Will the plan work to turn generation rent into buy?

[Crudeoink]

Second Best said:

Groat said:

Do they all REALLY have to have a Golf R or a Fiesta ST nowadays?

Groat said:

BOO HOO!! WAH! WAH! It's not NIIIIICE enough!! It's not got enough AMEEEEEENITIES!!! It's not in a city centre HOTSPOT!!!
It's EX_COUNCIL!!!!!! It needs a FORTUNE SPENT to make it into 1 Hyde PAAAAARK!!! It doesn't come with a JOOOOOOOB at the wages I demand and I'd have to work from HOOOOOOME or do something ONLINE so I'm just going to SCWEAM and SCWEAM and SCWEAM until somebody sorts it ouuuuut for meeeee!!! BOO HOO!! WAH!! WAH!!

fk off and learn to cut your cloth according to your measure....

Groat said:

And so we can now easily see what the millenial housing problem is.

It's NOT about there being no affordable properties available, it's about the available affordable properties being NOT what the millenial feels entitled to own. Not nice looking enough. Not in the right area. etc etc yadda yadda bleat

Two minutes on Google maps can tell that the building isn't cladded (although it MAY have an issue which I can't be bothered discussing).

And Google maps can also tell that the immediate area is well tended and orderly with no signs of any antisocial activity etc. Try it.

But no millenial would touch it as a starter flat they could move on from in a year or two and easily afford to retain as a renter currently easily able to generate £5kpa. to put towards their subsequent purchase.....

So it'll be bought by a professional landlord, because no millenial wants it.

Hands up who doesn't fancy a 20% ROI - and this quite possibly from a tenant who's there for 20 years.

Jesus, is the divorce that imminent? You seem to be very bitter towards younger people, assumedly because they probably have better assets and quality of life than you. It's quite often that my generation is seen to be the immature and unreasonable one, but it appears that a self-proclaimed "boomer" is throwing the toys out of the proverbial pram for no real reason.

PH used to be a decent place to have a chat regardless of age or status, if it's now full of this type of melt then perhaps we're best letting forums die out whilst we use more modern social media platforms.

Quite embarrassing on his part, I came here to read a decent debate as I am myself saving for my 1st home.
The simple fact of the matter is during the period of 1950's to around year 2000, houses cost on average 4-4.5x the average household income there were peaks during this period where house prices were at around 6x the household income, however these only lasted around 4-5 years. Today in 2021 this has risen to about 8.2x the average household income and has been about 8x since about 2014. Combine this with the fact a lot of young people (myself included) have to pay an additional 9% back on everything we earn over 25k the take home of a lot of young people will likely be well below the national average. Sure there are a lot of young people who have brand new PCP'd cars, the latest iPhones etc but that's not all young people. Just like you shouldn't judge all people of a different ethnicity because of the actions of a few, don't assume its not a struggle for the sensible young people saving for their first home.

edit to explain, that 9% is student loan repayments. We have to pay that back on top of normal taxes etc. Oh and don't forget we don't have any of those final salary pensions also, so the sensible among us are putting a decent whack of our income into pensions too.

Edited by Crudeoink on Tuesday 6th April 09:04

[HustleRussell]

Groat and Northenboy: “What, you want to buy in the same country you were born in and work in? Lah dee fking dah mr. Entitled...”

[Northernboy]

Crudeoink said:

Quite embarrassing on his part, I came here to read a decent debate as I am myself saving for my 1st home.

Edited by Crudeoink on Tuesday 6th April 09:04

Presumably then you’re doing as I did? No car, no eating out, no buying coffees out, no paid television, no holidays, taking sandwiches to work, and so on?

If so, good for you and good luck, but I think that you are going to be in the minority. Many people in your situation will buy sandwiches pre-made, eat good cuts of meat, pay for Sky, and buy branded clothes and then complain that they are struggling to save.

