Is it fair to blame the Banks & Government if you cant get mortgage approval?

JizzBeans · 13-05-2021 7:27pm #1

If the current generation of first time buyers have spent their 20's doing things like....

Traveling the world
Spending 3-6 years in college
Living in Australia for a couple of years
Buying new cars
Buying the latest smartphones
poor family planning
Going on expensive holidays every summer
Boozing every weekend
Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"

Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.

For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".

Cant blame the banks and government for everything, personal responsibility has to play a part, no?

Jinglejangle69 · 13-05-2021 7:30pm

Don't forget take aways etc.

Compare all of that stuff to the previous generation.

They had none of it.

They put every penny into getting a house.

You're right, they expect instant everything including a house but without the sacrifice.

13-05-2021 7:42pm

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

Traveling the world

Spending 3-6 years in college

Living in Australia for a couple of years

Buying new cars

Buying the latest smartphones

poor family planning

Going on expensive holidays every summer

Boozing every weekend

Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"

Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.

For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".

Cant blame the banks and government for everything, personal responsibility has to play a part, no?

Yes if they all, everyone of them, did that - you’d still be wrong.

But the reasons why they can’t afford houses is because housing is unaffordable. This is victim blaming.

Oymyakon · 13-05-2021 7:43pm

Mortgage approval isn't the issue - It's the cost and lack of availability of housing. If mortgage lending rules loosened, house prices would soar even higher if we don't tackle the root issue - supply.

13-05-2021 7:43pm

Jinglejangle69 wrote: »

Don't forget take aways etc.

Compare all of that stuff to the previous generation.

They had none of it.

They put every penny into getting a house.

You're right, they expect instant everything including a house but without the sacrifice.

Also. Houses were cheaper back then relative to income and people could purchase them younger.

pjohnson · 13-05-2021 7:46pm

I thought it was Avocado to blame?

13-05-2021 7:47pm

Dont forget avocados

Edit goddamit

pjohnson · 13-05-2021 7:49pm

[Deleted User] wrote: »

Dont forget avocados

Edit goddamit

dubrov · 13-05-2021 7:51pm

House buyers compete with each other for the same properties.

If they all had more savings, prices would just rise and the same people still wouldn't be able to afford them

13-05-2021 7:51pm

Is it worth going through the op’s list and proving them all wrong, or do we just leave it there as a testament to lies and economic illiteracy.

jimmycrackcorm · 13-05-2021 7:52pm

It would be very unfair to blame young people for being unable to afford to get a mortgage because they travel etc.

Those who scrimp and save instead still face a huge mountain to get past in terms of achieving an income that will provide 3.5 times salary and also the 20% deposit. On top of having to pay extortionate rents.

One significant factor is that many are choosing to buy as a single applicant where traditionally a couple would do jointly. And then singletons are competing with couples for limited supply.

13-05-2021 7:52pm

dubrov wrote: »

House buyers compete with each other for the same properties.

If they all had more savings, prices would just rise and the same people still wouldn't be able to afford them

Well that’s the economic part done.

L1011 · 13-05-2021 7:53pm

My parents bought a new 4 bed semi D on a commuter rail line from Dublin for a tad over 3x the median single salary in 1986.

The equivalent now - a new, smaller albeit better insulated house on a smaller site in the same town would be closer to 10x a median single salary.

Sure, interest rates were higher but that doesn't even vaguely cancel out the affordability difference. And your average 1980s buyers probably drank like fish and smoked like chimneys based on average consumption of each in Ireland back then; which have both fallen significantly - that's why there was no money for holidays and the like.

Buddy Bubs · 13-05-2021 7:55pm

If the reason they can't get a mortgage is an inability to get a deposit together then you have a point. I think deposits are a good idea by the way, I put in 10% myself I just missed out on the days of 100% mortgages and I'm glad I did.

Sometimes people have to make a choice between saving and spending.

If they have a 10% deposit saved but they can't get a mortgage, it's house prices being out of their reach.

Reasons why prices are out of reach:

Supply being too low to cater for people that want to buy homes, people that want to invest in property and institutions investing.

Building and land costs too high

Others that want to buy having higher deposits and higher salaries

I do believe the days of people in average to low paying jobs being able to buy in the same area their parents did with their average to low paying jobs are over.

What we do need, is a functioning rental market to complement the buying market. We don't have a rental market od be happy to be in at the moment. Institutional investors may actually be the answer to this.....but not at today's rent prices. I'd prefer to rent from a professional institution than a have a go landlord with no knowledge of the law and rules.

