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.

@Cam77

This has nothing to do with landlords and buy to let, it goes much deeper than that. It is more to do with the way that building land is valued, so only the big developers can afford to invest in it - they can then control how quickly houses are built and keep prices high.

Overly high house prices mean higher mortgages, which means the debt to GDP ratio is higher.

More people renting means their housing costs are higher and so absorb more of their income, which means they spend less elsewhere in the economy - which needs a big post-Covid boost.

Most importantly for the current government is the fact that people who don't own their own homes don't feel like stakeholders in the country and they certainly don't vote Conservative. Something that may interest your MP if they are a Tory!

In the 2008 crash the ordinary joes lost their homes but they didn't lose their savings, one of the main causes of the crash was they didn't have any but we're still given mortgages. I think that the chances of another big bail out like last time are slim, even if it were possible.

I would recommend getting an independent mortgage advisor on board. We purchased our first home last year with a 5% deposit, just before covid struck (we exchanged and completed on the same day in April) we put down just over £12,000.

MyDC, 2 weeks actually ( I took off for babies) but had non sleeping ones so hours of breastfeeding every night. I am not sure they really missed much because I worked that they would see getting helped with housing as a compensation for what happened when they were a few weeks old.

One big issue has been wage stagnation in some sectors for 20 years (not all jobs eg my London lawyer daughters can buy the same house we bought out in zone 5 in 1984 because the wages rose in effect to keep up with house prices but other jobs that didn't happen).
It is also hard to compare as a much smaller purchase price but 13% intrest rates and perhaps losing lots of capital when you sell at less than you paid as we did in the 1990s is hard to compare with someone paying 1.44% interest but on a much larger sum.

Was this property in Liverpool childwall

Completely against the prevailing opinion, but the majority of my friends did not have any problems with buying, despite working in manual and low-qualified jobs. Was helping someone with paperwork just before the last lockdown, a couple - a cleaner and a construction worker, deposit for a decent family home easily put together in two years (since their arrival to the UK). From an outsider's perspective, the UK is a remarkably easy place to buy.

Have they been paying any income tax on these jobs?

@woodhill

Have they been paying any income tax on these jobs?

Of course, how else would they be approved for mortgage? Two years good stable trading profits from both, very little expenditure, the bank was very happy to lend.

It's really difficult, I saved since I started working @17 as from an early age I knew that I wanted to own my home and love saving. By 28 I had over 30k in savings but even with both my, and my partner salaries we struggled to find a house we could afford. Eventually we found a house in our budget (probate) that needed a full refurb and took out loans and used credit cards for the refurb.

Maybe looking for fixer upper and taking your time fixing it up, at least you know its yours.

I don't know what area you are in but my son and partner moved onto a brand new housing estate. They paid a 5% deposit and given a 2k voucher to spend in Mark's Mark's and Spencer. They were offered other first time buyer schemes like first 3 months mortgage paid or all white goods given with the kitchen. They are now in a three bed house. Worth looking at deals new houses have to offer.

Please don’t give up hope!

The only way that we could afford a house was to buy something that needed total renovation.
I will be honest it’s been hard but worth it.

It may only be applicable for people without children, but if I was starting out now I would try to buy a two bed house and rent out a room to help pay the mortgage. Does anyone know if that's possible? When we got married (20 and 21) we had no financial help from either set of parents to buy a house, but we had a favourable mortgage from the company my husband worked for - and that was amazing. However, because my husband spent every night studying for exams and we had no money for the next five years we hardly ever went out and spent very little. We ate an awful lot of very cheap offal.....

It’s not easy. You could buy in a less desirable area, smaller house, needing lots of work etc. I bought at 22 with only my modest salary. The house was truly awful, outside toilet, peeling woodchip, damp, holes in windows, filthy swirly carpets. Did all the work myself, learnt to tile and fit kitchens, saving up to buy windows etc. It’s not a nice relaxing way to live by any stretch and it is hard work. Overpaid the mortgage whenever I could, pay rises go straight to mortgage. Made money on that house, moved to a bigger house in nicer area, again did all the refurb. Repeat the process. Mortgage paid off now I’m in my mid 30s. No handouts or help from others. It is hard work and probably impossible in London or south east if you can’t even stretch to the cheapest listing. Rent where I live is more expensive than mortgage so just getting on the ladder is key.