Others will have done a degree that’s worth little to nothing, had great fun for three years, and then moan that they have significant debt.

We’ve seen some irrational and very entitled posts on this thread from people who just won’t compromise; who turn up their nose at a nice £30,000 flat near Newcastle as they want a house with a garage in the Home Counties.

[stitched]

Crudeoink said:

Second Best said:

Groat said:

Do they all REALLY have to have a Golf R or a Fiesta ST nowadays?

Groat said:

BOO HOO!! WAH! WAH! It's not NIIIIICE enough!! It's not got enough AMEEEEEENITIES!!! It's not in a city centre HOTSPOT!!!
It's EX_COUNCIL!!!!!! It needs a FORTUNE SPENT to make it into 1 Hyde PAAAAARK!!! It doesn't come with a JOOOOOOOB at the wages I demand and I'd have to work from HOOOOOOME or do something ONLINE so I'm just going to SCWEAM and SCWEAM and SCWEAM until somebody sorts it ouuuuut for meeeee!!! BOO HOO!! WAH!! WAH!!

fk off and learn to cut your cloth according to your measure....

Groat said:

And so we can now easily see what the millenial housing problem is.

It's NOT about there being no affordable properties available, it's about the available affordable properties being NOT what the millenial feels entitled to own. Not nice looking enough. Not in the right area. etc etc yadda yadda bleat

Two minutes on Google maps can tell that the building isn't cladded (although it MAY have an issue which I can't be bothered discussing).

And Google maps can also tell that the immediate area is well tended and orderly with no signs of any antisocial activity etc. Try it.

But no millenial would touch it as a starter flat they could move on from in a year or two and easily afford to retain as a renter currently easily able to generate £5kpa. to put towards their subsequent purchase.....

So it'll be bought by a professional landlord, because no millenial wants it.

Hands up who doesn't fancy a 20% ROI - and this quite possibly from a tenant who's there for 20 years.

Jesus, is the divorce that imminent? You seem to be very bitter towards younger people, assumedly because they probably have better assets and quality of life than you. It's quite often that my generation is seen to be the immature and unreasonable one, but it appears that a self-proclaimed "boomer" is throwing the toys out of the proverbial pram for no real reason.

PH used to be a decent place to have a chat regardless of age or status, if it's now full of this type of melt then perhaps we're best letting forums die out whilst we use more modern social media platforms.

Quite embarrassing on his part, I came here to read a decent debate as I am myself saving for my 1st home.
The simple fact of the matter is during the period of 1950's to around year 2000, houses cost on average 4-4.5x the average household income there were peaks during this period where house prices were at around 6x the household income, however these only lasted around 4-5 years. Today in 2021 this has risen to about 8.2x the average household income and has been about 8x since about 2014. Combine this with the fact a lot of young people (myself included) have to pay an additional 9% back on everything we earn over 25k the take home of a lot of young people will likely be well below the national average. Sure there are a lot of young people who have brand new PCP'd cars, the latest iPhones etc but that's not all young people. Just like you shouldn't judge all people of a different ethnicity because of the actions of a few, don't assume its not a struggle for the sensible young people saving for their first home.

edit to explain, that 9% is student loan repayments. We have to pay that back on top of normal taxes etc. Oh and don't forget we don't have any of those final salary pensions also, so the sensible among us are putting a decent whack of our income into pensions too.

Edited by Crudeoink on Tuesday 6th April 09:04

My first house.
Terrace in a rough as fk estate in Ellesmere Port.
First week the locals welcomed me by throwing an asda trolley through my front window (thanks guys, it was really useful) I slept in a sleeping bag for 6 months whilst making the place liveable, working shifts then working on the house.
I made mistakes, then stepped back and put them right, ended up with a decent living space and returned the trolley.
I was 18.
My latest house, I had no inclination to buy as, now single, my employer of the day paid for my hotel, however I met a girl who wanted to settle down and I concurred.
I bought a sthole property in a nice area and a sleeping bag, 3 months later (I'm a bit more savvy now) she moved in to a decent living space (I'm 50 next year)
If you want a nice house either earn enough to pay for one prepared for you or bite the bullet and do it yourself, you are not entitled to anything.

