To be aghast at current house prices?!

[tiredoflooking]

I have been looking at houses for sale in the city we live for about 6 months now. We are a professional couple, we currently own a small city centre flat and have a good deposit saved. I can't find anything even vaguely affordable for us in a relatively decent area. I know there is a housing crisis but what is the story??! Who is able to afford these prices? Are house prices likely to fall? And are we to be flat bound forever or should we move out to the middle of nowhere (where it is only slightly more affordable?) I really dont know what to do anymore, should we just use the deposit to pay off some of our current mortgage and accept we will have to stay where we are? We are trying to conceive and I find constant searching through moving websites and the feeling of potential upheaval quite stressful. I find it really hard to believe that as a hardworking professional in my 30s a house is totally out of my reach!
I would love to hear other peoples thoughts/experiences

YANBU

isithappening I reckon you live near me…

Depends where you live.
I have just bought a 5 bedroomed house in a really good area - we are 20 minutes from the heart of the city- we paid £200K.
We were really happy with the price.

I'm trying to move from Scotland back to the South West of England where I grew up. I'd like to be as close to Bath as possible as the main reason for my move is to provide care and support to my parents, as my mum's health is declining. I don't think there's a single one bedroom flat in Bath on Rightmove at the moment priced below £150,000 - and for that think tiny, in need of renovation and weird layout. Who can afford that sort of money for accommodation that size? Decent one-beds and average two beds (not even lovely Georgian townhouse conversions) are almost a quarter of a million.

Now, I know Bath is a very lovely part of the country, but it's also a part of the country that people who've called it home their entire lives simply can't afford to live anywhere near: rents are extortionate, too. I have no idea who's propping up the market.

We are house hunting at the moment and have a reasonable budget for where we live - 200k which should buy us a decent 4 bed with a garden in a nice area. Dh and I have good jobs and relatively little debt. We've owned our home since we were 25 but have outgrown it - I want a bigger garden, a spare bedroom/office and 2 receps - 200k seems a reasonable amount to pay for that.

I was staying with my parents in north oxford this weekend and the house prices there are obscene.. Who are these people who can afford 400k for a small 3 bed and be happy with it? We'd never be able to afford the sort of house we want there, not in a million years! people seem to be able to though, where do they come from?

I feel especially sorry for people who have no choice but to pay silly money for a tiny new build with no garden, no storage and paper thin walls.

The housing situation in this country is fucked.

I agree that house prices in a lot of places are crazy but I'm always surprised that more people don't do the sums. Yes, salaries are generally better in areas with higher prices, but the salaries in no way match up with the difference in housing costs.

Even in cheaper areas of the country, some of the prices are wildly out of proportion with people's earnings.

We bought years ago, so we're fine, but I feel really sorry for younger couples in our area. Houses are probably amongst the cheapest in the UK, but if you're still looking at £120k for a basic semi, in an area where someone would be considered to have a really good salary if they earn £25k, then it is still going to take a lot of saving and two good salaries to buy that, whereas even 15 years ago a three bed semi would have been achievable on a much lower salary.

I have no idea how people in the south east of England can even afford to rent, never mind buy a house to live in. It's frightening.

It actually causes me great worry and sadness. I privately rent, we receive no housing benefit.
I want a home i can decorate, children's bedrooms i can decorate, a garden i can plant a flower and see it grow, a place where my children get to stay at the same school and move on to secondary with their friends. I want my children to have pets and stability.

We are slowly saving a deposit, but because they will only lend 3x wages at the moment that equals around £100,000. Where we are, we need 300-400k to buy a small starter house. 250k for a flat. Our 'deposit' needs to basically be the majority of the cost of the property. Houses round here really are going up by the £42 a day figure they quote, who gets a £42 pay rise a day?!

If we move areas it will mean closing my partners business and making ten people redundant.

We have life insurance, we struggled to get it as normally it decreases to cover a decreasing mortgage ours needs to increase with rent increases (although our need will decrease).

It eats away at me every day, not an hour goes past where its not there. I just want to settle my family, we live only 2 months away from a potential move.

Yes, 6-figure income here and I remember feeling annoyed that we were still priced out of most London areas. WHO ON EARTH ARE THOSE PEOPLE??? - I thought. And then the house prices in SE London (cheap part) increased by 30% at the time we started to look. My head was so ready to explode :))))

My colleague on the other hand managed to get shared ownership for a new build flat on tiny salary, in 'up-and-coming' area of LOndon. Very pleased.

Yes, gone are the days where a teacher supporting a large family could have a nice house and car.

I'd still advise to speak to mortgage advisor and...yes, estate agents (not all of them total scums))). There are likely to be places for you guys out there.

We bought ours for £180,000 in 2004. It's now worth £350,000. Although that is good for us, it is also absolutely ridiculous. We have 3 dc who will almost certainly have to leave the city of their birth, that they love to ever be able to afford anywhere. Even renting starts at about £800 a month for a studio falt :(

ComtesseDeSpair

I have no idea who's propping up the market.

That would be student landlords. Oldfield Park used to be an area of cheaper family housing, but once the Universities started to expand then the student landlords bought up all the family homes to rent out to students (and to make a killing at their expense). Any area with a university is suffering the same way; there are no family homes available to buy or rent at the lower end of the market.

