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Original poster

How can anyone afford to get a mortgage when banks supposedly only loan out x3.5 of your yearly salary?

103 replies

TwixBix1 · 25/02/2019 21:59

Most people when talking about buying a house always complain about how difficult and long it was to save up enough for the deposit (which is 5% minimum but can be more)..

Yet to me, it seems the deposit isn't too bad and it's finding a mortgage that'll cover the rest which is impossibe.

Say I wanted to buy a £250k flat/house and I pay 20k deposit towards it. That means the mortgage should cover 230k.. if banks only give mortgages up to x3.5 of your salary, surely I''d need to be earning at least £65,000 to get a mortgage for a measly 250k flat or house?

If that's the case, I feel like very few people would be homeowners..

Aside from having a joint mortgage, what's a way to get around this?

OP posts:
grasspigeons · 26/02/2019 08:07

How stuck are you in an expensive area - changing areas isnt always easy but moving somwhere cheaper is how lots of people do it.

CherryPavlova · 26/02/2019 08:07

It is hard nowadays in many areas. I know if we were moving to the area we now live in as the young family we couldn’t afford a house big enough to live in.

Our daughter bought in Winchester but had a 80k deposit and now has a huge mortgage. There house has risen in price but that’s not real money as they’ll still need to buy at same price range when they move up to a bigger property.

Our son used armed forces help to buy to boost his deposit. He couldn’t have afforded it otherwise as he’s bought alone as his girlfriend is still at university.

They both went to independent mortgage adviser and got good deals that maximised what they could afford.

CherryPavlova · 26/02/2019 08:09

Our sons flat is SE - nice area - and under £250.

Interested in this thread?

Then you might like threads about this subject:

General money
anniehm · 26/02/2019 08:09

Depends where you live - flats start at £60k here. My friends just bought a house and they are on minimum wage but in London forget it

adaline · 26/02/2019 08:09

250k here would buy you a 4-5 bed detached house with huge front and back gardens - it all depends on your location.

Our house is a tiny two-bed terrace that DH bought before we were married - his deposit was 5k.

If you want to live in London or the SE then you need to accept your money really won't go that far!

clairemcnam · 26/02/2019 08:11

There are cheaper places to buy in the SE. When people say they can't afford to buy in the SE, what they mean is they can not afford to buy in desirable places in the SE.

eurochick · 26/02/2019 08:14

You buy a small flat rather than a house. You buy in a less good area. You buy with someone else.

I can't think of any one I know who started out buying a house on their own, and most of my friends are higher earners (doctors, lawyers, bankers)

downcasteyes · 26/02/2019 08:17

OK, sidestepping those with the very obvious point that houses cost more in some areas of the country than others, I think the model for mortgages is very much geared towards a couple with two salaries these days. Which is really rough on those like yourself who are trying to afford a house by themselves. Earning £65k is a big step up from two people earning £30k.

I do know some people who have bought houses with friends or even siblings to get around this problem. It's not an easy one to solve, though.

SouthernComforts · 26/02/2019 08:19

It's hard. I rent a bog standard mid terrace and my neighbour just sold for 120k. I live on the outskirts of one of the most deprived towns in England. Wages are low. Most jobs advertised are 18-20k for semi professional roles (credit controller for example). It's extremely difficult to buy on your own here.

EvaHarknessRose · 26/02/2019 08:20

I came on to agree with you OP, as I live in an expensive area. But I have taken a look, and there are actually some options locally, flats or one bed apartments, or in a worse area, and similar to how dh and I started out. I guess the dilemma is often being able to rent something nicer vs getting onto the property ladder. And its probably very hard in rural commuter areas especially.

thecatsthecats · 26/02/2019 08:21

I'm so pleased to see the realism on this thread. I argued the same points on another forum, and got shot down with 'why shouldn't someone buy the average house? why should they buy below average?'

The problems in the housing market definitely exist, but it doesn't help if you distort the picture. If I lived in the SE, I would have bought a property up north to let out at market value - less, for a good tennant (hopefully somewhere I could eventually live), and used it to build up equity/subsidise my own rent.

adaline · 26/02/2019 08:22

, I think the model for mortgages is very much geared towards a couple with two salaries these days.

Surely that's only because house prices are much higher these days? Besides, the world was previously geared towards single income families where the dad worked full-time, mum stayed home and kept the house/looked after the children and maybe earned a bit extra taking in ironing or sewing on the side and I know I wouldn't want to go back to that!

UniversalAunt · 26/02/2019 08:22

“Single adults in the past rarely bought houses.”

Nor did many couples.

Widespread home ownership, & the expectation of it, is a relatively recent phenomenon. The past 40 years have seen a substantial shift in attitudes about expectations of home ownership & expansion in the financial services sector. For previous generations, credit & mortgages were not readily available, home ownership required higher incomes, proof of financial probity & deposits so for the many long term rentals or council housing were the norm.

Financial deregulation, right-to-buy, buy-to-let, private house building boom, lack of new public housing stock & technology have changed the face of home ownership in the UK in just over a generation.

havingtochangeusernameagain · 26/02/2019 08:24

I think people are too hung up on area. If you can't afford the area you want you have to buy elsewhere, that's the brutal reality. You need to be near enough to work to be able to commute sensibly but other than that you need to be flexible. Or can you do your job in a less expensive area? For example, if you were a lawyer, there are lots of law firms that pay well for the area in cities like Liverpool and Leeds. Although the house prices aren't that low for the nice areas. But certainly much lower than in the south east of England.