[Earthdweller]

Groat said:

Like many boomers my first ‘car’ was a motorbike.
And then a banger. Do they all REALLY have to have a Golf R or a Fiesta ST nowadays?

And you realistically stay in that low price one bed until you can AFFORD more space or more rooms or whatever.

I’m too young to be a boomer but my first car was a knackered old Morris Minor that I saved up for (£300) and commuted 30 miles each way into Manchester in it

My friend’s daughter who is at Uni has just got her first car ... a nearly new white Audi TT

When I moved to London I had to sell the moggy as I couldn’t afford to run a car and lived in one room in a block with shared toilets/showers but I saved and saved

I bought a small place and slept on the floor for six months till I could afford to buy a bed

The expectations today are way beyond what they were when I was starting out

Society has changed totally

[TheBinarySheep]

Mr Tidy said:

£80K for a house!!

Where in the UK was that? Where I live you'd probably have to pay that for a double garage.

I accepted an offer of £280K for my 2 bedroom end-of-terrace in Berkshire last week that is still 30 miles or so from London!

Similar houses to mine rent for £1,100 a month so how are people supposed to pay that and also save towards a deposit?

No wonder people living in certain parts of the UK think anyone with a £500K house is some sort of multi-millionaire - but in the outer London Boroughs that might just get you a 3 bed Semi!

Reality check for Northerners!

Although it does seem a bit pointless buying when you could just rent and spend money like it's going out of fashion - at least you could prior to CV-19.

My mother owned a retirement flat and because she owned it there was no State help so she spent over £28K on private carers between 2013 and 2019.

Then she had to move into a residential home which cost over £40K in 14 months, but luckily we managed to sell her flat before she got too far in arrears.

But money is irrelevant when I only saw her twice after the lockdown in March 2020 (August and September) before she died in November 2020 at 98 having missed her birthday, my birthday, my sister's birthday and most importantly her great grand-daughters's 4th birthday.

Allowing 2 visitors at care homes would have been great, but for my Mum it's way too late.

But I really can't see generation "Rent" buying - it seems to be all about instant gratification these days with no regard to the long-term.

Edited by Mr Tidy on Tuesday 6th April 05:11

People up north don't understand how prices down south, and people down south don't understand property prices up north.

Around here, £90k might get you a three bed semi on a reasonably new estate. In somewhere like Milton Keynes you might be looking at £250k for the same kind of house on the same kind of estate.

We live in a house on an ex-council estate (built in the 70's), 4 bedrooms, 2 bathrooms, double drive, garage, office/study (extension), and it's probably valued at £140k. I work with people around MK and Bedford, and they can't get over how cheap properties are up here.

Edited by TheBinarySheep on Tuesday 6th April 09:35

[okgo]

£1k for a room inc bills is pretty common in Z2 London now I think. There have been 3 properties on my street that now have been rented (annoying tbh, I prefer owner occupiers ) to groups of young. They're 4/5 bedroom properties. And priced between 3400-3700 per month, council tax i guess be the same as mine at 200, bills maybe another 250, so yeh, probably about 1k all in.

They presumably are all grads, I'm 33 but they look like kids to me, they probably all earn between 25-50k a year, I'd imagine having heard a few of them talk they're probably the posher end of the scale, so lets say they're all on 40k a year, which gives about 2500 per month -

- £1000 rent and bills
- £140 on travel (in normal times, but even with two days from home a week it doesn't change hugely)
- £250 on food
- £30 phone
- £30 gym
- £30 netflix, spotify, amazon prime.

