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)

We’re reckless cretins who had kids first, too. (We only met later on) and we’re in the same bit of the country. We bought when we inherited what amounted to a 50 percent deposit.

we are renting with 1 child and have just bought our hugely expensive 🤢 new house because my partner gets paid a fuck ton of money! no secret to it, sorry. i'm totally average/on a part time pittance but he makes the equivalent of about 90k. so we've still been able to save up 40k in 1 year with me on mat leave/smp. it's a combination of him being good at his job and lucky that a very nice opportunity was offered to him. unstable industry though so we'll probably be in arrears in a couple of years don't be too envious i feel sick/almost more unsafe than being a tenant at thought of new mortgage also grandmas do 3/5 days so we don't pay much for childcare either - again just fortunate bastards! we both drive shit cars (i mean really, really shit) though as we prioritised getting our deposit in the bank.

I too live in an affluent part of Oxon. Yes house prices here are ridiculous and many young have been priced out of the market and rural communities are losing their young because they can't afford to live there anymore.

I will say that there are a lot of developments going up so I'd put your name down on the local housing list because a lot of the affordable rentals are going to people that work, they're on mixed estates. I'd also look at part buy here, because they're are also a lot of new build part buys being built as we speak.

We got a new build in Swindon (40mins away from oxford) we were in outskirts of Newbury before hand. We saved 5%deposit to do the help to buy but then after a family member offerd to make the deposit bigger so we didn’t have to do help to buy. House Then went up in value and we sold it to buy somewhere bigger. Knew nobody in Swindon but was willing to travel to see friends to get foot on the ladder. Husband in a professional role under £45k I am what my name says on minimum wage.

I got my first mortgage aged 28 - pre children

Vendor paid the deposit - twas in a fairly shit part of town

sold that to buy a house with my now ex made money - sunk that into new house.

Got all the equity (substantial) in divorce, sunk that into another house

moved into this house 3 years ago - using equity again - now have much smaller mortgage and much more equity and plan to move again in 2 years and decrease the mortgage again - aim to be mortgage free by 60

Everyone I know in my age bracket (early 30s) has had help from the bank of mum and dad or inheritance, except one whose parents took half of her wage from the first time she started working and invested it and didn’t allow her access to it, and then when she came to buy a property she had £66k - however I don’t think I would have been happy if my parents had been so controlling.

My parents gave us the deposit, fortunately just before house prices shot up around 2002. We paid 97k for a 4 bed semi. Worked around each other for years ( me doing nights and weekends ) so that we didn't have to pay much childcare. Overpaid the mortgage as much as possible during those years. Received some inheritance 3 years ago and paid off mortgage. The house needs a lot of improvement / repairs but we can do that gradually.

Luck. London mad house price rises.

I agree with RedToothBrush that:
There is a line in the sand at age 36. If you are older than that you are probably fairly ok. If you are younger you are much much more likely to be struggling.

Living happily in a rented flat in London. LL decided to sell and offered us first refusal. We couldn't afford it (by about £10K), but the process of seeing if we could afford it sort of by-accident revealed to us that buying a property was not a complete pipe dream. It hadn't really been on our radar, we just assumed we couldn't afford it. But we could get a 95% mortgage on a property of up to £165,000. I had some savings, my DP had some debt...

So, 2004 we bought a one-bed flat in a shitty state but in a nice block for £160,000 and a 5% deposit of £8,000. DP scraped his 50% of the deposit from small gifts and a loan from a generous friend. Immediately got hit with a whole-block roof refurb that nearly crippled us over the next 3 years! Replaced bathroom immediately (credit cards), replaced kitchen after 3 years, including finally boxing in the wires that had been hanging out of the walls since we'd bought. Moved into a larger rented property when I got pregnant and let out our flat.

Fast forward to 2015 and we sold that £160,000 flat for £370,000.

Sheer madness.

However! We had 2 DC by then, and insecure careers (redundancies etc etc) and couldn't afford a family home in any of the parts of London we'd consider bringing up children in. So we had to move out eventually. Even a £210,000 profit won't get you what you need in London now.

