How do most people get their deposit to buy a house?

gsmith-

Getting onto the "property ladder" is one thing (and that is a horrible phrase too). But where it becomes extremely difficult is trading up. Many of us bought during the boom and jumped in at high prices not because we were too stupid to see the recession in the future but that we wanted to progress our lives and couldn't wait for that to happen.

Now you've a generation of people who managed to scape together to buy the overpriced 1 bed or 2 bed badly built dump on the edge of nowhere and are bloody well stuck with it. Negative equity is a double edged stab. Even if you break and sold your first house - where are going to get the deposit for the next one? Traditonally trading up released equity from the first but thats now a pit of debt for many.

Renting out your first home and renting elsewhere is the only option. But even if your first home pays its own way, you're paying rent which is crippling your ability to save. And as your get into your late 30s and early 40s you chances of getting another mortgage deplete as you age. It is utterly soul destroying. And your thinking of the future and how you'd save to pay for kids to go to college.

If you can take from your parents generation do so. Sure they lived through some bad times in the 70s and 80s but overall they've lived through a lot more prosperous times than their children. Plus some would argue those in the 50s and 60s created the boom and bust through their greed in the boom so they kinda created the mess that us and our children and even their children may be picking up the tab for.

Its worse when you've thought you did everything correctly. Saved hard for that first decent sized depost, negotiated a good interest rate with your lender, not gone looking for handouts from family or done daft things like released equity for frivolous things. And done it all yourself and you still end up financially insecure. So yea if youve done everything by the book and you rightlty feel hard done by, don't feel guilty about taking money from the previous generation. If you can - some of our parents generation have made and lost fortunes too so not everybody of that generation came out of it with savings, fat pensions and mortgage free.

Alf Veedersane

lima wrote: »

It's not the renters business where the money is going, they are purchasing a service to provide shelter and that's how far they should be thinking into it

It's like paying your phone bill and being angry about the money being used to pay off the operators debts

It's still dead money if the money you're paying is paying back a loan for a house cost a lot more than it is worth now. You're just paying the dead money for the landlord.

I'm not angry about what I pay over and above what was borrowed (interest etc). It is what it is. My house is worth more now than it was when I bought it. Doesn' make any difference to me what it's monetary vallue is now because my family and I are happy there. By the same token, a friend's house is about 60% the value of what he paid for it. It doesn't matter to him because he bought it with the intention of staying there for 20 years.

But ultimately, we're not going to agree in this. East is East and West is West and never the twain shall meet. But we don't have to agree

Alf Veedersane

gsmith- wrote: »

If you can take from your parents generation do so. Sure they lived through some bad times in the 70s and 80s but overall they've lived through a lot more prosperous times than their children.

I disagree with that. Expectations are a lot higher for their children. What was prosperous for my parents generation certainly wouldn't be classes as prosperous amongst mine.

You might as well have been king if you had cable tv in the 80s.

Now people look at me in disbelief when I say I don't have broadband in my house.

mrolaf

saved some, gifted some. save a grand a nth, two good salaries.

T-K-O

lima wrote: »

It's not the renters business where the money is going, they are purchasing a service to provide shelter and that's how far they should be thinking into it

It's like paying your phone bill and being angry about the money being used to pay off the operators debts

You're right, Vodafone is my next purchase.

gsmith-

Alf Veedersane wrote: »

I disagree with that. Expectations are a lot higher for their children. What was prosperous for my parents generation certainly wouldn't be classes as prosperous amongst mine.

You might as well have been king if you had cable tv in the 80s.

Now people look at me in disbelief when I say I don't have broadband in my house.

I guess it depends on what denotes standard of living. Of course they didn't have broadband and cable tv was a luxury for some. But a lot of people managed to buy and repay a house on one salary. Thats almost unheard of now. Things our parent generation could do without we find hard to do. Like for many commuting from far flung housing where there is little public transport infrastructure they cannot do without the expense of runnnig a car. For our parents generation they could just walk or cycle. The sheer growth of housing geographically is costing time or money or both. Our generation are wasting vast amounts in commuting. And many are not able to rely on grandparents for childcare for various reasons so thats an extra cost and commute. It may not just be about prosperity but also about complexity of modern living.

Another issue in the UK and Ireland are the sheer volume of homes taken up by "empty nesters" if there was a drive to coerce the older people into smaller more suitable accommodation there would be a lot more family homes on the market which are badly needed. Its crazy the amount of grandparents rattling around in larger houses completely unsuited to there current and future needs. Of course they aren't building enough nice, quality, smaller properties for the empty nesters to move into.

