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)

I despair really and think it depends on family help and where you live or are happy to compromise on where to buy.

honestly, we only were able to buy our first house due to family giving us a gift of a 25% deposit on a house over £250k - we would never have been able to save that!!

we've then got better paid jobs, bought cars when they were £2k and 10 years old and not dropped the money on expensive engagement /wedding rings, saved loads of net income for a couple of years and we've been able to make several jumps us the property ladder in one swoop.

mortgage is high but income is high, we automatically over pay mortgage by £500 per month to get it down. we are still making sacrifices and compromising on cars and "big" holidays to afford this house. i'm sure it will all turn out good.

I know 3 families bought council house with massive discount. Sold it 3 times they paid for and bought another house with massive deposit. I am the buyer who bought one of their ex council house. I saw these figures in the paperworks.

Yeah - the only reason I could buy was because I had inheritance that gave me a very good deposit in a cheap part of London, 16 years ago.

Had I not got that, I guess I would have still been able to buy the flat DH and I bought together when we did (I kept my first house and let it) as I subsequently got another big enough chunk of money from a family property sale to put down a deposit when combined with his earnings. He had no meaningful savings.

But when it was time to buy a family-sized house 3.5 years ago, had we not had the two properties to sell, we would have had to have moved out London to get a 4 bed place. That's with our combined salaries coming up on 100k, which shows how insane things have got.

Those irritating articles about 'We bought a place when we were 23' always have a line in there somewhere about them getting a 5-figure sum from parents, or else being able to live in a parents' large house/granny flat annexe for several years rent free. People don't seem to get that no amount of forgoing luxuries is going to be enough to save for a deposit in a lot of places unless you have help with money or living rent-free.

We bought with 100% nearly ten years ago mortgage but it was also a flat on a main road in the part of town people turn their noses up at.

I think it massively depends on where you live. I’m in Scotland and live in a really big house in a decent area; it cost around 250k which couldn’t get you a 2 bed flat in a decent area of London. Most (but not all) of my friends who purchased a house bought before they had children. And most (including myself!) had help to buy from their parents. I’m 36 but I know that people who are just a few years older than me bought their houses for a lot less than we bought ours, as house prices went through a massive leap in the 2000s. A few people I know had “right to buy” their council house at a huge discount. I think it’s a massive amount of luck involved: but most people will disagree and insist that it was them being frugal and savvy. Honestly, insome areas if you lived on baked beans, you still wouldn’t be able to afford to buy.

We worked numerous jobs and didn't go out hardly, ate beans on toast for a year before we bought the cheapest, grottiest studio flat.

We were only offered 2x higher income and 1x lower which meant our deposit was nearer £10,000 on a £17000 purchase price.

If the cheapest 2 bed house is £220,000 have you thought about going further afield and or buying a 1bed flat. I know a few families who live in 1 bedders. Children share the bedroom and couple on the sofa bed.

The thing is once you are in your own place it is cheaper than renting so you can save more. Also if the property goes up in value your equity goes up.

The thing is once you are in your own place it is cheaper than renting so you can save more

This has not been my experience at all. All the houses we have been able to afford have had way higher mortgages (our current mortgage is 4.75% iirc and we are finally able to remortgage and about to save £1k per month) than the local rent and they all needed work (otherwise we wouldn't have been able to afford them). Every month we had to spend £500-1000 on boilers, roof, damp, bathroom leaks, rat infestations, gas leaks, wall falling over...Renting was much cheaper. Houses are money pits.

I was in a similar situation, rural South Oxfordshire, DP and I had DD already, but were renting, while we had downsized and living in the less nice area of a very naice village, we still were just able to put a few pounds a month into savings.

My Mom passed away and left a decent inheritance, which allowed us to be able to start seriously looking at property. In the end we moved out of Oxfordshire into Berkshire, into a less naice area, but still have good neighbours schools etc.

If it hadn't been for the inheritance I doubt we'd have been able to afford to buy even now.

You have my sympathies, it's really tough

Bought house at start of property boom when was seeing DH 9 months. We decided to take the risk and go for it. Now 10yrs into mortgage. Wud of been very different if we hadnt bought when we did.

It basically is ingeritance or bank of mum and dad that gets people on the housing ladder now there are no more 100% mortgages.

Keeping wealth with the wealthy and making it harder for people without home-owning parents to get a leg up.

When you rent you are paying someone else's mortgage.

4.75%!!!! I pay 1.35%.

Surely you got a survey and would have adjusted the purchase price.

I have owned a number of places and once places have been done then there is nothing to pay out on for years.

Yes of course and the reduced purchase price was the top of our budget. 222k bought us an ex HMO which needed a fuckton of work. If it had been done it would have been 320k. The mortgage rate was the best we could do at the time. Now we are coming out of the 4yr period we are changing to .95 one (i think).

Everywhere i have rented has been about a third less than it would cost us with a mortgage and then the costs of owning/work needed added on. I'm not saying renting is great. But it definitely had it's positives compared to owning. We have now been in our 'new' place for 2 years and have a lot more to do. It's a work in progress which is going to take years. We estimate about 7 years and our house cost £720k and even that had about 100k knocked off because of the work needed and was the top of our budget.