So - massively luck. We scrimped and saved, we did - there were some very very very lean times. But we bought before children and when prices were lower relative to income and when lending guidelines were laxer and you only needed 5% deposit. I honestly don't think it would have been possible on our salaries even 5 years later.

Hi OP you're probably one of my neighbours we moved from Oxford to Oxfordshire 4 years ago, and were only able to afford our house because we made money on our previous property (did it up).

Yep, that 36 age sounds right. I'm 39, got a lucky redundancy payment that was a deposit on a London flat in 2011 (with some parental help), house price inflation meant I had £100k extra in three years to trade up to a three bed house in a cheaper part of the country (work let me relocate). My (millennial) DH had zero savings.

My ex and I bought a 3 bed fixer upper house on the south coast in 2010 when I was in my early 30s and had savings plus inheritance (a share of my dad’s retirement lump sum) of my own. I bought him out for his half of the deposit (he had BOMAD) plus mortgage contributions in 2012 and made £100k profit due to the rising market when I sold it last year after taking cost of renovations into account. Used that as the deposit on current house for which I am mortgaged to the hilt.

OP, you could move. There are 100s of 2 bed homes around England and Wales for less than £50k.

We had help from parents, we live in a cheap part of the country and we bought a cheap, small house in need of work (although in a nice village). Main problem for us is that it's a bit too small - it's only 2 bedrooms so we won't be having a second child (the second bedroom is tiny, I doubt we could get our bed in there if we swapped, even!). And by the time we're in a position to move or extend, I think I'll be too old to go through it all again. To be fair, we're happy with one child for lots of reasons, but the size of our house is definitely a practical constraint. But basically, we were very lucky that our parents were able and willing to help (unasked for by us, I feel I should add, but gratefully received).

My DSis and Bil got a shared ownership property - is that an option for you, op?

Whilst I do think people scrimped a bit more when I was buying my first place, I also agree that it would be bloody hard to scrimp enough to build up a deposit for a property in the S East on an average salary.

In my case age, luck and a high salary, I bought when prices in London were vaguely in touch with reality. I bought when I was 26 and didn't have children until I was in my 30's. When I sold my first place had around £200K equity against an initial purchase price of £73K.

Our current property has more than doubled in value (some of that is due to the work we have done but most is price rises) since we bought it 5 years ago. Even if property prices in our bit of London drop by 10-15% it will still be out of reach for most people (e.g. if the average property price is £700K and that drops to £620K that doesn't make the area truely affordable).

I think DH and I will have to help the DC out if they want to live in the S East.

'Careful, Mrsmadevens You'll get told that sounds like a wasted life, the first bit anyway '
We were so in love we didn't need anything else , sounds corny but we were really happy even with no money

Dh got on the propery ladder v early- his parents were guarantors, he let out rooms, and this was in Edinburgh where property prices then rose. Married me who had a more modest property which Id gotton a mortgage for with a deposit from my parents.

Sold his flat and bought a bigger one. Sold that just before it all went tits up in 2008. After it went tits up, bought a house benefitting from drop in prices and live there now.

So some saving, some judgement, a bit of luck, parental assistence. But honestly - mostly timing. We got on the ladder before it was pulled up.

Small inheritance (2k). Small parental gift (3k).

Substantial personal savings between fiance and I (65k) between the ages of 21 and 28.

We've lived together for five years beforehand, and put down a 20% deposit rather than a 10% deposit sooner because we enjoyed city centre living and didn't want to buy there.

Were we lucky? I don't think so. We planned for what we wanted. We earned well, but not extravagantly for the first 4/7 years saving. Were we 'boring'? I don't know, but we weren't bored. We were careful with our money though, and our life plans.

I'm not trying to brag, I just don't think it's helpful to pretend we're all victims of circumstance, when it is possible to prepare for these things (not that preparations are infallible, but they do make a difference).

