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)

DH and i both bought flats/houses (both at 28) separately before we met. They both cost 134k and we had 100% mortgages on them (I had saved £6k for costs and furniture over previous 3 years). When we met I sold mine and made £10k we put that in savings and lived in his. We then saved £1k per month for 2 years, he was on 27k and i was on 24k and the mortgage was £600 (this was 8 years ago). Then we had a baby/got married (within 3 months of each other) and bought our 'first house' together a 3 bed for 222k with a mortgage of £190k. We kept the house he owned and rented it out for a few years as by then it was in neg eq.

By then dh was on more but i wasn't earning as pregnant with ds2. The mortgage was really high and for a year we were just breaking even. Then his job really took off and we inherited some money so moved again to a bigger house and had another baby. So a combination of luck and being sensible and the markets being in our favour at the right times. I don't know how we'd do it now as the house we bought for 222 just 4 years ago is valued at 400. There is very little round here for less that that now.

One of my friends has gone from 1k a month to 2.5k just by her husband going self employed as a contractor. His salary has increased four fold at least.

We are almost in a position to be mortgage free by sheer luck of buying somewhere that has doubled in value in three years. A very cheap area that has been massively regenerated. But that is just pure luck. Buying our first house 13 years ago at the very upper limit of what we could afford also helped. I couldn’t afford it now. My kids will never own either unless we set up the deposits. It’s tough times house market wise.

Buyers need to buy early and just slowly move up and improve.

Well...it's because you live in an affluent area in Oxfordshire. To me, living anywhere like that is a massive luxury. Same with when people bleat about not being able to afford a house in London. To me, being able to even live near there is unachievable. If you haven't got the income you have to move somewhere cheaper to buy. Having a low salary (for the area), living in an expensive area and buying a house is not a good mix.

Mortgage before children here too. Not judging anyone, but I needed to stability of ownership after my parent’s divorce. Also, I didn’t think I wanted to have children so that made it easier.

Bought a tiny house with DP just before DD was born (90% repayment mortgage). Kept working FT even with two DC in nursery. Took it in turns with DH to concentrate on career progression - meaning we both earn significantly more than we used to. Saved all the money we used to pay as nursery fees once they went to school (to build a further deposit). Moved to a bigger house needing lots of work when the DC were at lower school (so lower childcare costs when looking at mortgage affordability - extra savings meant we had a 25% deposit). We were lucky that we were able to do this at the bottom of the market (a little over 5 years ago).

Mortgage before wedding, before kids. Started in cheaper area and upgraded areas with each move. Lived overseas for a few years which made last house move possible. The poorest we have been is when the DC were in nursery, we couldn't have saved anything then.

The single biggest thing for me was that I bought a one bedroom flat in a crappy part of London for £60000 and sold it for more than double that. Without that one thing, there is no way we would have been able to afford a deposit on a bigger house.

One thing i have noticed is that you can see where people are spending money but you can't see where they are not spending money.

I agree with this. I have bought, but I am still saving like mad. You can’t see that aside from underwear, I buy almost entirely second hand clothes. My Hobbs suit and Jaeger jacket are second hand (£16 the pair), so are my fat face jumpers, a joules tops. I’ll even buy second hand shoes. You’ll see my going on holiday to France for a week in June, but not see that the whole thing will be £150pp plus some money for food. Almost all my furniture is second hand. You can’t see that I redid my own kitchen, reusing the sink, the floor and some of the cabinets from the old one, or that some of my appliances were second hand.

(Though, tbf You probably could see that by the time I bought my house I hadn’t had any new clothes at all (not even second hand new) for more than 2 years and that my winter coat was 6 years old and not going strong, and I desperately needed new shoes.)

These things don’t make me miserable - I enjoy my sewing, my gardening, reading, going for bike rides, baking amazing puddings and the such. I like going out for lunch or for picnics. I’m lucky I have cheap wants!

I wonder how much people live on credit. So they are paying the actual mortgage but use credit to afford the lifestyle.

Just adding that our first deposit was 25% so we didn’t go out, have holidays, nothing beyound eating cheap meals for three years. Again I know that wouldn’t cut it now but again before kids. Painful at the time but it has paid off long term. I do often think we was lucky we entered the market a decade ago. Despite big increases in our earnings, house prices locally have risen way beyond our reach ( if wasn’t already owners)

Yes - I was the same as Riversleep. Doubling the value of a flat from £60,000 to £120,000 gave us the ability to move up to the next size property. Pure luck.

Problem for today's youngsters, and this will include my DC soon, is that the deposit required is ridiculous and no amount of eating baked beans and staying in will get you anywhere near close to what's required for a deposit.

No help from parents. No inheritances.

Dh had a tiny flat in a good location and we sold that at a small profit - we’d both just got better jobs and the combination of that deposit contribution from the flat and no kids at the time meant we could afford a small plot of land and a kit house in an area that we thought might get developed. It was a huge risk, but it is getting developed and our place is worth 100k more than we spent building it. We aren’t moving and we are overpaying the mortgage like crazy! We are pretty frugal otherwise - don’t go out much, haven’t been on holiday since we married, no expensive habits. We try to save 1/3 of our income.
I’m pregnant again at the moment so we are looking at a big income drop for at least a year, so saving as much as we can now.

It’s not the mortgage payment itself that’s the barrier for most people - it’s the deposit. Saving isn’t easy when you’re counting every penny. I guess we had some luck, and some good choices as well.

We bought an apartment, small house, had kids in small house, then we upgraded to larger forever house in a lovely area with great non fee schools.

