To think it IS possible to get on the housing ladder?

[SleepyHeadThisTime]

I'm not talking about people living in London - god I would not like to be a first time buyer there!

However, I live in one of the most expensive areas for housing in the country and DH and I have spent the last 10 years scrimping and saving to make it to our 'forever home'. Our first house was an ex council house and an absolute dive but we ploughed all our savings into it, did it up, sold it and did the same again twice more. We have never earned more than 40k per year between us.

AIBU to think there is an element of choice about getting on the housing ladder? I have friends who say we're so lucky to be in the position we're in, however when we were spending every weekend sanding, painting, tiling and the rest, they were having holidays abroad, meals and nights out and new cars?

I don't begrudge them this (we're now enjoying all these perks) but I am a bit irked that it's put down to 'luck' and not bloody hard work and very frugal money management?

Surely if you're earning there is the potential to get on the property ladder? I know some who weren't willing to go down our route but still managed it through the government help to buy and shared ownership schemes.

I understand circumstances such as buying on your own and being on a low salary etc make this much more difficult but when I read about 'millenials' earning 30k plus per year and living at home with parents because they can afford to buy it makes me a bit

Btw DH and I bought our first house in 2010 so not in the golden era when houses were only about 3 times yearly salary!

Well good for you, what a goady post.
How do you think you have made people feel who can't afford a house?

Hmm, you are BU.
Wasn't so hard 10, or even five years ago. Three years ago we sat down seriously and said, we can't afford to buy here- average 3 bed house was at the 270 mark.

An hour away houses were a little bigger for 100ish less. Just about doable for us. We took into account that property prices would shoot up, but still doable.

In the past 3 years, house prices went from £170k to £280k

Some people don't mind saving, but some quite literally will never ever qualify to the mortgage that's needed.

Don't mortgage advisors work on a 3x income rule?

Our income is 70k a year, we can get £210 mortgage if that's right. Plus we need to save a years wage, whilst house prices inflate and inflate... all the while we're growing older.

Seriously? I have a house I couldn’t possibly afford on my current salary because I bought it 15 years ago. I understand that is down to luck more than anything else. Why can’t you?

deposits needed are huge now, most of my friends bought years ago on 100% mortgages. By the time we saved the £50k+ needed we would actually probably need £100k by then instead.

My boss has just bought her first home, in an expensive part of the south-east.

She has scrimped and scraped for 10 years. She has never had a decent car (a car is essential in our job), has had one or two holidays in all that time, bought most of her clothes in charity shops, restricted her going out to the minimum, has a SIM only contract on her sister's old phone, has rented in house shares, often done 2 jobs and generally lived like a pauper.

Despite not being on a high salary (she was on £24k until about 2 years ago, and is only on £26.5k now), she managed to save a deposit big enough to buy a flat for just under £150k.

She completed on the flat a couple of weeks ago, and is thrilled to bits to have managed this before she reached the age of 30!

You were on the housing ladder 10 years ago.

^This

In lots of areas outside the south east yes, it's possible for people who earn more than the local median salary to purchase a property. There'll also be people in those areas and income brackets who decide they'd rather spend their money on something other than buying an overpriced, money burning dive. For them, not buying is a choice.

The question you should be asking yourself though is what about the rest. Why is your focus on such a small minority of the population, rather than those who don't have a choice? That you're mentioning schemes as risky as shared ownership and help to buy as decent possibilities is very significant in itself.

Bought our house 7 years ago, at a hugely inflated price (basically got it for pre-crash price) and spent all our money on it as we couldn’t get a decent mortgage due to a joint salary of 40k. But subsequent valuations (and local sales) have meant that our property value is likely 100-150k higher. Say what you want, but for people who actually do get on the property ladder, returns are good.

Yes there are cheaper houses out there but they are nowhere near family/jobs/kids schools etc. I don’t want to move up north or the Welsh valleys as there are no jobs in DHs field, etc

Crisscrosscranky-
I agree, we moved to a cheaper area, that cheaper area is now as expensive as the area we moved away from. A 3 bed house is £280+ just this morning I was looking, most are way up in the £300s, we moved here because houses were below £200!

Eleven years ago I worked with a lady who wanted to buy a flat but had minimal deposit. She went to a mortgage broker who skilfully amended her documents so she looked to be more able to afford it than she really was. Since then with the financial crisis banks are far more strict and less willing to accept low deposits.
As a pp said, for many unless you are given help or inheritance from family or live with parents while you save, it is simply impossible to save the appropriate deposits.

I'm in London so skewed but I honestly don't understand how young people are meant to get on the ladder these days.

It depends where you live. The first house we bought years ago is currently on sale for £70k. We used to live in London and moved here so we could afford to buy. We love it here, only thing I miss are the national museums and galleries.

