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

Il Prete Rosso

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I’d take any economic prediction over that timeframe with a massive pinch of salt.
It's not that far off to be fair. Most of them are already straddled with massive student debt and by the time they're 30, they have bad credit cause they can't find a proper high paying job or career with their degrees. I know people who have said they're gonna rent and not own a home whatsoever simply because they know they won't be able to afford a simple downpayment.
 

Adisa

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Most people my age that I know, are in no position to buy a house.
I don't know how one can be okay with paying rent forever.
You should not be worrying about your rent at age 70.
 

Oo0AahCantona

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Was chatting to a mate of mine yesterday about this when he said he’d found another property for him to do up and sell at a massively inflated rate.
 

villain

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It's not quite London levels, but Dublin is pretty bad. A 2 bed apartment in a good area will be around 300k minimum. It's similar to London in that certain professions (financials, IT, accountants, consultants) are on high wages, demand is really high, and supply is really low, so prices are sky rocketing.
Interesting, I guess in that instance the higher paid jobs will be able to afford those apartments, and the lower paid jobs will have to settle in a cheaper area to be able to get a property? Supply & Demand issues would only be worse if the prices were lower tbf.

In that case it would become a case of what you're willing to sacrifice if you want a home. For me, I can't afford a house in London by myself, so i'm looking at areas in the immediate outskirts.
 

Maagge

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Interesting, I guess in that instance the higher paid jobs will be able to afford those apartments, and the lower paid jobs will have to settle in a cheaper area to be able to get a property? Supply & Demand issues would only be worse if the prices were lower tbf.

In that case it would become a case of what you're willing to sacrifice if you want a home. For me, I can't afford a house in London by myself, so i'm looking at areas in the immediate outskirts.
Sadly it creates the problem that all the people working regular jobs with a lower pay like nurses, policemen, teachers etc. will all have to spend more money commuting because they can't afford to live close to where they work. It's a bit shit because everyone knows you need all of those professions in abundance in cities.

In the Copenhagen area prices are still horrendous quite a way from Copenhagen.
 

villain

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Sadly it creates the problem that all the people working regular jobs with a lower pay like nurses, policemen, teachers etc. will all have to spend more money commuting because they can't afford to live close to where they work. It's a bit shit because everyone knows you need all of those professions in abundance in cities.

In the Copenhagen area prices are still horrendous quite a way from Copenhagen.
Yep absolutely, couldn't agree more.
I guess you'd have to weigh up whether it's cheaper to rent in the city, and spend less time/money commuting. Or if it's cheaper to own a house further out and spend more on travel. I can't speak on Europe (my experience of travel prices in Europe is fantastic value for money) but in the UK the price of travel is ridiculous.
I could rent a room for the amount I spend on travel alone :lol:
 

Big Andy

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I own two houses, but I still rent a crappy 3 bed terrace that I live in...

How do I fit in this little scenario?
 

Cheesy

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It's a worrying problem insofar as one of the main things that's meant to happen under a capitalist system (generally according to those who are fond of it) is that people who're successful acquire capital as a result of their economic success. A house is one of the main forms in which that comes - without that we'll going to have a lot of people who're looking at the system, realising they're relatively well-off generally speaking but still able to afford all, and thinking that the system just isn't working for them at all.
 

SirAF

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It's more than that. I read an interesting article by a linguist a while back that claimed the reason Germany (I am German) has one of the lowest home ownership rates in the developed world is that the German words for debt (Schulden) and guilt (Schuld) are almost identical and that's one of the reasons why Germans are very averse to taking out loans (actually they are the same, but for debt you would typically use the plural). Personally I would never take out a loan for anything and only ever consider buying property if I had the cash. And I know many people who feel the same. I'm quite happy to pay rent for the rest of my life.
I find that a bit odd, it's virtually impossible to buy a house or a flat with cash. The right kind of debt is completely normal and harmless - what you want to be weary off is buying a 3000 Euro MacBook Pro with a credit card if you have a low income job, for instance.