Dublin and other areas in demand are not going to fall again in my opinion.

What we don't need are silly government schemes like shared equity and help to buy. They push up prices, I saw it first hand with help to buy.
My brother qualified for it and bought a new build house just as it came in. The developers then copped people had more money and jacked up the prices. The launch a few weeks after his were 30k dearer than his launch.

skimpydoo · 13-05-2021 7:57pm

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

Traveling the world

Spending 3-6 years in college

Living in Australia for a couple of years

Buying new cars

Buying the latest smartphones

poor family planning

Going on expensive holidays every summer

Boozing every weekend

Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"

Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.

For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".

Cant blame the banks and government for everything, personal responsibility has to play a part, no?

In this case you can blame the banks and the government. If the current generation of first time buyers had not done any of the things on your list, they still could not have the opportunity to buy a house or apartment.

pioneerpro · 13-05-2021 7:58pm

Jinglejangle69 wrote: »

They put every penny into getting a house.

You're right, they expect instant everything including a house but without the sacrifice.

Ah yeah, like the huge tracts of social housing sold for pennies on the pound to long-term tenants who were effectively subsidised for both their rent and their purchase by the Government?

Or like the current pension liability load? I suppose the fair market value of those pensions were earned during the working life of the over 60s?

Pull the other one.

they expect instant everything

Age to leave education, age to purchase property and even age to marry are now amongst the highest in the developed world. Normal economies don't force people to wait till their mid to late 30s to try for a child.

https://www.independent.ie/irish-news/average-age-of-irish-men-to-marry-is-now-oldest-on-record-38001372.html

Figel Narage · 13-05-2021 7:59pm

As someone in their 20's who has been saving since......forever to buy a house, I do note that a lot of people my age don't seem to want to save and would rather spend money on travelling, drink and strabucks who will then complain about the housing situation. Don't get me wrong, I'm not thrilled about the situation but I'm doing everything in my power to try and buy a house one day through a high amount of saving and getting on a path that increases income a long the way. The situation we're in is not great but in my eyes, you can only try your best to optimise the things you can control to get there and ignore anything outside of your control.

13-05-2021 7:59pm

Jinglejangle69 wrote: »

Don't forget take aways etc.

Compare all of that stuff to the previous generation.

They had none of it.

They put every penny into getting a house.

You're right, they expect instant everything including a house but without the sacrifice.

Fairly sure chippers have existed for a few generations.

Family planning in terms of contraception didn't exist for many.

More people went to the pub on a daily basis than the current generation.

However moaning about the younger generation is a time honoured pastime for certain types of people.

gandalfio · 13-05-2021 8:00pm

It's still pretty easy to get mortgage approval. It's the unaffordable price of homes that's the main problem.

JizzBeans · 13-05-2021 8:05pm

Oymyakon wrote: »

Mortgage approval isn't the issue - It's the cost and lack of availability of housing. If mortgage lending rules loosened, house prices would soar even higher if we don't tackle the root issue - supply.

Not entirely accurate, cost and availability might be an issue in area X but not in area Y.

If you refuse to entertain the idea of buying outside of Dublin, for example, then you cant objectively make that claim.

"I want to be near me ma" isn't a good enough excuse

Fann Linn · 13-05-2021 8:08pm

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

Traveling the world

Spending 3-6 years in college

Living in Australia for a couple of years

Buying new cars

Buying the latest smartphones

poor family planning

Going on expensive holidays every summer

Boozing every weekend

Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"

Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.

For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".

Cant blame the banks and government for everything, personal responsibility has to play a part, no?

Ye could apply your list to every generation.

JizzBeans · 13-05-2021 8:09pm

gandalfio wrote: »

It's still pretty easy to get mortgage approval. It's the unaffordable price of homes that's the main problem.

In certain counties, yes

JizzBeans · 13-05-2021 8:11pm

fvp4 wrote: »

Is it worth going through the op’s list and proving them all wrong, or do we just leave it there as a testament to lies and economic illiteracy.

Oof, lead balloon here:D

Oymyakon · 13-05-2021 8:11pm

JizzBeans wrote: »

Not entirely accurate, cost and availability might be an issue in area X but not in area Y.

If you refuse to entertain the idea of buying outside of Dublin, for example, then you cant objectively make that claim.

