Never going to buy a house

[Juiceey]

Just that, really. I feel really sad about it.

Me and OH are in our mid thirties and forties and know it's realistically never going to happen for us. We live in Herts and pay a whopping £1500 a month for rent (for a 2 bed house >not envy) and simply can't afford to save for a deposit as well. On top of that we're in an expensive town anyway, a 2 bed house to buy is at least 400k.

It's sad, considering we both earn good money, to know we're in this position. I'm trying to stay positive about it- we're SUPER lucky after years of bad luck (moving every year thanks to landlords selling etc) to be in a secure lovely let- our house is owned by a charity, they will never sell or evict us, and is about 10 times nicer than anything we could ever dream of buying. It's just small but at least we can decorate as we wish and feel really happy here.

(We really can't move away somewhere cheaper. DC are at school, we live smack in the middle of both of our workplaces, I have a grandparent who relies on me etc, not to mention endless friends and family. We couldn't/wouldn't want to live away from our people)

So how do I get over the sadness?

@The80sweregreat absolutely agree with you!

I think many people are in your position, and realistically it's impossible to buy once you have children especially , without inheritance/massive salary/ lottery win. Most people I know either relied on parents for the deposit or lived with parents until their mid to late 20s in order to save a deposit themselves.

@orangegerbil I think that's a bit sweeping, to say it's impossible to buy when you have children. Sure if you have children into your 30s and then try to buy without deposit help it'll be difficult, but we had our children in our very early 20s (not planned or recommended!) but the benefit was we had a longer period of time to save up, we were also nearly out of the childcare stages when it came to getting the mortgage.

Also, we did make the decision to move to a cheaper area away from family, everyone has different priorities but having moved around a lot in our 20s we know we can make any area work but a house was a priority for us, we are public sector workers so may as well shoot for a cheaper area as our wages aren't really impacted by location so better off somewhere cheaper.

So it's not impossible, but it depends on the decisions you want to make. Not wanting to move area, while completely understandable, is one that will make buying very difficult. My parents moved from a very expensive SE area to a much cheaper rural area when I was a child, as a result my family is more dispersed but it meant I was comfortable making the same decision for my family. But it isn't for everyone of course.

It isn’t that you can’t to afford to buy a house. But you can’t afford to buy a house in the area you live.

Why not buy something in a cheaper area and work your way back up.

Atm you are saving £1300 per month but then spending £2000 per month to stay in a posh area.

Normally nobody agrees with me on this forum so it's nice when someone does! 😀

I know a few people who made a profit on council homes : all good for them, but when this first came in I think that the government of the day expected people to buy and stay put! I could be wrong , but this is how it was first put across : didn't work that well though! The woman who owned our first house in Essex made about 40 k profit (end of the 1980s ) from the council and us and then disappeared to Wales! (Probably a millionaire now ! Lol 😂 )

We really can't move. Sorry.

DW works in London and already has a long commute and no, she's not about to change the job she's been in for 15 years and is happy in. We can't move any further out and extend her commute any further. I also have an elderly grandparent I look after here, plus the DC's dad.

Totally understand your reasons for not moving Op, particularly the DC’s dad. That’s non-negotiable so there’s no point debating further whether a move further afield would be an idea.

Have you thought about buying a property in a cheaper area to rent out? It would at least get you a foot on the ladder and something for retirement although I have no idea how hard or easy BTL mortgages are at the moment. Even if you could save £10k that’s a 25% deposit on a £40k flat/house somewhere very cheap. It won’t make you a millionaire but it’s a foot on the ladder and an asset that would hopefully appreciate over the long term.

I agree with others that the amount you’re saving does seem low for your incomes. If you had an achievable goal, would you be able to motivate yourself to find ways to save a bit more?

Juiceey

Have you tried the Rightmove where can I live search

You put in where you need to be and how much time you want to spend getting there. You can put in several destinations
and it comes up with areas you might not have thought of.

Even putting in your ex’s and how long you can accept being away from them.

Sometimes it isn’t the case of a longer commute it could just be a case of moving in a different direction.

You do have to accept that if you want to live in your rental property you have the worry that on retirement you might not be able to afford it or if the charity ups the rent it could end up costing you a lot more than you have.

Otherwise something has to give and sacrifices have to be made.
People move all the time so saying you are with your people really isn’t a reason to stay
Ultimately 10 or 15 years from now you could find yourself in a community where everyone has moved on and you are left a stranger in your area.

[quote BrieAndChilli]@8T8w I meant 2k a year!! God I wish I had 2k a month to save 😂[/quote]
Phew!! I was really hoping you'd worked it out wrong though, that would have been an amazing realisation. I'm sorry it is difficult for some many of us.

@Juiceey I feek for you. We are in similar situation, and are saving hard. What we've talked about before (but done nothing about yet) is buying a property in a cheaper area, that doesn't need to be near/jobs, for retirement purposes. That way it's somewhere to live when we can't or won't work, that doesn't need rent paying on it. It's not a very uplifting thought, but there's no way that we can afford to still be renting in 20-ish years.

For comparison, we're not in the UK but property prices are similar to London (if not more - depending on area of course).

I FEEL for you.. 😂

That's a good plan. Although I had read BTL mortgages are really hard to get for first time buyers.