Can't speak for other countries, but I think it's a lot down to choice in Norway.
Yes, owning your own home is expensive and something you have to want enough to put money aside for a few years in order to be able to acquire but it's far from impossible for anyone not in a similar situation to mine (hell, even then you can make it).

I think it's more down to a lot of people not bothering with saving up.
Mind you, I don't mean you can live wherever you want, but in proximity.

Then again most people in Norway will likely end up owners.
Agreed. Renting in Norway (and most places, I'd imagine) is basically throwing money out of the window/paying down the landlord's mortage.
 

onemanarmy

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Most people my age that I know, are in no position to buy a house.
I don't know how one can be okay with paying rent forever.
You should not be worrying about your rent at age 70.
No just worrying about your rent, also the fact that your landlord can kick you out of the house at any given moment. We have a 3 month grace period. Imagine being 70 years old and the stress involved in finding a new place, moving etc in couple of months time. I'll be 56 when my house is fully paid for, enough time to save up for my pension afterwards.
 

GiddyUp

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Interesting. Those cooperatives seem like a brilliant idea. We’re crying out for initiatives like that in Ireland.
There is certainly an opening for something like this but there is always that possibility of Dáil Éireann halting it due to the lack of brown envelopes being passed around. With a housing crisis continuing, heavily swayed towards landlords and banks, this would go a long way to helping my fellow Dubs get out of the house they were born in and in to something more sensible to their financial situations.
 

Mike Schatner

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The housing situation coupled with the lack of retirement savings will be a major problem in the future. Being in rented property on a small fixed income will mean many people face an existence rather than a true retirement.
 

GloryHunter07

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You may own the house afterwards, but usually you put equity up for it 30 years ago. If you had rented you could have used the same equity for other investments with a duration of 30 years -> opportunity costs.
Not necesarily - generally in the UK rent is more or less the same as the mortgage of a house / flat (interest and capital).

So paying rent gives you no equity, while paying a mortgage of equivalent amount gives you gradually acumulating equity.

If rents were below the cost of a mortgage in the UK then it might make sense to rent.
 

Il Prete Rosso

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The housing situation coupled with the lack of retirement savings will be a major problem in the future. Being in rented property on a small fixed income will mean many people face an existence rather than a true retirement.
Over the past 20 years, planning for retirement has slowed. The cost of living has made it harder for people to save and plan for long term goals.
 

VorZakone

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Surely though, as a retiree, you'd prefer owning a house? Imagine being old as feck and getting kicked out by a landlord.
 

George Owen

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The only way to stop the housing crisis is by law. The market won't regulate itself for the benefit of the majority.

The top 10% earners of the working force, never mind the 1%, have it too easy to save money, because they earn so much more than the minimum required for a living. While the opposite happens to the bottom 70% earners of the workforce, pretty much surviving on the same wages since the 70s. (remember in the 70s, even a shoe seller (Al Bundy) was able to buy his own 2 story house)

Buying houses for rent is the easiest way to make money, so all those in the top with money to spare, will keep buying houses just because they can, inflating the market for ever.

Housing laws needs to be improved according to the recent times. Either by taxing the shit out of those who own a lot of properties (3+) or simply by putting a limit on how much houses you can own.

Next decades gonna be fun.
 

NoLogo

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You do realise that when you agree a contract with a landlord, lets say 12 months. You're essentially in debt to them for 12 months and agree to pay it back at a set rate each month.

At least with a mortgage after 30 years or whatever, generally paying less money each month than if you rented, you get to own the house at the end of it. When you're renting, in this country at least, you're usually paying the landlords mortgage for them.
That's the thing that most people don't seem to realize. Once you are old and live on your pension or whatever you will probably have less money to spend and still having to pay rent may cut this down quite significantly.
 

P-Nut

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It's bullshit. I live in Ashton just outside of Manchester and have bought my own house. Also everyone of my mates bar one has their own house, with the one having the money to just waiting on finding the right house.

That's from a really rundown area of the UK where people are expected to struggle.
 

amolbhatia50k

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Is that a bad thing? Buying a flat or house is pretty much at the bottom of the list of my life's goals.
Yes it is. I pay rent and I'd definitely rather the money I'm paying go towards a house I'll actually soon own rather than merely gain the right to stay in one.
 

