AIBU to ask if you could afford the house you live in?

[IamnotH]

Just had house valued for remortgage and it's transpired that we could actually afford the house we live in!

Bought in 2016 for £185k. Borrowed an extra £50k for building work. House just valued at £380k.

This isn't a stealth boast- we're an average nuclear family, 2 kids, both worlds full time. Our house isn't massive (SE)- just a normal 3 bed. It actually means we're stuck here unless we move areas which we don't want to do.

AIBU to ask if you could afford the house you live in if you were to buy it now?

Yes but only just and we'd have had to pay uncomfortable monthly mortgage payments (although we would probably be approved from a salary multiplier perspective). The house has gone up by 20% in 18 months. Goodness only knows how we will help DC onto the housing ladder in 20 years time.

The way buying houses works in Scotland it is unlikely we'd be able to afford our house now unless it went on sale as fixed price at current value.

If it went on sale at fixed current value we'd just be able to afford it. Just and no more. (I think).

If it went in the market at offers over we'd lose it in a bidding war.

There has been a significant increase in value but when we bought in 2007 it was at the height just before the crash and we were in negative equity for around 5 years...whilst terrifyingly still being on an interest only mortgage (expensive childcare to pay for).

Increase in value and moving to repayment have finally given us some breathing space and equity.

Sorry to those who still think this was a stealth boast or boring. I think it's quite interesting and indicative that the current property bubble and inflated prices don't actually benefit anyone except for estate agents and the government in terms of stamp duty.

Bought ours for £430k and now it's £1.2m., so no we couldn't afford to buy it now if we started again (london)

Main thing is price differential - if you already own.

When we moved here there was a £100k uplift to buy a house vs flat. Now it's £300/£400k uplift to make the same move.

Crazy. I'd rather my house was the same price as when we bought it so that people could afford decent housing. Our system here is stupid and divisive. Using homes to make money is obscene. They are for living in.

I wistfully remember a time when we talked about houses, not 'property'.

We rent. Complicated answer this one. Yes we could afford the mortgage but the 5x earnings maths doesn’t work, they wouldn’t lend us the money. So no we couldn’t afford it.

This is an interesting thread and suggests that a price crash isn’t too far away.

Couldn’t afford to purchase it and tbh, wouldn’t want to either.

It’s a bog standard 2 bed starter home which we paid £105k for 19 years ago. Now valued at £415k which is utterly crazy.

@LeaveMyDamnJam

This is an interesting thread and suggests that a price crash isn’t too far away.

Not really this is usually the case.

@LeaveMyDamnJam

This is an interesting thread and suggests that a price crash isn’t too far away.

No. It won’t houses are selling as quick as the signs go up. Government will prop it if it came close. They should have let it crash in 08, but now, it would be even more catastrophic to drop to where it should be.

Yeah the question of whether the market will crash, or even just correct, is an interesting one.

A part of me thinks no it never will, because as previous posters have said, the Government won't allow it to so will prop it up as necessary. Plus low interest rates make it cheaper to borrow money, assuming you have the salary to get a mortgage in the first place of course.

But then a part of me thinks it is a bubble that's going to pop. My OH and I are both higher rate taxpayers in (fingers crossed) safe industries, we've got good savings, we've got no debt other than mortgage and 1 student loan which is nearly paid off. And if we would struggle to take the next step up the ladder, then what about people who don't earn as much and don't have savings and do have more debt. If prices keep rising like this and outstripping salary increases, it becomes unsustainable doesn't it? Or am I missing something?

I look now and wonder just how people manage to buy. When you look at the average wage and the average house price it used to work. But it doesn’t now.

Yes. We bought in 2012 with a big deposit, and DH and I have had promotions, and also built up other investments.

@EvilPea

We rent. Complicated answer this one. Yes we could afford the mortgage but the 5x earnings maths doesn’t work, they wouldn’t lend us the money. So no we couldn’t afford it.

Same here. A mortgage would only be a couple of hundred more than our rent. But we wouldn’t be allowed to borrow that much and we can’t raise the deposit. This was the cheapest 3-bed to rent in the area.

God no.
Bought for 182k now worth 330k.

We rent, but yes we could. Actually we're looking to buy a house that would cost more than the one we currently rent.

But I would see this as very much a positive. It means you've made a good investment. Presumably if you sold, you'd still be able to buy a similarly nice house in the same area with the equity you'd release?

Yes, we only just bought a new house. Older people in the area have told me they couldn't afford to buy their home now.

We paid 150,000 approximately 24 years ago for a complete doer upper, big garden, great urban area.

Older houses are still being bought in the area and having 500,000 being spend on them.

Lots of gardens being carved up into sites for new builds.

I think I would love a new, passive build house that costs a tenner to heat for a year, rather than our energy bills.

Good god, no!

I'm semi-retired and only work 17 hours pw, and at a much lower salary than I got in the public sector management job I was doing in the early 90s when I bought this house.

I paid £49k for it in 1993, one round corner, with no CH but otherwise in similar condition, and not in such a nice position, has just gone under offer at over the full asking price of £475k. It went under offer the first day it was offered for sale, too.

We couldn't by now for three reasons.
Firstly, prices have gone up, so it's worth half as much again as when we bought (we did buy in a low point)
Secondly, we couldn't actually afford it when we got it, however it had been repossessed so we got it for between 1/2 and 2/3 price.
Thirdly, we got a very good tracker mortgage. We're below 1% above base rate. It went up to about 1.5% the day after we got it.

@LeaveMyDamnJam

This is an interesting thread and suggests that a price crash isn’t too far away.

That's been said since we first moved here in 1998!

@LeaveMyDamnJam

This is an interesting thread and suggests that a price crash isn’t too far away.

🤣🤣🤣

Nope. Bought our house in London in 2009, and the value has probably more than doubled. Plus we've both changed jobs - I've gone from working full time in the insurance industry to being a part time TA in a primary school so gone from higher rate taxpayer to not paying income tax at all.

We have a legacy mortgage, too, which track BOE base rate, half at base rate itself, and half at 0.5% above base rate. Though we have had letters to say that if rates drop below 0%, the mortgage rate won't follow... :o

No. We paid £250k for it 11 years ago and through inheritance, help from parents and a LOT of scrimping, we've spent £120k on it in that time and increased its value to around £600k (2 double bedrooms in the loft and a large kitchen diner extension). No way could we afford £600k now, although not sure what we could. Joint income about £80k

@IamnotH might be worth asking MNHQ to correct your title otherwise you’ll have hundreds of people getting on your case having got the wrong end of the stick!