How do you upsize!?

[secondtimebuyer1]

This is a very first world problem and I know we are lucky to a) own our own home and b) have stable incomes.

We bought our first home in 2013 for £285k- a 2 bed bungalow. In 2015 we borrowed an extra £50k and converted the loft so we now have a three bedroom house. Mortgage is now £203k and house is worth £420k. We are desperate for a 4th bedroom so family can stay (post lockdown) as they all live up north.

When we bought our combined household income was just under £50k. We have progressed in our careers and our combined income is now £84k - despite our pay increases we still can't afford to upsize. A detached 4 bed with garage (our forever home dream) in our area is £700k- these are relatively normal family homes. We'd need a combined salary of £100k+ to afford a house like that- how do normal families afford it? We both work full time in professional jobs, nursery fees are crippling and I feel like we're just keeping up. If we were first time buyers we'd need a £42k deposit just to buy our own home- would never have happened!

AIBU to think the only way to really upsize, in the south east, is win the lottery or inherit?!

You’re relatively low earning, normal families don’t afford 700k houses. That’s the truth.

@Mylovelyhorsee

You’re relatively low earning, normal families don’t afford 700k houses. That’s the truth.

Relatively to what? Our ages? The uk? The area?

Either way, we've the highest household income of our friends. Most of my female friends work very part time or are SAHM and their DP's have normal jobs with 5 figure salaries...

@Jangle33 I don't disagree I see what you're saying. We couldn't get on the ladder till a bit later, although I would say we made a big mistake not extending ourselves more, we tried to be sensible and buy cheaply but outgrew the house very quickly, didn't make much money on it at all (despite overpaying) and then had a big increase in salary so ended up moving within 3 years, we pushed ourselves much harder this time (for the 4 bed detached actually but live in a cheap area so paid what many people pay for 2 bed terraces further south!) it's an investment so should pay off eventually. But we are not overpaying our mortgage at this moment in time, we have children and want to travel, go out for dinner etc etc, we are paying what we need to pay and will start over paying when we get a pay rise, mortgage is not the priority at the moment, living is. We have plenty of years ahead of us to pay it off. I've just never understood the obsession of paying a mortgage off ASAP to the detriment of daily life during our healthiest years, especially if children are already on the scene, but then I guess it depends on what the sacrifices are, one person's sacrifice is another person's gain!

@secondtimebuyer1 OP I earn similarly, it's an above average household income not to be sniffed at, but £700,000 is disproportionately above average, our salaries do not correlate with houses of that value unless we come into a windfall!

@secondtimebuyer1 but are your friends with lower salaries all living in the 4 bed detached with a garage?

[quote Jangle33]@secondtimebuyer1 but are your friends with lower salaries all living in the 4 bed detached with a garage?[/quote]
One has just bought a £650k home after her husband inherited and sold his mum's house.

Lots of the 'school mums' live in the houses I'm describing. They do the school runs so can't work full time and I can't imagine ALL their DP's earning £150k+ hence why I asked the question in the first place.

Well - you can't afford at the moment it if you're not going to move from your area, let's be blunt. You simply don't earn enough.
I don't know why your family can't stay in accomodation near you when they stay.Footing the bill for them a couple of times a year would be a lot easier than 20 years of a bigger mortgage.
Our daughter and her husband live a couple of hours drive from us. We stay overnight in a hotel when we visit, and spend all day with them. It's perfect - they're not squashing us in and we all get a bit of down time.

@secondtimebuyer1 well than they either made a lot more money than you on previous properties, inherited/were given family money or are mortgaged up to their eyeballs...

We are in same position. Would love to move to a 4bed but need to find an additional 100k from somewhere to do it. We would love to convert the loft but bank wouldn't even give us 10k towards it as we don't have enough equity. We have resigned ourselves to fact we can't live close to family AND have the house we want. For now, family proximity wins.

We just upsized. We managed it by looking out of the areas we really wanted to places that were in our budget for what we wanted but perhaps not our first thoughts.

We now have a large home, with plenty of space indoors and out, detached, and nice and rural. It's more of a doer upper than we'd ideally have liked and, as I say, it's meant moving to an area we hadn't initially considered.

I'm not going to say anything is achievable for anyone, as that's idealistic, but on the figures you're describing it should be achievable with compromise. What's more important location or the size of the house?

