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.

*fly? Flat! At least if I got swallowed by a fly I wouldn't have a mortgage!

The type of work women do has changed, (more daytime hours rather than early mornings and evenings) the earning potential women have has changed, (university playing a big part in that) the type of childcare families use has changed (childcare is far more regulated now than it used to be, older siblings no longer taking smaller DCs home from school and keeping them until parents got home) so there are more registered childcare providers and more grandparents being seen at schools. Grandparents will also be of the baby boomer generations who have been able to retire earlier than in previous years, this will add to increased grandparent presence at school gates. None of this, however, means that women didnt work before. They did, it just looked different.

Me and DP had both bought on our own. Both did up our houses so made money on them when we sold them. Then bought next house together, because of our profit on old houses we had enough money for a 40% deposit on anothet doer upper and enough money to do it up.
I'm now working part time though because of children so we have very little spare money.
To afford my first house I saved a third of my monthly income for a deposit, a third for doing up costs and the other third for living on. Which means I see people nowadays in their twenties going on holidays to Thailand and three or four weekend breaks etc which I never got to do

Location!

We brought four years ago for £435k. Have spent about no more than £10k on it. Just had valued for £615k and should likely Sell on the day goes on market if we put on at this price and not the higher valuations we receive

Mama, I never did those things either, I did nothing but work in my 20s including weekends. It's not enough to offset crazy prices.

I do really wish I'd chosen a career path that was all about money but no one predicted these prices...well at least I don't think anyone did, not sure.

Enjoying, if you want to buy in the same location then how does that help?

Because it's a very unique location. I could move ten meters away and still be in wonderful location but no chance of getting in to one of the best primary schools in England.

And in terms of our personal circumstances, income has increased by 30%

"
It wasn't easy and tbh I get pissed off when people assume I must have been left some money."

But you bought a house at 18? How is that possible without parental (or other) help?

We got lucky but like to think we made some of our own luck.

Dh and I both work in professional jobs. We bought around 2006 at the peak of the market. Did stretch ourselves and were pretty broke for the first few years but it meant that we didn't outgrow the house for a long time.

With pay rises we started being able to make over payments every month after the fixed rate ended. We also benefitted from going onto a very low svr at that point so by keeping the payments the same we overpaid. We also did some work on the house and had ds1.

Then we got the lucky bit: dh had share options through work that gave us a good lump sum which went to pay off more mortgage.

By the beginning of last year we were mortgage free so started saving to cover costs of moving. Moved last year, into a bigger house in a nicer area taking out a new 30 year mortgage but with manageable monthly payments. We don't plan to move again until this place becomes unmanageable for us!

Since then, ds2 has arrived so hopefully things will be ok with mat leave and extra childcare...

But you bought a house at 18? How is that possible without parental (or other) help?

I'd be interested to know that too...

I soppuse they could have worked, say 48 weekends out of the year for 2 years (age 16 to 18) and done 16 hours over the weekend. At £4.50/hour... that would be £6,912 so as long as her parents paid for EVERYTHING else I guess she could have had a deposit saved up? Plus a bit of interest would make £7.1k probably which is enough for a 10% deposit on a small house in cheap areas.

Enjoyingthepeace that's not exactly something that most people can replicate is it tho? Buying right next door to a highly sought after primary school?

Then we got the lucky bit: dh had share options through work that gave us a good lump sum which went to pay off more mortgage.

You also got lucky from the low SVR.

an entrenched belief in the "property ladder" - because inflation helped motor that along

I think your posts have been spot-on, georgette. The entrenched belief hasn't evaporated along with the wage inflation, though, hence a generation of people wondering how the hell you get to "move up".

I agree with the PPs who've said there's an even greater tendency to want everything glossy, as well. I lived in building sites for about half my working life - it was just obvious you got better value by buying a dump and fixing it. It takes up all your free time and money. Our mortgage interest rates were around 20%, too, so you had to do everything you can to increase the value of the asset.

I'm not down-playing the additional difficulties people have now - it is harder these days - but there seems to be a widely-held misconception that it was all a piece of cake for us. I was very lucky (until I got unlucky, heh,) and it was still a treadmill.

My parents' generation tended to stay in the same house throughout their marriage. It's no crime to have a titchy garden, and kids don't die from sleeping in bunk beds.

