AIBU to wonder how people afford huge mortgages and we’re struggling to make ends meet?

[Beanbag12]

AIBU to wonder how people afford huge mortgages and we’re struggling to make ends meet?

We live in a very affluent area in rural Oxfordshire. We rent. The idea of saving for a 10% mortgage is so completely unrealistic as the cheapest 2 beds around here are £220k. We currently spend more than our wages every month (high cost of living, childcare costs). Everyone, and I mean everyone that I work with either already owns or are buying hugely expensive houses. They’re on similar wages to me. AIBU to wonder how the divide between us is so big?

I know this probably has obvious answers; we should have been more sensible when we were younger, inheritance etc. but I’m interested in other’s experiences in this.
I don't really want to divulge any more information about our situation and I don't want advice (I know people will say it's our fault we're in our situation, which I am willing to accept, so no critisism please)

chicken West Yorkshire, so cheaper housing but average wages, no-one gets a chance to save up.

The career trajectory point though - that because we were lawyer and head of department teacher can be planned in relation to your own children. you can sit them down aged 12 and talk to them about what particular careers pay and how that will affect your life and then they can make active choices based on the kind of life they want to live. I planned mine out pretty much accurately at age 14. It may be too late for older mumsnetters to change career but not for your children who may be choosing whether to live in the NE where I am from and housing can be cheaper or the SE and look at pay in different jobs and all that kind of stuff.

you can sit them down aged 12 and talk to them about what particular careers pay and how that will affect your life and then they can make active choices based on the kind of life they want to live. I planned mine out pretty much accurately at age 14.

^this is such good advice, I just always assumed because I was quite clever and came from a fairly well off family that I’d earn well, as a teenager I probably didn’t even realise that some adults never earn above minimum wage, and I was always told to take subjects I enjoyed.

Looking back I wish someone had explained to me the importance of looking at what different careers paid and choosing education based on what lifestyle you want.

I'm struggling to think of anyone in my peer group who started a family before buying, because they would have never got on the ladder otherwise

Flat > marriage > baby : can't think of anyone in my immediate peer group who did so before the age of 30 either, as no one could afford £10k (minimum) a year for one child in full time nursery in their 20s. By the same token, if you're earning enough to afford a child, then the money that would otherwise be spent on childcare does go some way to help build up a deposit. Although I don't know anyone who didn't have help from the bank of mum and dad to buy, because London prices are so ridiculous. Absolutely no way anyone in my peer group would have been able to save for a deposit and pay for childcare. I know many people who have stuck with one child because they can't just magic up another £10k+ a year for nursery / childminder fees

I make it sound so glib and easy but of course it isn't and a huge range of factors and luck play a part. I certanily remember when our fathe drove us to school each day as teenagers (and yes I realise that itself is lucky - that he could afford the petrol etc and to drive us on his way to work even if it meant we were the first people at school every day although even that is great as you are never late!) talking about what careers we might do and what pay and other issues - what would be intellectually satisfying, what was interesting - i don't remember him once saying money was a factor actually but I did want to be able to afford a house etc.

I was just tonight looking at my university diary. I had a brutal 6 months of job applications in my last year in 81 to early 82. 120 applications (to law firms in London) , and about 25 interviews before I got a job, day after day rejection after rejection coming in. Actually that's better than today's students in a sense because employers often don't reply nowadays and if you don't hear you haven't got the job or the computer tells you you haven't. i was obviously getting something very wrong in the interviews themselves and yet I thought they were going well. In one I even did very well speaking in German when asked to do so. I had very good exam results, scholarships, prizes etc so it wasn't what was on paper that was the issue.
Right bed time. Lots of work tomorrow

My own DC I have advised them to do what they have a passion for. I have seen so many people who have chased the money and ended up spending a fortune on wine, clothes, treats because they need to reward themselves with something just to get themselves through the day and are bored to distraction with their careers.

My eldest left school last year and became self employed and went into a very precarious career. She works incredibly hard on that side of things and is starting to see some success. In the meantime she does 7 other jobs which she fits around her main work.

She loves her life. She often works 12-14 hours per day.

She is on track to buy her first property next year. Something very very cheap from the auction and then she will have rental income. Then she will start saving for her next place.

Oliversmum

Very laudable your daughter sounds like a credit to you

Hopefully the usual suspects won’t be along to accuse her of witchcraft for working hard to buy a house she can then rent to others...

She sounds a very sensible young woman who knows exactly what she is doing. I think my lawyer daughters and I have high paid work we adore which isn't in the slightest boring. In fact I wake up every day even 30 y ears into this career enthusiastic about it. Don't drink and don't really like things although I do like my house. As long as people make informed choices (those lucky enough to have a choice) that's fine and there is nothing wrong with letting out property.

I bought my first house with dh when I was 24, we saved for 6 months for our deposit luckily we were able to live with dhs mum pretty much rent free.
We purchased just before the crash in 2007, literally a week before and we were in negative equity straight away which was fine as we weren't planning on moving.
We got married 5 years later and then had a ds. We would like to move in the future and we are saving so we can keep our mortgage at a similar level that we have now. We purchased a 2 bed terrace and love our house but we have now outgrown it, 3 beds are a bit more round here but we could get a doer upper for a similar price to that as our 2 bed.
So really I think it's best to save when your younger and try and get your foot on the ladder before commitments such as children as your costs go up. However it's not impossible to save when you have kids and looking at different areas which would be in your budget is probably not what you want to hear.

cook I'm also in West Yorkshire , but that is the complete opposite to my experience. I certainly saved a deposit with no outside help. I'm thankful it's difficult but not impossible round here.