We have a relatively chunky mortgage (a third of our joint salaries) so if one of us lost our jobs it would be very tough, but the house has increased significantly in value so downsizing to a smaller 3 bed in the same area is always an option.

In terms of how we did it. I think it was really down to just working like dogs and going for jobs with bonuses. Bonuses or share options make a far bigger difference than salary when buying a house.

We had a great time in our 20's and early 30s but once we had children we really settled and so its one holiday a year and the odd mini break.

I spent every penny I had in my twenties and didn’t consider settling down until I was 30. Fortunately buying a house was possible for us because we live in the north east. We were able to save a 10% deposit while renting as our rent was pretty cheap and bought a 3 bedroom semi a couple of years ago for £135,000.

It’s not impossible for younger people to get on the property ladder in all areas of the country. I understand wages are higher in the south, but housing is more affordable elsewhere.

Display Regarding credit I think it is a huge issue. We own our (very old) cars and I am always amazed at people driving around in big land rovers whilst renting their home. What are they thinking?

Dh and I paid for years on this mortgage, for a small house, before having kids.

I saved my very first deposit by living in a house share for a couple of years, only way I could come up with the £12k I needed at the time, in zone 1/2 for cheaper commute.
No way could I have achieved that with children. It didn't feel like hardship, it was quite exciting at the time.

We were lucky with timings. My parents gave me £5k for a 10% deposit when I was 26 and I bought a 2 bedroom flat and rented out the second bedroom. When I met DH we sold my flat for £80k and used the £30k profit as a deposit for a large 3 bedroom Victorian semi costing £156k. Then we got married. We were both working full time in reasonable jobs but then I gave up work and had two DC. I went back to work part time.

We extended the mortgage and had a loft conversion for a fourth bedroom and extended at the back to make a kitchen/diner/snug. This cost about £120k. The house is now worth in the region of £800k - no way would we be able to afford this now! Following a good-sized inheritance we paid off the mortgage but are happy to stay in our current house. We hope to be able to help DC with a deposit each.

It's not your fault to be in the situation you're in at all!
We were extremely lucky. We got gifted a large deposit for our first place in our early 20s from PIL, we happened to buy in a place where prices skyrocketed just after and nearly doubled our money when we sold (in this time we rented it out for a few years while we rented somewhere cheaper than the rent we were receiving) we bought a tiny 300sq ft place in London after which we sold for double a year later, we just sold our current place for a 1/3rd more than we bought it for 2 years ago. So we went from a 2 bed flat to buying a 5 bed house in 8 years and have a fairly small mortgage. We would never have been able to do this if it wasn't for the extremely kind gift which was our inheritance given early.

Gift from my parents, and then we lived with them and saved for an exatra 6 months.

We did everything the wrong way round, started having kids at uni, then juggled eachother getting masters/pgce whilst renting a gorgeous little cottage, bought house and we get get married next year.

For starters, we moved from a very affluent area (naice commuter town near London) to a cheaper area. We knew we couldn't afford the luxury of living somewhere like that if we wanted to own our own home.

We were in our early 20's and pre-kids, which also helps. We bought a house that was practically falling apart and did all the work ourselves after work in the evenings and on weekends. I don't think I'd have had the energy for that if we'd already got kids to be honest. Furniture was mostly second hand, we got very good at bargain hunting and repurposing old stuff.

We rented out our spare room until our earnings increased enough that we could afford the mortgage by ourselves. This meant living with a succession of weirdos and CF's for few years, which was stressful at the time but we laugh about it now and have some cracking stories!

We put off having DC1 until our late twenties by which time we had finished doing up the house and we'd had a couple of years to enjoy living in it with no CF housemates. By the time DC1 was a toddler the house had gone up in value significantly, enabling us to buy a bigger house, one that still needed a bit of work but is in a much better area, near good schools ect and could potentially be our "forever home".

I don’t know to be honest. I doubt my two ( who are single) will be able to afford to buy as we are in Essex and prices are scary.
I can sympathise and most young people I
know live at home still. One of my sons friends moved out somewhere cheaper and got a mortgage but not sure how tbh! I do feel for you but your not the only ones. It is so unfair and the market will stagnate I think till there’s a proper solution.

The first house I purchased, with the exH, was with the help of a loan from the Royal Navy. That one got repossessed when we split up and he refused to contribute to the mortgage. Days before CSA.

2nd house was a council house, and I used the 'right to buy'. Got a huge discount off the purchase price. Lived there for 12 years, sold it for a handsome profit, due to spending a lot of money on it.

House we are now living in is still not the 'forever' home. Hope to sell when the mortgage is paid (we are paying the max that we can in over payments each month) and move to a bungalow, due to my impending health problems.

My daughter, and her DH, purchased their first house 3 years ago, with no help from anyone. They were living in a HA house and it got burgled. Within 6 months of that happening, they had purchased the house they are in now. They'd had first GS when they were 19, purchased the house when they were 25. SIL owns 2 businesses and DD has always worked full time, so they were able to get the deposit fairly easily.

All their friends, the same ages, also own their own houses.

Luckily, houses are still reasonably priced in this area, selling well, and still plenty to buy. (East Mids)

Bought a part buy, part rent flat in 2002 in a "naice" part of Soth East London, 50% of 165k. I don't need to tell you how nuts property values have become. In 2005 we bought the other half (mortgaged), but the value went up to £250k. Our neighbour downstairs sold his flat last year for £450k and went to live in Ladywell, in a small house. We haven't kept our flat up to the same standard but we reckon we could get £400k for it. We have £150k on the mortgage, so £250k in equity. We were fortunate to buy the flat before nearby transport links improved and the area gentrified.