How do millennials buy a house?

[Dorkins]

45 minutes ago, scottbeard said:

This is why no matter what happens with interest rates etc prices will NEVER crash to 90s affordability again as the two incomes cat is out of the bag.  Future generations will be forever working harder to pay the bankers.

The other big thing that changed since the 90s (I know you have said this too and this is your area of professional expertise) is how poor private sector occupational pension provision is now. I do wonder if at some point the average worker is going to twig that a few % of their paypacket going into a DC pension is not going to make a material difference to their living standards in retirement and they really ought to be putting in 20-30% as happens with some of the public sector DB pension schemes. This would dramatically reduce the share of income that people could put towards housing.

[Dorkins]

41 minutes ago, Si1 said:

This is such a load of ******. The actual productive portion of society has not gone up two times because people spend greater parts of their lives being a net burden (enter the workforce later and have longer retirements). So the flipside of women working more is that men work less.

Yes, I have posted the graph below many times on here. The overall employment rate has barely moved in >50 years, it's just that more women are in work and fewer men are. There are definitely not twice as many pay packets going out each month.

Source: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/employmentintheuk/may2020

Edited April 26, 2022 by Dorkins

[Si1]

10 minutes ago, Dorkins said:

Yes, I have posted the graph below many times on here. The overall employment rate has barely moved in >50 years, it's just that more women are in work and fewer men are. There are definitely not twice as many pay packets going out each month.

Source: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/employmentintheuk/may2020

I suspect that, instead of saving up for extended retirements, a lot of expenditure was brought forward by paying more for houses, and a reckoning will come when post boomer generations have poor retirements.

The boomers on the other hand got literally all of this for free 

[winkie]

21 minutes ago, Gurgle said:

London living (maybe a decent apartment) vs. a 4 bed house in Berkshire is now looking attractive.  London prices aren't as crazy as they were comparatively.  When I see some of the decent sized 2-bed places coming on at the prices of a basic 4 bed house in Berkshire it gets me thinking.  I don't know the areas in London well though so there may be a reason for these prices...

A huge disparity between where money is made and where property is purchased using that money.....we have been a magnet for international money made throughout the world in whatever way, partially because of our tax laws, property laws, and currency......some people buy prime place property for income and growth throughout the globe, gold or both store of value.......that is why working  somewhere will for a growing number no longer purchase a home to live in the same place as where they work......

[Twenty Something]

1 hour ago, iamnumerate said:

No it isn't in free market capitalism people's standard of living increases every year on average. Sadly housing is not a free market.

That is a good point

To get cheaper housing is simple, change the taxation system to make second home buying more expensive, don't pay people to live in expensive areas who don't work there, don't pay people to move to the UK.

I don’t think that capitalism ultimately = yearly increases in the standard of living. This is why there are recessions and booms - it isn’t a guarantee of capitalism that everything always increases. I can agree that housing isn’t a completely free market, but I would say that predominantly it is. Whatever bungs and props your life circumstances allow you to access, you are still free to invest those however you see fit, and you are still free to compete (or not) with others wanting a property. The definition of a free market is one based on supply and demand with little to no government control, and this is what we have. The government isn’t forcibly stopping you buying whatever you want, though you could counter that the various props pricing people out are. This is likely more a debate on semantics. 
 

It’s interesting that you seem to be saying on the one hand sadly housing isn’t a free market, yet on the other calling for greater regulation in taxing second homes, not allowing people to move to the UK and so on. You would appear to want the very opposite of a free market? Second home buying already is more expensive through the 3% second home SDLT levy, and I’m not sure how many people are living in expensive areas who don’t work there - not sure that turfing them all out is going to have anything more than a minimal effect on prices as they’ll all be in social housing anyway so won’t impact the private market? 
 

Ultimately there is an insatiable demand for property from multiple entities at present and I don’t see this changing short to mid term if ever. An Englishman’s home is his castle and all that. Short of legislating against second home ownership, I don’t see anything really stopping that particular train. 

Edited April 26, 2022 by Twenty Something

[Insane]

1 hour ago, winkie said:

Very often nowadays women earn more than their partners, not unusual for men to do the majority of the childcare, cleaning and cooking......times have indeed changed. 50:50.

I have not got figures for how many woman earn more than their partners. But I know with most couples both have to work full time then between them they still have to take care of childcare, cleaning and cooking. The average family do three jobs between them not two as it used to be. 

[Dorkins]

7 minutes ago, Si1 said:

I suspect that, instead of saving up for extended retirements, a lot of expenditure was brought forward by paying more for houses, and a reckoning will come when post boomer generations have poor retirements.

The boomers on the other hand got literally all of this for free 

Yes, you can see it in aggregate statistics like the market cap of FTSE or GDP per capita - the UK economy basically stopped growing overall about 20 years ago and there is no increase in productive capital being accumulated. The capital stock does produce a yield, but in net terms that yield is being consumed rather than invested in new productive projects.

