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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

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

247 replies

grannyinapram · 03/03/2021 09:30

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.

OP posts:
Original poster
grannyinapram · 03/03/2021 20:11

@Dobbyafreeelf
I feel so sad for you and it is not dramatic
everything is turning to shit. Renting is crap because you have to pay more and your landlord can sell. then you're forced to move.
its not secure.

OP posts:
cyclingmad · 03/03/2021 20:13

Oh please OP, you could of had one child and saved up for a house but you had a second at that point you could of prioritised a house but had a third and then a fourth.

You chose to have children above saving up for a house. Now you come on bleating about how its not fair prices are too high and I can't buy a house.

Well lots of other people made different choices and prioritised other things, made other sacrifices etc.

But one thing is for sure once you buy your property no doubt you'll be on the side of wanting prices to rise.

fronz · 03/03/2021 20:15

@Onedropbeat the concept of a housing ladder doesn't really exist now & for many people rising prices make it harder to move up a rung.

MayYouLiveInInterestingTimes · 03/03/2021 20:17

But one thing is for sure once you buy your property no doubt you'll be on the side of wanting prices to rise

Hi, as I said upthread we finally managed to buy a few years ago. Do I want prices to rise? Hell no.

I expect my generation, having been screwed over all our lives, will have to take the hit for the next. As long as they don’t fall too fast we should manage. Things cannot carry on like this.

Onedropbeat · 03/03/2021 20:17

[quote fronz]@Onedropbeat the concept of a housing ladder doesn't really exist now & for many people rising prices make it harder to move up a rung. [/quote]
Exactly this

But then what happens to all the people who buy starter homes? That’s them for life?

I just hope we can save enough for an extension. In that way we might be one of the lucky ones

Stellaris22 · 03/03/2021 20:17

So people should put their lives on hold just so they can afford an overpriced property?

I know couples with no children who work full time and still needed financial help from family to get on the property ladder.

Extending stamp duty exemption is a terrible idea and is no help to first time buyers.

Onedropbeat · 03/03/2021 20:19

@cyclingmad

Oh please OP, you could of had one child and saved up for a house but you had a second at that point you could of prioritised a house but had a third and then a fourth.

You chose to have children above saving up for a house. Now you come on bleating about how its not fair prices are too high and I can't buy a house.

Well lots of other people made different choices and prioritised other things, made other sacrifices etc.

But one thing is for sure once you buy your property no doubt you'll be on the side of wanting prices to rise.

Agree with @MayYouLiveInInterestingTimes

Bought 4 years ago, my house on paper might be worth another £100k but I now couldn’t afford to buy anything else on the market

fronz · 03/03/2021 20:23

The bottom rung is so high that's it's really hard to build equity & we have had wage stagnation, which we now will experience again. It's why I said any buyers now need to future proof as its not good to move frequently when you take into account reduced equity, stamp duty etc.

Where I am, a high priced part of London prices have pretty stayed the same the last 5 yrs when you factor in stamp duty, flats may have lost money.

cyclingmad · 03/03/2021 20:24

@MayYouLiveInInterestingTimes

But one thing is for sure once you buy your property no doubt you'll be on the side of wanting prices to rise

Hi, as I said upthread we finally managed to buy a few years ago. Do I want prices to rise? Hell no.

I expect my generation, having been screwed over all our lives, will have to take the hit for the next. As long as they don’t fall too fast we should manage. Things cannot carry on like this.

I didnt say you would want that, I said OP would because she has already said she doesn't want to buy a house and be stuck with negative equity. Thats the mindset of someone who wants to make money form a house not someone looking to own a home
fronz · 03/03/2021 20:25

But one thing is for sure once you buy your property no doubt you'll be on the side of wanting prices to rise

Err no, a) because I need to upsize at some point, b) Id like to not have all my money tied up in repayments c) I have dc.

fronz · 03/03/2021 20:26

people are already have dc later on in life & less of them.

NoIDontWatchLoveIsland · 03/03/2021 20:27

The only way we ever managed it was by our earnings rising. Because you can borrow usually 4 times your salary, even a little salary/income uplift goes a long way in terms if your purchasing power.

Eg
Dh and I planned to buy and started saving. London so £££. We started off with a budget of 300k, planning to save 10% deposit. Our income was 75k combined but we knew we wouldn't end up borrowing dull 4x due to various fixed expenses/loan repayments we already had.

By the time we had saved the deposit, we needed 350k. Our income had risen to £87.5k, so even though the prices had risen the increased amount we could borrow meant we could cover it.

emilyfrost · 03/03/2021 20:28

@cyclingmad

Oh please OP, you could of had one child and saved up for a house but you had a second at that point you could of prioritised a house but had a third and then a fourth.

You chose to have children above saving up for a house. Now you come on bleating about how its not fair prices are too high and I can't buy a house.

