Do Youngsters Spend too much ?

pblakeney

Step83 wrote:

I think it varies where you are, I work with a number of these younger folk. I know what they earn, not exactly easy 24K an houses starting at around 220K so its a case of get with a partner, help to by which you have to pay back in X number of years and take pretty much a 100% mortgage on a new property which is what I know at least three people have done.

Pretty much how things have always been. There was the exception mid 80s to mid 00s but before that people mostly got a house when they married, in their early 20s.
I remember when it was perceived that a single woman at 25 would be a life long spinster stuck on the shelf.

ryan_w-2

Are we not forgetting about all the old bastards that got 100%+ mortgages?

That's the killer now, saving for a 10%+ deposit for anything within commuting distance of London.

I can afford a £3k a month mortgage but I can't save for a deposit and rent at the same time.

norvernrob

Ryan_W wrote:

I'm 32 and trying to buy in the SW boroughs of London.

Sad state when £600k gets you a tiny 2 bed terraced house.

Now account for a 10% deposit, stamp duty and legal fees, you need IRO £83k, and not having wealthy parents, where the f**k am I meant to pull that from?!

We're saving hard but property prices are going up faster than we can save.

Doesn't help paying extortionate rent, but needs must.

£600k would literally get you a mansion here. I find it utterly insane when I read about London house prices, it's ok if you're earning £100k+ but how are people on normal salaries supposed to buy anything?

Our mortgage for a 3 bed semi with decent sized driveway and gardens is 1.5 times our annual income, and we don't live in a sh*thole either.

I'm relatively tight with money in general, household bills etc, but I like buying nice stuff. My parents didn't have much money, but a lot of kids these days including mine are pretty spoilt. My 5 year old son saves his money for things he wants, he always gets £15-£20 when he visits his grandparents and aunties that live 100 miles away, and he's just spent £300 on a Nintendo switch. I don't think I ever saw £300 until I was working!

rick_chasey

NorvernRob wrote:

My 5 year old son saves his money for things he wants, he always gets £15-£20 when he visits his grandparents and aunties that live 100 miles away, and he's just spent £300 on a Nintendo switch. I don't think I ever saw £300 until I was working!

Inflation innit.

DeVlaeminck

okgo wrote:

But its a small price to pay (even at 9k per year) if you use it properly and do a worthwhile degree from a good uni.

There are many sectors in London where if you've done the above you will start on 50k a year and be on 6 figures not too much longer after. Suddenly the 27k seems like a fairly small price to pay.

Obviously if you go to a crap uni, and do a crap degree, and get a crap mark, like most things, do it properly or don't bother IMO.

What if you want to be a teacher?

okgo

Doing it in London would be insanity.

FishFish

okgo wrote:

Doing it in London would be insanity.

Except that you would get a low cost home.

And then sell it for a shed load.

No system - just luck.

slowmart

Balance spending with living life. A fellow club member described that one of the lads on his shift had cancer and subsequently died. Out of the other 17 colleagues on that shift I believe 11 bought themselves new cars.

One thing I've found is once you secure your financial future you elevate your sights to your children and how will navigate debt, excessive consumerism and consumption whilst finding a worthwhile career.

I recently heard a phrase, "be thrifty till your 50, then spend till the end"

Given we're all heading for compulsory house sales to fund our individual health and social care does it really matter?

haydenm

My salary has more than doubled from before uni (I was working in something I also enjoyed) and I've moved somewhere nice but cheap. I know I'll inevitably end up in a cycle of buying larger and larger houses like everyone else but if we stay where we are we could be mortgage free in ten years (36) and I'd have tonnes of money to blow on rubbish. Sounds appealing now but I'm sure when we get there it will seem far more sensible to buy a new house and keep ploughing in the cash.

Nobody mention kids.

The majority of people I went to uni with now have a largely irrelevant degree and don't have a job in their field. The uni wasn't especially good, my course is just quite specialist. The bigger problem in my eyes isn't the fact that we are all terrible with money, it's that every school and sixth form in the country pushes kids to go to uni. That is irresponsible.

mr_goo

Ryan_W wrote:

I'm 32 and trying to buy in the SW boroughs of London.

Sad state when £600k gets you a tiny 2 bed terraced house.

Now account for a 10% deposit, stamp duty and legal fees, you need IRO £83k, and not having wealthy parents, where the f**k am I meant to pull that from?!

We're saving hard but property prices are going up faster than we can save.

Doesn't help paying extortionate rent, but needs must.

