To think most property owners don’t understand how hard it now is to buy a house

[Boredfromboredshire]

DP and me earn 40k between us and our rent is 1200 a month for a 3 bed house. We don’t have rich relatives, we are in our early 40’s and circumstances (ill health) meant that we didn’t buy a house before. We can’t save a deposit & houses are expensive by us. We have stable jobs & our kids are happy so moving in the current uncertain time’s isn’t an option. Life has happened to us & some of it has been out it control.

Cue well meaning friend (who bought their house for peanuts) asking me why we couldn’t afford a house when we could get a house in a cheaper area for ‘only’ 400k. I’m so fed up of it. We really want a home of our own & we would move but in the current recession, it’s not a good idea to give up a job. And we can’t afford to save. My friend (whose deposit was 12k can’t understand it and looks on pityingly while telling me the house they bought for 120k is now worth 700k.

For many of us, the housing market is closed for ever. I’m so tired of the pity and the complete cluelessness- I quite often feel utter despair about it. It makes me feel such a failure for no real fault of our own. Some people were lucky because they happened to buy at a particular month in time & then some of us couldn’t & it’s over.

I don’t think people who own really understand what it’s like. Low interest rates, cheap mortgages, everything weighted in favour of owners while renters are treated like the Victorian poor.

Aibu to be sick of it. We are a normal family in normal jobs.

you're right, I'm realizing the impossibility of having a normal and healthy life because of these absurd and shameful bussines real estate,
I live alone and I have a full time job but 3 quarters of my salary go only for rent of a bedroom, impossible to save money, I can hardly finish the month without many worries and frustrations, buying a house for me is just a dream with these circumstances and such will remain if this busines does not change.
I wonder why the government does not impose limits on housing costs?
why, don't you control the trap that exists in this real estate business? of course, this is not about the wealthy.
and it is equally assumption that it imposes the sharing of houses in order to live under a roof.
everyone has the right to his-her privacy and the freedom to live in own home.
all this takes away all dignity.

Where on earth do you live.
Even on minimum wage in a shared house I can’t believe you can’t find something cheaper.

www.rightmove.co.uk/property-to-rent/property-70430793.html

www.rightmove.co.uk/property-to-rent/property-79985287.html

www.rightmove.co.uk/property-to-rent/property-65273646.html

www.rightmove.co.uk/property-to-rent/property-69174963.html

These range from 550pm to 1300pm so allowing you to save AT LEAST 200pm OP and there are TONS of 3 bed properties for less than 1k!

I don't know if anyone has already said this but this whole discussion demonstrates that we need way, way more council housing

If people could rent securely and affordably there wouldn't be as much need to buy. Which would reduce demand and in turn prices. it would also force private rents down as there would be less need for that as well

The present government will never deliver that though, it's not in their interests

I say all this as a homeowner. I have no problem with house prices falling, they need to. i have roughly 120k equity in my house. And unlike some I don't act as if I've personally made that money. It's just pure luck. But it means fuck all it's not money in my hand is it. Unless i sold and kept the extra but where would I live then ? and if house prices fell and I wanted to move then other houses would be relatively cheaper anyway 🤷‍♀️

These range from 550pm to 1300pm

The £550 is for a room though. Can't imagine any students or young professionals wanting to rent one of the rooms in their house to a family, not to mention how unsuitable it would be for the children.

Given the retail sector's problems before and after CV19 I would support the rights of individuals (perhaps not big companies) to have the right to buy retail units and convert them to a home they will live in for at least five years.There is so very much space empty in shopping centres, rows of shops, commercial office space that could be used.

i am one of the few people who has owned since 1984 and have no house equity other than what was taxed at 40% income tax because I am the worst property investor in history and we sold 3 properties at losses in the 1990s crash in London and then my husband got 60% of our assets on my divorce with a very high valuation of the house - I am not even sure today the house is worth as much 15 years on and then I had an interest only mortgage traded in currencies which lost about £150k possibly more - so yes I am a unique incompetent... but I do have a house now without a mortgage which is a nice feeling having had mortgage debt since 1984 which at one point interest only cost £90k a year.

that is why if the state abolish income tax and replaced it with say £30k a year property tax on my house that would be a bit unfair on those who have no equity gains in the house although I would prefer that actually from a personal point of view. On the other hand what I am sure of as well as death is that tax will keep going up and up and up on those few of us (25%?) who are net payers into the system

@isabellerossignol fair enough (I didn't see that part😂) but as I said there are PLENTY of 3 beds for less than 1k.