Well lots of other people made different choices and prioritised other things, made other sacrifices etc.

But one thing is for sure once you buy your property no doubt you'll be on the side of wanting prices to rise.

Absolutely this. You made your choices, as with all choices, there are downsides.

By having so many children you have decreased your chances of higher savings. You can’t have everything.

NoIDontWatchLoveIsland · 03/03/2021 20:29

The only answer is for more housing to be built, so that supply exceeds demand, and no government will ever do it because they are too short sighted about house prices. They fail to see that high house prices tie up a lot of wealth that people could be spending/recirculating in the economy if their mortgages and rents were a lower proportion of their income.

fronz · 03/03/2021 20:32

Exactly so much more productive to have money to spend.

cyclingmad · 03/03/2021 20:42

@fronz

But one thing is for sure once you buy your property no doubt you'll be on the side of wanting prices to rise

Err no, a) because I need to upsize at some point, b) Id like to not have all my money tied up in repayments c) I have dc.

Did I direct that at you? No it was to OP, so not sure why you feel the need to respond to a comment I didnt make to youHmm
fronz · 03/03/2021 20:46

I can respond to whatever I like

Dobbyafreeelf · 03/03/2021 20:55

@NoIDontWatchLoveIsland

The only way we ever managed it was by our earnings rising. Because you can borrow usually 4 times your salary, even a little salary/income uplift goes a long way in terms if your purchasing power.

Eg
Dh and I planned to buy and started saving. London so £££. We started off with a budget of 300k, planning to save 10% deposit. Our income was 75k combined but we knew we wouldn't end up borrowing dull 4x due to various fixed expenses/loan repayments we already had.

By the time we had saved the deposit, we needed 350k. Our income had risen to £87.5k, so even though the prices had risen the increased amount we could borrow meant we could cover it.

@NoIDontWatchLoveIsland

But that is a massive massive salary!!! You could have bought something cheaper sooner.

My salary is about £21k - the cheapest property near me I have seen is £160k!!!!

Not remotely comparable!!!

RagzReturnsRebooted · 03/03/2021 21:11

@Stellaris22

Being told to just 'move out of the area' is so incredibly insulting. Why should you move just so wealthier people can live there.

We would have to move from where we are to afford a house, but that would mean no longer being close to the school DD loves.

Another thing people forget about this is that if all the low paid workers like nurses, carers, young teachers, TAs, public servants, retail staff etc leave the area then who will be doing these jobs?
Xenia · 03/03/2021 21:38

We moved to London in 1983. House prices even out here in outer London were so excessive the schools could not persuade teachers down here. We started out in a house provided by the school. Local nurses lived in nurses' homes (as my father's aunt did in the 1920s too - nurse in London). The London weighting for teachers are derisory given house prices even in outer London were 2 or 3 times the North of England.

Then by the 1990s prices were so much lower than you paid for a property.

My only point is that quite a few people have made losses on property even in London over the years. Markets go up and down.

1 bed flat we bought to let out bought £57,500 bought Jan 1988 (sold Jan 1996 £46,000 )
2 bed flat we bought to let out bought £74 950 approx bought Summer 1988 (sold 1 May 1996 £55,000)
Our previous house to the one I live in now bought 1990 £275,000 (sold Jan 1997 about £249,950)

SciFiScream · 03/03/2021 22:11

@grannyinapram please do re-read my answer to your question. I did my best to come up with an actual answer.

There may be something in there that works for you?

It won't be easy but it will be worth it.

notdaddycool · 03/03/2021 22:44

If you want stocks and shares you can get funds that track the ftse 100 which is safer than picking stocks you don’t really know. I’d also suggest getting a small place you can afford quickly to lock in but buy a place you can extend a couple of years later when you’ve saved more from not renting.

LemonadeFromLemons · 03/03/2021 23:07

@fronz

Exactly! It’s couched as a win in the budget, as if the govt are doing homebuyers a favour but as Starmer said in PMQs govt intervention of the sort they are pulling now (and have been for the last ten years) only pushes house prices further away from first time buyers. The equity gap also increase for upsizers too. The people who win are downsizers, BTLs (the vast majority having invested extra money, they already have their own shelter) and builders/landowners. I think I’d almost be okay with the new policies if they were at least honestly labelled as ‘help to sell’ not ‘help to buy measures’.

species5618 · 04/03/2021 00:07

A1b2c3d4e5f6g7
You may well be right. I come from a generation where marriage and children by 25 are the norm so find it hard to imagine starting a family in your late 30s.
DD will still struggle a bit for the next few years to to keep up mortgage payments so I'm assuming that family won't be on the agenda - apparently my becoming a grannie isn't a priority Shock

species5618 · 04/03/2021 00:18

@SciFiScream
You've rumbled me as a Sci Fi nerd Smile