For example, a lot of landlords are just using the rents they collect to supplement their lifestyle or are paying it to a bank which then pays it out as salaries and bonuses to bank employees, the rents are not being used to build new housing to collect more rents etc which is how capitalism is supposed to work.

[Dorkins]

18 minutes ago, Twenty Something said:

I can agree that housing isn’t a completely free market, but I would say that predominantly it is.

A market is where supply meets demand, and in UK housing both sides of that equation are heavily manipulated by policymakers e.g. the planning system on the supply side and the constant interference in the financial sector on the demand side.

Edited April 26, 2022 by Dorkins

[iamnumerate]

16 minutes ago, Twenty Something said:

It’s interesting that you seem to be saying on the one hand sadly housing isn’t a free market, yet on the other calling for greater regulation in taxing second homes, not allowing people to move to the UK and so on.

I actually said "Stop paying people to move to the UK." Not subsidising people to do something is not anti-free market.

Subsidising demand is not something that happens in a free market.

17 minutes ago, Twenty Something said:

I’m not sure how many people are living in expensive areas who don’t work there - not sure that turfing them all out is going to have anything more than a minimal effect on prices as they’ll all be in social housing anyway so won’t impact the private market? 

More space in social housing would of course mean lower private rents as private tenants move to the social sector.

[Si1]

3 minutes ago, Dorkins said:

Yes, you can see it in aggregate statistics like the market cap of FTSE or GDP per capita - the UK economy basically stopped growing overall about 20 years ago and there is no increase in productive capital being accumulated. The capital stock does produce a yield, but in net terms that yield is being consumed rather than invested in new productive projects.

For example, a lot of landlords are just using the rents they collect to supplement their lifestyle or are paying it to a bank which then pays it out as salaries and bonuses to bank employees, the rents are not being used to build new housing to collect more rents etc which is how capitalism is supposed to work.

In other words profits are not being reinvested in better housing or industry, but just being skimmed off. Yes that makes a lot of sense.

[iamnumerate]

1 minute ago, Dorkins said:

A market is where supply meets demand, and in UK housing both sides of that equation are heavily manipulated by policymakers e.g. the planning system on the supply side and the constant interference in the financial sector on the demand side.

+1

 

4 minutes ago, Dorkins said:

Yes, you can see it in aggregate statistics like the market cap of FTSE or GDP per capita - the UK economy basically stopped growing overall about 20 years ago and there is no increase in productive capital being accumulated. The capital stock does produce a yield, but in net terms that yield is being consumed rather than invested in new productive projects.

For example, a lot of landlords are just using the rents they collect to supplement their lifestyle or are paying it to a bank which then pays it out as salaries and bonuses to bank employees, the rents are not being used to build new housing to collect more rents etc which is how capitalism is supposed to work.

Considering the poor yield on housing not investing in more housing makes sense for them.

I am not saying it is a good state of affairs.

 

[winkie]

8 minutes ago, Insane said:

I have not got figures for how many woman earn more than their partners. But I know with most couples both have to work full time then between them they still have to take care of childcare, cleaning and cooking. The average family do three jobs between them not two as it used to be. 

I don't have figures either, but know it is not uncommon.....all work of all types now having to be shared.

[Dorkins]

8 minutes ago, Si1 said:

In other words profits are not being reinvested in better housing or industry, but just being skimmed off. Yes that makes a lot of sense.

The UK economy is currently in the second half of its second lost decade and policymakers seem pretty much fine with this because they are mostly interested in whether the rentiers are comfortable, and the fact is they are not just comfortable, they are thriving as more and more of workers' incomes is diverted to rentiers of various types. So living standards are rising at the top, falling in the middle and bottom and overall the economy is not growing. I would guess this will continue to be the pattern until about the early 2030s, to me it feels like that is the point that the system will become unviable because most of the comfortable pre-Boomers and Boomers will be gone and not enough of the voters left behind will want things to continue this way.

Edited April 26, 2022 by Dorkins

[Freki]

42 minutes ago, Dorkins said:

A market is where supply meets demand, and in UK housing both sides of that equation are heavily manipulated by policymakers e.g. the planning system on the supply side and the constant interference in the financial sector on the demand side.

I would add that the finance equation is not a leveled playing field. You can deduct some interest payments when you are a BTL, all if you are incorporated among other things. Overall the OO is disadvantaged and the current rules are playing against them (us)

[classimmons]

On 4/25/2022 at 10:34 AM, msi said:

Erm...

They can classify them any way they like _  they have a LA pay scale and ethos sadly

[sta100]

On 4/23/2022 at 1:27 PM, Speed1987 said:

I'll second that, whilist I was living frugally, working, running a business and stacking cash...

They were eating at high class restaurants and jetting arcoss the world 3 times a year.

8 years on, I almost laugh at their desperation. The funniest part of it, is that they are complaining they cannot afford to buy, yet will not compromise. They could buy on the outskirts or start in somthing smaller and work up the ladder but no.... they want that house now, so will rent instead.

