Page 2 | How do people afford to buy a house!

mydogisthebest · 20/10/2021 16:02

You obviously live in a fairly expensive area. Where I live - Notts/Lincs border you can get a 3 bed semi with a large garden for around £140,000

Nomoreusernames1244 · 20/10/2021 16:02

Bought what I could afford. A house would have been nice, but flats a little further away from my desired area were my budget.

Bought said flat, did some improvements, after a few years the less desirable area caught up and sold the flat, made a profit, and bought a house in my new budget.

Sometimes you have to just get on the ladder and buy what you can afford, rather than wait until you can afford what you want, which may never happen.

MrsPelligrinoPetrichor · 20/10/2021 16:03

We moved areas.

notanothertakeaway · 20/10/2021 16:04

I know a couple of people who bought with interest only mortgages. They have rather fallen out of favour in recent years, but they are cheaper

Their view is that this is the most affordable way to buy a family home. They are relying on (1) inflation reducing the real value of the mortgage, (2) house prices increasing. Their plan is that when 25 year mortgage comes to an end, they will sell the house, use the sale proceeds to repay the loan, and use the balance to buy a smaller house or flat suitable for retirement

Puddington · 20/10/2021 16:04

I had saved around 12k and my partner around 27k, but on top of that we live somewhere we were able to buy a three-bed semi for around 130k. His commute to work in the nearest big city is around 40 minutes but it would have taken considerably (CONSIDERABLY) longer for us to save up a deposit to buy there. Maybe someday we'll be able to move there now that we're on the ladder, but not a huge deal either way. It's gotten a lot harder than it used to be for everyone but I think living in a cheaper/more expensive area is what things really hinge on.

Meloncurse · 20/10/2021 16:06

We didn't have high salaries (45k combined) when we bought in a less desirable area in a part of the country that is already cheap. Even some years later there are plenty of houses for sale that are under what was our budget then (125k)

impossiblypossibly · 20/10/2021 16:07

@MrsPelligrinoPetrichor

We moved areas.

Where do you live OP? Presumably an expensive area by the sound of it. As many of the PP have said, you need to compromise on location to make it more affordable. Where I live you would get a 4 bed detached house for the amount you quoted, however I moved here from my preferred location and had to compromise on living further away from friends, longer commute etc.

3Nuggets · 20/10/2021 16:08

Husband & I purchased our first house at 20 & 21 only earning approx 20k between (we were both apprentices) This was 12 years ago though and we did only need a 5% deposit at the time on a house that cost 125k... Unfortunately times have changed and it's now very difficult for first time buyers.

Use your deposit to buy something... even if you don't live there, you could always rent it out? That way someone else is paying your mortgage and you're on the property ladder. Win win

MiloAndEddie · 20/10/2021 16:08

Move slightly out of area to bring the house prices down £50k is my first advice.

Secondly, have you spoken to a mortgage broker? Not just done online calls yourself because you’ll probably find they can squeeze a bit more for you.

CocaColaTruck1 · 20/10/2021 16:09

NE area 3 bed, conservatory and large garden for 150.
All depends which area you are in really, family down south actually moved back up to get more for their money.
Easier said than done I know

randomthings · 20/10/2021 16:09

@notanothertakeaway

I know a couple of people who bought with interest only mortgages. They have rather fallen out of favour in recent years, but they are cheaper

Their view is that this is the most affordable way to buy a family home. They are relying on (1) inflation reducing the real value of the mortgage, (2) house prices increasing. Their plan is that when 25 year mortgage comes to an end, they will sell the house, use the sale proceeds to repay the loan, and use the balance to buy a smaller house or flat suitable for retirement

That's quite the gamble! They must be relying on a huge increase in the value of their home.

If that doesn't happen they will find themselves due to pay off a mortgage they don't have the capital to pay off. There was a woman on the radio who basically lost her home at retirement age because of this.