If you are a teacher or shop worker you can go anywhere. It's only certain jobs that are confined to the south east.

It's a wider problem though - that so many jobs are concentrated in the south-east and so people live there. Rather than having the money spent on HS2, I'd rather see the government invest in decent broadband for all (so more people can work from home) and improve existing rail and cycle infrastructure to allow easier commuting as well as tax breaks to encourage more companies to locate away from the south east. There is no point living near London if you only need to go in one day a week and can work from home the rest of the time. Companies say they can't get the skillset outside the south east but it's chicken and egg, people live there because the jobs are there. And if there were more flexibility, people could work from home/co-working places anywhere in the country. It is beginning to happen, I've worked in London companies where people were based in Northern Ireland, Chester and Doncaster and only came into the office say once or twice a month.

DavetheCat2001 · 26/02/2019 08:24

You can find 'sub-prime' mortgage companies that will lend you up to 10x your salary..we are using one for our current house purchase as even though we have over 400k equity in our current property, and OH earns a decent salary, we can't move up to the next level with a multiple of only 3x his salary (London).

You pay a higher interest rate, but the idea is you only remain in the SP mortgage for a short period of time (1-2 years) and then move on to a high street lender.

It's a bit of a risky strategy, and you need to be sure you can make your repayments, but in our case it stacks up and is the only way we can buy the house we want.

Adversecamber22 · 26/02/2019 08:24

I can’t remember the exact stats but while doing research around 1998 I noted figures for people living in single person households had risen hugely from the early 1970’s. Now obviously actual house prices are a huge issue but while there have always been single person households the rise and for people to be able to expect to do so much alone is quite new. No one wants to go back to the days of being left on the shelf at 24 which is what my MIL has talked about and you had to get married. I’m just pointing out it’s quite a new development.

DerelictWreck · 26/02/2019 08:26

banks only give mortgages up to x3.5 of your salary

Banks give out 4.5x your salary (usually) so that's a bit better already!

LordEmsworth · 26/02/2019 08:27

surely I''d need to be earning at least £65,000 to get a mortgage for a measly 250k flat or house?

Hahahahahahahaha. If that's your attitude, you deserve what you get. (I am sitting in the kitchen of my lovely and considerably cheaper home as I type, I realise it won't meet your expectations but that's your problem).

Aaaahfuck · 26/02/2019 08:30

We moved away from London to NE and bought a house for 100k. With 6%deposit. The mortgage was based on my partners salary of 43k as I do freelance and short contract work for part time.
One of the main reasons we left London was we couldn't see how we could afford to buy. We would have been happy with a flat but that was out of our price range.

notanothernam · 26/02/2019 08:34

As a pp has said I'm really not sure why people are still even quoting 3.5-4.5 x salary, that doesn't mean anything these days, yes that might be the starting point but if you have a car on finance, expensive commute, childcare etc that amount is going to drop, significantly. It's affordability that matters.

Wait4nothing · 26/02/2019 08:34

There are still lots of places in the uk where you can get a house at a reasonable price.
I earned around £28k when we bought. House was £108k - so £97.2k mortgage after 10% deposit. So less than 3.5x my annual salary. I was actually married to dh but he was in a new job so they wouldn’t consider his wage (which was better than mine).
Our house is 3 bedroom - room to extend, large kitchen, driveway, garden, quiet village location, within half an hour of 2 towns and 45 mins of 2 cities.

bigcomfypants · 26/02/2019 08:40

Buy a grim run down deliatidated terrace in a northern town for £40k, do it up over 5 years as and when you can afford, sell it for £80K. Buy a run down 3 bed ex council house which belonged to a hoarder. Live in it for 3 years same plan. Sell for £106K. Buy the house you wanted all along.
This is how we got on the ladder, and my siblings. It is very very hard work.

Springisallaround · 26/02/2019 08:43

I live in one of the areas where the gap between salary and house price is the greatest. It meant even though I had a good professional job, I couldn't buy for a long time. It is extremely frustrating.

I don't know why everyone's saying buying a home is a recent thing, it's not in the UK. My grandparents owned their own home, my parents did and it is our generation that has struggled. Even in the 80's my friends who lived in council houses were buying their own homes (well, from the 80's onwards).

Fishwifecalling · 26/02/2019 08:47

I'm hoping that my dd will be able to buy somewhere once she's finished saving her deposit. She'll need a lodger but I'm hoping that if we use our house to guarantee it, or if we have to part own it, then it'll be doable to get her on the property ladder.

claireblueskies · 26/02/2019 08:50

In order to buy a property as a single person, I saved up.

It means I bought in my 30s rather than 20s, but in those 10 years, I wasn't just saving money, I was increasing my earning potential by carefully jobhopping for promotion.

You can't rely on an inheritance (that's just grim) or a partner (you can't plan love) so all you can do is get your finances in the best possible shape and save, save, save. If a bank won't lend to you now, doesn't mean they won't in a few years' time. So get ready.