My husband sent an article to our English friend that proposed that the declining birthrates in Europe were due to “anti-natalism”. I thought his reply was interesting, and somewhat depressing.
Hmm, interesting. But maybe the problem is slightly different here, because we’re all rather poorer than our American cousins.
If, for example, a young couple gets married, and borrow money from the bank to buy their first home, a one bedroomed apartment, which’ll cost them perhaps £200k, the bank uses ‘the multiplier’.
Which varies, but essentially it means they take their combined salaries, and multiply by perhaps four. So, if a couple of bright graduates earn, say, £15k pa each (of which maybe they take home £8k pa each) which is a typical graduate’s starting salary, that makes £120, 000 which is the maximum they can borrow. So they put £80, 000 down as a deposit (maybe cadged from their parents) and pay around £1000 a month repayments, maybe three quarters of their joint nett income.
But then the young wife falls pregnant, she can’t work, and they’re down to one income, and fall behind with payments. They default on the loan, the house is repossessed and sold off at auction by the bank for maybe half its market value. The bank doesn’t care because they have insurance to cover the difference (premiums paid by borrowers, who don’t see the benefit) and the bank just wants a super fast resolution. The bank wins again, and the borrowers still have to make up the shortfall, plus costs. So maybe now they owe the bank £100k plus their arrears, and their parents the £80, 000 deposit. This on top of their government student loans, which’ll be £50k.
I waited ’til I was old and reasonably financially secure before I thought about all that stuff. In fact, when I was younger, I made the definite decision not to have children. But, accidents sometimes happen, with the exuberance of youth, and youngsters find themselves in dire financial straits, through no fault of their own, other than inexperience and lack of planning.
There is hope is this sorry tale nowadays. If the price of their property goes up quickly enough, they just might come out even. But if there’s a slump, like there was here around 1990 when prices dropped around 25%, then it’s throw yourself off the bridge time, because you’ll have the dreaded ‘negative equity’, and the bank’s into you for life. You can never earn enough to pay off the interest. In the 90s people were just packing up, putting their house keys through the bank’s letterbox, then going missing.
That’s the real price of having children young. Devastating not just for the mother. And that’s why the populations of all western European countries is going down fast, even in Catholic countries.
Children are OK for grey haired company directors, but not for youngsters. Best time to have children is when you’re 75. But then you die, and the kids have to pick up your death taxes rather earlier.
It sounds like, financially, it would be practically impossible to have more than one or two kids in Europe unless you’re rich. I’m not well-versed on this issue though. Anyone have any thoughts?
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