The most precious thing you will ever own or be housed in is your body . I am nearly 50 and I have watched my mother’s generation and I just want to advise that knowing who you are is better than what you want . Look after your precious body see that as the most important thing you truly will ever own. My mother’s friend lives in a place of your dreams but she wrecked her body it’s bizarre that the house is more important. Just like when children forget the real world when they are online. There is something missing if bricks are worth more than your health and wellbeing Some of them end up enslaved to the upkeep I have so many stories I could tell you

As others have said it is nearly impossible to buy a 'family home' as your first property. You need to find a way on to the ladder so that any increases to the market will benefit you rather than hinder you.

@backonthescene

Will my bonus contribute towards the deposit to buy my home?

Yes, the government bonus will be added towards your overall deposit.

www.moneyadviceservice.org.uk/en/articles/a-guide-to-help-to-buy-isas#will-my-bonus-contribute-towards-the-deposit-to-buy-my-home

@Darlingx

The most precious thing you will ever own or be housed in is your body . I am nearly 50 and I have watched my mother’s generation and I just want to advise that knowing who you are is better than what you want . Look after your precious body see that as the most important thing you truly will ever own. My mother’s friend lives in a place of your dreams but she wrecked her body it’s bizarre that the house is more important. Just like when children forget the real world when they are online. There is something missing if bricks are worth more than your health and wellbeing Some of them end up enslaved to the upkeep I have so many stories I could tell you

This is a refreshing perspective - I do agree.

There has to be a middle ground though. If you're stuck in a cramped flat with noisy neighbours and little hope of affording anywhere more suitable because of high rents or the impossibility of saving a mortgage deposit, it can make life very stressful, affecting both physical & mental health.

I know people that commute 200+ miles to work
Stays for a few days, goes home for a few days

There are places where property is considerably cheaper, than other parts of the country

Renovation project properties are generally cheaper

Do you work or are all the savings coming from your DH wages ?

[quote PattyPan]@backonthescene

Will my bonus contribute towards the deposit to buy my home?

Yes, the government bonus will be added towards your overall deposit.

www.moneyadviceservice.org.uk/en/articles/a-guide-to-help-to-buy-isas#will-my-bonus-contribute-towards-the-deposit-to-buy-my-home[/quote]
“Overall deposit”

As in, not the up front deposit! You still have to have the 10% or 15% and can’t use the bonus towards that.

Can I put my Help to Buy ISA towards my mortgage deposit?

Yes - but you can’t put it towards your exchange deposit.

When you exchange contracts with the seller, they can ask you to pay an exchange deposit, also known as a holding or contract deposit. You can’t use your bonus towards this as the government only pays out the bonus once the property sale is completed.

Unfortunately you are fighting against the government who have unlimited money when it comes to housing, the new latest 5% deposit scheme and stamp duty holiday extension are designed to inflate house prices and get first time buyers into more debt than previous first time buyers so that you will have to work longer and therefore pay more tax to pay off the covid debt, same as back in 2014 when Help to buy and Shared Ownership were introduced solely to increase house prices and get people to pay more so that they have to work longer to pay more tax into the system.

@backonthescene I bought my house in 2019. I had my deposit in a LISA. I used it for the exchange deposit. There was no issue doing so and I definitely didn’t have 15%!

The government claim they want to help generation rent, but it's all lies when they do things like extending stamp duty holiday. That was one of the very few things that was beneficial to first time buyers. It needs to end and go back to being for FTB only.

When you exchange contracts with the seller, they can ask you to pay an exchange deposit, also known as a holding or contract deposit. You can’t use your bonus towards this as the government only pays out the bonus once the property sale is completed.

The fact they can doesn't mean this is what happens. You have a number of people saying on here how it worked for us in practice and you're still banging on the same old tune 🤦🏼‍♀️

The stamp duty holiday is for properties up to £500k I believe so although in some areas it will help second time buyers it is not helping the rich.

Another vote for shared ownership.