We earn 25k per year between us, our rent is 560 per month, include the other bills as well there is no extra money at the end of the month.
We have never been on holiday, have a very old car, don't have take aways or dine out. Our only luxury is phone bills which equate to £30 a month.
We live in a very low paid area and even with a degree you'd be lucky to earn over 20k per year.
The house prices do not reflect this.
So please explain how we are meant to save for a 30k plus deposit to get on the ladder? Because to me without a substantial loan or a very generous (non existent) rich family member it just isn't possible

And we are well away from family. Nobody in DPs family can buy a house where they were brought up. It is just too expensive. DP's sister has stayed there and rents. You have to decide what matters to you.

If you want prices to fall, either more council houses need to be built, and/or there buy to let needs to be made unattractive. It was buy to let that really changed things. Before then, the houses that first time buyers bought had to be affordable to some first time buyers.

Ravingroo Do you think those returns will continue? Where I am prices (already high) have stagnated for 3 years.

Dh and I lived in shared houses and then rented a flat together while we saved for our deposit. As I said before having children, living in an area where house prices are high and buying on your own make it much more difficult and those kind of circumstances aren't the ones I'm talking about.

Lakielady congratulations to your boss! She is a wonderful example of how I think compromise and frugality are, in some cases, (not all!) the decider between buying a house and not, not house prices themselves.

Nice if you have the skill and ability to do the renovations yourself too. Not everyone does.

I really hate these type of threads, because it feels very judgey.

Let's be honest, the deposits that most people will need to afford a house that's suitable, are huge.

My FIL earned a wage not too disimilar to what we earn now, but in the 80s, they bought a house for £15k, that mortgage was 20 odd years. Our deposit would be more than their mortgage was.

Doesn't really seem fair, not that moaning will change anything. But it's a different game now we're talking about deposits for teeny tiny houses being more than other people's houses cost.

I'd love to know how, if you were in your early 20s, on the same income you would manage as a first time buyer in the current economic climate.

@getsorted - yes I think they will. We live on a tiny Island which even after Brexit will have a higher population than Australia and Canada combined. Brexit will probably end up driving prices up as the UK issues more long term visas to wealthier immigrants that encourage them to buy. Have seen it already in Buckinghamshire and Leicestershire where house prices are driven by Arab / Indian / Chinese migrants who then keep hold of the properties when they become non-residents.

YABU

ten years ago you could get a mortgage with a 5% deposit. They just don’t exist anymore.

Prices have risen far faster than wages, deposits required have doubled or trebled, cost of living alone has risen more than wages so it’s harder to save while paying extortionate rent.

Just because you could do something ten years ago in a totally different financial climate doesn’t mean it’s as easy now

There are houses in most large conurbations near to job markets for less than 100k. They're often not going to be pretty, but they exist. It isn't just a Welsh valleys or equivalent thing. The problem is that even eg 75k houses in Oldham are typically an unaffordable multiple of local median incomes. Sure, the single person on 22k can probably get a mortgage on it and thus isn't entirely priced out of the Greater Manchester region, but most people in the local area won't earn anything like that much.

This is why OPs approach is flawed. She's talking about a subset of what is already a minority of the population, and extrapolating, without considering either the rarity of this or the consequences. Because OP and DP on their 40k buying the wreck instead of the nicer property that their equivalents in 2000 could've got, have also priced someone on a lower income out of the wreck.

(Not a criticism of your choice to buy the property btw OP, you're as much a hostage to prevailing housing market situation as anyone else. Only of your approach to analysing the situation).

See I don't agree that young people should have to live like paupers to get on the ladder. By all means save & don't be out brunching weekly but surely they should have some fun?

Plenty of time for frugality once children arrive!

10 years ago people were still paying mortgage interest rates of 5-6 per cent.

I do get what you mean OP, in that I know people similar to the ones you describe.

For example, one friend whose deposit of about 30k came entirely from her parents, in spite of both her and her partner earning well.

She goes on five or six holidays a year, buys an insane amount of clothes, and eats out constantly. She could have contributed substantially to her deposit, but in her own words 'it's important to treat yourself'.

No, she shouldn't have lived in misery purely to get on the housing ladder, but there was no effort whatsoever to hold back on spending in any way to achieve it. My OH and I are both the sort to put money by first and treat ourselves second, so our entire 55k deposit was provided by us.

Incidentally, when it came to buying, she insisted that she HAD to live in a particular neighborhood, and HAD to fulfill all sorts of picky criteria, and got a 35 year mortgage in order to afford it. We could have bought a house almost double the price but chose to keep lower.

I don't think that either I or the OP are saying that everyone finds it easy to get a mortgage, just that there definitely are entitled, spendy and privileged people out there skewing the narrative by blethering on about their poverty that doesn't really exist.