Monday, Jun 26, 2006

The boomerang generation

Firstrung: First time buyers head back to parental home as they can't afford to buy or rent

It's not just young adults who are being forced to move back in with their parents because of rising house prices and soaring levels of debt. An estimated 4.3 million single people aged between 25 and 50 have moved back to the family home after being unable to afford to live alone.

Posted by Converted Lurker @ 10:44 AM (2902 views)
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14 Comments

1. Gav said...

Shame a few more people don't think about doing this, just to see how long the new BTL people keep their empty houses for. Things are rosey when your tenants are paying the mortgage for you but how long will you pay it yourself whilst its empty?

Gav

Monday, June 26, 2006 11:13AM Report Comment
 

2. Abc said...

This is the position that I am in in my mid thirties and I know others others to. I'm glad somebody has highlighted this.

Monday, June 26, 2006 12:53PM Report Comment
 

3. Bidin'matime said...

Gav - the coming economic downturn will bring your wish true.

Monday, June 26, 2006 01:15PM Report Comment
 

4. inbreda said...

Where I live (Guernsey) this has been going on for a long time. It results in many people being forced to find work elsewhere - generally England. Not because there aren't enough well paid jobs here, but because they just don't relate to property prices.

Monday, June 26, 2006 01:22PM Report Comment
 

5. Superruss said...

I am also a RTN

Back in Brum at the moment, leaving "an exciting gap in the market" for anyone wanting to fill some landlord/estate agent's coffers in London.

Ho ho!

Monday, June 26, 2006 02:07PM Report Comment
 

6. gruppenfuhrer said...

Here in Essex I too have returned to the home of the parents to get a better deposit together. Just glad that I get on with them okay. I am sure a lot of people's housing problems are being compounded by being unable to take a breather at the Hotel of mum and dad.

Monday, June 26, 2006 02:32PM Report Comment
 

7. Autopilotengage said...

I have moved in with a friend rather than continue to pay my exhorbitant rent or buy anywhere. If enough of us do this, it will make a difference! As soon as sentiment shifts, it'll be a different story.

Monday, June 26, 2006 03:20PM Report Comment
 

8. devil's advocate said...

Does this not also highlight an issue that will doubtlessly arise if price do go down. All the people that have been living with parents or waiting for the crash will all decide to buy. This will inevitably force house prices back up again. the only thing that will keep prices down is high interest rates or the banks reducing their lending multiples.

Monday, June 26, 2006 03:53PM Report Comment
 

9. inbreda said...

Hopefully it is patience such as yours that will soon be rewarded.

Monday, June 26, 2006 03:53PM Report Comment
 

10. devil's advocate said...

Does this not also highlight an issue that will doubtlessly arise if price do go down. All the people that have been living with parents or waiting for the crash will all decide to buy. This will inevitably force house prices back up again. the only thing that will keep prices down is high interest rates or the banks reducing their lending multiples.

Monday, June 26, 2006 03:55PM Report Comment
 

11. Nails said...

Well im at home to. Cant see the point of getting a flat about the size of shoe box and then not being able to afford to do anythin nice. So i might as stay at home and save the pennys till i can and be able to go out once in a while.

Monday, June 26, 2006 04:39PM Report Comment
 

12. Hardlanding said...

Long-time lurker first-time poster..

If prices are *really* crashing it will be because there are more forced sellers than buyers won't it? i.e. higher interest rates on top of high debt levels leading to bankruptcies and resulting unemployment as businesses default through non-payment. The economic conditions that created the crash climate will be making things harder for everyone including delayed first time buyers.

Just as no one currently sees a top to the market as prices "have always gone up", when prices start to slide in earnest no one will be able to call the bottom with any certainty and property as an investment will be "over". If people are lurking in the margins to jump in as soon as pricing becomes affordable then we'll have the promised "soft landing" and a stagnation as prices move sideways for 5 to 10 years as earnings gradually increase and affordability improves.

Looking at the graph on the front page of the website it is starting to look like that is where we are.

-- HL

Monday, June 26, 2006 06:18PM Report Comment
 

13. bidin'matime said...

DA – you are overlooking the effect of the tide – once prices start to come down, the popular view that you must get on the ladder will change and the view will be (as it was in the early 90’s) that only mugs take out mortgages and buy houses. It will be slow at first and there will be the odd dead-cat bounce, but eventually the talk in every pub will be about who was stupid enough to mortgage themselves up to the hilt and who was wise enough to rent or stay at home.

Monday, June 26, 2006 08:14PM Report Comment
 

14. inbreda said...

Exactly bidin - RTNswill just wait a few years before buying - once they think prices have stabilised. Perhaps rent for a little while. Parents aren't going to want to push their kids into a market where they are obviously going to lose thousands. It's the exact opposite of parents throwing thousands of pounds at their kids so they can buy a house and make themselves thousands (*applies only in a rising market ;-).

The greedy will not be able to buy at the bottom of the market as the terms of their bankruptcy will not allow it. The patient few - who will have saved some cash - will be putting a fat deposit on good value property.

Patience is a virtue.

Monday, June 26, 2006 08:53PM Report Comment
 

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