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.

@Xenia i think prices might have changed since you married. I am not into big weddings at all, I eloped in 2015 and had a civil ceremony wedding. I was absolutely determined to buy a flat before celebrating my wedding with the religious ceremony/reception which was why it was scheduled for 2020, 5 years after getting married.

For my synagogue wedding, it is £1500 for a service and you also have to pay for music. The wedding is postponed now cos of covid 19, but I was planning a ceremony and a simple afternoon tea in the synagogue hall afterwards. My friend who is a caterer was going to prepare my food, my dress cost £500 (now hanging in my closet sadly). my musician SIL was going to do the music with her band (i am going to pay them but she basically told me to decide my own price). Overall it was going to add up to £5K for the simplest wedding ever. Unfortunately cos i am singaporean, my family expected a meal at a singapore hotel. However, due to the oversupply of hotels in singapore, lower taxes and no minimum wage, a 7 course chinese banquet reception for 50 relatives somehow added up to less than the super simple synagogue ceremony and afternoon tea.

I would say my weddings are going to be the simplest of all my friends (at least when covid ends). But its going to be £10k for the synagogue ceremony and singapore reception. Its not a small amount of money. I expected that this would be the case in spite of cutting all the corners I could; hence i refused to even think of celebrating a wedding before we saved the money for our deposit.

The problem with weddings is that unless its is a civil ceremony affair and pub later (which I also did in 2015), it all adds up even if it is small and simple with 50 people. It still costs some money. And thats why people get tempted to trade up to the most expensive option. of course £20K is an absurd amount of money for 1 day and there are ways to cut back. however cutting back would mean that people wouldn't think they are attending a wedding. Its sad that it has to be this way.

@WombatChocolate

Exactly that, retirement...

Having a house means, no mortgage or more stressful rent, within retirement.

However as you put, its whether the person will actually stand up to the reality of the situation or continue to avoid.

www.mrmoneymustache.com/2015/07/27/rent-vs-buy/

It's always important to calculate whether it's cheaper to rent or buy. In many cases, yes it is cheaper to buy and definitely more secure... But in other cases esp for.more expensive properties it can be cheaper to rent esp if your mortgage term is shorter.

I say this as someone who owns a 2 bed flat in London.. for my flat it is cheaper to own than to rent. My mortgage is £1k and the listed rent is £1500.

As you pay your mortgage off you can reduce your term or your monthly payments. To rent my house would be about £2000 a month, my mortgage payments are £500pm, I have 8 years left on the mortgage.

It's always important to calculate whether it's cheaper to rent or buy

Unless you know the date of your death then you can only do a vague calculation and even taking the rental/mortgage in the link. One might be more but has a finite end to the payments and will also go down over time whilst the rent is the cheapest it will ever be and will only go up and never go away until the day you die.

I know a few people who have taken the view that it was cheaper to rent than buy.

One pays £60 per month as a sitting tenant in a room in what was a shared house
The very large house has been turned into flats and only 2 tenants remain sharing a bathroom and a tiny kitchen.

He is so proud that we were all suckers when we got a mortgage whilst he only pays £60 per month.

But adding up even the £60 per month which he has been paying since the 70s he could have bought 3x1 bed flats. If he had bought when everyone else did his outgoings would have stopped years ago.
He is quite a sad character. Everyone moved on with their lives, moved in together, married, had families, grandchildren etc and he is stuck.
He did have gfs at first but they moved on when they realised he wasn’t prepared to leave his “cheap” accommodation.

@Oliversmumsarmy Buying wouldn't necessarily guarantee financial security either. I would rather rent than be on an interest only mortgage where I have to repay the principal at the end of the term.

Buying and spending all your money on the house and associated property maintenance and commute costs (since people tend to buy as big as they can, this often necessitates an expensive commute) with no savings buffer is a financial disaster. You might be better off at 68, but you are going to probably be in huge trouble in the immediate future.

Nothing wrong with buying a modest home with minimal commute costs that you can afford and still save 20%. of after tax income. That is usually cheaper than renting anyway. But I find for the 800K-1 million 3 bed house, its cheaper to rent than to buy.

I'm not sure house buying has ever been easy. I finished university and spent 7 years saving for a deposit. I lived in tiny box rooms in house shares with 6+ people to pay minimal rent. Met now DH he started doing the same. We both re-evaluated our careers early on and made the decision to take routes with better earning potential. We spent our 20s working our arses off to climb the career ladder as fast as possible. We had a very, very small, cheap wedding and held off kids until we'd got our first house. We also relocated to an affordable area. We spent 5 years saving up and then doing up that house and then sold it and traded up. I had to negotiate hard for our current place and we are starting all over again doing it up.
A house was our priority. We made conscious life choices for years and years to get there. The other cost which isn't apparent from the outside is I had my first baby late in life so haven't been able to have any more. I'm not complaining but the point is every decision comes with a price. Overall I wouldn't have done anything different but it has certainly not been 'easy'.

Desiring, in Catholic churches it is almost free of charge and obviously no one has to buy a white dress and that kind of thing if they don't want to - here is a random example which from the below looks like £40 minimum ( registrar) but if you can afford more and want to you can give more.
If you want music you can pay extra for fee for an organist.