There are plenty of opportunities to buy housing throughout the UK.

Obviously you are not going to buy a property in London, Oxford or the SE unless your extremely wealthy, create an amazing business or gain some inheritance.

You must be able to save cash. Impossible if you chose to live in a nice area with high rents and eventually the market will cast you out of that area, as competition increases. Younger individuals replace you, who are able to keep up the pace and produce wealth in other ways I.e. the internet.

So your options to move onto the ladder for most couples with 30-50k income, is to find a property between 100-200k, as your first entry point. The lower the better.

You are now only required to save up 10-30k, this is much easier. 10k is achievable in 4 years, saving only £200 a month, that's not having a second car or a holiday, it's all balance. Sacrifice your pleasures and you will have more pleasures long term.

For a 100k house you will pay around £600 pound rent but the mortgage will be around £300 almost half the mortgage cost.

Other ways, are to move back in with your parents and pled poverty. Move into a 2 bed flat in a cheap area.

Once you are on the ladder, your half way there... you can now pay down the capital with that extra money you used for renting or just enjoy life much more (I chose to enjoy life much more).

Your loyalty or sentimental value of a particular place in the UK, is nothing which market forces care for.

Covid19 may present current buyers with a discount later this year between 5-30% depending on the area. However just remember that although many may loose their jobs, they may chose to rough it out rather than sell, the conditions that lead to the 2008 crash are not the same as today. Governments are also more keen to help the public currently.

I appreciate how hard the process is because I've done it myself, currently early 30s, 3 years of saving and creating a ecommerce businesss got me on the ladder. Best decision I ever made.

Some reading to get you there, Rich dad poor dad, Economics in one lesson and anybody on learning to be frugal.

That will help adjust your mindset.

@DianneWhatcock but giving ppl social housing is not the answer if they have the right to buy it imo
Social housing should STAY social housing and ppl should be re assessed every 10 years. When they die/move on etc it then goes to someone else.

@TheGuruishere doesn't rich dad, poor dad say buying a home you live in is a liability and not an asset. Absolutely contrary to what all the posters are saying here. As it doesn't create an income flow and all OP would be doing is paying down her mortgage until she is 60. Which would not get her rich or even necessarily well off. My MiL has a house worth £700k. She still earns far less than OP and has probably a more uncomfortable lifestyle and no way to retire.

Buying your own home is not an investment. Its a home and you are paying for it. I bought a modest 2 bed flat in London, in an area I want to live in and near good schools and with bus routes to private schools/Jewish schools cos I see it not as a financial investment but an investment in my child's future.if I saw it as a way to enhance my net worth, I would have bought bigger in an up and coming area outside London. However I believe a property you live in is a liability. I do not own a house, I own precisely 330k in debt that I am happy to take on so I have a roof over my head and some measure of security which would help my mental health and hence earning power. A secure place for my child to grow up without being evicted by landlord (that is something you can't undervalue).

But moving outside an area with economic opportunities is doing long term damage to earning power for the sake of owning a liability and in rich dad poor dad parlance, is a dead stupid thing to do.

I think the 'move back in with your parents' advice is really selfish.

This is hypothetical for me, as I am a homeowner, but by the time I was the OPs age, with young children, my parents were in their 80s. They had worked long and hard raising their family and were enjoying their retirement. They loved their grandchildren wholeheartedly but their well-being would have suffered if we had decided we wanted to live with them, they would have been exhausted by the sheer noise and intensity of young children. Older parents have their own lives and whilst it works well for some, there are many situations where it wouldn't and older parents don't owe their 30 something children financial support, which is what living rent free with them amounts to.

