Mortgage payments of less than £1000 a month are a bit of a thing of the past

[Chillisnaps]

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.

@Doseofreality

I don't understand why your children will benefit from your life insurance? Those policies are only for untimely deaths? My apologies if that is what you meant. I hope you are ok

I completely agree with you-it’s frightening and seems to have happened really quickly. We appreciate that we were very lucky when we bought and how that has meant we were able to pay the mortgage off early. I worry that my adult kids will never be able to afford to get on the housing ladder. They will have horrific student loans to pay as well!

We brought our 3 bed house as FTBs in 2016 with a 5% deposit. We sold our house 6 years later and made £180K which we put towards the next house. Now, in 2024, what we paid for our 3 bed house wouldn’t get you a 1 bed flat in our area. We brought at just the right time and thank our lucky stars. FTBs today, I feel sorry for.

The Indians and Oligarchs, don't worry. They leave them empty, they're just for investment purposes.

Should be illegal to own property unless you live in the UK full time and/or are a UK citizen.

And to @Pollipops1 point about declining birth rate in London.

The running ‘joke’ (you have to laugh) among my friends is:

• £3-4k mortgage
• £3-4k childcare for two at nursery

Everyone is skint.

This is why we're relocating in August. We currently pay over £1k a month rent for a 3 bed in very poor condition. If we're ever going to pay off a mortgage before retirement we need to buy now and we can't buy even a 3 bed here, never mind a 4 bed (3 teens).
We will still be paying more in mortgage payments than we would renting, because of interest rates but at least the mortgage ends one day.

I pay £600 a month for a 3 bed semi in the South. It cost £200k just over five years ago and we were paying £700 a month (5 year fix term). We’ve been overpaying as much as we can though in that time. It’s now worth about £250k.

Yes we bought a house 5 years ago in 2019, now said house is worth about 50k more and much higher interest rates being offered on mortgages. I suppose wages have risen a bit but nowhere near in line with this. We wouldn’t have been able to buy it if conditions were how they are now. House prices must surely be falling soon? There’s no way first-time buyers can afford current prices with a 5/6% interest 😳

@MidnightPatrol Im not sure what point you are trying to make re birth rates?

https://www.cypnow.co.uk/analysis/article/tackling-decline-in-london-pupil-numbers

Problem is, a lot of people can pay it. And do. House prices are shocking in our region, including new builds, yet people keep managing to buy them.

Bought a new house 2006 I think, sadly ours has depreciated, a few neighbours have sold at a loss.

I agree it's quite frightening .

Just had a look in our area. You can get a flat for £100 - £150k. £200k for an old style terrace with work needing doing or £230k for ex-council semi. And houses are generally fairly reasonable in my area . But the advertised mortgages for even the cheapest houses on right move are now around £1000 per month . Easy to see why older people who have paid off their mortgage (and this includes me) are so much better off than younger families.

This isn't a new phenomenon. The town I grew up in (home counties) was beyond my reach 30+ years ago despite being a qualified professional. The only people who could afford it had benefited from timely and sizeable inheritances.

A couple of friends of DB's was in that happy position. The only child of only children plus some childless great relatives. So capital was funnelled down to them. DB is deeply envious.

Instead we settled in Northamptonshire. It is still affordable now. Plus it's commutable to London if you are only going in a couple of days per week.

I’m agreeing with the poster re: declining birth rate in London and pointing out you can spend ~£7-8k a month post-tax to fund a three-bed property and two sets of nursery fees.

People aren’t having children in London because it’s completely unaffordable.

The population of Britain had increased from 58 to 68 million people in the past 25 years. That's if you believe the government figures.

There were an additional 1.2 million visas issued last year.

Unless there's a massive house building programme, house prices are only going one way.

I’m up North, a decade ago it was still affordable.

My house was valued and had risen by around 180% a decade ago, we contemplated moving due to DH commute but decided not to. Now the area has become very popular and the exact house sold next door for 400% more than we paid in 1999.

A house in my road sold for 600k last year, it is a nice house 5 bed, drive for 2 cars but a postage stamp size garden. Nothing cost that much in my town a decade ago.

@Sweetandsaltyburn true of our road, new neighbours are CEO of a company and an engineer. Other side and residents for 40 years both worked as factory hands.

The higher interest rates are slowly affecting house prices.

Around here (SE) the expensive houses, 650k+++ are not selling, all end up reduced and still not selling.

I think there is a delay people are hoping the interest rates will drop but they won't go down to historic lows again. You will need time means tested up to 8%, the mortgage market are trying to offer 35 year mortgages and intergenerational mortgages just to keep house prices high. It's built on sand.

Once the FTB are priced out what do you do? If you need to sell you will have to drop the price.

Well, surely it depends on your deposit? I benefited from an inheritance so was able to put down a good deposit on my 180k (3 bed semi, up north). We also currently have a very low rate at 1.2% so are currently paying £250 a month. Obviously this will go up when we remortgage.

Oo! I am loving Ingleby Barwick! Bargain for massive houses! And close to Whitby. I don't actually want to move though as all my family live where I am now.

@MidnightPatrol oh yes that was me, I understand now!

We purchased a 3 bed semi, garage, big front and back garden for 173k in 2020. It was 550 a month. Its gone up to 750 a month now. Hoping the rates drop before its up in 2026! We would struggle on over 1000k a month

We need to address the elephant in the room as it is seriously causing problems now. 700,000 people needing a room arrived on these shores last year.

UK population growth is just above 1% a year, the number of homes is increasing by about 0.5% per year.