Up to a third of millennials 'face renting their entire life'

Pogue Mahone

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Buying and selling property is a long-drawn often stressful experience. Its not like you can up and move tomorrow. Especially if you're going to be earning the same money in another city (or slightly more) and you can't afford to pay rent + mortgage. Atleast let's not pretend like any working man with a mortgage doesn't have to think 10 times (or maybe a 100) before throwing in his quitting papers or changing geography.
See above. Renting out the home you own is really not much more of a hassle than moving from one rental property to another. People do it all the time. You obviously need to be able to cover the mortgage with the rent you can ask for, which is unlikely to be a problem. In most European cities anyway. In fact, I've known people deliberately downsize and leave their city home to get a bit of extra income if they have a freelance job where location isn't important.
 

Interval

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See above. Renting out the home you own is really not much more of a hassle than moving from one rental property to another. People do it all the time.
It's a lot more difficult than just up and moving (a lot more!). Finding renters and maintenance itself is difficult. Like I pointed out earlier, not everyone can afford to pay rent in a new city whilst also paying their mortgage in the old city (if they haven't found renters). Ergo, a shifting to a new city decision has to be taken months before hand (as long as you can find the renters).

I'm sure people do it all the time, but that's most likely amongst the foremost reasons why no-one really wants to buy houses in the western world. It doesn't look like its too expensive; what could possibly be another reason why youngsters don't want to buy housing? Or is it a supply constraint - ie lack of housing?
 

MadMike

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You should be buying more property then! If that rental yield in your neighborhood goes below 2%, sell that property and cash in the capital returns.
Would if I could. The yield may be good but cobbling the deposit together and qualifying for the mortgage is no mean feat.

When property prices are high, rents are high, but incomes are depressed it takes years to save for a deposit or to reach a deposit level that qualifies you for the mortgage for the remaining of the equity.

Hence people are talking about millennials being locked out while swaths of baby boomers that bought incredibly cheaply during the 80s or 90s, have become millionaires just riding on this property market and playing the buy-to-let game.
 

Pogue Mahone

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It's a lot more difficult than just up and moving (a lot more!). Finding renters and maintenance itself is difficult. Like I pointed out earlier, not everyone can afford to pay rent in a new city whilst also paying their mortgage in the old city (if they haven't found renters). Ergo, a shifting to a new city decision has to be taken months before hand (as long as you can find the renters).
It's really not that difficult. Worst case, you can pay a management company to do all of that for you.

I'm sure people do it all the time, but that's most likely amongst the foremost reasons why no-one really wants to buy houses in the western world. It doesn't look like its too expensive; what could possibly be another reason why youngsters don't want to buy housing? Or is it a supply constraint - ie lack of housing?
Again, I can only speak from the perspective of where I live and it's 100% down to lack of affordable housing to buy. Inconvenience would be right at the very bottom of a list of reasons why people can't/won't buy a house. In fact, I don't even think most people would consider it. The inconvenience of being forced to move out of a rental property at a couple of month's notice, unexpected hikes to your rent, or dealing with awkward landlords would far outweigh the "problem" of needing to relocate from a house you're paying a mortgage on.
 

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Again, I can only speak from the perspective of where I live and it's 100% down to lack of affordable housing to buy. Inconvenience would be right at the very bottom of a list of reasons why people can't/won't buy a house. In fact, I don't even think most people would consider it. The inconvenience of being forced to move out of a rental property at a couple of month's notice, unexpected hikes to your rent, or dealing with awkward landlords would far outweigh the "problem" of needing to relocate from a house you're paying a mortgage on.
Word.
 

MadMike

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On another note, the generations according to wikipedia are:
  • Lost Generation
  • G.I. Generation
  • Silent Generation
  • Baby boomers
  • Generation X
  • Millennials (Generation Y)
  • Generation Z

Where do you go afterwards? They shouldn't have started with letters so close to the end of the alphabet. Unless it's prophetic and the kids born in the early noughties will be the last generation to see adulthood.
 

