6 Top Tips for Millennials to Solve the Property Puzzle

Everyone knows that a big house is the sign that you are a success in life and if you don’t have one by the time you hit 30, you are a loser!
So here’s some tips for millenials.

Property is the best asset class and the ladder to the riches you deserve.
Millennials take note, it has never been easier to buy a property – and if you don’t, then you will remain renter scum forever!
Here are six tips to get you the housing ladder of riches.

Everyone knows that property is great and GFF is a certified property expert (next year I will reach guru status). I’ve been literally surrounded by property for over 30 years – that’s a lot of experience that you can’t just gain by studying or learning about things. I have tonnes of real world experience of living in houses mixed with edutainment progammes like this and that.
Tip Number 1: Buy property 20 years ago when it was cheaper

MilleNnials everywhere are learning a lot about the world; important lessons that they need to know. For millennial househunters a great tip to save money on the cost of housing is to have bought twenty years ago.
Back in 1999, the average house in England sold for £70,000 and now it’s more than 3 times that. Things have gotten even better in London – but we’ll come to that later.

The reason for the increase in house prices is poorly understood by those who benefited but to those lucky mortgageholders who bought in the 1990’s but it was not due to their skill, intelligence or hardwork. More like a combination of Zirp, underbuilding/NIMBYism, demographics, government meddling and BTL and other factors.
Even adjusted for inflation the cost of property 20 years ago was half of what it is now. So savvy buyers will invest in a DeLorean (here for only about £23,000, which is £10k less than the average FTBer deposit) and travel back in time to when prices were lower.
Tip Number 2: Don’t buy in the North of England within the last 10 years
Anyone who has ever been to the North regrets it. Don’t be tempted – it’s a trap! House prices have barely moved there in 10 years! Unlike London which has seen a patriotic soaring of house prices by £200,000 to over £450,000 in 2017, the North has barely moved (much like salaries).

Sure, the yields on BTL might look good, but unless you want to live in affordable housing and not have a mortgage three times what houses cost only a few years ago – AVOID!

For the price of a 4 bedroom charming house in Leeds you could afford a 50% share of a small flat in Peckham. I know what I’d choose! Lovely Jubbly.
Millennial snowflakes might like it up North by the way because it’s so bloody cold! Take this from GFF who is freezing himself up in Scotland – with only haggis, single malt and a wood burning stove to keep himself and family warm.
Choosing to live somewhere expensive is important – remember, if your house isn’t increasing in value, how on earth are you going to MEW to afford anything fancy in life?
Remember, your house works & pays for you and not the other way round.
Tip Number 3: Don’t buy in London within the last 2 years
If you did think back then that now was a good time to buy, I hope now that then was not 2 years ago and there was not London.
House prices in London have maybe peaked. It could be argued that if it requires every possible bung to keep the tottering pyramid scheme from collapsing – help to sell buy, shared ownership, selling flats first tooverseas slumlords before locals have a chance, allowing offshore funny money to hoover up property, promoted unaffordable housing as an asset class for the rich.

Sadly for any number of reasons, consistent house price inflation above 10% year on year was not sustainable and prices are actually moving into reverse! If high and rising house prices are good – then if prices drop back to where they were just a few months ago is terrible news for one and all. If prices were to drop 5% that would wipe out many people’s deposit on their overpriced HTB forever flats! So do your research

Tip Number 4: Help to Buy helps you onto the first rung of the ladder
Being “helped” to buy a property that you otherwise can not afford could be a good idea. Couldn’t it? I mean, it’s not like the house builders who are selling houses are able to inflate the prices of their Barratt Boxes and record profits – and I mean record profits – from mugs and the tax payer? No wonder they love it so much.
Help to Buy is the brainchild of the free-market capitalist party (Tory). It works like this:
With a Help to Buy: Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home (40% in London).
To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.
The home you want to buy must be newly built with a price tag of up to £600,000.
Cynics might call Help to Buy: HELP TO SELL; since it’s designed to help housebuilders sell homes. Don’t worry that you’ve potentially signed up for a 25+ year mortgage for a property that might not suit you needs in a few years time, and the extra albatross loan may make it very difficult to remortgage at the end of your teaser rate.
Tip Number 5: Have a huge deposit
Canny millennials will have had their parents and grandparents saving a deposit for them since before they were born. BOMAD is the best of all banks and if you choose to have a huge deposit for your house, you can benefit from some great deals. If you only have a £10k deposit for your house, the Nationwide will charge you around 3.34% for a 2 year tracker but if you can easily add a Zero to that deposit you can get a mortgage for just 1.44%.
Even better, use that deposit to buy something that is less shit than the cheapest property you can afford – but remember to stretch! Aspiration is key!
The difference is huge, on a £150,000 mortgage, the difference between a 3.34% and 1.44% interest rate is almost £250 a month (tax-free) over the lifetime of the mortgage.
BOMAD is the gift that keeps on giving!

Tip Number 6: Enjoy those 0% interest promotions
Once you are a proud mortgage holder homeowner be sure to “make it your own”. If you read some quality newspapers you’ll probably find good evidence that your canny purchase has already gone up in value.
So, now that you are rich (remember debt = wealth) you should protect your asset by investing in it. And luckily there are no end of people who want to help you achieve your dream home. What’s important to remember is that it’s the vision that matters most. Don’t let anything get in the way of your dreams and the only number that matters is how many likes on instagram you get. Other numbers like the cost can be ignored unless you are availing of a 0% interest for 5 years / pay nothing for XX months. In which case, you are wise to spend the money now and pay it back later (possibly by remortgaging).

GFF & Property

GFF has managed to avoid the major problems of housing costs. I bought a cheap flat in 2006 to live in whilst renting out a room to make a little money. We sold it for a fantastic 100% increase in 2014. The sane dlat would sell in 2022 for what I paid for it in 2006 – so I’ve got good timing. Many people I know doubled down when prices rose. Lifestyle inflation, nesting, greediness? I don’t know but we got out when it was good.
We rented from 2011-2015 and we’ve had enough of the private rental market in the UK. Renting suits when you are living where you don’t want to settle but in the UK, renters are not seen as customers (who are always right) and just cash cows to be milked.
We bought a lovely big town house in 2016 in an unpopular city in Scotland (but we love it) for a fraction of what it would cost elsewhere. It’s in a lovely area, and I want it to be our family home where the little Master and little Lady will grow up.
We’ve been here 7 years now and despite all the things going on in the UK, our life here is worth staying for.
I see my house as an asset in that it cost me a lot of money and I have a huge mortgage on it but I don’t plan to see anytime soon. Mortgage is about 10% of networth, house about 25%. We are lucky I guess but that comes with patience and practice.

Thanks, GFF