"I want to be near me ma" isn't a good enough excuse

Ok, let's say the Dublin house hunters decide to buy further afield. Then the regional areas go up in price as well due to the competition.

We're already seeing it in these housing estates in the likes of Kildare and Meath, unless we tackle the issue of supply then the affordability issue will keep spreading across the entire country. Besides, very few people will have the remote working flexibility to buy homes in the likes of Sligo...

The J Stands for Jay · 13-05-2021 8:11pm

Jinglejangle69 wrote: »

Don't forget take aways etc.

Compare all of that stuff to the previous generation.

They had none of it.

They put every penny into getting a house.

You're right, they expect instant everything including a house but without the sacrifice.

And don't forget the avocado toast They're always eating.

jam_mac_jam · 13-05-2021 8:15pm

L1011 wrote: »

My parents bought a new 4 bed semi D on a commuter rail line from Dublin for a tad over 3x the median single salary in 1986.

The equivalent now - a new, smaller albeit better insulated house on a smaller site in the same town would be closer to 10x a median single salary.

Sure, interest rates were higher but that doesn't even vaguely cancel out the affordability difference. And your average 1980s buyers probably drank like fish and smoked like chimneys based on average consumption of each in Ireland back then; which have both fallen significantly - that's why there was no money for holidays and the like.

Same with my parents. They always go on about how poor they were and I think to myself you had four children ffs and went abroad on holidays. You really really weren't. I would never be able to afford their house even on two wages and one kid.

It is so much harder for the generation after me to buy a house. And it wasn't very easy for me. The amount of people on crazy commutes or spending half their wages on rent.

The J Stands for Jay · 13-05-2021 8:17pm

JizzBeans wrote: »

Not entirely accurate, cost and availability might be an issue in area X but not in area Y.

If you refuse to entertain the idea of buying outside of Dublin, for example, then you cant objectively make that claim.

"I want to be near me ma" isn't a good enough excuse

There are no jobs in area Y. If you moved there, you would then not be able to afford the lower price.

It's the older generation who demand instant gratification. New Toyota Corolla every two years, going nuts when the lad in the dealership can't get it quick enough "You can't use Covid as an excuse for everything."

divillybit · 13-05-2021 8:18pm

Young folk get very touchy about their spending habits and see going to oz as a right of passage that often times doesent do much for their career progression... I did the 4 years in college, graduated in 2008 into the recession, decided not to travel as I'd no real interest in going abroad and wanted to get work in Ireland... But I worked hard and saved hard and by 2016 had enough saved to buy a place along with needing a small mortgage that I've since cleared.. People in their 20s kinda need to be mentored a little that those are the years when they will have the most disposable income and to save or invest it wisely..but they don't really want to listen

Shebean · 13-05-2021 8:18pm

I can't believe anyone believes the first comment including the person posted it.

Prices are too high and supply is low. New supply is being bought up to be rented and first time buyers are being priced out. The younger cohort have come up through this, a financial crash and Covid. Hardly living on the pigs back.

JizzBeans · 13-05-2021 8:20pm

Oymyakon wrote: »

Ok, let's say the Dublin house hunters decide to buy further afield. Then the regional areas go up in price as well due to the competition.

We're already seeing it in these housing estates in the likes of Kildare and Meath, unless we tackle the issue of supply then the affordability issue will keep spreading across the entire country. Besides, very few people will have the remote working flexibility to buy homes in the likes of Sligo...

Maybe, but over a longer period of time.

Triangle · 13-05-2021 8:22pm

Land prices play a huge part. Back in the 90s land was land.
Now agricultural land can be around 15 acre (depending on quality) but you have planning permission and its suddenly worth €200k.

Padre_Pio · 13-05-2021 8:24pm

JizzBeans wrote: »

Oof, lead balloon here:D

Too right. Not sure if you're trolling really.

People enjoying their 20's has nothing to do with the cost of housing being at a near all time high. Wages in 2021 are not too far removed from 2007

gandalfio · 13-05-2021 8:25pm

JizzBeans wrote: »

Not entirely accurate, cost and availability might be an issue in area X but not in area Y.

If you refuse to entertain the idea of buying outside of Dublin, for example, then you cant objectively make that claim.

"I want to be near me ma" isn't a good enough excuse

So people should leave Dublin and spend hours commuting, spend a fortune on fuel, tolls, car depreciation etc, uproot their children from school and friends, move miles away from family and supports, spend a fortune on fuel, tolls, car depreciation etc?
It's not that simple.