Every house i've lived in (including growing up) has needed a lot of expensive ongoing maintenance.

We bought new and used the government Help to Buy scheme, which meant we only needed a 5% deposit, which was a lot more achievable than 10%. We also did this before kids when we had more disposable income.

People don't seem to get that no amount of forgoing luxuries is going to be enough to save for a deposit in a lot of places unless you have help with money or living rent-free.

Not true, I could still save a deposit on my first salary today. Again, I would only be able to buy a bedsit in a crap area, pretty much what I did back then. I don't know anyone who could have afforded a detached house as a first property, 20 years ago or today.

Buying a tiny house with DH the month before the 2008 crash on a 95% mortgage at 23. Paying 7% interest for 5 years, in negative equity. Then selling for what we, 'd paid, using the equity for the Help to Buy deposit in 2013 on a new 4 bed.

Oh, I should add we are only now having a baby after 10 years owning a home!

Didn't have bank of mum and dad. Just saved saved saved when both working full time and pre children. Have you considered trying to relocate? This worked for family members.

There was a post similar to this the other day. The overwhelming reply was you have to lower your standards/expectations and location.

We bought a small, ugly flat in a not so nice part of London. We did it up and started to creep up the property ladder. Very few people buy their first house in their ideal location with it all looking beautiful (unless they get help). Oxfordshire is a beautiful place. Move to a less nice place and start working your way up. Yes I know you don’t want to - kids schools, commute etc. But you won’t manage to eventually buy your ideal home unless you do.

And it all takes a huge amount of time.

I wouldn't have been able to buy on my own despite having a good job and saving as much as I could but I have never inherited or had help from family. My husband lived at home for a few years before I knew him and saved a lot, inherited some from his grandma and was also given some from his parents which meant we could afford to buy when we got married.

95% mortgage, helps that we live in the NW and our 3 bed semi was only £135000

Literally didn't spend any money that wasn't for bills or food for a few months and was given enough money from parents to cover solictor / broker fees

We have debts, both had car loans and credit cards with a few grand on - but still managed to get a rate of 3.9% which on a 95% mortgage isn't bad at all

If you can scrape the deposit together, then find a good broker. One told us there'd be no chance of a 95% mortgage with our debts, but the broker we used got us a deal with a high st lender even though we didn't have squeaky clean credit

@MrsKoala did you not get a survey done? That’s a monstrous level of expense.

Yes, as i said. We knew it was going to cost some, but other things did emerge later too. But if all those things were not needed we couldn't have afforded it. That's what a fixer upper is. We could never have bought a house otherwise. We did see another bigger/better/nicer house with more potential but that needed completely gutting for £200k. I was really keen but with a 2 year old and a new born it was unrealistic. I wish we had got it pre-dc as i'd happily sleep on the floor for a few years and do it up.

In 1979 (when i was 2) my parents bought a house in Chiswick. It was a shell of a 2 up 2 down terrace. No floors, plumbing, heating, electrics, outside loo etc. It cost £11k, but they got a grant of £9k from the local authority to do it up. My dad is in a trade so him and his friends worked on it. For 6 years. I remember walking across beams and looking straight down into the kitchen below etc. For the whole time we had some scaffolding poles holding up the back of the house. The day they came down Mum and Dad put it up for sale (i was 8). It was sold for £82k and my parents bought a bigger house which needed work, not quite so much; loft conversion, new kitchen and bathrooms and a lot of decorating. They spent the next 6 years doing that one too. I fondly remember helping.

Altho they worked very hard, they never could have done it without the grant. That 9k investment has set them up for life. It's foolish not to help young people start off. Give a man a fish and all that.

DP is fantastic at saving. Lost over 10 k of savings twice though in two different relationships. After he divorced his wife he saved as much as he could after he'd paid off credit card debt from divorce, he had no holidays, limited days out, cheap car etc. Then when I moved in we pooled resources and were able to save a lot more. Took us about 2 years of serious saving after the divorce of putting away about £500 to 1000 a month. We went for a slightly cheaper area which had a bigger commute but overall works out cheaper. I guess we are really lucky that house prices are relatively cheap and we both had good incomes. I can't imagine trying to do it with several young DC living with us full time.

Saying everywhere you have rented before was cheaper is a bit misleading unless you rented the whole of an HMO.

I know from friend who rented her council house a few months before we bought our first place. Apart from a bit of time in the early 90s our mortgage has always been cheaper than her rent.

If you bought at the top of your budget a place that needed a ton of work then yes you would be struggling.

We bought our place 20 years ago and saved up to remodel and renovate the place. It took a year (although not finished completely due to family circumstances) but I haven't had to spend on anything since.

For us it was my partner living with his parents in his twenties to save like mad for deposit, and I inherited some money that was my part of the deposit. Both earning good salaries when we bought. And bought together pre marriage and kids.