@Juiceey have you looked at help to buy or shared ownership? You may decide it's not for you especially on weighing up your strong rental position, but worth looking into to rule it out if nothing else. Lots of myths around both but it's a good option in certain circumstances.

Give it 6 months OP. We're due a house price correction soon. Just save as much as you can for a deposit, in the meantime. Some forecasters are predicting a 15% drop in house prices. Which is why a lot of lenders have pulled their 5 and 10% deposit mortgages.

Perhaps the government should relaunch mass council house building on a scale that existed before the 1980s. Would be a cheaper alternative to private renting and buying.

This would only be popular if the same conditions were attached to getting a council house, as they were pre 1980s. Ie normal working people, with a strong connection to the local area, were able to get a council house.

I'm not so sure about a big house crash : only because I listen to the radio a fair bit and most of the experts they tend to interview on lbc or five live are of the opinion they won't drop hugely. However, I m aware that the banks are tightening up their criteria for lending and it is harder to get a mortgage just now , so maybe these people are wrong? Even a 10 percent drop around here wouldn't help my son buy anything on his own , but then he only has a just above min wage job etc but people with two incomes it would help a lot I'm sure.
A bigger crash would only encourage more ' but to let' too I think even though that isn't as easy to do as it once was I believe.
Have to see what happens when furlough ends and how the employment figures are looking. Could be a big crash then?

A bigger crash would only encourage more ' but to let' too I think even though that isn't as easy to do as it once was I believe.

Yes, have a look at the tax changes implemented over the past few years, along with the tightening up up of lending for buy to let's and increased regulation (EPC and HMO for example).

Have to see what happens when furlough ends and how the employment figures are looking. Could be a big crash then?

Yes, if we have high rates of unemployment then there will be a crash, less demand, less potential buyers. Those in secure jobs will do well out of it. We started looking at the end of last year but put it on hold while Corona lockdown happened. We're now watching closely. We've got a decent deposit and secure jobs, so we don't think there is any harm in watching the market for 6 months before we decide.

That’s a very strong income OP, I think you need to look at the choices you make which mean you can’t also buy your own house. Even with rent of £1500 there’s a good £3.5k a month to play with, many people live on much much less so while you say you live frugally my guess is we might both have a different definition of frugal.

If you are earning just under £100,000 per year between you then I can see that you could spend it all but I am unsure you are really being that frugal.Especially if you are spending £1000 per year on Netflix and Sky.

Realistically you can’t really afford to live in that area. It only takes one of you to lose your job in these uncertain times and everything will fall and long term with your age it is going to get harder and harder to get a mortgage and come retirement virtually impossible to stay where you are.

I know Hertfordshire quite well and with what you have said if you in the general area of where I think you are
I think there are cheaper areas coming further towards London or going out or to the side with quicker commutes.

Maybe you can live 20 or 30 minutes away from your parents and the children can change schools.

Maybe you can be 40 minutes away from the ex. Not too sure why him not moving means you can’t move.

I think you have to be flexible and decide what is going to give otherwise if anything changes you could find yourself moving and alternative choices could dry up.

As I said the Rightmove Where Can I Live does throw up some interesting areas you might not have thought of.
Then with much less outgoings you can then save more so you can move back to the village in time. If that is what you want.

At the moment though I think you are in a financially precarious position

I'm not spending a grand a year on Netflix and Sky! We don't even have Sky. That was a different poster.

I don’t think home ownership is out of the realms for many. Realistically the time for getting a house deposit is straight out of education with no ties when you can work all hours, two jobs etc and live relatively cheaply in house shares etc.

What many mean is they want to live in x area, have children, the whole big white wedding etc and hence then can’t afford to buy.

Sorry mixed up posts.

But what about the rest of my post.

I think you are in denial about your situation

@JessStu

Give it 6 months OP. We're due a house price correction soon. Just save as much as you can for a deposit, in the meantime. Some forecasters are predicting a 15% drop in house prices. Which is why a lot of lenders have pulled their 5 and 10% deposit mortgages.

They've been predicting a big crash for the past decade. It hasn't happened.

Some forecasters are predicting a 15% drop in house prices

At the moment house prices in areas I am looking at seem to be rising. E.g. stunning terrace house that sold last November for £250,000. Same type of house. 3 doors down which needs at least £25000 spent on it is up for £250,000 and I am seeing this over and over.

Even auctions have gone through the roof.

Houses that need gutting at auction are going for the same as the beautifully presented ones went for a few months ago

Saw a flat with 3 years lease left on it.
The flat was rented out.
Even if you owned it for 2 year and then tried to extend the lease it would be touch and go that the lease wouldnt run out and the lease extension would have cost quite a bit.

The most it should have gone for I think was £30,000. (Potential of £36000 rental income and the risk involved that the tenants could leave or if you could extend the lease it would be extortionate)
It got sold for over £100,000
Even just adding the lease extension on it. Let alone it needing any work it would work out more than the ones being sold down the street.

Yes we might be facing a 15% drop but is that drop from prices in January or from the prices having risen recently

Can you keep saving as hard as you can then get yourselves a buy to let in a cheaper area and hand it over to a letting agent to manage?