Is Housing unaffordable for the young?

https://www.thetimes.co.uk/article/o...sopp-dpt9q3v3c

Young people could afford to get on the property ladder if they gave up luxuries such as their gym membership and foreign holidays and looked at cheaper areas, according to Kirstie Allsopp.

The Location, Location, Location presenter said she felt “enraged” when people claimed they could not afford a home. Some graduates and school-leavers could consider moving back in with their parents, she added. Allsopp, 50, bought her first property with family* help at the age of 21

For comparison, we bought a small 3 (2.5 really) bedroom house in Leeds for £27k in 1985, and last year the next door but one house (same size, same layout) was sold for £281k - an over 10 times increase in price.

I was earning £11k per year at the time, so could get 2.5 times salary mortgage, with a small deposit we had from selling our first house in Thatcham - pretty sure anyone in the same job I was in at the time (software programmer) isn’t earning £110k per year in Leeds at the present time…

Even worse Down South - our first house was in Thatcham, near Newbury (in 1984), and I earned £10k and the 2 bed semi cost us £26k; it’s now on the market at £306k…

I believe the most of the current mortgage lenders are basing their offers on four to five times annual salary, with a deposit of at least 10% - so for our previous little 2.5 bed semi in Leeds, a deposit of nearly £30k and an annual salary of £50k would be needed.


*her father, Charles Henry Allsopp, 6th Baron Hindlip, was Chairman of Christie’s at the time…

[Carth]

So typical of these people . . and the shows they appear on . . to have no idea of anything outside of their 'privileged' comfort zone.

Bought my first house (3 bed terraced) in 1972 at 18 years of age . . on apprentice wages. Try doing that now

The infamous 'affordable housing'* is the only realistic option for many nowadays . . and they're lucky if they can afford that.




*2 bed rabbit hutch

[Halcyon]

The house price increases have gone up a lot faster since Kirsty bought her house when she was 21! No wonder she got on the housing ladder quickly.


There is also the fact that back then there were most likely grants still available for university. Young people these days are coming out of education with mountains of debt even before their lives have fully begun.


Yes, there are a lot of luxuries that people could cut back on and I have seen many people lose money from just forgetting about services they pay for eg. spotify, netflix etc and basically paying for things they never use.
And there are so many companies that will still screw you over, for example if you have a phone on contract and then the contract ends and they just keep reeling in the money when you could be paying probably half of what you are paying.


You could argue that people should be aware of these things but equally businesses just want to make money off us and won't just stop taking your money.


I know that I would have found it very hard to get on the property ladder if I hadnt done it by coming together with my girlfriend at the time.


Sadly with costs of living going up and salaries staying put, I feel many young people will be stucki in the renting game where money just gets thrown out the window.


It is also shocking to see the terrible quality houses that get put up within weeks. For the prices people pay it is crazy!

Visited a new estate recently and saw what was described as a 3 bedroom house. The 3rd bedroom was basically a cupboard. I doubt you'd even get an adult single bed in there!

From the end of the Times article.

A first-time buyer who gave up a Starbucks latte every weekday, an ordinary Netflix subscription, gym membership, and two return flights to Europe a year on easyJet would save about £1,600 a year. However, if they moved into their parents’ house and did not pay rent, they could save on average £7,000 a year.

The average deposit for a first-time buyer is £59,000, according to Halifax. To save that, you would need to forgo your Starbucks latte, Netflix subscription, gym membership and easyJet flights for 37 years.

She’s obviously not speaking from personal experience but it’s churlish to dismiss her professional expertise based on who her family is. I’m reminded of a show that was on TV probably 15 years ago now with Alvin Hall, the personal finance expert. Week after week he’d help out someone who “couldn’t afford it” (whatever major life purchase “it” was) and every single time there was poor personal financial planning and even just basic weekly budgeting at the root of it.

Housing has certainly got a lot more expensive but is there really nothing valid in her ladyship’s observations about personal finances and the things we think we “need” to spend money on that are hindering our ability to save for a deposit?

[mrmistoffelees]

Originally Posted by Hugh

From the end of the Times article.

TBF, take London/South East out of the equation and it will be significantly less.

---------- Post added at 14:12 ---------- Previous post was at 14:08 ----------

Originally Posted by Chris

She’s obviously not speaking from personal experience but it’s churlish to dismiss her professional expertise based on who her family is. I’m reminded of a show that was on TV probably 15 years ago now with Alvin Hall, the personal finance expert. Week after week he’d help out someone who “couldn’t afford it” (whatever major life purchase “it” was) and every single time there was poor personal financial planning and even just basic weekly budgeting at the root of it.