@holyshmoly1
Out of the options you have given one is a student room. The other two far away from Oxford, Hook Norton has zero public transport and would be more than one hour commute on an average day If not more. Witney is a nightmare commute, there are buses but the price of that would have to be factored in. If you work for the university, assuming you are on a site with available parking, in itself that is unlikely, you pay around 2% salary for the car park, the right to hunt for a space not even a guaranteed spot. Witney commute I think is more than an hour. I live closer it takes me 45 minutes on an average day. The house you found in Oxford is £100 more than they pay now. I appreciate if you don’t have the experience of living / working here it’s hard to know. It’s partly crazy expensive because it’s so awkward to get here from outside of oxford, public transport is useless and the housing shortage and people coming from outside make a congestion horror show.

I don't think the options are either move up North where there are no jobs, or stay in a super-expensive town with jobs. Every picturesque, expensive town with good jobs has a cheaper, more run-down neighbour also with good jobs - for example St Albans/Hitchin have Luton/Stevenage nearby, which both have plenty of companies and head offices based there. But people are snobbish, the only advice online is to "avoid" the shit areas, which isn't possible for most FTBs! (Unless they are happy with a precarious mountain of debt or have rich dead relatives).

Regardless, prices are overdue a correction.

What's wrong with an hour commute? Very common for many people for the exact reason OP is facing, can't afford to live closer to work.

Everything is a choice.

@Desiringonlychild

I think the message from Rich dad poor dad is understanding how our choices impact our wealth, seeing what true value is. Where we loose money and how to make more of it.

Just as you demonstrated within your post, of choosing to invest in your children's future.

Although a house could be a asset or liability, this is determined by your choice of area, supply and demand and government policy.

Goverment policy is also affected, by the most wealthy, whom influence the government.

Housing isn't really a choice, it is an essential necessity, so the only other option for people in this postion is to rent.

I don't want to get overly complicated here.

However renting a 100k house over 25 years at £600 = £180k rent paid. Which would likely increase as time goes on.

However putting 30k down, so £70k mortgage @ £300 a month over 25 years is £90k = total spend £120k, plus ownership. You'll save £60k. Granted you'll have to maintain it also. Any increases, is money in your pocket.

The difference is between an awful liability renting to a not so awful liability a mortgage, which actually through government policy and market forces, turns out often to be an asset.

I understand this is also based on market forces, however they are unlikely to change. Why should I give up my wealth and hardwork, for you to have dinner on me? Therefore anybody with wealth will always act to protect it and the better you understanding of money, the more so.

In other words, if you create loads of free social housing, I will sell my property and join you and then invest else where. The government will then have to tax all of us more to make up the short fall.

Free market economics.

The problems we have at the moment with social housing are numerous, though. The "right to buy" scheme means houses don't stay in council stock, causing problems for future generations.

Lifetime tenancies are also a big problem. People get 3/4 bed homes with young children and can continue to live in those homes in their seventies, when their kids have long since flown the nest, leaving nowhere for young families to live.

Tenancies should be assessed regularly and if people are in huge homes with loads of spare bedrooms then they should be moved to smaller properties to allow new families to move in.

If you don't need a four bed council house then why should you be able to stay in one while families are struggling in one bed flats?

Oxford is tough, they make life really difficult for those with earnings less than £70k per year. Rent is high, if you convert your living room into a bedroom and charge £500/£600 per room to a student you are going to make more with a 3 bed semi than renting to s as family. This happens a lot. So when you do rent you have got no chance of saving.
OP I appreciate you are attached to the city but it’s a nightmare for lower income workers. I think either you need to think about career progression, 20k is low for a university job. Or move somewhere not so far away, Reading for example where you can easily come and visit friends but life is more affordable and get new jobs.
Moving far out from oxford is a challenge in itself , poor public transport, the price of commuting, and the logistics of being far from the kids for school arrangements. Personally I think you are stuck and you need to become open to moving further away and getting new jobs for your own quality of life. Oxford won’t change do you have to.

@Desiringonlychild

No staying in an area, which is beautiful and overpriced is a stupid thing to do, if you cannot economically compete long term or have the wealth to do so.

You are leveraging your health and retirement and once you're no longer able to compete, you will be hit with realism. Cast to an even worse situation, you are only choosing comfortable living today at your expense tomorrow.