"Costs

Priests often hear the question, “How much does a wedding cost, Father?” The answer, of course, is that there is no charge for the sacraments. The sacraments are dispensed by the Church as gifts from God to the community. There is, however a long standing custom of free will offerings made by the faithful on the occasion of certain sacraments. These offerings reflect both gratitude to God and appreciation of the ministry of priests.

Sacred Heart Church is served by the Missionary Oblates of Mary Immaculate and your offering should recognise the expense a parish incurs in connection with all involved with your marriage. The offering should be in proportion to the other costs of the wedding celebrations. The Offerings are not for the priest but for the Oblate Mission.

Registrar

The official fee for the registrar is £40. Cheque payable to ‘Margaret Kiely’

Church Offering

An offering of £150 towards the cost of providing church facilities is suggested. Cheques made payable to “Sacred Heart Church”

Flowers

By arrangement with Ann Palmer 7624 9680
Cost of flowers agreed with Anne and £50 charge for preparing flower arrangements.

Sacristan

An offering of £20 is suggested"

@Xenia I don't doubt that, my Catholic parents had a very cheap church wedding. Which is why they don't understand why i can't have a simple celebration as their understanding of religious expenses is $10 in a collection tin. Judaism is an expensive religion but not in a scammy way, it's smaller and hence needs fees to survive. Things like kosher catering also bump up the cost.

But I think for things like weddings, it's unfair to just blame Instagram. A lot of it is parental expectations..I think even nice weddings cost a lot less in the past like houses.

@BillyCongo as a young person, I think what concerns a lot of young people is the fact they aren't doing as well in the property market as their parents.It is really obvious when I compare the people in my MIL's zone 3 London neighbourhood, the people who bought in the 90s were on really ordinary incomes- freelance translator, rabbi (clergy), media worker while the people who bought recently usually have jobs like highly paid startup founder. I am sure the older people saved very hard to get there, but it still doesn't change the fact that if they would need to pay £700-800K for the same house today (and 2 teacher salaries do not get you a mortgage for that kind of house today, even if you didn't eat for 5 years). So they have to move further out and the people who could afford to buy in those far out places now can't.

I bought a 2 bed flat in the same area as MIL but i think a generation ago, i could probably have stretched to a 2 bed house.

Yes, is it very difficult for people. Even in 1984 we could not afford Ealing so bought further out. My journey back from work took at least an hour - sometimes 90 minutes if there were delays and I was often rushing back to breastfeed a fairly new baby. My daughter has bought at exactly the same age I did a reasonably similar house by the way earlier this year but she and I are lawyers., Mind you my husband's teacher colleagues even in 1984 could not afford to buy in most cases even with two full time wages or found it difficult or commuted 40 minutes to school and bought in the worst bits of Watford or lived in a school provided flat and bought a country cottage hundreds of miles away so they had something for retirement so your career has often decided where you can live.

@Xenia Edgware takes an hour? I live in East Finchley and it's 25 minutes on the tube, not including walking time. Edgware is only a few stations after hendon. Used to live in Hendon and my commute is maybe faster by 2 minutes. Do you live very far from the station?

Actually rent Vs buying in the elderly years might be cheaper to rent especially if the pension isnt great. My future MIL doesn't own and she probably has more spare cash than we do, her pension credits supplement her state pension. If she has to go to a care home, there no assets to be sold, so the state will take care of it.

I don't live in Edgware./ The tube journey itself from my house with no delays is about 35 minutes. It takes about 15 - 20 mins either to alk to the tube or drive down and park there and mess around with parking and at the various firms I worked in London it was about a 10 minute walk at the other end so yes has always taken at least an hour door to door. Could rarely afford to live right near a tube station I suppose.

Ordinary people with ordinary salaries buying properties in expensive areas is a blip of about 50 years, with the norm being that most normal earners rent or need to live in much cheaper areas. The post-war generation came into affluence whichnallowed very ordinary people without high levels of education or earnings to buy in lots of parts of London and other expensive cities which would never be affordable now. So comparing yourself to parents, whilst natural isn't helpful. Most couples with 2 adults in decent jobs won't be able to buy a 3-bed semi zone 2 like many of our parents did. To get the 3 bed semi you have to move much further out.

Wealth is becoming more polarised. Twenties and thirties buying in expensive places have more often had help from parents and are from more affluent backgrounds. Those without the large deposit gift and high paying career might always rent or will need to move away to buy, and insisting on staying in the expensive areas means a lifetime of renting.

I find the discussion of properties in the £800k+ bracket rather odd and unhelpful for those like Op on close to minimum wage who want to become home owners in their 40s. It probably confirms their sense that people have no idea of their reality.

I am sure the older people saved very hard to get there, but it still doesn't change the fact that if they would need to pay £700-800K for the same house today

I am in a house atm and my now adult children aren’t able to afford this house. However at their age I couldn’t have afforded this type of house. All I could afford was a studio flat and that took a lot of 100 hour weeks to afford.