So basically after what I would consider a fairly straight forward existence you have £1k left - even cutting the luxuries there is making no difference to anything, the headline is the 1k room, and 40k is probably pushing it too as an average. It will take many many years of saving/rapid payrises/meeting a partner on the same trajectory to get anywhere near anything.

To buy a 2 bed flat on the same street is £500-600k.

I was quite boring and didn't live in z2, and instead spent a long time in the suburbs paying 600 quid for my room, and buying my first place somewhere where they cost not far off half what they do here.

I suppose my point is that many people see the above, and they don't even attempt it, it is just too big a mountain to climb. Throw in boozing, drugs, takeaways, ubers, all fairly normal things for young people, and things you think you should be able to do on 40k a year, suddenly you're left with perhaps a couple of hundred of quid a month to save. Pointless. But getting accustomed to living fairly centrally etc means you wouldn't consider moving further out to somewhere cheaper until you absolutely have to (kids?) - it's a tricky one I think.

[Challo]

I turn 40 this year and rent and have done all my life. Was terrible with money in my mid-twenties, got into loads of debt and spent a number of years paying it off. We rent a house just outside Reading and pay £1200 a month, with bills on top.

My expectation is I will never own my own house, unless I win the lottery or my mum bites the dust and I inherit some money.

I completely admit it was my fault and I could have saved and bought somewhere when I was younger, but even my friends all had help with deposits.

Unless the banks are willing to go with 100% mortgages then I doubt we will ever be able to buy.

[TheBinarySheep]

Challo said:

I turn 40 this year and rent and have done all my life. Was terrible with money in my mid-twenties, got into loads of debt and spent a number of years paying it off. We rent a house just outside Reading and pay £1200 a month, with bills on top.

My expectation is I will never own my own house, unless I win the lottery or my mum bites the dust and I inherit some money.

I completely admit it was my fault and I could have saved and bought somewhere when I was younger, but even my friends all had help with deposits.

Unless the banks are willing to go with 100% mortgages then I doubt we will ever be able to buy.

What you find as well is that even if you've been renting and paying £1200 per month, when you apply for a mortgage the bank turns around and says that according to it's affordability checks, you can't afford to pay that much per month, yet you might have already been doing it for years.

I spoke to a mortgage advisor a couple of weeks ago. He said we can have 5x our combined wage, which works out at about £1000 per month.

[Northernboy]

Challo said:

I turn 40 this year and rent and have done all my life. Was terrible with money in my mid-twenties, got into loads of debt and spent a number of years paying it off. We rent a house just outside Reading and pay £1200 a month, with bills on top.

My expectation is I will never own my own house, unless I win the lottery or my mum bites the dust and I inherit some money.

I completely admit it was my fault and I could have saved and bought somewhere when I was younger, but even my friends all had help with deposits.

Unless the banks are willing to go with 100% mortgages then I doubt we will ever be able to buy.

If you can get together a £3,000 deposit then your mortgage on the flat in Washington that I posted above will cost you about £115 a month for your mortgage.

As well as being cheaper it’s a far nicer place to live than Reading, and the roads are much emptier.

As unbelievable as it may seem I lived in Reading once as it was a nicer place than where I worked at the time, but it’s not a patch on the North East.

[Greg_D]

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)
Why earn 20% more in London if living expenses are treble???

It’s just brain dead!!!

Get your heads out of your asses and into the real world. Decisions have consequences, and you’re going to regret all the shiny shiny when you are 65 and still renting a flat.

It’s just loser talk and it gets a bit boring.

[Northernboy]

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.

[paddy1970]

Northernboy said:

Presumably then you’re doing as I did? No car, no eating out, no buying coffees out, no paid television, no holidays, taking sandwiches to work, and so on?

Most people think that it is all about saving but it is all about making more money!

[HustleRussell]

Northernboy said:

It’s fine. They can enjoy their avocado toast

BINGO!

