No need to start at top of ladder

LIZ Alley of Brewin Dolphin urges millennials to ask “Grandbank” for a £50,000 gift to help them onto the housing ladder (Pitting the old against our youngsters, Your money, April 9). She uses an example of the UK average house price of almost £185,000 and compares this to paying £725 monthly rent. In many regions outside of London and the southeast, £725 per month would pay for a very nice home indeed.

These days, young people are under pressure to have the trappings of wealth the second they’ve left the womb. When my wife and I bought our first home in 1990, mortgage interest rates were over 15 per cent and we bought a modern one-bedroom cottage flat in Glasgow on a 25-year mortgage, which ate up almost half of our combined earnings. We traded up four years later to a three-bedroom semi, then eight years after that to a five-bedroom bungalow. Over the years, as our earning power grew and mortgage rates fell, our home size increased.

Like, I suspect, many of the grandparents and parents of millennials, we made sacrifices. We didn’t go out every week, we didn’t have every gadget, we took simple holidays and saved as much as we could. We paid a mortgage until it hurt, prioritised our spending. We wanted to get on the property ladder, anywhere on the ladder. It’s called a property ladder because you are expected to make your way up the ladder rung by rung.

If millennials want to get on the property ladder it would be better if financial advisers (and relatives) encouraged them to do it the old-fashioned way – to start at the bottom where properties don’t cost £185,000 and then, with time, work their way up. If they want to start mid-ladder then naturally that will be more challenging and take longer than starting on one of the lower rungs.

John Thomson Glasgow