A Generation Forced To Pay Rent

[Cogs]

I remember posting on forums back in 2003 or so saying how I was a grad and could never buy somewhere. Meanwhile I saved hard and kept my eyes open. Whadyaknow I found a nice place to buy in 2006.

I think the question to ask is, why havent these two 30 yr olds got plenty of savings in the bank? If they chose to spend spend spend in their 20s then too right they should be screwed now. Consequences of their actions.

We seem to want people to be accountable for their spending yet seem sympathetic to the situation it leaves themselves in. Im not a big earner, im not 30. I have a house. If this couple didnt plan carefully enough then unlucky darts, some people only learn the hard way. But hey, if they do now what they should have done in their 20s maybe they will buy a starter home when they hit 40.

This should be a lesson to any younguns coming out of uni now - get saving and live below your means. Its funny how little support this idea sometimes gets given how much people detest people living beyond their means but hey its your choice - do you want to be sharing a house in your 30s, or not. Im pretty happy with my decision.

If they are academics they would have been 25 before they were being paid more than 7 grand a year, at which point one year contracts begin starting at 16,800 a year (more like 18,600 now, but I'm their contemporary and that was I got after much arguing). The option to do as you did and save 50k in under 8 years was not available to them.

They took a decision certainly but it wasn't to spend, spend, spend.

Edited June 29, 2007 by Cogs

[sun n sea]

From what I read on this site most of the bearish posters are not saying that "you can't get a mortgage" rather that it's neither sensible or sound to mortgage at any price and at any cost.

I personally think it's an insane situation that educated, hard working people cannot buy property without resort to a mortgage of almost suicidal dimensions. All the wheezy new mortgage products and shared ownership schemes appear to have come into being because we are right up on the limit of how much money people can get hold of. If you have to borrow barrow loads of cash way above your salary to buy a house something is seriously wrong and the sums aren't adding up. Rather than accept this all the people who make money from the property industry simply invent new ways of sustaining unaffordable prices.

Using hindsight is all well and good but it has to be born in mind that the insane amount of money lenders now dole out at the drop of a hat are recent developments. In the past lending was stricter so it's not the case that people were feckless by not taking up mortgages that were being thrown at them.

In all of this the point surely is that a mortgage needs to be affordable with enough slack in your finances to cope with interest rate rises and those unforseen rocks in lifes road. Unless you are in the position to be able to realistically afford the mortgage payments a lot of people kept saving and working their careers with the aim of getting themseleves in the right financial position. The way the property market has rocketed has thrown a fecking spanner in this plan.

[Habeas Domus]

I personally think it's an insane situation that educated, hard working people cannot buy property without resort to a mortgage of almost suicidal dimensions. All the wheezy new mortgage products and shared ownership schemes appear to have come into being because we are right up on the limit of how much money people can get hold of. If you have to borrow barrow loads of cash way above your salary to buy a house something is seriously wrong and the sums aren't adding up. Rather than accept this all the people who make money from the property industry simply invent new ways of sustaining unaffordable prices.

Well put.

I think that rather than go back to the 70's situation of rationed lending, the govt should just place some kind of limit on liability for stupidy geared borrowing.

e.g. anything above 95% of the properties value could effectively be made unsecured lending - that would put the can on the most risky lending without preventing people getting a mortgage at all.

[HPC Convert]

Well said

When you're young then arsing about, not getting a mortgage or making a committment is fun. And renting a lovely place with a big garden even if it means sharing is far preferable to getting a rather dreary place on your own and investing in the future. Then you get older and your priorities change and you wish you'd done things differently, it's a shit situation to be in but don't go whining about it.

Don't get me wrong, I've a lot of sympathy for people young enough that the market was already out of their reach before they even got a job, but these people are in their early thirties, they could have got on the market before it was too painful, they just didn't. And now they're whining to the guardian about it.

The generation forced to pay rent is the generation coming out of university at the moment (barring a crash). These people aren't part of that, they aren't forced to pay rent, they chose to pay rent and now they can't undo that decision easily.

My guess is that they stayed in (state financed) education until reality caught up with them around their late 20s. They could probably easily afford a home in much of the UK but just not a large one in Cambridge - or is it that their public sector job is tied to Cambridge? If this is the case they will never own - as a direct result of their own life decisions. Time to pay the piper.......

[HPC Convert]

Housing in Cambridge has been very expensive for years,

Then move somewhere more attractive and affordable.

[HPC Convert]

I agree.

If young people are choosing life, and to broaden their horizons, rather than become compliant debt-slaves within 'the system', then good for them. In many cases it could pay off for them in the long-run.

Which is great and we must not knock them for doing so. However they cannot then come home and whine because they cannot afford a house. Find me any other generation in British history that was able to get an education, junket round the world and then come home to a good job and a cheap house. Never happened - never will.

[bugged bunny]

Then move somewhere more attractive and affordable.

I don't live there (never have done), but I know people who do.

I left the south-east and moved to Bristol in order that I could buy a reasonable home and improve my quality of life.

My current plan is to bank the profits and move to Italy. Again, moving somewhere more attractive and affordable.