Tasden

lima wrote: »

Yeah but they don't have to work for mammy+daddys money

And?

lima

Tasden wrote: »

And?

and they miss out on the life satisfaction of working their way up and paying for themselves

Tasden

lima wrote: »

and they miss out on the life satisfaction of working their way up and paying for themselves

But they may have worked for what they did save themselves. Or they may have saved a full deposit themselves before getting money as a gift from parents. Or any other number of scenarios. And why do you care about their life satisfaction?

lima

Alf Veedersane wrote: »

It's still dead money if the money you're paying is paying back a loan for a house cost a lot more than it is worth now. You're just paying the dead money for the landlord.

I'm not angry about what I pay over and above what was borrowed (interest etc). It is what it is. My house is worth more now than it was when I bought it. Doesn' make any difference to me what it's monetary vallue is now because my family and I are happy there. By the same token, a friend's house is about 60% the value of what he paid for it. It doesn't matter to him because he bought it with the intention of staying there for 20 years.

But ultimately, we're not going to agree in this. East is East and West is West and never the twain shall meet. But we don't have to agree

That's the fun of boards you get to express opinion with opposite viewpoints

It may or may not be dead money to the landlord but that's his business what he does with it and it's nothing to do with the renter whether the property they rent is worth more or less what the landlord paid for it. The renter pays for a service, which does not offer any sort of rebate or investment return. The renter can walk away at any time.

For me, if my property was worth 60% less I'd be in a high state of distress, knowing that there is a noose around my neck and I am trapped in the position I am in and can't get out of it - renting doesn't offer this perk

lima

Tasden wrote: »

But they may have worked for what they did save themselves. Or they may have saved a full deposit themselves before getting money as a gift from parents. Or any other number of scenarios. And why do you care about their life satisfaction?

They would be getting free money that they did not work for, whether or not they were going to use it for a deposit or not, and whether or not they saved up money themselves

I have great satisfaction in knowing mammy and daddy didn't give me money, it's a wonderful feeling to be building a life without handouts that is all really

Alf Veedersane

lima wrote: »

For me, if my property was worth 60% less I'd be in a high state of distress, knowing that there is a noose around my neck and I am trapped in the position I am in and can't get out of it - renting doesn't offer this perk

He doesn't want to move though so he's happy to be there for the next 14 years plus. And he doesn't have to worry about the vagaries of renting.

But the vagaries of renting appeal to some.

I'd have had no issue with continuing to rent where we were if we had no luck with the househunting and I certainly wasn't going to commit to spending the next 25-30 years totting up what was left over after the bills to have a house.

And yes rent is paying for a service. But in a lot of cases, people are overpaying for the service. They can move but jesus moving is something conceived in the seventh(or possibly the ninth) circle of hell

runawaybishop

lima wrote: »

They would be getting free money that they did not work for, whether or not they were going to use it for a deposit or not, and whether or not they saved up money themselves

I have great satisfaction in knowing mammy and daddy didn't give me money, it's a wonderful feeling to be building a life without handouts that is all really

You must really have a ****ed up opinion of people if you think parents helping their kids out instantly and irrevocably turns the kids into ungrateful spongers.

Only if the person whose parents helped them out refused to help out their own kids should you really call them spongers.

Tasden

lima wrote: »

They would be getting free money that they did not work for, whether or not they were going to use it for a deposit or not, and whether or not they saved up money themselves

I have great satisfaction in knowing mammy and daddy didn't give me money, it's a wonderful feeling to be building a life without handouts that is all really

I never disputed that, but it doesn't take away from any saving or work they did do.

Ok but that's your satisfaction. They may be just as happy and content knowing "mammy and daddy" helped them out and they now have a place to call home as a result.

drumswan

lima wrote: »

I have great satisfaction in knowing mammy and daddy didn't give me money, it's a wonderful feeling to be building a life without handouts that is all really

Id say its a better feeling just getting the free cash without having to do all that tedious, grinding work stuff. Im sure if someone handed you a cheque for 50k youd refuse it because its not worth the tingly feeling you get from saving it yourself, psssh

iusedtoknow

We were lucky with our place in Barcelona. My wife lived at home and was always very frugal. We moved rent free into her uncle's investment place for 2 years while he was abroad but modernized it for him (piped hot water FTW!) and did a lot of work ourselves on the place.

When the time came , we had enough saved from our salaries that we could buy our own place with a 30% deposit on a property that had fallen in price 200000 during the crash. When we left Spain we sold it at a profit (after the work we put in) and have that money tied up in an account for when we are ready to buy here, whenever that will be. 2 bedrooms in San Francisco are currently running at an average of 1,000,0000 so it'll be a long while off.

Clareman

I'm amazed by all the people continuing to put their "savings" into paying off their mortgage, depending on you rate of interest you might actually be able to get more money in savings than the mortgage is costing you, also, a mortgage is the cheapest debt you can have, it would probably be a better move to put the money you'd put into paying off the mortgage into a savings account, once you've more than the money owed saved decide what to do with it, it's a nice little cushion in the event of an unforeseen event.

lima

Alf Veedersane wrote: »

He doesn't want to move though so he's happy to be there for the next 14 years plus. And he doesn't have to worry about the vagaries of renting.