[quote Jangle33]@secondtimebuyer1 well than they either made a lot more money than you on previous properties, inherited/were given family money or are mortgaged up to their eyeballs...[/quote]
It's not just a case of salary multiples for many of these families. Plenty of couples owned a property each when they met and combine the equity. There are also lots of parents of 30-somethings doing equity release and giving their offspring £300k of the £800k they've made by staying in the family home for 30 years.

Sorry, quoted the above post to agree with it if that's not clear!

You've just answered your own question - your friend managed it because they had an inheritance.

Normal families don’t afford 700k houses.

‘Normal’ will always be in relation to the U.K. average. No point asking how ‘normal’ families in expensive areas are supposed to survive because the answer is they aren’t maybe 50 years ago you could feel entitled to remain in the area you grew up and be annoyed if you couldn’t afford a home there but between overpopulation and massive increase in migration around the U.K. that’s not the case at all now. Your budget dictates your location and it doesn’t much matter if you ‘have’ to live in an expensive area for XYZ reason, either you can afford to live there or you can’t

The only caveat at essential workers like nurses/emergency services who have to be in an area there salary won’t Accommodate. My friend was a nurse in central London and received subsidised housing though so there are measures in place.

I live in an expensive area of the north. Average house price in our city is about £500k for a 3/4 bed terrace. Villages around are pricey but bigger houses. We moved East and and paid £140k less for a comparable house to SIL/BIL who moved West. Anyone willing to move South would pay £100k less than us for a comparable house. It’s just the way it is.

I think a lot of ‘normal’ families in the U.K. are struggling to get on the property ladder even in averagely priced areas. The cheapest area I know is currently selling 3 bed semis for £250k so unless you have £25k laying around and a joint income of 50k you aren’t getting one! And honestly I wouldn’t want to live there poor ‘normal’ families xx

Yep. I think a lot of people assume shared ownership scheme applications will be first time buyers, single people and early 20s couples but there are plenty of families of 4 and 5 applying for 40% shares.

You don't know the background of the school mums.

Eg they might have worked overseas for a decade or, not paid tax and therefore saved enormous amounts.
Inheritance.
Partner earns more money than you think. Eg a relatively junior it person can earn double scs in the civil service.
They are older than you think and therefore bought earlier. In particular, if both bought flats before getting together.

They have moved more and thus done it in increments.

They rent the house

Etc

and I bet that all the school mums with those sort of houses moved into the area from a more expensive area.

Thats certainly the case in my, and similar, villages

Ways people upsize..

Increase earnings
Move to a cheaper area
Wait until you are no longer paying hefty nursery fees
Inheritance

As others have said, a £700K home is not a 'normal' house price based on UK averages. My house is a 4 bed detached and is worth around £350K (in the Midlands).

"they do school runs so cant work full time"

@secondtimebuyer1 I do school runs and work full time. You can't assume they don't. I have total flexibility so work my (fairly well paid) job around the school runs

I think it's both waiting for nursery fees to subside and buying in stages and overpaying the mortgage.

We live on my previous salary with all the extra from my last promotion goes against the mortgage.

Can your DH not get promoted where he is if you need higher salaries for the mortgage? I do think house prices have risen much faster than salaries. We could not afford to buy the house we live in now due to house price inflation.

What baffles me, are you the people buying mediocre 3 bed terraces for >£1m just because they're in London. Madness. But hot to worry, they'll probably be worth £2m in 10 years, at which point they'll move out to a small mansion in Surrey

Ah autocorrect.

@Mylovelyhorsee

You’re relatively low earning, normal families don’t afford 700k houses. That’s the truth.

Agree. Our combined incomes are £120k, we don’t have nursery fees anymore and we couldn’t afford a 700k home. In our area you can get 4 bedrooms for 550–600k. Personally I think it’s mad getting that much debt for visitors. Get a cabin in the garden, put the kids in one room When you have visitors or one of you needs to earn significantly more.

We also do a lot of school runs and both work full time.

I've only read your posts OP but I encountered a similar problem when exh were still together and looking at upsizing. Our 3bed semi was worth nearly 400k and to afford the 4 beds we would have had to mortgage to the hilt. The crux was that our house had increased in value by 150k in 6yrs. Ridiculous really. The main issue is that house prices have far outstripped any wage increases.

Our solution? Split up and buy two homes in cheaper areas not recommended and possibly a little drastic! It does make me pine for the 3bed semi a bit now though.