Maagge

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On another note, the generations according to wikipedia are:
  • Lost Generation
  • G.I. Generation
  • Silent Generation
  • Baby boomers
  • Generation X
  • Millennials (Generation Y)
  • Generation Z

Where do you go afterwards? They shouldn't have started with letters so close to the end of the alphabet. Unless it's prophetic and the kids born in the early noughties will be the last generation to see adulthood.
Generation AI?
 

Pogue Mahone

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On another note, the generations according to wikipedia are:
  • Lost Generation
  • G.I. Generation
  • Silent Generation
  • Baby boomers
  • Generation X
  • Millennials (Generation Y)
  • Generation Z

Where do you go afterwards? They shouldn't have started with letters so close to the end of the alphabet. Unless it's prophetic and the kids born in the early noughties will be the last generation to see adulthood.
That sounds very American. Unless it refers to a generation of people with dicky stomachs?

As a random aside, I heard recently that American G.I’s skewed a lot of the earliest data we have about coronary artery disease. It was initially thought to be far more prevalent than we now realise because a lot of the pivotal population studies are from post-war America. Turns out the poor cnuts had astronomical rates of heart disease because Uncle Sam made sure that every soldier had constant access to a steady stream of free cigarettes.
 

P-Nut

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Doesn't that mean it's cheaper than elsewhere though?
Also less likely to get a well paid job as well.

I find companies are looking towards the future more and more (around here at least) and trying to phase out the old guard and bring in younger people with new ideas.

The jobs are there if you work hard enough and are determined to make it.
 

MadMike

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That sounds very American. Unless it refers to a generation of people with dicky stomachs?
It's got different names in different countries but it's generally the generation the was born between 1900s-20s. Essentially the generation that actively fought in WWII.

The 3 first in that list were pretty fecked because of the wars. The two generations afterwards experienced what always happens after a "Purge", huge growth with abundant opportunities and a very optimistic outlook on life.

While Millennials in the West still enjoy very good living standards on average, it's this lack of growth and opportunity compared to previous generations that makes them feel stifled.
 

Interval

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Would if I could. The yield may be good but cobbling the deposit together and qualifying for the mortgage is no mean feat.

When property prices are high, rents are high, but incomes are depressed it takes years to save for a deposit or to reach a deposit level that qualifies you for the mortgage for the remaining of the equity.

Hence people are talking about millennials being locked out while swaths of baby boomers that bought incredibly cheaply during the 80s or 90s, have become millionaires just riding on this property market and playing the buy-to-let game.
It's really not that difficult. Worst case, you can pay a management company to do all of that for you.

Again, I can only speak from the perspective of where I live and it's 100% down to lack of affordable housing to buy. Inconvenience would be right at the very bottom of a list of reasons why people can't/won't buy a house. In fact, I don't even think most people would consider it. The inconvenience of being forced to move out of a rental property at a couple of month's notice, unexpected hikes to your rent, or dealing with awkward landlords would far outweigh the "problem" of needing to relocate from a house you're paying a mortgage on.
Both of these make more sense. It points to a skew to new launches. And honestly, there is only one solution to it - huge infra projects that connect the outskirts to the main city so that people can buy houses there and travel inward to their job places. The problem with affordable housing in metro areas is that housing is either affordable (more outside the city) or accessible. It also means that a lot of the current new supply is being designed for and being gobbled up by investors (ie rich people looking to either rent it out or flip it). Which means regulations to curb investment demand, it more punitive taxes on these investors may actually force developers to focus on the home-owner segment by building something in the outskirts/ more affordable areas of the city.

EDIT: UNLESS, new housing isjust not coming up

But I disagree with the inconvenience bit. Inconvenience is the wrong word. to begin with. In this context, its more fear of being bogged down/ commitment to a project you really may not want 2 years down the line. But anyways, this can drag on.
 
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Cheesy

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The biggest flaw in all these theories about renting being a better option is human psychology. The idea that anyone in their 20s/30s will diligently divert a big chunk of their salary into mutual funds (or a fecking pension!) is a complete pipe dream. We all know the way life works. You get your salary, pay your rent, then spend what you have left over each month. Rinse and repeat. So it's a no brainer signing up for something which forces you to put a huge chunk of money each month into something which will help make you financially secure in the long term. Plus you have the stability of knowing nobody can feck you out of your gaff at a few months notice. Which is a nightmare for anyone who is thinking about starting a family, wants to send kids to school etc. If you're lucky/well paid enough to have an option to buy then it makes perfect sense.