[Crudeoink]

Northernboy said:

Presumably then you’re doing as I did? No car, no eating out, no buying coffees out, no paid television, no holidays, taking sandwiches to work, and so on?

If so, good for you and good luck, but I think that you are going to be in the minority. Many people in your situation will buy sandwiches pre-made, eat good cuts of meat, pay for Sky, and buy branded clothes and then complain that they are struggling to save.

Others will have done a degree that’s worth little to nothing, had great fun for three years, and then moan that they have significant debt.

We’ve seen some irrational and very entitled posts on this thread from people who just won’t compromise; who turn up their nose at a nice £30,000 flat near Newcastle as they want a house with a garage in the Home Counties.

Pretty much, I do have a car (but work 40 miles away, and it has no public transport links, not ideal but C19 meant I had to quit my last job), but no eating out or takeaways, take my own coffee and lunch to work (£5 a day adds up), freeview TV, did go on holiday last year but it was a week camping.
It's annoying when you see people say "You lot are so entitled". I'm not saying I am entitled to anything. I've always worked hard for what I have (50 hr weeks, taking leave to do a 2nd job as a bin man at festivals, well pre-covid) and have always avoided debt / PCP / phone contracts like the plague. Anyways, the first point still stands, regardless of whether you waste your money or not, houses are almost twice as expensive now as they used to be (relatively), something that keeps getting ignored on this thread.

[okgo]

paddy1970 said:

Most people think that it is all about saving but it is all about making more money!

To really get somewhere, it's both.

[Crudeoink]

stitched said:

My first house.
Terrace in a rough as fk estate in Ellesmere Port.
First week the locals welcomed me by throwing an asda trolley through my front window (thanks guys, it was really useful) I slept in a sleeping bag for 6 months whilst making the place liveable, working shifts then working on the house.
I made mistakes, then stepped back and put them right, ended up with a decent living space and returned the trolley.
I was 18.
My latest house, I had no inclination to buy as, now single, my employer of the day paid for my hotel, however I met a girl who wanted to settle down and I concurred.
I bought a sthole property in a nice area and a sleeping bag, 3 months later (I'm a bit more savvy now) she moved in to a decent living space (I'm 50 next year)
If you want a nice house either earn enough to pay for one prepared for you or bite the bullet and do it yourself, you are not entitled to anything.

Never said I was entitled to anything. I'm working hard and have been saving for years. Will be buying a small house of flat when I find the right one. Ideally one that needs work as that way I can add value and increase the LTV for when I re-mortgage. My first point still stands however, relatively to the 50 or so years pre 2001. Regardless of you opinions on how young people spend their money nowadays, houses are twice as difficult to buy now when you compare average household income to house-prices.

[ClaphamGT3]

okgo said:

£1k for a room inc bills is pretty common in Z2 London now I think. There have been 3 properties on my street that now have been rented (annoying tbh, I prefer owner occupiers ) to groups of young. They're 4/5 bedroom properties. And priced between 3400-3700 per month, council tax i guess be the same as mine at 200, bills maybe another 250, so yeh, probably about 1k all in.

They presumably are all grads, I'm 33 but they look like kids to me, they probably all earn between 25-50k a year, I'd imagine having heard a few of them talk they're probably the posher end of the scale, so lets say they're all on 40k a year, which gives about 2500 per month -

- £1000 rent and bills
- £140 on travel (in normal times, but even with two days from home a week it doesn't change hugely)
- £250 on food
- £30 phone
- £30 gym
- £30 netflix, spotify, amazon prime.

So basically after what I would consider a fairly straight forward existence you have £1k left - even cutting the luxuries there is making no difference to anything, the headline is the 1k room, and 40k is probably pushing it too as an average. It will take many many years of saving/rapid payrises/meeting a partner on the same trajectory to get anywhere near anything.

To buy a 2 bed flat on the same street is £500-600k.

I was quite boring and didn't live in z2, and instead spent a long time in the suburbs paying 600 quid for my room, and buying my first place somewhere where they cost not far off half what they do here.

