Drastic measures by first-time house buyers

[Scott_F]

I think the issue is slightly more complicated than that.

There is no shortage of affordable housing.... but people don't want to live there.

People rightly want the best jobs, and these tend to be in or near our main cities.

So house prices in London are rocketing due to demand, while house prices in Grimsby are plummeting due to lack of demand.

I think the term 'housing crisis' is misleading, instead the 'housing-jobs balance crisis' is more appropriate.

Nothing wrong with house prices in the UK as such:

Top 10 most affordable places to live - Zoopla Mobile

....apart from the fact that the good jobs are not spread across the country.

There is much wrong with UK house prices - they are becoming increasingly disconnected from earnings.

On average (which begs the question "What is average ?"), prices are in excess of five times typical earnings and the figure increases to ten times in London:

https://www.economicshelp.org/blog/5568/housing/uk-house-price-affordability/

That's why we have a generation of older people living in properties that they couldn't possibly afford if they had to buy them today and a generation of younger people with decent salaries but no prospect of getting on the housing ladder without help from affluent parents.

 

[ToeKnee]

So what's the solution? Lets imagine, for a moment, that the government get their finger out and build five million houses and offers them at an affordable £80k to first time buyers only. Great, first time buyers can now afford a house but what will it do to the people who own similar houses and have a £200k mortgage? Would it suddenly create a huge negative equity problem? If they try and sell them at the current prices it won't help first time buyers, so I'll ask again, what is the solution?

 

[Deleted member 65149]

A flat costing £50k in Ipswich (or anywhere else for that matter) would be in a neighbourhood where no sensible person would choose to live.

Therein lies the problem today. “Yuk, I wouldn’t live there so instead I’ll go without my own home and moan about how hard it is to get on the property ladder.” I know from what I’ve read in this thread alone that I’m not the only one to have started house ownership in less than ideal conditions. But we did it so we could have a roof over our heads and not be a burden on anyone else. We may have been able to get a bigger mortgage and start somewhere better, but even way back then it made sense not to overstretch our finances. So we’re we not being sensible to chose to live there, or were we just being practical and thinking beyond the ends of our noses? No pain, no gain?

 

[zipdip]

Well as a person who took a mortgage out in 1969,with wife and small child,I know how hard it can get,we did not go out or have a holiday for two years,what made it easier was Sailor Ted,he printed a shed load of money and off went inflation and house prices and also wages,the middle 70's were chaotic times ,I even had pay rises linked to inflation for a few years,every month I got more money and then just as inflation was beaten the company decided to give us a generous rise and stop the inflation proof wage deal,fantastic,of course today youngsters are earning more but property prices are high,but they are helped by very low mortgage rates,these have been around for nearly half a 25 year mortgage and there is no sign they will rise anytime soon,the only thing young people lack now is inflation,it is a godsend when you have borrowed a large sum of money agreeing to pay it back over 25 years,inflation plus wage rises soon have the mortgage outlay under control and life can begin.

 

[Scott_F]

Therein lies the problem today. “Yuk, I wouldn’t live there so instead I’ll go without my own home and moan about how hard it is to get on the property ladder.” I know from what I’ve read in this thread alone that I’m not the only one to have started house ownership in less than ideal conditions. But we did it so we could have a roof over our heads and not be a burden on anyone else. We may have been able to get a bigger mortgage and start somewhere better, but even way back then it made sense not to overstretch our finances. So we’re we not being sensible to chose to live there, or were we just being practical and thinking beyond the ends of our noses? No pain, no gain?

I would suggest that a "less than ideal" area when you first bought a few decades ago is a different proposition to a "less than ideal" area now.

Drugs now blight these areas in a way that they didn't back then and crime (drug-related and general) is higher than it has ever been regardless of what fanciful government figures try to say.

So it's not simply a case of "Yuk.." - I don't see why anyone with a half-decent salary would decide to live in an area where drug dealing, acquisitive crime and antisocial behaviour make daily life intolerable.

 

[WDB124066]

tiny trailer homes - Google Search

Or do what the Japs do and work for a company that provides the lot.

Steer away from what is typically done in China.

 

[WDB124066]

Re-establish Empire with one way emigration to Nation of your choice.