If you can't afford to buy then it's a tough one. I really like the idea of the co-op apartments in Germany someone mentioned earlier on in this thread. They would be a game changer for young British/Irish people who want a bit of security about where they live. The current situation for people who are forced to rent in the long-term is kind of grim.
That part is very true. And for a lot of people the idea of a house at that age is probably a pipe dream in itself - it's all well and good telling someone to save for X amount of years and limit their social life/spending as a result, but when the prospect of actually owning a house may be a decade or so away for someone, it can be tempting to just ignore the idea when all sorts of things could feck up your savings plan - losing a job, splitting up from a spouse, having familial problems back home, or even (grim as it sounds) finding yourself in a position where you're ill yourself, making all that time spent saving a bit meaningless in the end. A lot of that's quite extreme but I think it's understandable as to why a lot of people can't really be arsed saving substantially to buy their own place when the rewards seem so distant and tenuous a lot of the time.
 

MadMike

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Both of these make more sense. It points to a skew to new launches. And honestly, there is only one solution to it - huge infra projects that connect the outskirts to the main city so that people can buy houses there and travel inward to their job places. The problem with affordable housing in metro areas is that housing is either affordable (more outside the city) or accessible. It also means that a lot of the current new supply is being designed for and being gobbled up by investors (ie rich people looking to either rent it out or flip it). Which means regulations to curb investment demand, it more punitive taxes on these investors may actually force developers to focus on the home-owner segment by building something in the outskirts/ more affordable areas of the city.

EDIT: UNLESS, new housing isjust not coming up

But I disagree with the inconvenience bit. Inconvenience is the wrong word. to begin with. In this context, its more fear of being bogged down/ commitment to a project you really may not want 2 years down the line. But anyways, this can drag on.
It was a combination of things.

One, is a chronic under supply of housing in general (not just affordable) due to many reasons but mostly a general difficulty in acquiring land and permits to build. Several agencies and NGOs have been flagging this problem up for nearly 2 decades now, during which time we were increasing the deficit rather than bridging the gap. Current under supply estimated at 1m homes in the UK, most of it in the London commuter belt.

Secondly, investors (domestic and foreign) swarming a high yield - low interest market (due to the under supply) and pricing out home buyers who until very recently were offered no protection or help. Apart from the buy-to-let landlords there were also the pure investors. There are 40000 homes in London alone, owned by offshore companies based in tax havens. Most stand empty too creating further shortage.

Thirdly, developers reacting to the aforementioned situation and building property targeted more towards investors rather than first time buyers, knowing the former would gobble up the properties quickly. Hence the even larger under supply of affordable housing.

When I was looking for property, agents were showing me shitty flat conversions in old homes in East London asking for ~£400k for properties that were sold for 40-50k in 2000 and not even refurbished since. Some had doubled in price since 2010. How young people were expected to save up and buy when prices were growing faster per annum than their gross annual salary was beyond me.
 

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@Interval im a little confused, I’ve looked at buying a house and my mortgage payments would be significantly cheaper than the price I’d pay to rent. What savings would I be using to invest?
 

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See, you've made the classic mistake of not living in the alternative universe where rental prices are reasonable.
:lol:

Even if they were I struggle to see how to turn the little bit of money you would save into enough to cover the money you’ve just given to your landlord never to see again.
 

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Interest only or repayment (or offset)
Initial (discounted) rate? Fixed or standard varuable?... And what % deposit
Repayment, at fixed or variable, fixed for 10 years brought it closer. That’s with about a 15% deposit.
 

ivaldo

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What are these fantastical places? I'd like to buy a house there and put it on rent.
Our mortgage is £100 cheaper than the rent on our home 8 years ago, and about £200 cheaper than a smaller property we rented 4 years ago.

Renting is almost always more expensive.
 

