To not understand how people afford next house up?

(240 Posts)
evilnaggingwife Mon 09-May-16 14:58:37

We purchased our first house about 3 years ago. A 3 bed terraced house with a tiny garden for around 230k. As first time buyers, we only saved a 5percent deposit and got a mortgage with a high rate! That will end next year when I hope we can get a more sensible rate.

Our house has probably gone up to around 280-300k I'd imagine based on local prices.

dh and I earn around £60k combined (although he is self employed so always tricky to prove income). We have saved enough to pay cost of moving and stamp duty and fees etc of next move.

I keep looking on right move and houses that I would consider next one up are stupid money. I'm talking 3 bed semi with a drive and larger garden... £400-500k!!!! How on earth do people manage this? Are we stuck here forever?

I go to a mortgage calculator online, it tells me how much I can borrow and when I do a search on right move the same types as our house come up... Terraced, not in town, no drive, small garden, small 3rd bedroom.

Iggi999 Mon 09-May-16 15:00:55

Don't know but I'm hoping someone gives you the answer! I'm still trying to move up to what you have now OP.

whois Mon 09-May-16 15:01:49

Well, you're really meant to increase your income over time so you can take on a larger quantum of debt. Or pay off the debt (overpayemnts are great) so you have more equity in your current home when you want to trade. How else did you think people move up?

OutToGetYou Mon 09-May-16 15:04:39

Move somewhere cheaper? Our five bed, detached, double garage, double driveway house is valued around £350k. Near two good schools, village location, small development not an estate.
If you've not got kids move somewhere cheaper before you get tied into schools.

sandiedc01 Mon 09-May-16 15:05:12

Hiya we bought our first house 3 years ago and sold it a year ago, the money we had already paid meant there was a little extra equity left. Our mortgage on first house was £180000 this time it was £234,950 (we paid £6000 in cash ourselves) you will be able to borrow more but I think £100000 or more is unrealistic - can you extend the property you've got?

sandiedc01 Mon 09-May-16 15:05:58

Oh and we extend the term by an extra 2 years.... So depending on how many years you have you could push that back a little

evilnaggingwife Mon 09-May-16 15:07:19

Who knows! All I know is, I have young children and would ideally like a larger home to house growing family but I'm paying a fortune in childcare and working 4 days a week so my salary/career isn't exactly moving up right now! Maybe people inherit? Maybe people get lucky?

NewLife4Me Mon 09-May-16 15:08:11

We managed it by starting off really small in shit holes to be precise.
did the house up, made a profit and moved to the next house, a 3 bed shil hole that we did up.
Then, you guessed, the same on a four bed and so on.

I think to be able to do it today you need to do the same and go for houses and areas that are much less than you'd usually go for.
You sound like you are in an expensive area you could almost get a mansion for that sort of money in some places.

splendide Mon 09-May-16 15:12:26

We moved to a cheaper area. So we sold our 1 bed flat in zone 2 and bought a 3 bed house in zone 6 for the same money. Can't do it again though so we're also a bit stuck.

I actually earn 3x what I did when I first bought the flat but I wouldn't want to borrow on such a big multiplier again.

MyLocal Mon 09-May-16 15:12:47

Just curious but does anyone else think expectations have changed over the years too?

When we bought our first house (ok it was 25 years ago) the expectation was you started with a 2 bed terrace, then when funds permitted you moved up to a three bed semi and that was it. These days so many people (and I could be generalising in our area, it being the north) want to start in a three bed semi and then expect a four bed detached even if they don't have a hope of paying it off before retirement.

It just seems all different to me, expectations are so much higher so moving may seem so much harder.

I dunno, just a random observation from my perspective.

UnderTheGreenwoodTree Mon 09-May-16 15:13:31

An awful lot of people do it on the equity when house prices are rising astronomically. Others get pay rises, windfalls etc. Or can manage bigger mortgages as they get older.

We started 20yrs ago in a 60k house, then sold that a year later for 85K. Moved up from there. We now have a 500k house, and a mortgage for about 280k. Others I know have done far better than us from the property market too.

splendide Mon 09-May-16 15:16:56

The problem with relying on rising prices is that the house you want to move to will have risen too. We are in a 600K ish house on a 200k mortgage (all equity as a result of property prices rising - we've always been interest only). So brilliant I have a theoretical gain of 400k but meanwhile, (while my 3 bed terrace with no parking, shit garden and downstairs bathroom has been becoming ridiculously priced) the 4 bed with a garden and a parking space is now a million.

curren Mon 09-May-16 15:17:15

I started when I was 18z

Bought a dump, did it up, slowly. Dh moved in and we got married and finished doing it up. Sold it.