From this perspective - having fallen off the "ladder" and ended up in a tiny rented flat - I often think people are too fixated on property ownership and moving up. We did it when we did because the crazy inflation meant it made sense. Had it been more pragmatic to rent, we would've rented. If wages had been stagnant, we'd have stayed in the first place we bought.

A couple of things you need to remember, I think, are:

1. If you 'own' one property, then it's not a business. It's your home. You're always going to need one, so having a reasonably secure roof over your head trumps any conceit of worth/value.
2. You don't own it, the bank does. And it's a numbers game. Sometimes the game favours those who hock themselves to the limit, sometimes it punishes them. You've got to evaluate the situation as it applies to you.

Since Gideon's fantasy recovery plan relies almost entirely on property price inflation, interest rates will stay low. But it's only a confidence trick; the bubble's likely to pop before too very long. People need to make their own judgements about how much debt they'll be willing to carry if/when borrowing gets more expensive.

I loathe this rhetoric that some people worked harder than others. They didn't. They were just bloody lucky at the time.

That's my view as a 1990's graduate in the SE.

Why the need to move up though? I mean if you have the number of bedrooms that you need and like your house then do you really need to move on to a larger, more impressive house unless you want to keep up with the Joneses.

Whois, it is actually!

And if not a school, then something also very attractive e.g easy walking distance to mainline station

Inheritance and a massive mortgage is how we doing it

Martha, here's a link showing the difference in the number of women (or more particularly, mothers) who worked in the 70s compared to the 90s.
www.employment-studies.co.uk/report-summaries/report-summary-women-labour-market-two-decades-change-and-continuity

We sacrificed space. Brought a two bed garden flat. Not set up for families, much more appealing to affluent retired couples (previous two owners being just that). The particulars didn't even mention it was spitting distance from a spectacularly well regarded successful school. As it turned out, the flat was wonderful for our family but now we know the value and we have our children in the school, we feel space has become more of a priority.

Be savvy and your research

The only reason we'd like to move littlehouse is to be out of the city a bit. We're NE though so that doesn't take us too far from DH work. If it doesn't come to pass we're very happy with our home. It needs a lot doing though so we'll probably be here for another 10 years at least anyway!

London is now stratospherically crazy with another bubble on top of the bubble!

georgetteheyersbonnet but what would you do, now, say if you could afford to buy a flat in London and move out of rented. Would you, and just hope that you haven;t bought at the peak of the market, or would you wait - for how long? - for a bit of a correction and hope oyu could afford more?

since I moved to London 4 years ago I've seen prices just go up and up. I'm now in a position to buy and on the one had it feels like there is a a slow doen (which would just be brexit) and on the other hand I don't really see how there is going to be a full on crash.

For sure, the super prime +£2m is dead. The +£1m is pretty slow. But the £500k-£1m bracket is booming. Because that is where the foreign money goes into, and its also what 2 city workers + some BOMD deposit cash can buy around the £500 mark.

There is also an over supply of tiny 'luxury' flats that are no good for families so that is a risk area I think. Whoever thinks that a luxury 2 bed flat is one that is less than 800sq foot needs shooting in my opinion.

"hat would be £6,912 so as long as her parents paid for EVERYTHING else I guess she could have had a deposit saved up?"

I suppose she could have been working full-time from 16, but would a bank give an 18 year-old a mortgage?

Tbf i started my first job in a national bank at just turned 17. I could have started at just turned 16 if i had been quicker off the mark. That was a full time salary of over £12k, bonuses were also still in existence back then (12/13 years ago) and even on my lowest wage bracket were healthy enough. We also had a ridiculous weekend pay rate where i made over £400 for a few hours work over the weekend several times. And I would also have benefitted from a staff mortgage rate which would have helped too. I was living with my parents at the time and only a car to fund and inexpensive mobile to fund so could have saved a hefty enough deposit if i'd been smart.

We've been very lucky and managed to get a house that is our "forever home" as first time buyers. 95% mortgage, sadly, but we'll overpay as much as possible and keep our fingers crossed. The alternative is to rent forever and I just couldn't face it when we had the option to buy, at last.

Enjoyingthepeace but a property near a good school, or a good main line station will already be more expensive than a similar property 10 mins away. So you need to either accept a smaller property, or have more cash to start off with to be able get that prime bit of real estate.

Whois, I lived in London for years and worked in the city, often being involved in property.

£2mil is not super prime. £10mil is super prime and is indeed flat.

£1-£3mil is doing very well.

£500k in London terms is nothing. My little brother's two bed in a grotty part of Brixton is worth £490k