 

[Headhurts]

It would be something like that or if the partner couldn't match the deposit I would want to own a share so that if they split up the partner wouldn't end up with my money.
Maybe I shouldn't be so pessimistic.

I totally agree don’t make the mistake our family have.

Our son split from his wife and was living in the family home of my ex wife.

Son moved out DIL because of children ends up with the home despite never having paid anything towards it and seems to be systematically wrecking it.

It’s more complicated than it seems but you get my drift.

Robin


Sent from my iPad using Tapatalk

 

[Deleted member 113659]

I was thinking of saying whatever you save toward the deposit over 2 years we will match it...

I think that's a great idea. It's nice to help your kids.

Mrs Ant & I have never had any financial help from anyone. However, when the time comes we will give our daughter all the help we can. It'll be nice to see her enjoying the benifit of her inheritance.

 

[Deleted member 65149]

I would suggest that a "less than ideal" area when you first bought a few decades ago is a different proposition to a "less than ideal" area now.

Drugs now blight these areas in a way that they didn't back then and crime (drug-related and general) is higher than it has ever been regardless of what fanciful government figures try to say.

So it's not simply a case of "Yuk.." - I don't see why anyone with a half-decent salary would decide to live in an area where drug dealing, acquisitive crime and antisocial behaviour make daily life intolerable.

Drugs. Now there’s a whole different issue and very much a thread of its own. Is it just worse in “deprived areas” or is it worse everywhere? I fear it’s the latter.

Crime. Is that much different to how it’s always been or is it just reported more to all of us through social media?

Is the “less than ideal” area a matter of perception, status or simply what you get used to? I’ve heard people who live in places where I wouldn’t want to walk alone at night say how wonderful it is where they are. Presumably they’re less bothered by the graffiti, litter and unkempt front gardens than me.

Are the areas that you talk about as being intolerable mainly located in city centres? That’s certainly what I think. What makes them worse is that city centres are the most expensive areas for what you can get for your money, so there becomes a mix of poorer folk living almost next door to millionaires in their luxury accommodation, a situation that’s bound to lead to resentment and its associated problems.

That’s why the first home I bought was in a small village remote from the rigours of bustling and expensive cities. With a bus only once a week, commuting wasn’t easy. It took a bit of effort. Out of interest I went back there fairly recently and the village doesn’t appear to have changed much. Certainly no visible signs of the drugs, crime and anti-social behaviour you attribute to less expensive areas.

As I say, the choices are there and it’s up to us to make them.

 

[Deleted member 65149]

That raises another good question, should we be helping our children with deposits to get on the property ladder? My eldest at 21 is just beginning to save for a deposit and is desperate to move with her partner instead of sharing a bedroom.

She is still planning on taking 1 last major holiday this year before committing all her disposable in a lifetime ISA. I commend her for trying to buy than rent and eventually she will inherit from us.

The question is would it be better to try and help her with the deposit now when she needs it or will we be "spoiling her" again, I was thinking of saying whatever you save toward the deposit over 2 years we will match it....

I would be interested in what other parents on here in a similar position have done/think, we did not receive parental help at her age but managed to secure a 100% mortgage with 12% interest rates....

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Should we be helping our children to get on the property ladder? A great question. I didn’t get any help from my parents or the outlaws, and neither did my two eldest children. But that was mostly because of not being in a financial position to do so. Yes, I could have moved to a cheaper place to help fund my kids, but they both thrived on having done it all themselves, just as we did all those years earlier. But now very many years later (there’s a 42 year gap between my second and third child) I’ve already started putting money away to help my daughter later in life (she’s 2 now).

But would we be spoiling her and not allowing her to appreciate what she has totally through her own efforts in the same way her parents have? It’s not easy to know just how much to help is it?

 

[Deleted member 113659]

I think it's very easy to help your kids 'IF' they don't expect/rely on it all the time. I'll admit our 12 year old daughter is spoilt, but she doesn't act spoilt. Big difference IMO.

 

[Darrell]

Should we be helping our children to get on the property ladder? A great question. I didn’t get any help from my parents or the outlaws, and neither did my two eldest children. But that was mostly because of not being in a financial position to do so. Yes, I could have moved to a cheaper place to help fund my kids, but they both thrived on having done it all themselves, just as we did all those years earlier. But now very many years later (there’s a 42 year gap between my second and third child) I’ve already started putting money away to help my daughter later in life (she’s 2 now).