I think aside from inheritance/deposit gifted by parents the big one really is getting the house before having children tbh. That's not a judgment lest anyone think it is!

When it's just the two of you well, you can live in a dingy one bed flat or a bedsit while you save, you can take any extra work that's going, you can apply for better paying jobs without having to consider whether it works around your childcare arrangements and so on. You just get to save more of your income so you get the deposit together quicker or a larger deposit meaning a smaller mortgage.

Throw one or two dc into the mix and you're either sacrificing one salary or paying for childcare, you need to rent a bigger and likely better place. You don't mind having the heating on for just an hour a day or that bit of damp in the bathroom when it's just you two but you want better for baby so your outgoings go up and your savings (deposit) don't.

Bought before having children. Didn't spend loads in my mid 20's going on expensive holidays abroad, two good wages, saved money, bought a modest 2 bed house to start with.

I live in the south in a very expensive area, but all my friends have managed to buy too. I never really understood the idea that younger people now struggle to get on the property ladder. It's completely affordable even in the south if you are sensible in your twenties and don't have expectations of buying a big family home for your first property, or choose to only work part time.

Borrowed from DH grandparents a 15% deposit on a 70k house (up North, small but a really lovely house), paid back a lump sum every month - essentially a loan without the interest.

Then saved for the wedding, got married in the same year.

Sold house 2 years after purchase for profit of 18k, purchased the 'forever' home (3 bed detached cottage, up north) for 160k, which we put down a 10% deposit and all fees paid by the house sale.

Now, 3 years after that last purchase and 5 years after the first purchase and wedding, we're having our first child. We haven't had childcare costs, reduced hours etc. To contend with - we've worked a lot, increasing wages steadily as we've gone. Couple of nice holidays in between but that's it. Current house valued about 20k more than what we paid but we probably won't look to move until DD is around 4/5 and it's purely for school catchment, rather than a bigger house as such.

Forgot to say.. first mortgage was about £270 a month, that leaves a lot left over for paying back the deposit loan and anything else we wanted to save for!
Current mortgage is £510 which I suppose is still small compared to some! I'm 29 and DH is 32.

To be able to afford the house we have in the SE we got lucky. My DH bought a flat in East London where the area became regenerated and by the time we moved, it had made £40k growth a year. When we moved we would not have been able to afford the flat if we were starting out let alone the house. Starting early and pure luck.

It's completely affordable even in the south if you are sensible in your twenties and don't have expectations of buying a big family home for your first property, or choose to only work part time.

Eh, no Racoon that's simply not true for many, many people . Perhaps you only mix with high earners? There are plenty of sensible 20/30 somethings who work full time but cannot afford to buy. Wages stagnated for years but property prices really didn't plus lenders are more cautious than they were when I was buying, also in my 20s.

We managed to buy our first home after having children, a few years ago here in the pricey SE, so it can be do- able on fairly average salaries even if you do it the “wrong way round” . No family help.

My tips: rent as tiny a place as possible. Our rented house was teeny, but it meant we had money left to save.

Really question what you “need” - we drove old cars, no new clothes, no holidays or meals out or gym memberships or TV subscriptions etc etc (but it was a time when I was happy hanging out with DS so didn’t mind)

And we got creative with childcare - both shifting work patterns etc so that we only needed to pay for 3 days of nursery but both worked full time

We used DH bonuses, quite a bit of his salary came in an annual bonus each year so we locked that away. Otherwise set up a standing order into a savings account and don’t touch it.

And of course being realistic about where/ what we could buy.

Inheritance was by far the main factor in affording our house. Plus we bought a wreck and spent all our free time and money renovating (before we had children). A big part of it is also that we spend very little. Our wedding cost about £3k and we even drove ourselves to the reception in our own car. We didn't have a honeymoon; in fact we've never ever had a holiday together because we were saving for a deposit and then we were paying the mortgage. We drive old cars, we buy clothes in the sales, and we rarely go out because we can't afford it. We're always puzzled by friends who drink loads and have £10k family holidays to Disney World then express jealousy at our house.