Edited June 30, 2007 by bugged bunny

[bugged bunny]

Which is great and we must not knock them for doing so. However they cannot then come home and whine because they cannot afford a house. Find me any other generation in British history that was able to get an education, junket round the world and then come home to a good job and a cheap house. Never happened - never will.

Happened to my father, a boomer. He didn't go travelling but he spent a year bumming round at university, mostly playing pool, dropped out and walked into a professional training scheme. Within a few years, in his mid twenties, he'd bought a three bed semi in a posh leafy area and started a family. My Mum was not working at the time. He was then able relocate his family to a 3-bed semi in one of the most expensive towns in the country!

So it has happened, but will not happen again in my lifetime I fear.

I agree that moaning about it won't change anything. Once I realised this myself I took action to improve my lot, and am continuing to do so.

But IMO lot of people who are moaning and feel helpless deserve sympathy.

Edited June 30, 2007 by bugged bunny

[munro]

My guess is that they stayed in (state financed) education until reality caught up with them around their late 20s. They could probably easily afford a home in much of the UK but just not a large one in Cambridge - or is it that their public sector job is tied to Cambridge? If this is the case they will never own - as a direct result of their own life decisions. Time to pay the piper.......

Perhaps everyone should leave school at 16, and work for...well, shelf-stacking then progressing up the career ladder in retail. A trade in which maybe 1 in 20 ever earn a decent wage. Or they can become estate agents, or any of those other unskilled "trades" in which very few people ever earn enough to buy a house.

Or they can go to university, leave ASAP at 21 and pile into law, accountancy or management consultancy. Of course there will be a problem for their kids as no-one will stay on and get qualified to teach in turn in university, as that involves spending several years in the state-funded education you so despise.

Your recipe is for the ultimate in dumbing-down. At the moment we are allegedly hanging on through the "knowledge economy" - specifically pharmaceuticals, which requires massive investment in education and universities, and the City, which relies heavily on maths PhDs. But in your world we won't have any of this - then what?

Frankly this is so far beneath contempt I can't imagine why I'm wasting my time replying. But perhaps it indicates a lack on your part of a highly-trained brain - envy, perhaps?

[Mrliberty]

They're building up an entire generation who have nothing to lose and no way to gain; people who have nothing to lose are the kind who burn down Parliament and string rich bankers from lamp-posts.

Precisely Mark.

There are an awful lot of people out there who don't seem to be able to grasp this fact.

Of course, it couldn't possibly happen in this day and age......

[Zaranna]

Good post - the 30 something renters should of thought more about saving for the future than pissing it all away on living beyond their means, they should of been easily on the ladder by now and just seems like sower grapes that they suddenly can not have it all - hello welcome, its a tough world, now live by your earlier decisions!

As was pointed out earlier, the article makes it clear that these people most likely had to undertake a long period of postgraduate or professional study in their 20s. Many high-skill professional jobs require this now. This is almost exactly my own situation in Cambridge. (I'm not "Claire" BTW but I am an academic and about the same age, and my husband and I now earn decent above-average salaries and still cannot afford to even think of buying a house). When I went back to do my PhD, nice houses, even in Cambridge, were still available at decent income multipes of an average professional salary. Like many people, I had no way of knowing that while I was a graduate student a massive speculative asset price bubble woudl blow up in housing. By the time I finished my PhD and got my first academic job (most junior academic jobs are on fixed-term contracts BTW), housing was unaffordable.

Given that in our economy we increasingly need high-skill high-qualification knowledge sector jobs, especially in the sciences, are you suggesting that the people in this article should have looked into the future and straight out of university got a job as an estate agent, bought a few BTLs and maxed themselves out on debt in order to "save for the future" rather than spend their 20s studying for professional or graduate degrees?

Hello to the new UK society where spending your 20s doing professional study or research in the sciences to contribute to society and build a career is looked upon by f***ing idiots on the internet as "pissing it all away by living beyond your means" and bad "earlier decisions"!

I plan to emigrate in a year or so -- I'm lucky that I am in a high-skill high-demand academic field, and I anticipate that I will be able to move to the US or Canada relatively easily -- houses are (getting more and more!) cheaper there, and I will pay less tax in a society where the demographics are more weighted towards the young. I don't want to live here paying more and more tax in an ageing society where my function is to prop up the pensions system and pay for the old and greedy BTL-ers: I intend to move to where my skills are properly valued. More of my colleagues move to the US every year: particularly in Cambridge, where it now requires four multiples of a Professorial salary to buy a one-bed flat, we are haemorrhaging brilliant research scientists and economists to the US.

The brain drain is incredible at the moment. And this IS something you should be worried about. Remember that in the future when you can't get good cancer services and research science and higher education for your children and decent public servants and doctors -- what you sow you reap.

[The Ayatollah Buggeri]

My guess is that they stayed in (state financed) education until reality caught up with them around their late 20s.