But would we be spoiling her and not allowing her to appreciate what she has totally through her own efforts in the same way her parents have? It’s not easy to know just how much to help is it?

I’m the eldest of 3 children and none of us got any financial help from our parents. I don’t know why but my dad never offered it up.

My dad died recently and he didn’t leave us 3 kids anything. That’s not a problem for us but neither did he leave any of his grandchildren anything!!! He set up a trust where they get a couple of grand when/if they go to uni and a couple more when they marry. His estate is worth the thick end of £800,000.

I have 2 rental flats in north London. Eventually my daughter will get one and my son the other.

 

[Deleted96908]

A little story about kids and money - not house related directly, but…

This is about my son Christian who is in the final year of his under graduate degree. The deal has been that we provide spending money and a car, and in return he uses his student loan to pay for his accommodation. Trouble is he spends his loan long before his rent is due.

Now, many of you will remember that Christian had blood cancer 6 years ago, aged 16, now in remission, and because of this I’ve always found it very, very difficult to be tough with him. And he knows that. So, every term he was spending his rent money knowing we’ll send him more as soon as he called. But as time passed it became a bit upsetting. Not least because he needed to learn how to deal with money.

So we hit upon an idea which has worked wonderfully. Whenever he receives his student loan we’ve asked him to send us his rent money for the term, and in return, every month we send him his rent, plus ..... 10%. And it works like a dream. It costs us £30 each time but on the other hand we save £300, and... he's never late with his rent, plus of course he gets a little bonus.

It seems some of the simplest things we do in life, often pay the greatest dividends.

 

[Deleted member 65149]

I’m the eldest of 3 children and none of us got any financial help from our parents. I don’t know why but my dad never offered it up.

My dad died recently and he didn’t leave us 3 kids anything. That’s not a problem for us but neither did he leave any of his grandchildren anything!!! He set up a trust where they get a couple of grand when/if they go to uni and a couple more when they marry. His estate is worth the thick end of £800,000.

I have 2 rental flats in north London. Eventually my daughter will get one and my son the other.

Perhaps your dad didn't offer you or your siblings anything because he wanted you to succeed in making your own ways in life, which you clearly have.

 

[KennyN]

When my daughter was travelling the far east last year she met an English girl who had just finished her five year uni education and seemed totally unfazed that she was in £72k worth of debt

I hope she gets a job as a lottery winner as she is going to need it.

Kenny

 

[Deleted member 65149]

When my daughter was travelling the far east last year she met an English girl who had just finished her five year uni education and seemed totally unfazed that she was in £72k worth of debt

I hope she gets a job as a lottery winner as she is going to need it.

Kenny

Or doesn't get a job that pays much so never has to pay back the loan (funded by tax payers).

 

[KennyN]

Or doesn't get a job that pays much so never has to pay back the loan (funded by tax payers).

I think that is more like it.

I dont know how student debt effects their credit score and how much of an impact it has on mortgage applications or car finance inquiries.

Our daughter has just picked up her first full time job after graduating and she thinks she is a millionaire , there is talk of an iPhone X , a new car and a holiday to Sri Lanka --- she doesnt even start until the beginning of March

One thing she hasn`t factored in is the "dig" money to her poor parents , i think £500 p/m should cover it as i fancy a new phone , car and exotic holiday.

Kenny

 

[clk320x]

I dont know how student debt effects their credit score and how much of an impact it has on mortgage applications or car finance inquiries.

I believe it has very little effect.

 

[Darrell]

Perhaps your dad didn't offer you or your siblings anything because he wanted you to succeed in making your own ways in life, which you clearly have.

Not too sure. His parents left him their house in Mill Hill and he was already well off when that happened.
We think the main reason is that he took his divorce from my mum very badly and ended up a very bitter man. Especially with having to give her 50% of everything. We reckon the reason he left us nothing was in case any of us got divorced and the family jewels would end up with an ex-spouse.
Crazy thinking I know but there you go.

We have since found out that he thought we sided with our mum at the time which of course was a complete load of tosh.