To not understand how people afford next house up?

[evilnaggingwife]

We purchased our first house about 3 years ago. A 3 bed terraced house with a tiny garden for around 230k. As first time buyers, we only saved a 5percent deposit and got a mortgage with a high rate! That will end next year when I hope we can get a more sensible rate.

Our house has probably gone up to around 280-300k I'd imagine based on local prices.

dh and I earn around £60k combined (although he is self employed so always tricky to prove income). We have saved enough to pay cost of moving and stamp duty and fees etc of next move.

I keep looking on right move and houses that I would consider next one up are stupid money. I'm talking 3 bed semi with a drive and larger garden... £400-500k!!!! How on earth do people manage this? Are we stuck here forever?

I go to a mortgage calculator online, it tells me how much I can borrow and when I do a search on right move the same types as our house come up... Terraced, not in town, no drive, small garden, small 3rd bedroom.

also depends on the skils as I am sure has been mentioned. DB has done this ,slow start at first, small flat they could do all the work themselves, ie plumbing and plastering, then brought another house, poor area, but they put extension on, made it nicer all round, then they moved to a real do er upper, got trusted well known cheap builders in, and now they are in a 700K plus house thats lovely. Huge extension and added a bedroom and bathroom, they brought it for 300K. NO KIDS.

mango we are exactly the same as you, DH has had no pay increase for 5 years. We brought current house with no thoughts to dc whatsoever, its very very lucky we do have room and a good garden for them.

Three years isn't long to stay somewhere before you move, so I'm not surprised you can't afford to step up yet. But I f you've got the money saved to cover moving costs, maybe chuck it at the mortgage as overpayments or at the property as improvements. Where I live (London zone 4) people are moving in and pushing prices up so fast that it's impossible to think of stepping up here, we'd have to move even further out with implications for commute, as others have already said. So what most people who want more space here do is do a loft conversion to make an extra bed/bath or knock through downstairs to give an illusion of space. Also adds value to the property so when you really want to move in another three years you're in a better position. But equally - count your blessings! A three bedroom house (and 60k joint income) is a pipe dream for some people.

Oh, and we bought a fixer-upper 5 years ago, and as we're doing it ourselves and/or from income rather than savings, it's only half done so far...

Not so much kind frazzledas seeing how difficult life is for young people these days.
I bought a house on my own at 30 -was raised in a council house and parents could not contribute anything (financially) Mortgage rate was I think 18% but I managed,just. I think mortgage was 3.5 times my salary I sold it for 25%more than I paid for it when I married DH two years later .
DH was from more middle class background -his mother had gome back to work (1952 so fairly unusuall)so they could buy .DH married very young and he and first wife bought in London with parental help and moved to Midlands. He bought her out when they split up .So had big mortgage when we got together but on a nice 1930s 3 bed detached.We sold it 5 years after we married for big profit and stretched ouselved to buy 4 bed detached in better school catchment .
Were it not for the fact that DH had two umarried aunts and was an only child(hence the inheritances we have passed on) I do not think my DDs would ever have got on the housing ladder without a partner .Despite both being graduates neither is well paid and cannot expect huge increases in salary .I am so thankful we can help them (I have to say I am astonished at friends far better off than we who will not do the same )

I should add that in the 3years between marrying and having DD1 every spare penny went on paying off our mortgage and this continued after we moved. We reduced it by £60,000 in three years-just as well as DH was made redundant and did not work full time for 8 years .We hung on to the house,just .Still here .I wouldn't want anyone to think we have had everything handed to us on a plate .And both my daughters have a very responsible attitude to money and do not regard what they have been given as a 'right'

Writreforfun, nearest friends family are an hour away. In the 11 months we've been here, I now have a fab group of friends in the village! Just had to get out and take the plunge. I was 38, a SAHM and had lived in London for 20 years!

Move somewhere where housing isn't so stupidly expensive. Obvious I would have thought.

Postchildrenpregranny Things aren't difficult for young people everywhere. Only difficult in places where houses cost stupid money. Plenty of really cheap housing round here.

Graduated in 2007 with fiance, lived one year in a mouldy rented flat in Bath, on a combined wage of under 30k. Bought a 2 bed terrace in Wiltshire with a nice big kitchen in August 2008, 2 weeks before the crash. We paid 25k less than our neighbour did in 2007. That was a 95% mortgage on 123k. We were 23. My parents lent us the 6k deposit.

Stayed 5 years until 2013 when the fixed rate mortgage we had ended, sold up for 125k and used the 12k equity to pay fees and deposit for a 4 bed new build townhouse at 170k on HTB. By then though we were on 20k more combined; now it's closer to 25k.

So I would say for us it was a combination of 2 x salary increases, not having children, and living 2 hours from London in the SW. Most people commute no further than Bristol or Swindon from here. And yes, 3 years is not long enough to build up any equity towards moving - stamp duty etc!

We've "moved up" twice now. Thinking about how we have managed, a few things come to mind.

1. Buying early. We worked and saved from 21 to 23, then we bought our first house for 45k with 5k deposit, while all our friends continued to rent. It needed work, so we did it, which meant next to no nights out with our friends. Sold a couple of years later, just before the meteoric rises of 2007, for £55k, giving us a £15k deposit for next house at £100k.
2. Wage increases allowing us to increase borrowing at each stage.
3. A redundancy payout allowing us to put a big deposit down on our recent purchase. So luck really, although the year of dipping into this to survive while my husband retrained didn't feel very celebratory :).
4. Location. We aren't SE England based, which I thank my lucky stars for every time I watch a property show. We couldn't have afforded to move if we had been. Instead we are based in part of the UK that did see a severe and prolonged crash in house prices. They are still sitting at less than 50% of 2007 prices. We lost money on house no 2 but saved more on house no 3. As an aside, the house price bubble much discussed on here is not really a UK wide issue (although I appreciate the ripple effects of a crash will be far reaching).

So, at least two of those are based around luck, or a fluke of birth. We couldn't have moved once, let alone twice, without them.

Just remembered another one.
5) we moved out of the city for house no2. It was a nicer area and we got more for our money. We decided it didn't make sense to pay a premium to be near all the amenities like restaurants and bars, when we couldn't afford to use them. Our friends thought we were absolutely mad but we prefer our small coastal town by miles :)

Move somewhere where housing isn't so stupidly expensive. Obvious I would have thought.

It might sound obvious but that's not a realistic option for many people. I'd happily move to a cheaper area of the country but both DH and myself work in jobs that are generally based in London. We've both worked in these careers for many years and now earn what I think are good salaries so to try and start again in a field with more jobs outside London wouldn't work financially (and besides, we both enjoy our work).

Also, it seems obvious to me that it's not a good thing for whole cities to become completely unaffordable to all but the wealthiest people.

this is why when people cheer at house prices rising my heart sinks.

house prices rising don't help me even though I own in central london. We like our neighbourhood, so don't want to leave the area. but we are priced out. we only bought a few years ago and couldn't afford our place now.