96 replies to this topic

[Icey]

I'm also lucky enough to own my own house, I've owned new cars, have an iPhone and go abroad on holiday a couple of times a year. So between myself and Cooperman we break the generalisations (him being the not-so-destitute pensioner and me being the home owning millennial), I think that suggests that whatever you've been told/believe about either generation is pretty much junk.
 
But lets look at this housing problem - if only the 'yoof' would stop spending all their money on smashed avo on toast they'd be able to afford a house. This is an irksome generlisation as it ignores the elephant in the room - rampant property price rises with pretty miserable wage growth with a generous helping of rent increases.
 
 
Wages:

Flat to decreasing. By itself that's only part of the problem. Yes, it's tough but as a few have posted above, you can scrimp and save to scrape together a deposit.
 
But couple that with rising rents (sorry, crap image but is from the ONS and covers the last 10 years) and your finances are getting really squeezed, but again not insurmoutable:
 

Now for the real stinger. House prices. I've only lived in the South so can't comment on the rest of the UK but can cover the East and West. I've grabbed some house prices in locations I've either lived or worked:
 

Just look at those!

Look at the cheapest (£140k). I won't say exactly were it is but it's in a small town in the South West with no real redeeming features other than being within ~1hr of a few bigger towns (albeit via very congested roads with no real options for public transport). It almost quadrupled in value over 10 years, that's a very difficult rise to deal with for a couple on average wages especially considering all of the above.

Now look at the most extreme (£2.1m). I think it's pretty obvious this one is London but it's shows how extreme the problem is for some.

 

If you are saving hard to get on the ladder, the problem you're facing is that someone keeps pulling the ladder up a little every day/week/month. No matter how hard you save the houses you're looking at are likely going up faster than your savings and wages. So for many the simple answer is not to bother. You'll never be able to afford a house so you may as well spend your money on things you can afford and enjoy (cars, phones, holidays etc..).

 

That's not all either, many will also have additional financial stress factors (student loans being the prime example).

 

Hopefully that explains why the 'yoof' are living the way they are - their world isn't like yours. It's changed, the things you (i.e. previous generations) took for granted are gone.

 

[mab01uk]

I'm also lucky enough to own my own house, I've owned new cars, have an iPhone and go abroad on holiday a couple of times a year. So between myself and Cooperman we break the generalisations (him being the not-so-destitute pensioner and me being the home owning millennial), I think that suggests that whatever you've been told/believe about either generation is pretty much junk.

 

Out of interest and to help advise the 'yoof' members reading this, how did you break the 'generalisations' and become a home owning millennial with new cars, an iPhone and a couple of holidays abroad each year?

Edited by mab01uk, 15 June 2019 - 06:54 PM.

[Icey]

Out of interest and to help advise the 'yoof' members reading this, how did you break the 'generalisations' and become a home owning millennial with new cars, an iPhone and a couple of holidays abroad each year?

My father died from MND at the age of 54. Otherwise I would be in exactly the position I described (despite being fortunate enough to earn a decent wage and having a healthy savings pot).

 

Edit:

I realise that that answer probably doesn't explain much, let me expand a little. I now earn a decent wage and have enough to take out a mortgage of the size I took out ~9 years ago. The difference now is that the house I bought has increased in value by ~£100k. So despite saving more money now than I ever would have been able to ~10 years ago I would still be struggling to buy the house I have now. I would be treading water - saving money but never enough to out-pace the price rises.

 

Before I bought this house I didn't have new cars (I drove a £300 Peugeot) , or an iPhone (I had a phone my employer paid for) or holidays (I only went on a foreign holiday for the first time at the age of 31, although I'd traveled with work a reasonable amount). God only knows how much worse it would have been if I had dared have a child in my twenties.

Edited by Icey, 16 June 2019 - 09:32 PM.

[Broomer]

I have NEVER bought or owned a brand new car, always had second hand with no finance, saved for years when young for my first deposit on a small run down property in the mid-1980's, we had no furniture to begin with so we sat on garden chairs and had an old b&w TV, s/h bed/mattress, fridge, cooker, etc most donated as hand me downs from friends, family or cheap from the local free ads newspaper. Then in the John Major era our interest rates went through the roof and we had to work long extra hours to pay the huge monthly rises in our mortgage payments for several years. No holidays for years at home or abroad, any spare money or time was spent improving the place to help climb the property ladder.
Most of the young people I live and work with now have brand new cars (eg. BMW/Mercedes/Audi, etc) on finance soon after passing their test, have several holidays a year to exotic places, have the latest phones, big screen TV, Sky/Netflix/Amazon prime and everything on monthly payments but are not willing to give any of these 'essentials' to life up, while complaining they can't save a deposit or find a ready to move in property with all mod cons that needs no hard diy work doing and that we had it easy......

You realise Netflix is £5.99 a month right?

[kit352]

I dont think netflix has been that cheap for years.

[Icey]

I dont think netflix has been that cheap for years.