I would say the biggest difference between buying in the 70s or 80s to buying now is in the 70s and 80s the very idea of living in private rentals was so horrendous you worked your arse off to afford your own place. You weren’t fussy about areas or size of rooms. Rented properties were really grim and the less time you spent their the better.

You only have to look at student accommodation from that era to now to see why people bought

@WombatChocolate unfortunately in a lot of parts of London and probably also oxford, a 3 bed house is £800K. I was never sure whether OP meant actual houses or property in general, i presumed she was talking about buying a bog standard 3 bedroom terrace/semi-detached in an expensive area that her family has always lived in/where her job is.

I managed to stay in the area that DH grew up in by buying a flat. Like you said, times have changed and outside the UK, apartment living is ubiquitous. I can't afford a 800K house either, but its not useful to deny thats how much it costs.

@Oliversmumsarmy yes but the difference is that while you scaled up from that studio flat, i dont know if my generation can scale up from our first homes without moving miles and miles away. The property crash of the 90s enabled my MIL to sell her 1 bed flat at a 40K loss but also buy her forever home. I hope that this would happen for me, that I can save and overpay my mortgage so I am not in negative equity even in a 40% crash. Then I would happily sell my 2 bed flat at a loss and trade for a bigger flat/ house.

Desiring, my older son who has chosen low paid work has moved "up" by moving counties more into the countryside and beause I chose to work full time and help him buy his first property. My lawyer daughters will have more a tragectory that we did as their pay will rise over time.

We might have sold 3 properties in 1996/97 at a loss in outer London but that almost meant my current house was also cheaper to buy than it otherwise might so yes despite the paper losses, real losses actually on the 3 properties we were in a sense helped by a crash. I am sure there will be regular property crashes - there often are.

Also some bought in what were slum areas of London and endured awful stuff and those areas then came up. I wanted us to buy some crashed out old place in the East end in 1984 as that was close to my work but we bought near my husband's work out here and did get a garden etc even with a 3 bed semi (those - our first house - cost £400k today and you would need as we had a head of department teacher and London business lawyer salary to buy them)

I am probably different anyway as I am from Newcastle and my husband was from Yorkshire so we know those property markets (much cheaper ) very well and my mother grew up in a rented house which today costs about £50k to buy and yes it will be a bit of a dump but like most people they didn't have much money. Her mother was widowed when my grandfather fell from a great height in 1930 at the shipyard in an accident at work when my mother was 4 months old and her mother had only been married for about 15 months and she never married again.

@Xenia my 2 bed flat in zone 3 London is 400K. our combined income is £70K and we had a 70K deposit saved from living at home for 3 years. i think you and your husband probably had better salaries than us(adjusting for real terms). Dh also has a massive student loan, I don't as my parents paid for my education.

if you don't mind me asking, which area is this? I wasn't aware you could get a 3 bed semi in north london for 400K.

i dont know if my generation can scale up from our first homes without moving miles and miles away

That all depends on the choices you make.

In boreds case it isn’t that she can’t afford to buy in an area that is very commutable to where she and her dh work but the fact that they want the cute little Victorian terrace in Summertown as opposed to the 3 bed semi or terrace in a commuter town 1 stop away on the train.

My first studio flat was in one area. We then moved out to buy a house in another area. Then moved to a different area for dp’s work then moved back to London but in a different area altogether.
I didn’t realise it was an awful thing that we had to do to be able to afford a house.

@Desiringonlychild I'm late 30s so not exactly an old person!!. We also used to live in Zone 3 North London. As first time buyers our choice was a studio or one bed flat in London or relocate for a house. We chose to relocate and buy a 3 bed house which needed a lot of work to be affordable. It's not easy but that's the choice we made to be able to buy a property.

@Desiringonlychild you can buy a nice 3 bed within 6 miles of Oxford for under £300,000, most cities other than London have areas of very expensive properties and relatively cheap ones in comparison.

This is tjhe road we bought on in 1984 - I only found a semi one though and it is much nicer than ours which was terraced. www.rightmove.co.uk/house-prices/detailMatching.html?prop=76126262&sale=56108435&country=england. That is £458k. If it were not done up and terraced as ours was would be more like £400k.

This one sold for £450k this year (before CV19) but is much more modernised than ours was. www.rightmove.co.uk/house-prices/detailMatching.html?prop=80554112&sale=90616854&country=england
May be my £400k is out by £50k although with the pandemic you could probably get somewhere near there for about £400k in tersm of a small terraced house.
Here is a 2 bed terraced sold this year for £365k www.rightmove.co.uk/house-prices/detailMatching.html?prop=85243793&sale=90616716&country=england

@Xenia thank you. I think I did look in harrow when searching but we didn't find anything suitable. Probably because we were looking at harrow on the hill (near the shopping centre) which was more expensive.

I agree, OP completely. We’re very lucky that my parents gave us £10,000, which we used for a 5% deposit. Hi his was a couple years ago when the interest rates on 5% mortgages were phenomenal (our £200k house had the same monthly repayment as my sisters £500,000k house due to the fact they had a 25% deposit which massively reduced interest) we’ve since remortgaged and due to equity increase etc we’ve managed to get much more favourable terms.

Without my parents there is no way we would have been able to save up a deposit.