made a dent on that deposit anyway so they use the £1000 they put away over the last couple of years to buy themselves the console, and then there's only a few hundred quid left anyway so will we go for a holiday as we've not really been anywhere as we've been saving so hard?

Then they come back, cry about how hard it is to save for a house and how they don't have any money while they post their pictures on their latest Strawberry uPhone Y from a beach in Mexico before going home to drive their PCPed N-Sport convertible they needed to have to get to work.

It's a mentality thing, not a capability thing, in a vast proportion of the population.

Edited by Pegscratch on Tuesday 6th April 11:27

That grand was never going to get anyone anywhere anyway. All of what you've mentioned apart from perhaps holidays are an irrelevance in the grand scheme of saving a deposit.

Unless you can save hundreds a month, ideally thousands in the SE, then its mostly not going to happen. And whether or not you buy a new phone or a new xbox will make very little difference to that.

[red_slr]

Joey Deacon said:

I have effectively been a first time buyer twice, once in 2000 and again in 2020. To give you an idea of how different it was.

1)House was £145K, went to look at it on a whim and didn't have a mortgage in place. Offered on the property, got approved on the mortgage the next day and put the 5% (£7.5K) deposit on my credit card ("I didn't hear that" said the mortgage advisor). I also ran a brand new Subaru Impreza turbo at the time.

2)House was £525K, both of us saved hard for 3 years to get the 20% deposit. Currently run a shed.

House 1 would be roughly worth what house 2 is worth today.

The point I am making is I needed £7.5K in 2000 as the deposit, today I needed £100K+

3.5x growth in 20 years.... thats not typical IME.

[HustleRussell]

Pegscratch said:

No, but not because the funding or mechanisms employed are useless.

Today's generation of youth are very disinterested in "owning" a place to call their own; having somewhere they can take someone back to shag their brains out after a night out, or to have a few mates over in the garden for a barbecue - before turning it into a starter family home for them and their partner, and maybe eventually a child or seventeen. They're all about the latest and greatest phone (on tick), the most chintzy car (on tick) and the latest games consoles (on tick). The prospect of putting hundreds of pounds away a month when they're living at home and can partake in a never-ending game of one-upmanship with their mates instead is preposterous, and then the parents get some balls and start making their life uncomfortable so they move out. They have no money, so they go renting.

Instead of renting what they need, having been turfed out of mummy and daddy's four bed detached with double garage and driveway parking, they need to rent somewhere for most of a grand a month. With a friend or two, because they can't afford that and their designer lifestyle on the money they earn. They then realise they can't go on doing this forever, so they start putting £50 a month away towards a deposit in the hope that it'll buy them a house. Microny and Sosoft release new consoles, and they decide they've not really made a dent on that deposit anyway so they use the £1000 they put away over the last couple of years to buy themselves the console, and then there's only a few hundred quid left anyway so will we go for a holiday as we've not really been anywhere as we've been saving so hard?

Then they come back, cry about how hard it is to save for a house and how they don't have any money while they post their pictures on their latest Strawberry uPhone Y from a beach in Mexico before going home to drive their PCPed N-Sport convertible they needed to have to get to work.

It's a mentality thing, not a capability thing, in a vast proportion of the population.

Great, another person with no real insight attempting to tell us how ‘a vast proportion of the population’ live.

[anonymous-user]

okgo said:

That grand was never going to get anyone anywhere anyway. All of what you've mentioned apart from perhaps holidays are an irrelevance in the grand scheme of saving a deposit.

Unless you can save hundreds a month, ideally thousands in the SE, then its mostly not going to happen. And whether or not you buy a new phone or a new xbox will make very little difference to that.

I have a BTL in Hampshire that I have owned for four years and have rented out to the same couple for that time. In the last four years the value of the house has increased by £60K.

So they would have needed to save £1250 a month just to keep up with the value increase alone.

I seriously think if you live in the SE you need to be saving £3K a month for years just to get a deposit together. You can see why for a lot of people this is pie in the sky and they just give up.

This is why it will go mental once the 5% deposit scheme comes in and prices and competition for houses will go insane.