If you want to be near Bath then your best bet is to look a bit further afield, out to Trowbridge and Melksham, or Keynsham/Bristol.

Melksham £140k

Trowbridge £135k

We are dependent on London for work. But we live in a very cheap suburban town, and commute. We have a 6 figure salary between us and are stuck in a two bed house with a tiny kitchen and one tiny living room as we can't afford anything with 3 beds despite needing it for children. I had a brief rant to my plumber about space issues and he looked blankly at me and said I clearly needed 3 bedrooms so the council would sort me out I'm as liberal as they come and very pro the welfare state but that was a bit of a blow. What the hell are we working our asses off for?

An additional weird twist is that we are looking at privately educating our children - paying £70k total per child (10k / yr) from our income for private primary schooling is more affordable for us than moving to an area with good schools or buying a bigger house to improve our children's childhood - which conservatively for a 3 bed we would live in (not hugely high standards, as I say it's already a skanky town) would be at least £400k which we don't have, £500k plus to live in a nicer part of town.

The whole house of cards will come tumbling down eventually. It's not sustainable forever. We've been very lucky that we bought our potentially forever home first go, so don't really care if the market collapses (which it will, it's all swings and roundabouts) as we don't need to keep climbing the ladder. I am strongly advising people to future proof their next purchase, in case we head into a fall. I appreciate this is easier said than done!

*Apatite" will it? I don't really understand economics...how will it happen? Can anyone explain how it all works in simple terms and how a crash and fall of prices might happen?

I feel like we got really lucky. We are in the Midlands and bought our first house 10 years ago on 100% interest only mortgage with no deposit. It was in a crap area but gave us a foot on the ladder. The market crashed and we were stuck. Our house lost value and it was a cheap 'first time buy' in the first place! However, we were able to continue paying the same mortgage but because the interest rate dropped we were actually over paying which reduced the mortgage slightly. When we came to sell last year we sold it for £10000 more than we paid for it. That combined with our over payments whilst on interest only gave us a small deposit and we were able to buy our forever home. Admittedly, our forever home is a modest 3 bed but it is in a nice area and there is lots of room to extend, so I do feel very lucky. All I will say is I spent several years stuck in a horrible house in a horrible area and never thought we'd get out, but we did. It might be worth talking to a financial adviser, that's what we did and it helped us to see it wasn't impossible even with our small deposit. Good luck.

It's all cyclical in the property market. Except no one knows when the dips will be. Lots of people claim they do, but no one can possibly be sure.

Over very long term, like decades, I believe the property market is a good investment. You have to be able to ride out the lows. However, unlike other assets, people who grow out of their homes are more susceptible to the variations in the market. Anything that forces a sale, eg death, divorce, downsizing puts you in a more vulnerable position. It's prudent to think not only "does this house fit my needs now" but also "if I couldn't sell this house favourably in future, is there potential to extend/adjust and make it work?"

The economics depends on too many factors: interest rates, inflation vs deflation, international property markets, currency, who wins the general election etc I think that's what makes it so difficult to predict and why we keep hearing conflicting advice!

definitely dependent on where you are - we live in a 3 bed detached in the suburbs and paid 160k for it - in the north east with a joint income of approx £50k.

no help from parents in the monetary sense, however did move in with dp's dad for a year to save the deposit. threw everything we had into saving, including both working 2 jobs and not seeing very much of each other. worth it now though.

frightens me to think that some areas would be almost half a million for just a 1 bed flat :\

Yes times have changed. We're both graduates and have always worked, have what I think is a hefty income. We've moved a long way out from where we were renting/working and live in a 2 bed house, bought as a bit of a hovel. We've never had a new car and we're nearly 50. We bought it for £240k in 2007 at what was "the height of the market". Similar houses are selling for £300k now. We couldn't have bought it now, even though we're earning more. It's an awful situation. I can see dc living with us forever.

A 3 bed semi in our area ( East Midlands) is around £170k so not too bad compared to the South East.

I think sqibble's comment 'I can see DC living with us forever' is very important. The economics of it is massive.

MrsTawdrey property busts and booms are simply about supply and demand. At the moment demand is high keeping property prices high; interest rates are at an all time low makes houses more affordable for people, and the economy is ok so people are feeling confident about jobs and having money in their pocket, and additionally foreign investors in particular keeping the London property market expsnsive.

There are a number of things which could make the bubble burst - anything to make the money markets jittery - a Greek exit from the eurozone for example causing instability, or the General election, - interest rates go up people can't afford to buy, and other people can't afford the new rates and therefore to stay in their homes, so the market becomes flooded with properties with less people able to buy, meaning prices go down. A downturn in the economy would mean redundancies and pay cuts, and again no demand for housing.

Yanbu. It is crazy. Methe - oxford house prices are propped up a) by Btl landlords knowing they can make a fortune and b) people who commute to Reading or London and earn higher salaries than are available locally.

My parents live near Oxford and bought their house in1990 for £250k. It was recently valued at £1.5m. They can't find anything to downsize to as they don't want a retirement flat and most stock is snapped up by Btl.

DB and DSIL just moved in with them to start saving for a deposit. They reckon it will take 5 years and they both earn well above average salaries.