Housing has certainly got a lot more expensive but is there really nothing valid in her ladyship’s observations about personal finances and the things we think we “need” to spend money on that are hindering our ability to save for a deposit?

No, there's nothing valid at all.

I believe I read earlier, that by applying all the things that she should be done it would would save you approximately the amount of money that your deposit % has increased by in the past 12 months. approx £2k

---------- Post added at 14:13 ---------- Previous post was at 14:12 ----------

Originally Posted by Carth

So typical of these people . . and the shows they appear on . . to have no idea of anything outside of their 'privileged' comfort zone.

Bought my first house (3 bed terraced) in 1972 at 18 years of age . . on apprentice wages. Try doing that now

The infamous 'affordable housing'* is the only realistic option for many nowadays . . and they're lucky if they can afford that.




*2 bed rabbit hutch

You've absolutely hit the nail on the head.

---------- Post added at 14:18 ---------- Previous post was at 14:13 ----------

Originally Posted by Hugh

https://www.thetimes.co.uk/article/o...sopp-dpt9q3v3c



For comparison, we bought a small 3 (2.5 really) bedroom house in Leeds for £27k in 1985, and last year the next door but one house (same size, same layout) was sold for £281k - an over 10 times increase in price.

I was earning £11k per year at the time, so could get 2.5 times salary mortgage, with a small deposit we had from selling our first house in Thatcham - pretty sure anyone in the same job I was in at the time (software programmer) isn’t earning £110k per year in Leeds at the present time…

Even worse Down South - our first house was in Thatcham, near Newbury (in 1984), and I earned £10k and the 2 bed semi cost us £26k; it’s now on the market at £306k…

I believe the most of the current mortgage lenders are basing their offers on four to five times annual salary, with a deposit of at least 10% - so for our previous little 2.5 bed semi in Leeds, a deposit of nearly £30k and an annual salary of £50k would be needed.


*her father, Charles Henry Allsopp, 6th Baron Hindlip, was Chairman of Christie’s at the time…

Similar story, SWMBO and i bought our first house twenty years ago, in Boro for £45k for a three bedroom terrace. she was on about 11.5k and i was on about 17k. Current house we're in has gone up approx 60k in the five years we've lived here.

[nomadking]

I get annoyed when people keep talking about the "property ladder". As if the sole aim is to make easy money out of increasing house prices. It periodically ends up in tears when house prices crash, because not enough other people have the money to buy the houses with ever increasing costs. Same with any other sort of financial related crash, when nobody can or wants to buy, the price plummets.

If your only aim is to get on the property ladder as opposed to buying a home, then you should be prepared to make sacrifices and buy outside of London and other expensive areas,

[Hom3r]

My niece (21) is current doing a 3/4 year degree in psychology, she has told me that her and her girlfriend (19) want to get a place together.


But currently there is no way they could afford a mortgage.

[mrmistoffelees]

Originally Posted by nomadking

I get annoyed when people keep talking about the "property ladder". As if the sole aim is to make easy money out of increasing house prices. It periodically ends up in tears when house prices crash, because not enough other people have the money to buy the houses with ever increasing costs. Same with any other sort of financial related crash, when nobody can or wants to buy, the price plummets.

If your only aim is to get on the property ladder as opposed to buying a home, then you should be prepared to make sacrifices and buy outside of London and other expensive areas,

I think most people do it for split reasons (excluding B2L), 1. and predominantly to buy a home, 2. to have an asset to pass onto their children

[nomadking]

Originally Posted by Hom3r

My niece (21) is current doing a 3/4 year degree in psychology, she has told me that her and her girlfriend (19) want to get a place together.


But currently there is no way they could afford a mortgage.

At what point in past would anybody in that situation have been able to buy a house?

---------- Post added at 15:16 ---------- Previous post was at 15:12 ----------

Originally Posted by mrmistoffelees

I think most people do it for split reasons (excluding B2L), 1. and predominantly to buy a home, 2. to have an asset to pass onto their children

Buying a house is meant be an aspiration, not a right. If you're not buying as a home only, then people should quit whinging about it. Eg You can't really complain about not being able to buy a 3 bed house, when you've just graduated and only yourself is going to be living there.

[TheDaddy]

Originally Posted by mrmistoffelees

TBF, take London/South East out of the equation and it will be significantly less.

