How can you save enough for a house when house prices keep getting higher?

[grannyinapram]

when I moved out, house prices near my parents house were 90-100k
now those houses are £160-200k
I can't afford to live there anymore.

I live in a really horrible area, ex council houses are 130-140k We can almost afford it. BUT every time we get to that magic number, suddenly house prices go up and we have to save more. By the time we have saved more, we look again and house prices are up again.

Well our savings are worth less now than they were when I started saving.
When I started saving I needed £5000 (plus fees) to get a mortgage.
now I have 10k behind me but we still need £5000 to afford smaller houses than when we first started.

And our savings are just sat there losing money.
The interest paid this year is half of what was paid in last year, despite the amount doubling.
I don't know what to do! I don't know how to get there.

How do you get on the housing ladder when the ladder has been put on the back of a truck and is driving away from you?

any advice?
we are saving as much as we can. A third of our income goes into the savings.

Once we get to own a house we are delighted when their value rises. That why we invest in property.

Of course - that means the house you want to 'move up to' will likely have risen too.

We all need to be prepared to widen our search to get on property ladders, sometimes focussing in our preferred areas is just not possible.

I’m in the same boat, prices in my area are rocketing and I really don’t want to have to change schools, or move away from family childcare. Plus even the cheaper areas in my region are out of reach now.

Thanks to all those who’ve made helpful suggestions but so many make me laugh, look at new builds - these start at £205k where I live. You need help from parents - as if they all have £000’s in the bank and not just barely getting by themselves. People who have a joint income of £80k+ saying how they made sacrifices to save every penny! There’s not much to sacrifice when you’re earning £20k.

And best of all the huge number who’ve told the op off for having 4 children. I hope their lives never take an unexpected turn and they become single parents or part of a blended family with more kids. If you can’t say something helpful or kind, why comment!

Yep, in the same boat dear. It feels like you can't win with this.

We moved back in next to my parents in their annexed flat (still our own space but technically same building as my parents).

Feels sometimes like my privileged friends look down on us for it, but they have council jobs so they haven't felt an inch of the economic blow the rest of us have - First with the effects of the global financial crisis in 2008, which we just started recovering from in 2019, then Covid, setting us back from the worst recession in over 300 years.

I always dreamt of a nice suburban home near a respectable school district, with access to shops and amenities nearby. The white picket fence dream, if you will.

But that's all gone. In a way, I do sometimes feel resentful towards the older generation, because the first crisis never would've happened if banks weren't repackaging lending deals and giving them away without doing any proper background checks, and if people back then actually spares a thought for the consequences of borrowing without being able to repay their debts.

If you read the history of this, starting with the crash of the Lehman Brothers and Enron, it would just shock you how it is just a decade later we are reliving the same housing bubble problem as back then.

Market factors, Brexit, Air B&B, no job security and this pandemic all contribute to the rising inflation rates we're seeing here in the UK for instance. I warned my peers this would happen years ago, but nobody listened.

I've now pretty much given up the dream of ever owning a home - not until we're in our 40s anyway, or unless if we win the bloody lottery or make it big (even more unlikely given our delicate economy).

Maybe, don't be as pessimistic as me. If you're happy to own a home, any home, then just keep doing what you're doing. We have an ISA that we put savings in, plus our own additional savings account, but as you say it feels like each time we take a step forward, it feels like the finish line just moved 10 more feet away.

What we actually need is a solution. Not rehashing the same business model - it'll never work for our generation. I think if someone with enough money could tap into how to develop a sharing economy model in the housing context, we may actually be able to get somewhere.

Why did you have children before buying a house? I don't know anyone who does this!

I was brought up with the same mindset

@modernfamalam

I’m in the same boat, prices in my area are rocketing and I really don’t want to have to change schools, or move away from family childcare. Plus even the cheaper areas in my region are out of reach now.