But the vagaries of renting appeal to some.

I'd have had no issue with continuing to rent where we were if we had no luck with the househunting and I certainly wasn't going to commit to spending the next 25-30 years totting up what was left over after the bills to have a house.

And yes rent is paying for a service. But in a lot of cases, people are overpaying for the service. They can move but jesus moving is something conceived in the seventh(or possibly the ninth) circle of hell

Personally it costs about 150-200 more to rent a month that a mortgage

Having a large mortgage means that with the vagaries of life there is a large risk that you become unable to pay and are left with a large debt you cant service

I have no idea what that religious thing at the end is

lima

drumswan wrote: »

Id say its a better feeling just getting the free cash without having to do all that tedious, grinding work stuff. Im sure if someone handed you a cheque for 50k youd refuse it because its not worth the tingly feeling you get from saving it yourself, psssh

That's not going to happen though!

I'd feel terrible taking money from my parents, I'd only take it if I really really needed it but I know loads of people who took money from their parents to get huge houses (that are worth nothing anyway now)

Knowing that you 'made it' yourself is priceless, it's a goal of life for many to be in this situation

Tasden

lima wrote: »

Knowing that you 'made it' yourself is priceless, it's a goal of life for many to be in this situation

For many. Not everyone cares about 'making it' yourself.

blacklilly

LaGlisse wrote: »

I wasnt talking about inheritances, i was talking about all the people in their 20's and 30's who just expect their parents to help them out, or to let them live rent/ living expenses free. There is a lot of them about.

And what business is it of yours?

If some parents are happy to gift their children money in order to help them on the ladder, so what?
What impact does this have on you?

You sound very spiteful and jealous

T-K-O

Let me get this straight, I work hard and help my kids out who in turn help their kids out = failed to make it in life

lima

blacklilly wrote: »

And what business is it of yours?

If some parents are happy to gift their children money in order to help them on the ladder, so what?
What impact does this have on you?

You sound very spiteful and jealous

Unfortunately they don't learn the value of money and this money ends up getting used in bidding wars on a depleted stock of property

If it gets harder for people to get mortgages then kids with no work ethic whose mammy and daddy help them out will be ones to buy property in the future... god help us

blacklilly

lima wrote: »

Unfortunately they don't learn the value of money and this money ends up getting used in bidding wars on a depleted stock of property

Annnnnnd the biggest sweeping statement award goes to.................

lima

blacklilly wrote: »

Annnnnnd the biggest sweeping statement award goes to.................

Constructive

Tasden

lima wrote: »

Constructive

Much like the generalisations and use of the phrase "mammy and daddy"

Woshy

There seems to be a lot of chips on shoulders in this thread tbh. One big one in particular.

Personally I don't care how other people afford their deposits. Everyone's situation is different. I don't think getting inheritance/money from parents means you are necessarily frivolous with money or lack the ability to save. That's a huge generalisation and just smacks of bitterness to me.

Roxee

How did I get deposit? By not spending all my money during my 20s and very gradually building a nest-egg.

Parents always instilled the importance of working into us and it started with helping out where she worked when in the summer I turned 14! There were summer/Christmas jobs during school years, then started a evening/weekend job in a shop the day after my leaving cert finished and have never stopped working (luckily), so point being from age 17 to 27 I always had modest (often minimum wage) steady income and was just sensible. I spent, I rented, I lived, I had holidays, I bought cheap cars, all of it, but I just never ever spent all my money each month, there was always a cushion. And the cushion kept growing little by little. By 27 I had almost 30 grand, genuinely without really trying. I didn't call it my savings, I called it my "non-spendings"! Got mortgage and bought at 28 (end of 2012) and I only needed about 17k deposit (modest house, bottom of market) but I used the bulk of the cash to put into the purchase and so only borrowed 83pc of house price, so my repayments are lower now than any rent I paid in the past.

Luckily my parents were able to loan me some money to help with getting wiring and floors etc done, and so I'm paying them back bit by bit with little interest. Very fortunate about that.

But the answer to the question is - a lifelong not-spending-everything-you-earn habit, even on modest income, and not at the expense of buying nice things or having a life either.

Not much use as advice if you're in your 30s now but still - that's the answer to the question!

The_Morrigan

My parents 'gifted' me a sum of money (circa 10k) when I was buying my place.
However, I renovated their house and paid circa 10k for that when I was living at home. I also paid housekeeping to my parents from the age of 16.
That monetary gift is currently being repaid on a monthly basis to them as they are retired and don't have an income.
Their will stipulates that I get that 10k back from the estate.

Swings and roundabouts people.

Chris_5339762

I was chatting with my dad the other day about this. Back when he was young, he toiled at it and saved 1/3 of the value of the house. That was his deposit. Things were a bit different back then, but he is very surprised at the lack of deposits now compared to back in the 60s/70s.