Was chatting with someone I know earlier who bought their 4 bed house in late 2020, and they are paying back £750 a month. We are currently buying a much smaller, cheaper property yet we will be paying a few hundred a month more.
If you bought your house decades ago, low house prices mean you’ve been lucky enough since to gain significant equity.
If you bought 3-5 years ago, although house prices were rising your mortgage rate was likely to be incredibly low.
It’s a catch 22 now.
On a 200k property over 35 years you will be paying around the region of £1000 a month.
In most parts of the country, 200k doesn’t buy you a lot. In parts of the south it would get you nothing. Up north it might buy you a 2 bed, but then you’re paying £1000 a month (minimum!) for a small flat or house not suitable for growing families. It’s unlikely to gain in equity at the rate properties used to and you have to find the cash to move, as well as have the available funds each month to cover the repayments on a more expensive property than this. It might not be possible if having kids has affected your earning potential, or you have large bills such as nursery fees.
What is the answer? Surely something has got to change? I have no idea how anyone younger than me is going to be able to buy their own home and think there are a lot of people who are mortgage-free or halfway into the term who are completely oblivious of this.