A lot of postgraduate education is not state-financed, and the decision to go through it is, for most people, one which is based very much in reality. And even postgrads who do get a research council grant usually have to take other jobs to keep afloat (after allowing for the fact that it's tax free, my British Academy studentship paid me the equivalent of a salary of £6k a year, in 1996-99 prices). They go through it in the expectation that after living through the first 3-4 years of their economically active life with a very low disposable income, the reward at the end is a job with slightly above-average salaries and much better than average job security and pension. And most academics make substantial contributions to the economy through their teaching and research.

[MarkG]

The brain drain is incredible at the moment. And this IS something you should be worried about.

Yeah, but our new 'knowledge economy' doesn't need brains, it just needs the knowledge of how to get a bank to give you ever-increasing mortgages so we can build an economy around selling houses to each other at ever-increasing prices.

[sossij]

Yeah, but our new 'knowledge economy' doesn't need brains, it just needs the knowledge of how to get a bank to give you ever-increasing mortgages so we can build an economy around selling houses to each other at ever-increasing prices.

Heh heh

[bomberbrown]

Then move somewhere more attractive and affordable.

Errrr......and take the University with you? (thats why I lived in Cambridge for 3 years (95-98 APU))

[winkie]

I plan to emigrate in a year or so -- I'm lucky that I am in a high-skill high-demand academic field, and I anticipate that I will be able to move to the US or Canada relatively easily -- houses are (getting more and more!) cheaper there, and I will pay less tax in a society where the demographics are more weighted towards the young. I don't want to live here paying more and more tax in an ageing society where my function is to prop up the pensions system and pay for the old and greedy BTL-ers: I intend to move to where my skills are properly valued. More of my colleagues move to the US every year: particularly in Cambridge, where it now requires four multiples of a Professorial salary to buy a one-bed flat, we are haemorrhaging brilliant research scientists and economists to the US.

The brain drain is incredible at the moment. And this IS something you should be worried about. Remember that in the future when you can't get good cancer services and research science and higher education for your children and decent public servants and doctors -- what you sow you reap.

In other words, my country doesn't deserve me.

[winkie]

I plan to emigrate in a year or so -- I'm lucky that I am in a high-skill high-demand academic field, and I anticipate that I will be able to move to the US or Canada relatively easily -- houses are (getting more and more!) cheaper there, and I will pay less tax in a society where the demographics are more weighted towards the young. I don't want to live here paying more and more tax in an ageing society where my function is to prop up the pensions system and pay for the old and greedy BTL-ers: I intend to move to where my skills are properly valued. More of my colleagues move to the US every year: particularly in Cambridge, where it now requires four multiples of a Professorial salary to buy a one-bed flat, we are haemorrhaging brilliant research scientists and economists to the US.

The brain drain is incredible at the moment. And this IS something you should be worried about. Remember that in the future when you can't get good cancer services and research science and higher education for your children and decent public servants and doctors -- what you sow you reap.

In other words, my country doesn't deserve me.

[Zaranna]

In other words, my country doesn't deserve me.

Nothing to do with my country doesn't deserve me. Pure pragmatism -- if I can't have a decent standard of living here, I'll go elsewhere where I can.

[winkie]

Nothing to do with my country doesn't deserve me. Pure pragmatism -- if I can't have a decent standard of living here, I'll go elsewhere where I can.

Don't blame you. There will always be a better place at a better price.

[Ethel]

No, collapse. The post-WWII 'bread and circuses' system is coming to an end.

A global political and economic collapse will certainly be something to tell our grand-kids about, and we'll probably be able to afford to have some afterwards.

Bring it on....

I hope we return to an extremely harsh dog-eat-dog era... survival of the fittest.

And when the dust settles, maybe we'll be left with the building blocks of a decent society once the scum who are clogging up the arteries of this nation have been wiped out.

[MarkG]

Nothing to do with my country doesn't deserve me.

In any case, I don't know whose country this is, but it's not mine; it bears little resemblance to the place I grew up in.

Pure pragmatism -- if I can't have a decent standard of living here, I'll go elsewhere where I can.

The big problem is that the cause-and-effect feedback of these policies is so long. If you price the productive people out of living in your country and they leave, the impact will be huge... but not for a decade or two, by which point it will be far, far too late to fix.

[drrayjo]

Bring it on....

I hope we return to an extremely harsh dog-eat-dog era... survival of the fittest.

And when the dust settles, maybe we'll be left with the building blocks of a decent society once the scum who are clogging up the arteries of this nation have been wiped out.

Wow. Iron lady.

[sossij]

Bring it on....

I hope we return to an extremely harsh dog-eat-dog era... survival of the fittest.

And when the dust settles, maybe we'll be left with the building blocks of a decent society once the scum who are clogging up the arteries of this nation have been wiped out.

I like your implicit assumption that you'll be one of the ones to survive your "extremely harsh dog-eat-dog era".

[Ethel]

I like your implicit assumption that you'll be one of the ones to survive your "extremely harsh dog-eat-dog era".

So you should. *snarls*

[Guest Cletus VanDamme]

Yeah, but our new 'knowledge economy' doesn't need brains, it just needs the knowledge of how to get a bank to give you ever-increasing mortgages so we can build an economy around selling houses to each other at ever-increasing prices.

Have you emigrated yet, MarkG?