Move to Southampton or Bournemouth areas and commute. 1000s do it. Rent is cheaper and you can get a 3 to 4 bed detached house for under half million.
But do it quickly as many Londoners are already migrating down here and it's already impacting on property prices.

stormsedge

We facilitate Dave Ramsey's Financial Peace University (FPU) as one mission at our church. It is not unusual to see folks with consumer debt (mostly credit cards or easy payment plans--not mortgages) that consume the bulk of their monthly incomes...interest payments are eating people alive. That said, our culture (if there is one) has stepped past be patient and save for a later purchase of something reasonable to instant gratification and super size it with glitter and fur. Add the mindset that going to college is the only way to have a good paying job (neglecting many of the good paying careers in the trades and military) causes many to take out loans to live high on the hog while in college rather than working and paying as they go...it's nearly a perfect storm of overpowering debt before one is even established in the work force. We have had participants of all ages--20 somethings to over 80, and while some take the course to try and fine tune retirement, insurance coverages, or in hopes of getting their kids interested, it is rare to have folks starting out with us in the 30-60yo bracket who are either out of debt or on a reasonable path to being out of debt. When a single or family lays down an actual zero base budget and start to live by it...paying off their debts, the realization begins to set in that all the interest payments were destroying their cash flow and ability to live well on whatever their income. It is about choices. Debt is normal--be weird! Obtw, if you are interested in FPU, go to the Dave Ramsey website to find one near you...believe they are offered pretty much world wide. It works if you do.

fenix

I don't believe my company would employ me now. I haven't a degree.

There's so much competition for jobs now that they can demand that even the menial jobs require a degree as they know people will apply for them. Doesn't mean that you NEED a degree for it. It's sad - but without a degree big companies won't even look at you.

haydenm

Fenix wrote:

I don't believe my company would employ me now. I haven't a degree.

There's so much competition for jobs now that they can demand that even the menial jobs require a degree as they know people will apply for them. Doesn't mean that you NEED a degree for it. It's sad - but without a degree big companies won't even look at you.

My company wouldn't employ me without a degree either, there is a real shortage of graduates in my field though so I don't know if that will last. Unfortunately we do need people with the knowledge, they do exist in the non-degree qualified people in the industry but would be very difficult to find sadly. I don't mean that to be condescending but what I do and what a guy I might meet on site do are completely different, they know a hell of a lot more about their job than me and visa versa

We were as near as aggressively pushed into applying for uni whilst at 6th form and if you didn't apply you automatically ended up being summoned to meetings with the head of year to discuss what's going wrong. It either devalues degrees, or hugely over values them if you don't have one.

thistle_

Fenix wrote:

Are the young seeing the dream life portrayed by Instagram and living it up with stag parties in Vegas and weekends in Marbella, the latest 4x4 and forgetting to save ?

Some people I know (people I went to school with, friends of friends etc.) complain that they can't afford to buy a house, but they say that they "need" a 3/4 bedroom detached house. Some people need to lower their expectations.

Some young people also seem to think the streets of London are paved with gold and they'll make their fortune there. Employers advertise jobs with higher salaries, but they don't realise the cost of living is higher. An ex colleague moved down to London and now complains that he has no money and can barely afford the rent even though he was comfortably off up North on a lower salary.

Stevo_666

thistle (MBNW) wrote:

Fenix wrote:

Are the young seeing the dream life portrayed by Instagram and living it up with stag parties in Vegas and weekends in Marbella, the latest 4x4 and forgetting to save ?

Some people I know (people I went to school with, friends of friends etc.) complain that they can't afford to buy a house, but they say that they "need" a 3/4 bedroom detached house. Some people need to lower their expectations.

Some young people also seem to think the streets of London are paved with gold and they'll make their fortune there. Employers advertise jobs with higher salaries, but they don't realise the cost of living is higher. An ex colleague moved down to London and now complains that he has no money and can barely afford the rent even though he was comfortably off up North on a lower salary.

Funny that, sounds just like when I moved down to London many moons ago.

Some things don't change.

steve91

My partner and I are about to start the process for buying a place. We have around 30k saved (most of it from her teaching bursary) but being so close to buying means we are trying harder than ever to save, and I even sold my car to add that to the fund, but I can't see how we'd do it while renting. It's tough enough saving while living with our parents.

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

pblakeney

steve91 wrote:

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

This used to be normal. A first buy was always small, low value and usually a flat.
Today's expectations are too high.

angry_bird

I'm 26. I spend too much on bikes.

steve91

PBlakeney wrote:

steve91 wrote:

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

This used to be normal. A first buy was always small, low value and usually a flat.
Today's expectations are too high.

Ah ok, I didn't actually know that. I know the biggest step is to get on to the property ladder, so I'll be happy with anything that isn't a money pit!

dannbodge

I'm 27 and bought my first house (with my OH) at 24.