SEPT 23 1989 · 13-05-2021 8:33pm

Seriously go out and enjoy yourselves in your 20’s spend your money on rubbish

Enjoy a bit of travel.flash cars and clothes

Splashing out in Nightclubs and pubs

The money men who will have you by the balls for the rest of your life can wait

13-05-2021 8:33pm

divillybit wrote: »

Young folk get very touchy about their spending habits and see going to oz as a right of passage that often times doesent do much for their career progression... I did the 4 years in college, graduated in 2008 into the recession, decided not to travel as I'd no real interest in going abroad and wanted to get work in Ireland... But I worked hard and saved hard and by 2016 had enough saved to buy a place along with needing a small mortgage that I've since cleared.. People in their 20s kinda need to be mentored a little that those are the years when they will have the most disposable income and to save or invest it wisely..but they don't really want to listen

You cleared a mortgage in 5 years? fair play, but I get the idea that you are outside in the boondocks somewhere. Also you appear to be a farmer.

Thats the other problem with these kind of threads, apart from the economic illiteracy, some parts of Ireland are still cheap. Most aren't.

JizzBeans · 13-05-2021 8:47pm

Padre_Pio wrote: »

Too right. Not sure if you're trolling really.

People enjoying their 20's has nothing to do with the cost of housing being at a near all time high. Wages in 2021 are not too far removed from 2007

Its no coincidence we have a generation with virtually no savings or pensions for that matter.

Witcher · 13-05-2021 8:51pm

JizzBeans wrote: »

Its no coincidence we have a generation with virtually no savings or pensions for that matter.

Source?

Tork · 13-05-2021 8:51pm

What do you think of the rent they pay?

Geuze · 13-05-2021 8:54pm

Shebean wrote: »

I can't believe anyone believes the first comment including the person posted it.

Prices are too high and supply is low. New supply is being bought up to be rented and first time buyers are being priced out. The younger cohort have come up through this, a financial crash and Covid. Hardly living on the pigs back.

Correct.

It is genuinely much harder to buy a house now, especially in urban areas.

In 1982 my father, aged 35 approx, on one wage, could buy a 4-bed 1800 sqft detached house on 0.25 acre. This is in a small provincial town.

That same house would now ask approx 300k.

Could a typical 35yo now, one-earner, with a wife + 3 kids, buy a 300k detached house????

gmisk · 13-05-2021 8:57pm

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

Traveling the world

Spending 3-6 years in college

Living in Australia for a couple of years

Buying new cars

Buying the latest smartphones

poor family planning

Going on expensive holidays every summer

Boozing every weekend

Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"

Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.

For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".

Cant blame the banks and government for everything, personal responsibility has to play a part, no?

You missed out Avocados!

I think it's more that cost of property has gone through the roof and wages haven't really grown massively, definitely not at rate of inflation.

What was the average wage to average house price ratio when your parents were buying do you think?

Jizique · 13-05-2021 9:05pm

[Deleted User] wrote: »

Also. Houses were cheaper back then relative to income and people could purchase them younger.

Lower population, emigration and higher rates.
If interest rates were 8%, prices would be a lot lower, but I guess we would not be happy with that either.

Jizique · 13-05-2021 9:08pm

gmisk wrote: »

You missed out Avocados!

I think it's more that cost of property has gone through the roof and wages haven't really grown massively, definitely not at rate of inflation.

What was the average wage to average house price ratio when your parents were buying do you think?

Irrelevant - rates were a lot higher, so if you want lower house prices, let’s increase interest rates to historical levels (say 8%) and reduce the life expectancy to 75 thereby freeing loads of houses occupied by the elderly; and end immigration

shivermetimber · 13-05-2021 9:09pm

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

Traveling the world

Spending 3-6 years in college

Living in Australia for a couple of years

Buying new cars

Buying the latest smartphones

poor family planning

Going on expensive holidays every summer

Boozing every weekend

Moving out with friends to live the life

My folks did literally everything on that list bar 4 and 5 (number 3 was the US but same thing different generation) and they still managed to buy a house in a location of their choosing easily in their late 30's, with 2 kids, and on one civil servant wage.

On the flip side, I only did 2 (education...why is that a bad thing?), 6 (who said holidays have to be expensive?) and 8 (moved out because that's what an adult does right?), worked consistently since, pumped money into rent, saved what I can on mediocre wages and still can't afford to buy a 1 bed apartment within a 50km radius of Dublin. I don't blame the banks, I blame the Government.

