And so it’s done – my daughter and my son have finished their GCSE and A-level tests/assessments or whatever you want to call them (don’t forget, there are no exams this year!), and the whole sorry shambles that has been year 11/13 in a pandemic is all but over.
I had been planning for this year for a long time -the year when they both had a long summer holiday together – the last year basically of their childhood and of us as a family unit. In my dreams, this was the year when we were going to have one last big family trip, with both of them having a long summer break, and then I would have some fun time with them whilst getting ready to wave my daughter off to university in the autumn.
Instead, we have no such plans. Foreign travel looks like a really bad idea right now, so the family trip is restricted to a week in Bournemouth in August. And the chances of a fun summer with the children are fading fast too, as my husband is still working from home, which means that the house has to be a quiet, sombre place most weekdays, and the children will probably do anything to be anywhere else during the summer.
My plans of mini-festivals with teenagers camping all over my lawn are very unlikely to happen and I do feel I have been robbed.
You may have figured out from reading this that I am somebody who likes making wild plans and having something to look forward to. Some of them are fantasies, and others I have been able to turn into reality, but I always have a project or two on the boil, some short-term and others long-term. People laughed when my children were 3 and 5 and I was already looking at secondary schools, but the plans were well-laid and they ended up in the best possible place for each of them. My brain is a bit weird, but it seems to work OK, and if nothing else, having daydreams and vague plans keeps me occupied and keeps worries at bay.
So in the absence of anything exciting happening in the next year or two, and things being too uncertain to call, I’m starting to look forward to the next stage of our life. It seems weird to think it, but retirement is just around the corner for my husband and me, maybe six or seven years away.
As with so many parts of my life, I’ve had a long-term plan for this for quite a while too. I want to move back down to the South coast – the sea is calling me home. I mentioned this idea to my husband a few years ago and he seems reasonably happy with it as a plan too – he has very much enjoyed our holiday breaks down there and I think he would love to be able to take a walk by the seaside most days and to have easy access to the New Forest too.
So while I can’t plan holidays or summer activities, I’ve started to look in more detail at what our retirement might look like. I’ve got a rough idea of what our current house is worth and I’m looking at what sort of houses we could get for the same amount in our preferred locations for the same amount or possibly a bit less. If we can find the right place, it would be lovely to be able to liberate a bit of capital so that we could give each of our children enough for a mortgage deposit. It seems crazy right now to imagine either one of my teenagers taking out anything so big and important as a mortgage, but the last few years have gone really quickly, and it’s only going to be a matter of time before they have both graduated, hopefully found employment and will be looking to put down roots.
What does the mortgage market look like for young people?
When I look at the mortgage market now, compared to when I was in my twenties, I must admit I feel really sad. When I qualified as an accountant, three years after graduating, I was able to purchase a two-bedroom flat in Zone 2 in London, which was then valued at three times my single salary. A deposit of only £5,000 sealed the deal and I became a homeowner.
Now, according to a recent survey from Compare the Market even the cheapest areas in the UK have an average house price that is more than 5 times the median earnings in the area. And of course, London, which is the most expensive, has an average house price of £465,000 and median earnings of £30,000, so more than 15 times salary. It seems unfair somehow.
I couldn’t resist looking on Zoopla, and the two-bedroom flat I bought in London in the 90s, is now worth more than the five-bedroom house we currently have in Surrey.
Despite interest rates being at record low levels, mortgage repayments are still colossal, and interest rates are very likely to rise over the next twenty-five years – the duration of a mortgage taken out now. I know the government has a Help to Buy scheme and there are other innovative financing schemes available, especially on many new build developments, but that just means that the length of time you are indebted for just gets longer and longer.
The chance of our children being debt-free like we are in our mid-50s seems almost impossible.
On top of that, my children will be leaving university with a colossal student loan each, which means that once they do start earning a sensible salary, there will be a slice shaved off and given to the government, making them even less attractive to mortgage lenders. I did a little hypothetical calculation using a tool on Mortgage Calculator of what my daughter, earning a typical graduate salary, could hope to borrow. Take a look at it yourself – it’s a real eye-opener. Even if she had a hypothetical partner who was also working in London on a typical graduate salary, the two of them could not even afford to buy a one-bedroom flat in our home town.
How is anybody supposed to ever afford a house, unless with significant support from their parents?
Planning our retirement
I’m probably completely overthinking this, and I guess I should get off the subject and back onto next year’s holiday plans, which are a bit more jolly to think about. But looking at things like this, makes me re-evaluate where we might live in our retirement. We’ll probably pick a smaller home ourselves, or a slightly less fancy neighbourhood, in order that we can give our children a helping hand onto the property ladder when the time comes.
But first of all , I guess they need to complete their studies, get top grades and go and find themselves a proper job, and I need to focus on feeding, clothing and entertaining them, so that they can do and be the best they possibly can.