Thanks to all those who’ve made helpful suggestions but so many make me laugh, look at new builds - these start at £205k where I live. You need help from parents - as if they all have £000’s in the bank and not just barely getting by themselves. People who have a joint income of £80k+ saying how they made sacrifices to save every penny! There’s not much to sacrifice when you’re earning £20k.

And best of all the huge number who’ve told the op off for having 4 children. I hope their lives never take an unexpected turn and they become single parents or part of a blended family with more kids. If you can’t say something helpful or kind, why comment!

Noone has told OP off for having children, its comment saying its easier to save up for a house pre-children and comments that if you lr aim was to have a house then perhaps after the first child that what you prioritise particularly if already know you want more children

OP is complaining about house prices saying its taking too long to save up but it wouldn't be if she didn't have children or had fewer children.

I understand to work as an estate agent and the number if people who want everything in a house and aren't willing to compromise was really high.

Sorry but you will have to sacrifice something to buy a house.

Also the reason why people saying best time to buy pre children is because you can be more flexible, you don't have to consider schools, child care from parents etc.

We would all love to live in a world where you cna have what you want but we don't. Reality is that anyone over 18 should realise that if you want to own a house the best way to do it is to save as soon as you start earning and before having children.

Instead people love to tell 20 somethings go party, travel have a life and live it to the max, worry about houses, kids, retirement later. Instead of telling them to have a more balanced approach, yes go travel but don't spend all your money doing it esp if you desire a life where you can have comfortable retirement or want have lots of children and a house.

Isn't that awfully judgmental? How do you know about the OP's personal circumstances? And what if owning a house just isn't possible, and meanwhile you might have issues like age, health or social factors that make putting off having kids near impossible? What makes a home isn't a building, it's the people in it.

Its not judemental at all, she has decided to prioritise having children and now complaining why its taking so long to save up, well duh you have more expenses with children so of course its going to take a long time to save up. Suck it up thats your decision. Don't moan prices are too high.

It took me 8yrs on my own to save up enough from being on 25k salary to then being on 36k and renting at the same time. Did I complain about house prices being too high? Infact I wanted to buy where I was renting but when I could finally afford a house I was priced out so I moved to another area where I wasn't.

@StoneofDestiny

Once we get to own a house we are delighted when their value rises. That why we invest in property.

Of course - that means the house you want to 'move up to' will likely have risen too.

We all need to be prepared to widen our search to get on property ladders, sometimes focussing in our preferred areas is just not possible.

I bought my house 2 years ago. If house prices crash by 40% ill be delighted.

As the more expensive houses (that im looking to move to next), will become more affordbale!

@cyclingmad

I agree. I put off having kids until I at least bought my first flat, that was my choice.

I put off buying a new car, haven't been abroad in 7 years, worked 1000 of hours of overtime, and saved 50% of my salary, so that I could buy my current house.

Whereas my friend has been abroad almost every year, bought a new car 7 years ago and bought another car just 2 years ago; and now complains they cant afford a deposit for a good house...

We all make choices on our priorities, then you have to live with them.

Well, I only rented a room in a house share.

I don't know many people who can afford to rent a family size property, have a family AND save for a mortgage.

My first (small) flat was a bit of a shit hole, I spent 6 months without a kitchen and I didn't have furniture for the first couple of months. It meant sleeping on the floor, which gets old when you work full time!

Then I sold my fully redecorated flat, bought another one, then move up to another bigger one, and now I have a family house. That's how I did, and all my friends around me.

I still had a bit of life, but I was younger and more importantly child free. They didn't suffer.

What about buying a smaller property, renting it out and using the additional income to enable you to rent a larger property?

@Tiredmum122

What about buying a smaller property, renting it out and using the additional income to enable you to rent a larger property?

We’ve toyed with that idea. The thing that puts us off is if you get an arsehole in there who doesn’t pay the rent. Your paying rent and mortgage.

@goodbyelenin

Same here.

You need to start at the bottom, work hard, be patient, make sensible life choices, and do things at the right time.

If OP didnt, then thats on OP.