Such a nonsense troll post.

13-05-2021 9:13pm

So I'm in a position where I will buy in the near future. I'm in my thirties, I earn a pretty high salary. I don't live in Dublin and am planning to buy in a commuter town. I've saved a decent deposit and didn't remotely live life as the OP described. I'm mortgage approved and the reality is that it's still not particularly easy to buy. I'm hoping we have a bubble that's gonna pop cause prices have increased to insane degrees.

Compare this to the fact that 2 decades ago a nurse would be able to buy a new build if they had a deposit saved. And that fact is pretty important, I'm in a lucky position where I earn a fair bit. Meanwhile there are plenty of people who will struggle to buy, they fulfill important roles in society but if they don't marry, they're gonna struggle to buy. We've become more affluent in plenty of ways but plenty in my generation are gonna struggle to ever buy and it's not just because of insane lifestyles.

And none of the above is because of struggling to get mortgage approval. It's just an extraordinarily difficult market to buy in, in plenty of locations outside of Dublin.

Renno123 · 13-05-2021 9:17pm

Very short memories op..
The People you refer to spent their their late teens and 20s in severe recession of up to 15%unemployment.
Don't forget the public sector only removed the hiring freeze a number of years ago.

Housing is unaffordable, not because of smartphones but because of failed government policy.

eviltwin · 13-05-2021 9:20pm

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

Traveling the world

Spending 3-6 years in college

Living in Australia for a couple of years

Buying new cars

Buying the latest smartphones

poor family planning

Going on expensive holidays every summer

Boozing every weekend

Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"

Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.

For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".

Cant blame the banks and government for everything, personal responsibility has to play a part, no?

My peers and I did everything on your list except the year in Oz and got mortgages. None of us in especially high paying jobs either. The only difference is we bought in the early 2000’s when the deposits were lower and property was bought to live in and not rent. As others have said it’s supply,

13-05-2021 9:21pm

JizzBeans wrote: »

Its no coincidence we have a generation with virtually no savings or pensions for that matter.

That’s because of the high rents, there, jizz.

McGaggs wrote: »

Isn't that the over 40s?

It’s most private sector workers.

The J Stands for Jay · 13-05-2021 9:21pm

JizzBeans wrote: »

Its no coincidence we have a generation with virtually no savings or pensions for that matter.

Isn't that the over 40s?

KaneToad · 13-05-2021 9:22pm

The govt has a once in a lifetime opportunity to effect real change with balanced regional development. It has been proven that WFH is entirely possible for huge swathes of the population.

Public sector jobs, where possible, should be WFH or work from hub. Private sector jobs should be encouraged, via tax incentives, to have employees WFH or work from hub. The concentration of all govt depts in Dublin is ridiculous.

Dublin property prices are unobtainable for the majority. We never built appropriate, high density, city dwellings....now Dublin is just a sprawling mess.

gmisk · 13-05-2021 9:22pm

Jizique wrote: »

Irrelevant - rates were a lot higher, so if you want lower house prices, let’s increase interest rates to historical levels (say 8%) and reduce the life expectancy to 75 thereby freeing loads of houses occupied by the elderly; and end immigration

What I wrote is entirely relevant.
The below is a few years old and its probably even worse now.
https://m.independent.ie/business/personal-finance/property-mortgages/more-difficult-to-buy-a-home-now-than-in-the-1980s-36321280.html

Errr you can't just decide to increase interest rates or lower life expectancy randomly...

I don't have skin the game either to speak. I worked hard saved a lot and bought a house alone in my early 30s in Dublin (I couldn't have afforded the place I got if there wasn't a recession though)

gmisk · 13-05-2021 9:25pm

KaneToad wrote: »

The govt has a once in a lifetime opportunity to effect real change with balanced regional development. It has been proven that WFH is entirely possible for huge swathes of the population.

Public sector jobs, where possible, should be WFH or work from hub. Private sector jobs should be encouraged, via tax incentives, to have employees WFH or work from hub. The concentration of all govt depts in Dublin is ridiculous.

Dublin property prices are unobtainable for the majority. We never built appropriate, high density, city dwellings....now Dublin is just a sprawling mess.

I agree with you entirely.

But it isn't going to happen with the public sector. It will be a blend for some (like the one I am in).

Is it fair to blame the Banks & Government if you cant get mortgage approval?

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