That is the key here, 'delayed gratification'

I did both. Partied like a rockstar and ended up with money.

You're a bit too boring to be smug mate.

[sta100]

19 hours ago, Postman said:

I see the usual tropes about millennials being feckless are being bandied about... So here's one of my own; Millennials have been absolutely fcuked by selfish gen Xers and boomers who expect the generations after them to work twice as hard for the same provision because "back in our day we didn't have smart phones". 

 

Exactly, as a gen xer it's a load of absolute nonsense. The truth is that these generations don't want to admit that they've royally f*cked up. A bunch of cowardly people.

Edited April 26, 2022 by sta100

[sta100]

On 4/25/2022 at 8:32 AM, iamnumerate said:

I knew loads of people in the 90s who bought and were not at all frugal. One person I know spent £40 just on entry to a nightclub for New Years Eve in 96.

 

Almost everyone I know from gen x blew a load of things up their nose at the weekends. Boomers in London used to get p1ssed every lunchtime. When I grew up everyone had a load of video games walkmans tvs/video recorders when their parents worked pretty average jobs. Nobody who works those same jobs could afford those houses anymore, they've mostly been bought up by wealthy foreigners.

Edited April 26, 2022 by sta100

[scottbeard]

2 hours ago, Si1 said:

This is such a load of ******. The actual productive portion of society has not gone up two times because people spend greater parts of their lives being a net burden (enter the workforce later and have longer retirements). So the flipside of women working more is that men work less.

Actual data to back up your assertion can be found where I wonder....?

I'm not aware that people are currently having longer retirements.  If anything they are retiring ever later.

The bottom line is clear - back in the 1950s married women didn't work.  Houses were priced based on only a man's income.

Fast forward to now and, other than for a few years with babies, married women DO work.  Houses are priced based on two incomes.

The working patterns changed gradually.  The mortgage lending changed all at once in the early 2000s, hence about a 25% increase in house prices in 2002.

Yes it's not DOUBLE but it's the most significant driver of house price increases in the early 2000s.

[byron78]

27 minutes ago, sta100 said:

Exactly, as a gen xer it's a load of absolute nonsense. The truth is that these generations don't want to admit that they've royally f*cked up. A bunch of cowardly people.

Indeed.

We privatised housing in the UK in the 1980s. 

It has been a disaster for most as far as I can tell.

[iamnumerate]

40 minutes ago, sta100 said:

Almost everyone I know from gen x blew a load of things up their nose at the weekends. Boomers in London used to get p1ssed every lunchtime. When I grew up everyone had a load of video games walkmans tvs/video recorders when their parents worked pretty average jobs. Nobody who works those same jobs could afford those houses anymore, they've mostly been bought up by wealthy foreigners.

I didn't know people who partied that much. However sometimes you get the impression that in the 20th century young people for fun went to the library (it is free) or for a walk and that cinemas etc only started in the year 2000. And if only millenials would do the same - the extra £20k they need for a deposit would just appear as if by magic!

[msi]

1 hour ago, classimmons said:

They can classify them any way they like _  they have a LA pay scale and ethos sadly

Ethos?  so you mean anything you don't like.  Pathetic.

[scottbeard]

3 hours ago, Dorkins said:

Yes, I have posted the graph below many times on here. The overall employment rate has barely moved in >50 years, it's just that more women are in work and fewer men are. There are definitely not twice as many pay packets going out each month.

Source: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/employmentintheuk/may2020

Ah the curse of statistics : is 16-64 really a good indicator?

How many 16 or 64 year olds are buying their first house?

Come back with employment rates for say 25-35 year olds and let’s see again what the picture shows 

[classimmons]

Just now, msi said:

Ethos?  so you mean anything you don't like.  Pathetic.

Calling someone you know nothing about names it what is pathetic.

I have worked at a HA.

They are totally uncommercial.

1st day the dept I was working with went to the pub for lunch for a birthday and did not go back to the office.

One guy was sick nearly every Friday.

Most people there - there were exceptions - were lazy and disinterested.  They knew it was a doddle of a gig which is why they stayed.

Older people on final salary pensions.

If you think that is a good use of taxpayers money good luck.  

 

[Insane]

52 minutes ago, classimmons said:

Calling someone you know nothing about names it what is pathetic.

I have worked at a HA.

They are totally uncommercial.

1st day the dept I was working with went to the pub for lunch for a birthday and did not go back to the office.

One guy was sick nearly every Friday.

Most people there - there were exceptions - were lazy and disinterested.  They knew it was a doddle of a gig which is why they stayed.

Older people on final salary pensions.

If you think that is a good use of taxpayers money good luck.  

I have spoken with a few people who worked for housing associations. 

One told me he knew full well that properties were being sub let the person who it was allocated to was living elsewhere while making a profit on the rent. He ignored these situations as he did not want the hassle and extra work involved evicting people so it carried on.

Another complained that the work involved with this sort of thing was too much bother and if the house was being lived in by someone so what.