Buy to let mortgages usually are more expensive to take out. Usual you need a higher deposit, the fees are more and the interest rate higher. Plus a lot of BTL mortgages are interest only so you will need a plan on how you are going to repay the initial loan.

A lot is said on how their rent is higher than what their mortgage would be but no one works out why this is. Interest rates for residential mortgages have been kept artificially low for quite a few years now.
www.mortgagestrategy.co.uk/analysis/historical-interest-rates-uk/
Look at some of the historical base rates and tell me is your rent would still be more expensive had you bought pre 1992 and remember these are base rates and the interest rate is higher than the Bank of England base rate

Yes as I said my grandfather was 49 when he had my father as he could not marry young due to lack of money and he wanted to own a house. My parents both worked full time for 10 years and put off babies and bought their house just before I was born. I bought with my husband before we had children and again we both had a professional job each full time. My child with children did the same - 2 full time professional salaries for both husband and wife and bought before the children came.

I think the biggest problems have been caused by interference by the state in the free market.

What we actually need is a solution. Not rehashing the same business model - it'll never work for our generation

@TTCmum90 which generation are you talking about? It’s definitely worked for my generation, I’m early thirties, me and all my friends have managed to buy in a very expensive south east area. If you mean younger then that then actually there are lots more help schemes available for first time buyers now then when I was buying my first house in my twenties.

Switch your Help to Buy to a LISA account. You can get more in bonuses than Help to Buy and it is for the deposit not afterwards. With the new 95% LTV mortgages available from April you will be good to go? Get a broker now because there is already massive demand for them ready for April.

Actually of you transfer to LISA you might have to wait 12 months.

[quote BalancedIndividual]@goodbyelenin

Same here.

You need to start at the bottom, work hard, be patient, make sensible life choices, and do things at the right time.

If OP didnt, then thats on OP.[/quote]
But one fuck up early on in your life shouldn't mean you can't rectify it later on, and thats where our housing market is.

Buy with the wrong person, contraception mistake, lose your job and you can't do it for the rest of your life.

Can so relate. House princes have 2.5x since we bought where we are. No way we can afford to move now. There are definitely days I feel stuck but am also so glad I gambled and bought when we did. My friend just bought a 1 bed flat for what I paid for a 3 bed. The difference in a decade is shocking. I never thought I'd get on the housing ladder, but I did and I think you can to!

My advice is to speak to many mortgage lenders, some can get you a better deal than others. I was turned down for many and got one through a recommendation and had no problems from there on in. Was able to borrow what I needed, get a good rate and it was so smooth.

Also, can you or partner commit to doing some extra work, even evening work to boost savings? If you knew it was only for a year that may help. Friends just did this to buy a terrace instead of a flat. Both got extra jobs. One working for Tesco about 15 hours a week on top of his non-Tesco full time job and she got a job working in a care home on Saturdays on top of her regular job, then went full time instead of 4 days a week in her full time job too. They scrimped and saved everything for a year. No holidays, no take aways. Because it was only a year they could do it. They saved an extra 16k between what they cut and what they earned and it meant a house instead of a flat. Also got a longer mortgage term. This mean they could stretch to a terrace but also kept a small emergency fund of 2 months expenses in case something happened.

They both actually loved their part time jobs so much they stayed on though at reduced hours. He does about 8 hours a week and she does 4/5 and they plough all that into first getting their emergency fund up to 6 months expenses, and then overpaying their mortgage. Not a long term measure but they want to try and keep it up for 2-3 years so they are in a really good place financially. They make sure no one works from Sat 1 pm until Monday morning so they still have family time. It's a balance. I myself work more than one job too trying to get a better financial picture for the family and get goals met. It's hard but kind of exhilarating and when you close the door and get home from work it all feels worth it.

Good luck.

@EvilPea it doesn’t mean that, it’s just whenever you buy in life you have to start at the bottom. You can’t expect to get to your thirties, having had two kids and expect to be able to buy a three bed house straight away unless your wealthy or in a very cheap area. It’s always been that way.