Most opportunities which exist in London do so in other places of the country such as Birmingham and Manchester.

You can always find a way to make similar money, although you probably wouldn't need to, as living costs are lower as you move out of the capital.

It's all relative anyhow, if you chose to stay at that job in London and have a fantastic pension at the end, that will keep you going.

However a wiser choice, is to build up capital in a property where you can afford to live.

Then move to that beautiful house when you're in a better postion and still have all those extra benefits.

@TheGuruishere my dad is a property developer in singapore. in singapore, 85% of all housing is government housing. They are not built for rent (except for those in truly dire straits, but those are tiny flats rather than standard 3 bedroom flats), but built to sell to singaporean citizens/permanent residents who generally have equal or less than 120K SGD/ GBP 84,000 in house hold income at the time of purchase. So basically middle class and lower income people/people in their 20s in the early days of the career. Unsurprisingly singapore also has a 92% home ownership rate. Actually this policy was a legacy of the british but the singapore government expanded it from independence while the uk disbanded their social housing policy ,

What happens to the people on higher incomes and the property developers? They buy luxury condos or they can buy the government flats on the resale market (which can usually be resold after 5 years and only to other singaporeans). No one is allowed to own more than 1 government flat. My Dad invests in commercial property and a lot of his peers invest in those luxury condos. Singapore is a very attractive place for property investment but the locals can mostly get their foot on the ladder. Meanwhile, he knew that his daughters could always afford to get on the property ladder with 0 help from him. i bought in London instead and the price i paid for my london 2 bed flat was literally twice of what my cousins paid for their government housing flats, despite singapore being more dense. And the singapore top tax rate? 22%.

We can't always compare countries but I dont see why the government can't build more housing for low and middle income people. Other countries manage to.

@dontdisturbmenow
It is going to be inconvenient for someone with the childcare arrangements to commute more than an hour, surely It means they won’t be able to go in together so no car sharing. if they are both committing that’s the cost of either running a car and paying for parking or paying for the bus. If you move somewhere rural often you need to drive as the service isn’t there, but nor is the parking in Oxford. If it was sitting on a train for an hour and you know when you leave and arrive you can plan but the congestion in Oxford is so crazy you can easily add on 30 mins or more on any given day, which is stressful when you have school pick up. If you move somewhere on the train network that would be more reliable but then your savings go on train fare and you might as well have stayed where you were in oxford.

@TheGuruishere DH and i work in finance. London is the financial centre of the world, no dispute. If i had to move out of london, i would rather move back to singapore where i can buy a 1000 square feet flat in a great location in singapore for the same price of a london flat and still earn london salaries and lower tax.

I mainly live in London cos its more exciting than singapore and the spouse visa for DH (who is british) is a lot less clear cut while i have my residency rights in the UK. Also securing a similar job in singapore is not guaranteed either, as locals in singapore are generally as qualified as the expats so you have to be quite experienced to prove to be a good hire . But it probably can be done as 1 in 4 singaporeans are married to foreigners, and most do get visas.

@Oliversmumsarmy
Quiet, I don't live in central London even though I would have liked it, I just live and work in a small town outside London where costs are still high. do you think the ideal would be to live around the coasts where the costs are really low but do you think it is easy to find a job in those parts? or do you think i could go 100 miles away to go to work? be realistic !!
work and home are human rights, please do not fall into the ridiculous of absurd sacrifices.

@Desiringonlychild

So it is choice then, you've chosen London because you like it there "it's more exciting" an that requires a fee.

Good luck

People shouldn't confuse
"Can't afford to live" with "can't afford to buy"
And
"Right to housing" with "right to own" the latter doesn't exist).

doesn't rich dad, poor dad say buying a home you live in is a liability and not an asset

But this is based on an American system with their property tax and CGT if you don’t live in a house long enough or capital gains tax on profits over a certain amount.

Yes technically your house is a liability but you do need to put a roof over your head and I can see if you are going to have to pay CGT on a property then it might as well be one that is earning you money as opposed to one that doesn’t.

Should we all just buy the tiniest places and all go into btl which is sort of the basis of Rich Dad Poor Dad.