Bought another house and did that up. But not as bad as the first as we wanted kids. And went from there.

The house we are in now is out forever house. It's a new build. 4 years in, I am bored so we are having it remodelled as I type. And that will put the value up again.

It wasn't easy and tbh I get pissed off when people assume I must have been left some money.

Iggi999 Mon 09-May-16 15:17:19

My expectations are low. My parents earned far less than us (and DM didn't work) yet had a nice 3 bed semi, the same around here would cost in the upper three hundred thousands and is unobtainable for us.

shockedballoon Mon 09-May-16 15:17:53

We're managing by merging households with my mum! Possibly a bit drastic for some....
She's sold her house and bought a small retirement flat with most of her savings (she was mortgage free on the house too) and we're selling ours. With the equity + money from mum's house + bigger mortgage we'll have enough for a house that has sufficient space for a ground floor annexe for mum. She'll then live between the 2 until the highly likely time when she needs/wants to live with us full time (she has some health issues)
Appreciate that we are v lucky to have this option though, we'd struggle otherwise. And of course it works best for mum too.

MarthaCliffYouCunt Mon 09-May-16 15:21:48

I agree expectations are different.

Tbh i think a lot of people are going to have to rethink the idea of the "next one up" and make the best of the space they have. Or move to cheaper areas.

evilnaggingwife Mon 09-May-16 15:25:14

I don't feel I'm expecting too much. I would love a three bed semi with drive and decent garden. This is the same house my parents started in... When my mum wasn't working shock

NewLife4Me Mon 09-May-16 15:27:13

My local,
Yes I have found this too.
Also, years ago there were fewer dual income families so no money went on childcare.
We never paid a penny childcare, as I didn't work and as we were a low income family did the work on the house ourselves. Very rarely did we pay tradesmen, only if it was something we really couldn't manage ourselves.
My dh learned how to do most jobs on the house except electrical and boiler which was left to the professionals.
It's so easier to get in front with a sahp, because you have the time to do all these things and it can save you far more than you can earn by both working.
It is beginning to pay off for us now at 50.
We still only have a low income but mortgage paid off ages ago on our home and second home which we rent usually.

mrsmortis Mon 09-May-16 15:27:16

We moved. What we sold our 3 bed end of terrace for got us a much bigger 4 bed semi further out. I pay the price in the length of my commute though.

Pootles2010 Mon 09-May-16 15:29:07

Yeah I think either you have to increase your income or lower expectations - a 300k house for a couple on 60k is pretty good going!

We're on similar ish, our house is about 180k i reckon?

And terraced/smaller garden/out of town aren't the end of the world either.

MarthaCliffYouCunt Mon 09-May-16 15:29:35

This is the same house my parents started in... When my mum wasn't working shock

I'm guessing that was at least over 30 years ago? Its a vastly different market and economy. You cant seriously expect things to stay the same as when your mum was buying her first house.

MsRinky Mon 09-May-16 15:31:32

You can tell yourself people inherit or "get lucky" if it makes you feel better, but to be able to buy something more expensive, you have to be able to access more money, either by earning more, owing less (overpaying) or doing the kind of improvements that outstrip the market.

Isn't it obvious that a rising property market just makes everything more expensive, and that the gaps between different types of houses just get wider? It sounds as if you just expected to be able to move up as an automatic process. You won't have paid much off the capital of a repayment mortgage in 3 years. Remortgage to a lower rate if you can, but keep your repayments the same as they are now so that you are overpaying. Or move somewhere cheaper.

MarthaCliffYouCunt Mon 09-May-16 15:31:55

Fwiw a 3 bed terrace where i am (ive just moved out of one) in doer upper condition starts around £40k. In great condition- up to about £80k

shovetheholly Mon 09-May-16 15:32:02

I don't think expectations have risen - quite the opposite. I think what is happening is many people are modelling their future on that of their parents at the same age. The narrative, for a long time, is that everyone will do at least as well as their folks did. What that fails to realise is that younger people now are actually quite a lot poorer in terms of what they can afford as housing has increased in value so much faster than most middle class wages, and many younger people are far more burdened by things like student debt.

coffeeisnectar Mon 09-May-16 15:32:22

I bought my first flat (a one bed) in 1997. It was an absolute dump and I got it very cheaply.

I had to put in central heating, convert to a two bed and rewire the whole place. I had to replaster all the walls and replace all the flooring. It all got done over a very long time and I spent years living in a small building site.

I sold it last year for £65k profit. However, that was in Scotland and I'm now in the south of England and have no chance of getting back on the housing ladder. We rent a three bed terraced house which we love and although it's not got a massive garden we are very happy here.

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