---------- Post added at 14:12 ---------- Previous post was at 14:08 ----------



No, there's nothing valid at all.

I believe I read earlier, that by applying all the things that she should be done it would would save you approximately the amount of money that your deposit % has increased by in the past 12 months. approx £2k

---------- Post added at 14:13 ---------- Previous post was at 14:12 ----------




You've absolutely hit the nail on the head.

---------- Post added at 14:18 ---------- Previous post was at 14:13 ----------



Similar story, SWMBO and i bought our first house twenty years ago, in Boro for £45k for a three bedroom terrace. she was on about 11.5k and i was on about 17k. Current house we're in has gone up approx 60k in the five years we've lived here.

My friend is a doorman in Bedford and I can regularly be found up there with him even though my days of working them are now over sadly and the amount young people spend is eye-watering and they do it every day of every weekend, they could have the odd night out and save over 10k a year easily so I think Chris' point is valid, guess it comes down to either luck or how much you want it, I never thought I'd buy somewhere let alone in London but I got lucky, I saved up for legal fees and settlement for a divorce that was settled amicably

Originally Posted by nomadking

I get annoyed when people keep talking about the "property ladder". As if the sole aim is to make easy money out of increasing house prices. It periodically ends up in tears when house prices crash, because not enough other people have the money to buy the houses with ever increasing costs. Same with any other sort of financial related crash, when nobody can or wants to buy, the price plummets.

If your only aim is to get on the property ladder as opposed to buying a home, then you should be prepared to make sacrifices and buy outside of London and other expensive areas,

I don't get annoyed by it but I do agree, a home should be for living in as a sole aim imo, anything else is a bonus that comes later

Originally Posted by nomadking

I get annoyed when people keep talking about the "property ladder".

You're over thinking it.
The "property ladder" is just a phrase, most people who move do so to move into somewhere bigger, as needs arise, not a money making scheme.
https://en.wikipedia.org/wiki/Property_ladder

I bought my first house (a 2 bed) in 1983, and my second house (a 3 bed) in 1992 (I still live in it).

Prices have changed so much since then - based on its current estimated value, I dont think I could afford to buy it were I looking now.

Kirstie Allsopp as a clueless moron who should keep her mouth shut about matters she doesnt seem to understand.

[Carth]

I know darn well I wouldn't be able to afford this house (3 bed detached with garage) if I was buying it now.

I also know that, even though its price is around 3.5 times what I paid for it, I couldn't afford to sell up and move elsewhere unless downsizing . . even if I was younger and still working.

I've also thought a few times when having a new bathroom, new kitchen, double glazing, electrics, central heating boiler, and all the fencing, that It would have cost me less if I was in a council house . . .

[Taf]

All of our daughter's mates, who left the nest before the pandemic, have returned to their parents' homes.

Most were renting, but a few had mortgages.

[mrmistoffelees]

Originally Posted by nomadking

At what point in past would anybody in that situation have been able to buy a house?

---------- Post added at 15:16 ---------- Previous post was at 15:12 ----------


Buying a house is meant be an aspiration, not a right. If you're not buying as a home only, then people should quit whinging about it. Eg You can't really complain about not being able to buy a 3 bed house, when you've just graduated and only yourself is going to be living there.

You seem to be following the US model, where more often that not people are happy to rent something which has historically never been a part of the UK mindset.

You can complain however if you can't afford to buy a property because of an influx of second home buyers driving prices up to simply exorbitant levels. Or, you can complain if you're buying a ridiculously overpriced 1 bed flat due to its commutable distance to a major city.

---------- Post added at 16:56 ---------- Previous post was at 16:52 ----------

Originally Posted by Carth

I know darn well I wouldn't be able to afford this house (3 bed detached with garage) if I was buying it now.

I also know that, even though its price is around 3.5 times what I paid for it, I couldn't afford to sell up and move elsewhere unless downsizing . . even if I was younger and still working.

I've also thought a few times when having a new bathroom, new kitchen, double glazing, electrics, central heating boiler, and all the fencing, that It would have cost me less if I was in a council house . . .

SWMBO's best mate lives in a council house (in one of the rougher areas of Boro) her and her husband probs pulling in between them £45k a year , they have two kids living at home, probs pay about $300 a month in rent for a three bed semi detached, with all the work covered, in the past year it's had new roof, new windows & doors.

Really really annoying when they could be easily paying a mortgage and freeing up that home for someone who actually needs it....