 

No, it's £8.99 a month, just over £100 a year. Or in 'Millennial Maths' that works out to 10.2 organic avocados a month.

[Broomer]

I dont think netflix has been that cheap for years.

 
No, it's £8.99 a month, just over £100 a year. Or in 'Millennial Maths' that works out to 10.2 organic avocados a month.

[kit352]

I stand corrected.

[M J W J]

I dont think netflix has been that cheap for years.

 
No, it's £8.99 a month, just over £100 a year. Or in 'Millennial Maths' that works out to 10.2 organic avocados a month.

Whether is £5.99 or £8.99 it's still a luxury that people could do without when they are trying to save for something.

A guy in my office is being "forced" to sell his car that he only bought a few months ago to pay for child care as the family member who was doing it for them is no longer able to. The car was bought using a loan (not finance) so I had to point out that selling the car didn't really solve the problem as he is still going to owe the loan back.

It gets better. On Friday a parcel turns up at work for him. Its a small loco for his model railway that apparently cost him £80. Our conversation went something like this.

Me "you can't afford your car but you can afford expensive toys. I'm not giving you a lift into work"
Him "the wife hasn't got anything for my birthday so said to go get myself something"
Me "I would have saved it towards a car" (I've tried sell him my 04 plate corsa that I bought as a back up car for the mongol rally to help him out a bit. We are talking bangernomics vehicle here but it works and has MOT until next March)
Him "I don't want your car"
Me "didn't necessarily say my car, just a car"
Him "I can't afford £80 a month on a car"
Me "I meant save it to buy a cheap run around, not finance"

Meanwhile his wife is paying for their brand new fiesta on a finance deal. ?‍♂️

[Broomer]

Yeah your work mate should cancel his Netflix and buy nearly a gallon of fuel instead....

Or cancel Netflix for 200 years and he actually have an average house deposit.

Can you see my point?

[M J W J]

Yeah your work mate should cancel his Netflix and buy nearly a gallon of fuel instead....

Or cancel Netflix for 200 years and he actually have an average house deposit.

Can you see my point?

I'm assuming you are trying to say it's a trivial amount and won't make any difference but it's not a trivial amount if you don't have that money spare and my colleague doesn't.

He is paying out loads on interest on money him and his wife have borrowed to buy basic things yet they insist on having a brand new car, amazon prime, Spotify, sky, xbox live subscriptions as well as going away each year on holiday.

It might not seam a lot of money but all those subscriptions that aren't totally necessary start adding up. Combined they probably would pay for a tank of fuel and that's enough for me to get to work and back for the month.

Giving up a lot of luxuries is how I got my deposit together for my house. Last year was the first time I went away on holiday in 12 years.

The phrase look after the pennies and the pounds look after themselves is very true.

[mini13]

One issue is in this day and age there are " necessary " costs that just went around years ago, obviously not I phones and Netflix, but society makes it awkward for any one that's not in constant communication, meaning a phone contract and Internet connection.
Also modern cars are not as fixable as stuff years ago, you cant just dick around with the plugs and points anymore to get it going again, so for many people it makes sense to lease a car, as for a regular payment you get a new car every 3 years, and don't have to work about maintenance,

[Fast Ivan]

Average student leaves uni with around 50k worth of debt
Average house price is about 10 times the average wage
Minimum wage is below the living wage
Zero hours contracts are the norm

But yeah, it’s the Netflix

[Cooperman]

The student debt is one of the big issues.

30 years or more ago, not so many young people went to university., but the government said that every young person needed a degree in order to earn a living with the result that the current 'student culture' has grown and developed.

Thus evolved the raft of useless degrees which did nothing for employment prospects and simply left the young graduates with huge debt and very mundane jobs. I used to run a business, part of which was high-end engineering recruitment. We had a young guy join us as a recruiter who had a 2.1 in Economics. He had a lot of debt, but in all honesty he didn't need the degree to do what he did, successfully I might add, for my company. We actually trained him 'on the job', but although he earned an excellent salary and a good bonus, the repayments of his student debt really creased him financially. Having a company car helped, but he simply got taxed on that as well.

So who is benefitting from these useless degrees? The universities and their top staff!

I suspect that the student loans companies might be making a profit 'on paper' but there must be a high level of non-repayment.

The old and tried was was apprenticeships with day-release and British apprenticeships were recognised as excellent all over the world. At the end of an apprenticeship you have well-trained young people who could actually do a proper job without further training.

[kit352]

My company just started doing apprenticeships for engineering students.  We started with about 100 applicants who attended our orientations.  All but 9 dropped out after a few weeks because they didn't want to work as an apprentice.  They wanted to start at full pay immediately yet most have never had a job in their life.  The 9 remaining will probably drop to maybe 4 or 5 at the end.  Those 4 or 5 will be making 50k a year at the end of the apprenticeship next year and have a job for life.  It still boggles my mind that people turn down the apprenticeship knowing what they get at the end.  Plus they can take the skills we give them to nearly any company and do really well.  I'm told a decade or two ago those 100 would have stayed full term.