Brwned

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Yeah, I live in India. Interest rates here are 10%+ while rental yields are 2%-4%. But that doesn't change the calculation. In most metro areas in the world (I'm sure London included) would have rental yields that are lower than the prevailing interest rates there. It so works out because the property owner factors in the long term appreciation in value of the property. https://ftalphaville.ft.com/2016/06...-property-market-is-doomed-doomed-i-tells-ya/

As long as that is the case, you'd prefer to be renting as long as having the 'security' of housing is not something that you seek. Which brings us to the second driver. Younger generations do not seek this 'security' since they are highly mobile, do not like consistently working and don't like the anchor of fixed payments. So its not surprising that an entire generation of people prefer to just rent rather than put down big chunks of their income and stay in that one location their entire lives having to necessarily work it off. It also enables them to spend a larger chunk of their income, which is great.

As far as savings go, its to do with mindset. In India, most youngsters are forced to save by their parents. So they do end up saving.
Does the data support what you're saying? What I'm reading here is 2/3 of millenials will end up owning a house, and 2/3 of adults own homes currently. Which I imagine indicates that first time buyers will be slightly older in this generation, rather than this idea - founded on a simplistic generational stereotype (and your own anecdotal evidence) - that this generation has stopped giving a feck about security.

That's a cool story to tell but sweeping assessments and predictions based on the attitudes of a prominent group within a generation don't tend to have any real link to the eventual reality. Most hippies ended up having a pretty typical middle class life.
 

sun_tzu

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Our mortgage is £100 cheaper than the rent on our home 8 years ago, and about £200 cheaper than a smaller property we rented 4 years ago.

Renting is almost always more expensive.
Well also remember interest rates are at historic lows... a couple of points rise could see a lot of people paying 50% to 100% more and potentially unable to remortgage due to affordability criteria and therefore stuck on the standard variable
 

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Well also remember interest rates are at historic lows... a couple of points rise could see a lot of people paying 50% to 100% more and potentially unable to remortgage due to affordability criteria and therefore stuck on the standard variable
Yeah that’s the thing here too. People are buying apartments just to rent them because they feel they can make a profit on them every month and then have an asset to either sell or keep making them money after 15-20 years.

Trouble is, when interest rates go up it won’t be sustainable anymore. It’s not so much of a problem if you have a high income and can afford to make a loss on the apartment or pay it off quicker. Most people I know who have bought apartments for rent are not in such comfortable financial position though. Some of them could hardly even afford to pay anything from their pocket.
 

ivaldo

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Well also remember interest rates are at historic lows... a couple of points rise could see a lot of people paying 50% to 100% more and potentially unable to remortgage due to affordability criteria and therefore stuck on the standard variable
Invariably rent will go up with it too though, wouldn't it?
 

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Not exactly informed on the housing matter but can't help but feel this should be the case in most countries.
I think there should be exceptions, not a blanket ban. If you live and work in a foreign country, I think you should be entitled to owning a home.
It will never happen in this country though. All those rich feckers would see their property value plummet.
 

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I think there should be exceptions, not a blanket ban. If you live and work in a foreign country, I think you should be entitled to owning a home.
It will never happen in this country though. All those rich feckers would see their property value plummet.
New Zealand residents are allowed buy homes, kind of a misleading headline.
 

Vidic_In_Moscow

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On another note, the generations according to wikipedia are:
  • Lost Generation
  • G.I. Generation
  • Silent Generation
  • Baby boomers
  • Generation X
  • Millennials (Generation Y)
  • Generation Z

Where do you go afterwards? They shouldn't have started with letters so close to the end of the alphabet. Unless it's prophetic and the kids born in the early noughties will be the last generation to see adulthood.
It should surely start with a hashtag. #UsToo
 

Silva

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Generation hashtag is already taken by Z you old farts. It's used in reference to 15-25 year olds (gen z) being the generation that came of age with twitter and instagram.
 

Vidic_In_Moscow

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Generation hashtag is already taken by Z you old farts.
I can't correlate a single one of those generation nicknames to an actual decade. The only time they're brought up is by silly wankers who think you can generalize every single person who was born at a certain time and think that they can argue some kind of point over it.