Maxii

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That depends where you are. if you're in a more rural area with cheaper housing and decent wages then sure, you might be able to.

But I was talking about Dublin, where a house in a decent area is maybe 350-400k minimum, so you'd need around a 300k+ mortgage = €75k salary = way beyond most under the age of 30 and even beyond a lot of couples under the age of 30, and over 30, too.
You wouldn’t even get a 300k mortgage with €75k because of the 3.5 times salary limit. So you’d only get a mortgage of €262.5k.

There is an exception limit on 10% of mortgage approvals for those who earn over €70k but the majority wouldn’t get the extra credit. So in this situation if you want a house for €350k you’re looking at a deposit of nearly €90k which is insane.

Me and my girlfriend are currently in a similar situation but we’re going to need to hit bank of mammy and daddy to bulk up our deposit when the time comes.
 

SwansonsTache

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Seems to me like it just isn't that much of a priority in some countries, Germany, Spain and France for example.

Around here owning your own flat or house is something you are encouraged to do, and is considered an important part of 'growing up'. There are a lot of incentives put in place, like something called "BSU" which is an account where you can save 25k NOK\year and get 5k NOK tax reduction from, you also get 4,5% interest on the account. In addition if you've got a mortgage for a house you can subtract 23% of the interest yearly on your tax return.
 

Massive Spanner

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You wouldn’t even get a 300k mortgage with €75k because of the 3.5 times salary limit. So you’d only get a mortgage of €262.5k.

There is an exception limit on 10% of mortgage approvals for those who earn over €70k but the majority wouldn’t get the extra credit. So in this situation if you want a house for €350k you’re looking at a deposit of nearly €90k which is insane.

Me and my girlfriend are currently in a similar situation but we’re going to need to hit bank of mammy and daddy to bulk up our deposit when the time comes.
My apartment was 320k. Worked out as around 302k cause of the help to buy scheme. Got a mortgage of 3.5x my salary and then savings and inheritance from my nan when she passed

Would never have been able to get it alone without the inheritance, so I am lucky in that regard. My max would have been around 260k which you can't get anything decent for really.

Also I know plenty of plenty who got more than 3.5 who aren't on 70k so I don't think that applies. Pretty sure it's based more on credit checks, savings etc., Proving you can afford the repayments basically.
 

baskinginthesun

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Didn’t read the article as I am sure it is similar to the stuff that I have already read. However, I do believe that number. I am sure it is isolated though. Big metro areas are renowned at keeping housing supply low and demand high.

I live in the San Francisco Bay Area where the likes of Google,Apple, Microsoft, intel, Facebook live. Basically some of the largest job providers on the planet. Which keeps people coming to the area. Which also keeps the housing demand high but, the supply cannot keep up. In turn, this has led to some extremely high housing costs.

If you want to own a home here you need to come up with some silly money to do it. I just cannot save enough to do that and therefore choose not to own. I live comfortably renting an apartment and saving for retirement instead.
 

caid

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It's not quite London levels, but Dublin is pretty bad. A 2 bed apartment in a good area will be around 300k minimum. It's similar to London in that certain professions (financials, IT, accountants, consultants) are on high wages, demand is really high, and supply is really low, so prices are sky rocketing.
Read a report recently saying it was worse. I kind of doubt you'd get anything around the city for 300k, let alone something in a good area. If i had to pull a number out of my ass i'd say a closet in a shithole would start at 350k.
 

Massive Spanner

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Read a report recently saying it was worse. I kind of doubt you'd get anything around the city for 300k, let alone something in a good area. If i had to pull a number out of my ass i'd say a closet in a shithole would start at 350k.
Nah I know a guy who got a decent house in terenure for like 350k. It's definitely nowhere near London levels yet.
 

caid

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Nah I know a guy who got a decent house in terenure for like 350k. It's definitely nowhere near London levels yet.
Terenure is weirdly reasonable actually. Wouldn't really say its in the city though. Think the report was in the Irish Times, i didn't really read it - could be twisting some figures to force the point. I'll see if i can dig it up

EDIT:
https://www.irishtimes.com/life-and-style/abroad/price-of-rent-globally-how-does-dublin-compare-1.3078387

Yeah, its not outside of pretty specific circumstances. Bunch of articles around the same time that said the cost of living is more expensive but thats not really the same thing either.
 