I went to uni and did a placement between my 2nd and 3rd years and because I did well, the company sponsored me for my final year and gave me a job 1 week after I graduated (on a fairly good salary) at 22. Two years of renting a nice flat and saving 1k a month (my OH did the same) and having pretty good savings already allowed us to buy "young".

We took out our mortgage on a 35 year deal, but 2 years later we have kept our repayments the same and dropped it to 19 years due to our house price increasing by over 20% (very popular area). Also helped by my wages increasing by over 50% since getting the mortgage.

I don't really budget my earnings, but then I don't go silly and make sure I put something away every month. Including 12% of my salary going straight into my pension.

capt_slog

steve91 wrote:

PBlakeney wrote:

steve91 wrote:

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

This used to be normal. A first buy was always small, low value and usually a flat.
Today's expectations are too high.

Ah ok, I didn't actually know that. I know the biggest step is to get on to the property ladder, so I'll be happy with anything that isn't a money pit!

My first house was a mid terrace that according to the estate agents, no-one else would take on or couldn't get a mortgage for. I spent all my free time for months making it right, re-wire, plumbing, plastering etc.

Second house was similar, the first day in there we had to rip up the living room floor and replace all the rotten joists/boards. I fitted central heating, put the bathroom upstairs (thereby bringing the only toilet indoors!), and built a kitchen extension.

When I hear these days that a house isn't acceptable because Xxxxx wants an en-suite, I have to wonder.

rick_chasey

PBlakeney wrote:

steve91 wrote:

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

This used to be normal. A first buy was always small, low value and usually a flat.
Today's expectations are too high.

You think?

I'm not convinced that explains this:

http://www.economist.com/news/britain/2 ... uch-faster

Perhaps the single biggest complaint of young Britons concerns housing—and it is justified. In the past 25 years the rate of home-ownership has fallen among all people of working age. But it is down by a whopping 30 percentage points among 25- to 34-year-olds. Whereas in the early 1990s two-thirds of this age-group owned their own home, nowadays little more than one-third do. Eleanor, a young media worker in Manchester, sighs that unlike her parents she will not have a home of her own by the time she is 30.

Some youngsters are delaying the purchase of a house out of choice. One reason is that they are more mobile than previous generations. And research shows that the desire to own a home is influenced by the decision to tie the knot. Britons marry eight years later than they did in the 1970s, which has pushed down homebuying among youngsters.

But other factors keep would-be buyers out of the market. Britain’s housing stock is not keeping up with demand, pushing up prices. The average home now costs twice what it did in 2000. Oldies compound the problem, since they hog what is already built. The proportion of “under-occupied” households—with two or more spare bedrooms—in England increased from 6m to 8m in the two decades to 2015.

This means that youngsters have to be rich or lucky to get on the housing ladder. The average first-time buyer now has an average household income of £40,000, or $50,000 (the average for the whole country is £25,000). The “Bank of Mum and Dad” is now involved in a quarter of all mortgage transactions. For well-off youngsters, there is little reason to moan. Among their peers, pricey housing may explain why so many feel gloomy in spite of improving job prospects.

okgo

PBlakeney wrote:

steve91 wrote:

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

This used to be normal. A first buy was always small, low value and usually a flat.
Today's expectations are too high.

Still well over £300k in most parts of Z1-6 London.

I'm 29 and considering my next move. It will cost over 700k, and it will likely have 3 bedrooms and certainly be attached to something else one if not both sides.

kingstongraham

PBlakeney wrote:

steve91 wrote:

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

This used to be normal. A first buy was always small, low value and usually a flat.
Today's expectations are too high.

My first house bought in 2000 was 110k for a 3 bed townhouse in London. Probably about 2.5 x combined earnings. No point pretending it isn't different now. Same house sold last year for 358k. Wages definitely haven't kept up with that.

pblakeney

Rick Chasey wrote:

PBlakeney wrote:

steve91 wrote:

Despite us earning a combined 60k (her 41k, me 19k) we are still potentially going to have to buy a flat, as my partner won't entertain a terraced house (she wants allocated parking or a drive) and a semi detatched / detached place is out of budget or in need of extensive work.

This used to be normal. A first buy was always small, low value and usually a flat.
Today's expectations are too high.

You think?

I'm not convinced that explains this:

http://www.economist.com/news/britain/2 ... uch-faster

Perhaps the single biggest complaint of young Britons concerns housing—and it is justified. In the past 25 years the rate of home-ownership has fallen among all people of working age. But it is down by a whopping 30 percentage points among 25- to 34-year-olds. Whereas in the early 1990s two-thirds of this age-group owned their own home, nowadays little more than one-third do. Eleanor, a young media worker in Manchester, sighs that unlike her parents she will not have a home of her own by the time she is 30.