I suppose my point is that many people see the above, and they don't even attempt it, it is just too big a mountain to climb. Throw in boozing, drugs, takeaways, ubers, all fairly normal things for young people, and things you think you should be able to do on 40k a year, suddenly you're left with perhaps a couple of hundred of quid a month to save. Pointless. But getting accustomed to living fairly centrally etc means you wouldn't consider moving further out to somewhere cheaper until you absolutely have to (kids?) - it's a tricky one I think.

One of the challenges in this - very realistic - example is that, during my twenties and early thirties, my first wife and I were earning far more money out of property than we were from our very good jobs in real estate and advertising.

Having taken the decision to struggle and get on the property ladder early at 22, we bought, renovated and sold at a profit five homes in ten years, did another three as straight business propositions and bought four buy-to-lets. The money we made gave us a lifestyle far in excess of what we could have funded on our salaries at the time. More importantly, even allowing for splitting the profits when we divorced, it's no exaggeration to say that those ten years of effort set me up financially for life. Whilst I wouldn't pretend that this was the norm, we were far from the only ones in our friendship group doing this.

On the flipside, we were only able to do it because of 100% IO mortgages, loose lending criteria that were relaxed about what they were lending on and why, negligible stamp duty, no Govt imposed barriers to entering the BTL market, being psychologically comfortable being perennially leveraged away to buggery and lending decisions made by human beings who actually knew us as individuals and our families and were prepared to make genuine decisions, rather than rely on 'computer says yes/no'.

Its a shame that successive Govt's, in a well meaning bid to save people from themselves (never a legitimate function of Govt), have done their best to take this opportunity away from the current generation.

TLDR: I'm glad I was in my twenties in the 1990s rather than now

Edited by ClaphamGT3 on Tuesday 6th April 10:17

[clockworks]

98elise said:

Have you ever seen an estate agents with no properties for sale? What's stopping the tenants from buying one of those? When I bought my first BTL there were 3 identical properties for sale in the same street.

Tenants buying the properties would also push prices up. Same number of people, occupying the same number of properties.

At no point have you reduced the demand, or increased the supply. All you've done is change the financial model for putting one family in one home.

The issue as ever is there is not enough property to house the number of people needing a home. That is the principal driver of high prices.

Not seen an estate agent with with no properties, but it has come pretty close.
I bought my current house about 11 years ago, and used to see the estate agent I dealt with quite regularly. At one point about 3 years ago they had just 6 properties for sale on their books at one branch (St. Ives). Pretty much anything even remotely desirable was getting snapped up by second home owners and developers. Houses either sold very quickly, or sat on the books for months.

I don't agree with there being a shortage of property. There is undoubtedly a shortage of nice houses that are ready to live in in many areas. There's plenty of property that could be converted, brown field or banked sites that could be developed, and commercial property that could be repurposed. Plenty of property in less desirable areas too.

[Challo]

Northernboy said:

Challo said:

I turn 40 this year and rent and have done all my life. Was terrible with money in my mid-twenties, got into loads of debt and spent a number of years paying it off. We rent a house just outside Reading and pay £1200 a month, with bills on top.

My expectation is I will never own my own house, unless I win the lottery or my mum bites the dust and I inherit some money.

I completely admit it was my fault and I could have saved and bought somewhere when I was younger, but even my friends all had help with deposits.

Unless the banks are willing to go with 100% mortgages then I doubt we will ever be able to buy.

If you can get together a £3,000 deposit then your mortgage on the flat in Washington that I posted above will cost you about £115 a month for your mortgage.

As well as being cheaper it’s a far nicer place to live than Reading, and the roads are much emptier.

As unbelievable as it may seem I lived in Reading once as it was a nicer place than where I worked at the time, but it’s not a patch on the North East.

In principle yes, but not sure my missus or 2 dogs would be happy.