Massive Spanner

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Terenure is weirdly reasonable actually. Wouldn't really say its in the city though. Think the report was in the Irish Times, i didn't really read it - could be twisting some figures to force the point. I'll see if i can dig it up

EDIT:
https://www.irishtimes.com/life-and-style/abroad/price-of-rent-globally-how-does-dublin-compare-1.3078387

Yeah, its not outside of pretty specific circumstances. Bunch of articles around the same time that said the cost of living is more expensive but thats not really the same thing either.
I was in London recently for a weekend and Dublin is definitely more expensive now in terms of food, drink etc. so i would believe that. That has a lot to do with the decline of the sterling, though.
 

Vato

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Great... these new kids don't want no gender, no kids and now no property.

I wonder what's next.
 

Pagh Wraith

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I find that a bit odd, it's virtually impossible to buy a house or a flat with cash. The right kind of debt is completely normal and harmless - what you want to be weary off is buying a 3000 Euro MacBook Pro with a credit card if you have a low income job, for instance.
Might be my German mindset that views any form of debt as bad. Here you don't start your work life with the burden of having to pay back huge student loans and foreigners often look bewildered in many shops and restaurants because credit cards aren't accepted. Different mentality.
 

Sied

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Low interest rates are making the situation worse and hurting first time buyers. Low interest rates encourage people (often older couples with retirement pots) to invest their cash into property seeking a reasonable and safe return. Higher interest rates should cause them to sell.

If the banks can offer 5% deposits at 4/5x salary, it should help first time buyers get on the ladder. Even with the higher interest rates, they'll be better off than the 100% dead money that is rent.
 

TMDaines

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This article: Couple Buy £235k Home Aged 23! Our situation is not too dissimilar but it conveniently buries the fact that they needed a £10k gift from their parents too.

Is living with your parents as a couple that remarkable to save a deposit? I know not everyone’s situation allows them to do it, but your parents putting you up for a few years as a couple, before or after marriage, is more of a done thing abroad.

We bought our first home (which would now be valued the same) in 2016 at 26 after making an offer on a house a couple of years after I graduated. We lived with my parents for about 20 months to save a deposit but still have some money to spend. We had more expenses to worry about though as a couple, as my missus was emigrating to the UK from outside the EU and visa fees are simply an insult nowadays, so we had to live apart for about 10 months after marriage whilst I eanred at the £18,600 visa income threshold for six months.
 

sullydnl

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I know quite a lot of people who say they have no interest in buying a home but I wonder how much of that attitude has been influenced by how difficult it would be for them to do so anyway.

I'm not sure how I feel about it myself but the reality is that I left university expecting more of a struggle in terms of employment and finances than those who had graduated half a decade or so before probably did. That immediately made owning a house seem like a very distant prospect.
 

barros

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You do realise that when you agree a contract with a landlord, lets say 12 months. You're essentially in debt to them for 12 months and agree to pay it back at a set rate each month.

At least with a mortgage after 30 years or whatever, generally paying less money each month than if you rented, you get to own the house at the end of it. When you're renting, in this country at least, you're usually paying the landlords mortgage for them.
I don’t feel like I own my house when now my property taxes are higher than my mortgage but I live in New Jersey and the only option is moving south (which I would but my wife will not move at all)
 

Interval

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nah, shit video and shit arguments.

They also failed to mention that after paying for 30 years to the bank, you are the owner of a fecking house. While after renting for 30 years you are owner of shit.
Your argument is incorrect as well. Like for like, the rental to a property will be much lower than the EMI/mortgage you pay to the bank in most parts of the urban world. Assuming you can reinvest the savings into something that yields better than property, you'd possibly be equally wealthy by then.