Some youngsters are delaying the purchase of a house out of choice. One reason is that they are more mobile than previous generations. And research shows that the desire to own a home is influenced by the decision to tie the knot. Britons marry eight years later than they did in the 1970s, which has pushed down homebuying among youngsters.

But other factors keep would-be buyers out of the market. Britain’s housing stock is not keeping up with demand, pushing up prices. The average home now costs twice what it did in 2000. Oldies compound the problem, since they hog what is already built. The proportion of “under-occupied” households—with two or more spare bedrooms—in England increased from 6m to 8m in the two decades to 2015.

This means that youngsters have to be rich or lucky to get on the housing ladder. The average first-time buyer now has an average household income of £40,000, or $50,000 (the average for the whole country is £25,000). The “Bank of Mum and Dad” is now involved in a quarter of all mortgage transactions. For well-off youngsters, there is little reason to moan. Among their peers, pricey housing may explain why so many feel gloomy in spite of improving job prospects.

Contradictory.

"And research shows that the desire to own a home is influenced by the decision to tie the knot. Britons marry eight years later than they did in the 1970s, which has pushed down homebuying among youngsters."
As I stated earlier.
"The proportion of “under-occupied” households—with two or more spare bedrooms—in England increased from 6m to 8m in the two decades to 2015."
People are buying houses too large for their needs.
"The average first-time buyer now has an average household income of £40,000, or $50,000 (the average for the whole country is £25,000)."
Confusing household income with personal income.

I won't debate housing costs in London. If you are mug enough that's your choice. If you earn enough, fine.

rick_chasey

I think you're quite quick to draw hard conclusions.

I'd imagine a lot of under occupied homes are family homes where the children have grown up and left; rather than people buying more rooms than they need; that would make more sense, given how expensive property is.

Also I thought average household income was around £25k no? It happens to be similar to personal but I don't think there is confusion there.


As for London; I don't know about other Londoners but when I started working I applied out of London and was basically told every time they weren't hiring; they were cutting jobs.

All the jobs available at the time were in London. That, believe it or not, will be why prices are high. That's where the work is.

pblakeney

Rick Chasey wrote:

I think you're quite quick to draw hard conclusions.

I'd imagine a lot of under occupied homes are family homes where the children have grown up and left; rather than people buying more rooms than they need; that would make more sense, given how expensive property is.
Downsize and retire then. No?

Also I thought average household income was around £25k no? It happens to be similar to personal but I don't think there is confusion there.
Average salary = £27,271. £50k joint seems about right.

As for London; I don't know about other Londoners but when I started working I applied out of London and was basically told every time they weren't hiring; they were cutting jobs.

All the jobs available at the time were in London. That, believe it or not, will be why prices are high. That's where the work is.
I must be great. I have found lots of jobs outside London. All of them in fact.

rick_chasey

PBlakeney wrote:

Rick Chasey wrote:

I think you're quite quick to draw hard conclusions.

I'd imagine a lot of under occupied homes are family homes where the children have grown up and left; rather than people buying more rooms than they need; that would make more sense, given how expensive property is.
Downsize and retire then. No?

Also I thought average household income was around £25k no? It happens to be similar to personal but I don't think there is confusion there.
Average salary = £27,271. £50k joint seems about right.

As for London; I don't know about other Londoners but when I started working I applied out of London and was basically told every time they weren't hiring; they were cutting jobs.

All the jobs available at the time were in London. That, believe it or not, will be why prices are high. That's where the work is.
I must be great. I have found lots of jobs outside London. All of them in fact.

So the article argues oldies are not downsizing and retiring. Hence tying up a lot of space.

Average household income is around £25k, according to the ONS here: https://www.ons.gov.uk/peoplepopulation ... 1516prices

Your assumption that most people have joint incomes doesn't really fly, nor does the fact that plenty of households don't have working occupants.

pblakeney

These houses with 2-3 spare bedrooms that the oldies are hogging. Are they really what first time buyers should be looking at?
Oldies are doing the young a favour by keeping out of the market.
Young people should be working, or are they lazy?
Reports are reports. Evidence can be found to back up any stats.

ryan_w-2

It's the fact that saving money is hard for some in todays 'look at me / Instagram culture'...

My fiance and I earn well over £100k a year combined, however, saving £3k a month is hard work, especially when we need IRO £85k to get on the ladder.

That means we HAVE to save £3k a month for 2.5 years, but the properties we're currently looking at will have increased around £50k+ in that time, so we're back to square one.

Not having wealthy parents and needing (wanting) to buy in London is an absolute killer.

The inflation of property is swallowing up even the best of savers!