I am in my early forties, so was growing up and making career decisions in the mid 90s. The difference was that, back then, even the adults I knew who were living on fairly modest salaries (mechanic and pt nanny, previously SAHM) had been able to buy houses in our nice commuter village in the south east. People who had something a bit more substantial (HR manager and pt librarian) were living in modern 4 beds a large development. There wasn’t any social housing. So that gave people of my age a fairly false picture - the impact of careeer choices appeared to be a choice between a smaller house and a bigger house, not ‘house or no house’.

Those 4 beds are now £650k.
The house lived in by the mechanic and his wife is now about £460k.

Also, when you have been living on pocket money and Saturday job wages, any proper salary seems like the riches of Solomon! So unless someone explains that relationship between salary and house purchases, you don’t have full information.

Mortgage lending criteria for the best deals:

Huge deposit
Big salaries
No dependents
No Finance/HP/debt

Or
Well off, youngish guarantor in place (hens teeth)

Also the old adage if I can have that by just multiplying salary x 4.5 is long gone.

5% deposit is the killer in much of the SE, I agree. I found when scanning papers recently however my mortgage calculations when i was a student at university - looking several years ahead. These days you can do a web search. i don't think it's impossible for young people to go on line and look at what you need to earn to borrow X. It is much easier to do that now than in my day. That does not mean I am saying it is easy to buy but just that the information is out there on salaries etc.

You're right Xenia the online calculators are useful but I'd caution that when it goes to a Lender and their criteria for an AIP/DIP, you may well get a different answer.

I'd go to a reputable broker/lender and get to the nitty gritty of what you will actually be loaned. To get an AIP the amount of detail is phenomenal. Saves a lot of disappointment in the long run though!

I agree to go with a broker. It's how we could buy this house (I was in year 3 of working for myself) as the broker knew the market very well. It was worth paying their fees. On the internet issue I just meant it is easier today for people to look on line to see roughly what you can borrow compared with my hand written calculations I found from my last year at university.... then I was reading last night the 5 very difficult months in my final year rejected by employer after employer -over 110 applications and 25 interviews. The day I got the job offer (Feb 82) although subject to a 2/1 in the days when 2/3rds of people on my course and elsewhere got 2/2s was a big relief.

From my own experience in the past everyone I knew of our age group and a lot of people who on the face of it were on modest wages all had 2nd, 3rd and sometimes 4th jobs.

I knew some who would go office cleaning in the mornings before work or after work. A lot worked in pubs or restaurants or doing event hosting.
One woman was a hairdresser before she started working in an office so would do peoples hair after work.
In dds case she has her business which she gets jobs which pay very well but come up only occasionally. They will get more frequent as she goes on then subsidises her income with a range of other work.

She works so many jobs that one woman thought she was having deja vue as dd kept popping up to serve her in various locations around London.

Those 4 beds are now £650k.
The house lived in by the mechanic and his wife is now about £460k

But they were most probably not the first place they bought.

The house in Zone 5 was my 3rd place having in the past 3 years bought then sold then moved 200miles then rented then bought sold then rented then bought.

I don't own I rent. Started saving for a deposit, once we had cleared all our loans, credit cards, over drafts etc, and dc where both at school.

But then ill health struck me and I am now unable to work, so we are in housing asscociation accommodation (which is lovely by the way).

My question is my eldest dc is off to uni in September. Law degree with LLB, and will be commuting each day. He works part time so earns around £300+ per month, doesn't go out drinking (may change when he's at uni, but he just isnt interested in alcohol, going to clubs etc), and he will be taking out a maintenance loan etc.

He asked me a few days ago how much I wanted him to contribute per month. He splits his time 50/50 between me and his dad.

I was considering having a chat with his dad, and saying for example £250/£300 per month as a total between both of us. BUT as there will be no difference to him eating the food, using electricity etc. Putting this money aside so that when he graduates he has around 10k at least (we will add a little here and there when we can too) to get him started towards a deposit. (Actually where we are that would be around a 8% deposit at the moment).

He will get inheritance from grandparents (they've already told me this but obviously not the amount), but that could be in a years time or 20 years time, so I don't want him to factor that in anywhere, I want him to see that as a bonus as and when.

I'd love to be able to give him a lump sum but that's out of my reach. What's everyone's thoughts on this? Is it a good way or have I overlooked something? Am willing to accept criticisim!

We bought our house a 2 bed end terrace in 2011 all things considered if I was to buy the same house now I wouldn't be able to afford it .

We put down a 10% deposit which wouldn't be enough now. Prices have sky rocketed and buying is unattainable for a lot of people.

Not rtft so this might have been said, but if you are trying to buy in rural Oxfordshire, you can see after a five minute drive that you won't be able to afford to buy very much here. Most people can't!

I think the way it's done is if buying is really important you look for a part of the country where it is affordable and make up your mind to live there before you put down roots. I couldn't have afforded to buy where I grew up. Probably still couldn't now. You have to accept the idea of living somewhere else or accept perpetual renting!

Got mortgage as soon as finished degree,then had kids ,then moved to bigger house.morgage nearly finished we are mid 40s...what we didn't do was have expensive holidays ,or expensive cars or meals out ,or expensive days out,our furniture was all second hand ,except beds,in some ways I don't feel I've done much with my life except have a mortgage and kids,perhaps renting and lots of holidays aboard might of been better...luckily my kids are able to live here with their partners to save deposits for their own homes ,I suppose they wouldn't be able to do that if we hadn't be careful.

Have you thought about buying a house somewhere cheaper and renting it out,it still gets you on the ladder ,

I think if was young now ,I'd think outside the box...I like the idea of living on a narrow boat ,or converting a bus ,or living on a mobile home site,I'm too old for all that now ,but I also feel I could of managed in a much smaller house ,smaller mortgage,cheaper area,we are in Oxfordshire and yes it's way overpriced,and no I wouldn't move here through choice(job)