I am totally saddened to read the story about your children's finances. Unfortunately still, this story is commonplace everywhere in the west. Debt is simply future consumption brought forward. It profits the lenders and nobody else in the long run.
It's their own fault and I've told them that had grandkids NOT been involved, I would have let them sink for no other reason than like an alcoholic, they don't listen till they want too or have too. As they explained it to me, it was a loop. Credit cards, bank loans, store cards, car credit then everything gets too much so they take out a consilidation loan which clears everything else. Suddenly all that credit that was full up is now empty and available again. The way they talked about it, it was quite commonplace within their age group
I have less than half their annual income and zero debt,I have always made debt control (lack of debt) a priority and have gone without many things in the past. The payback is that I am now secure as I can be in these times. There are two words in the English language that must be clearly understood to survive and hopefully prosper "need" and "want" they are the ONLY reasons anything is ever bought and unless you understand the difference then you should be kept well away from anything to do with finances/money. May sound harsh but it's true.
Very similar to my old man. If you cant afford to pay for it you cant afford to buy it (only exception was a mortgage of an affordable size) and if you want it badly enough you'll save up for it which I have done more than a few times over the years. It's a tough life and quick easy fixes are few and far between.
I still have an interest only mortgage at 54 and can’t afford anything else, it’s too late to do anything else tbh. They were saying on Radio 4 the other day you can have RIO ( retired interest only ) mortgages until you’re 99 years old. I have enough capital in the house to payoff the mortgage and buy something smaller, but only if it doesn’t drop in value, if it does, I’m fvcked !
Maybe sell up now and do just that A few contractor guys I know have maxed out IO mortgages. I think they're bonkers.
It's a conundrum for sure, but I'm certain it was no different when we were all in our 20s. Take my eldest daughter (26) as an example. She's a psychologist, employed by King's College but assigned to the NHS, earns c.£23k pa gross, including London Weighting. At that level she pays relatively little in tax. However, she's based in London and thus has to pay £1600 a month for rent for a 2 bedroom flat in Clapham. Yes she could live in another part of town and pay less, but she's a millennial. She rents out the 2nd room for £1000/pcm (yes ONE THOUSAND POUNDS for one room) thus subsidising her rent bill. After travel expenses, food, electricity, council tax, mobile phone, internet access, insurance, contributory pension, (no Sky, no car) there's next to nothing left to save for a deposit. Yet at that much rent, if she had a deposit, she could afford a mortgage, but because she's renting she can't save. This is the conundrum. Neither my wife's nor my parents contributed towards our respective mortgages when we were that age, they couldn't afford to, but I suspect we will end up assisting both our daughters when the time comes. Personally, although I understand why people rent, I'm not sure it's the right thing to do long term. If you rent for your whole life what happens when you stop work and only have the State Pension as income, how will you afford the rent then? Personally, I'm an advocate of home ownership, build up the equity over the decades then downsize and be neither a burden to the state or your family. The State could assist 1st time purchasers with home purchases by providing the funds required for a deposit. The interest rate would be in line with 5 or 10 yr gilt yields (c.0.9 - 1.1% respectively), secured as a 2nd charge behind the mortgage company on the property. Repayments would be taken as part of the deductions made by employers, along the lines of student loan repayments now, but spread over the term of the 1st charge mortgage. If the recipient sells up to move the State Deposit Loan gets paid back after the mortgage provider, any shortfall ends up as an attachment against future earnings. Link this with a genuine, not-for-profit, Council housing scheme for the lowly paid or unemployable and there might be a solution there.
11,000 MOD properties empty in this country costing us fortune, i believe they were MOD owned then sold off and re rented back to the MOD, many vandalised now, this shower shit.............
A friend of my daughter is a doctor that works as a locum 3 to 4 days a week. She earns £60K a year. Should I be feeling the house situation is really bad if doctors can't afford a house. Or should I be feeling my heart pumps piss for you. TB