123Applesauce456 · 20/10/2021 16:09

I moved out of London. Am up North now and after no hope in hell of buying, have now bought a beautiful large three bed house by myself without inheritance, etc. Also much better quality of life overall. I love it here.

notanothertakeaway · 20/10/2021 16:11

@EurghCobwebs

Bought a flat (£250k) after saving up a deposit. Renovated it. Sold it 6 years later for £100k profit. During this period our joint earnings increased. So we had larger borrowing power and decent equity for the next place we bought.

Unfortunately you sometimes have to start from the bottom and work your way up.

We had no inheritance. Please don't believe that that is one of the only ways people get onto the property ladder. A lot of people like me from working class backgrounds have had to graft and I find it insulting when people think it's the only way onto the property ladder for younger people.

@EurghCobwebs

Sounds like you made some good choices, and benefited from increasing house prices. And that's great

But it's a lot harder for people trying to get on to the ladder AFTER those huge jumps in house prices eg your flat increased in value by 100K in 6 years. Fantastic for you, as that extra 100K made a big difference to where you could go next. But for someone trying to buy 6 years later, that 100K price increase makes the difference between being able to buy, or not

NailsNeedDoing · 20/10/2021 16:12

People I know in your position have gone ahead and bought the property they can afford. Sometimes that has meant moving out of a bigger, nicer rented property, but it’s not unusual for people to start out in flats or tiny houses.

randomthings · 20/10/2021 16:12

I have decided that me and H need to be prepared to die rather than going into a care home, so that our kids can inherit enough to be able to buy a house.

Of course, this means I may have to kill H ...

Jennakj · 20/10/2021 16:12

We got a springboard mortgage - so parents put 10% in a separate account and we got a 100% mortgage.

It worked well for us all as my parents got an amazing interest rate on the money, which was returned to them 36 months later, and we now have a 60% mortgage less than 4 years down the line.

I’m a high earner but house prices in the area were rising faster than I could put money away at that time!

Lyricallie · 20/10/2021 16:13

We have fairly decent waves for the area we live in. 80k between us and our 4 bed house was 150kish. We didn't have any family help but we did use the Scottish new home fund which was brand new when we started looking so not many people knew about it so we got an additional 10k towards our deposit from the Scottish gov and they own a % of our house when we come to sell (if we never ever sell there is nothing to repay). Maybe there's something available in your country? I think the Scottish one has stopped now but I'm not sure if it's getting replaced.

Sh05 · 20/10/2021 16:14

You live in a very expensive are which is yourmain factor. We bought our first house 11 years ago in greater Manchester. At the time our joint income was around 22k, we had 3 DC and we'd been renting for 8 years.
Our house was just over 100k, we paid a 24k deposit. My parents lent us 5k but the rest was all savings.
In the last 11 years the value of our property hasn't grown massively but we have extended into the loft, our income has doubled as has the number of children.
290 would get me a mansion with a drive for multiple cars plus lots of garden space in Bolton

Biker47 · 20/10/2021 16:14

Depends on the area, we bought a new build 4 bed detached for £250k where we live.

MiloAndEddie · 20/10/2021 16:15

Also is the £290k the total they’ll lend you? Because that plus your £45k will get you what you need!

neededafart · 20/10/2021 16:15

I bought my first tiny little house at 19, so when dc came along and needed bigger, we had a fair bit of equity. That's the only way we have managed to 'upgrade'. I would never be able to afford my house now if I was just starting out on the property ladder.

inferiorCatSlave · 20/10/2021 16:16

Without boasting I have managed to save 45k, to some it may seem nothing but to me its a huggee amount. But after calculating mine and my husbands wage we could only buy a house for £290k, where we lived that wont even get you a decent 2 bedroom house!

Saved similar amount took 10 years.

Bought ealier still struggled - compromised longer communtes, less great schools, more work in house than ideal and matchig cheaper housing areas with work opportunties.

DH needing to move around UK for career - we've made that work for us - found areas of cheaper housing and ruled out living in entire parts of UK including where I grew up.

If we were looking to buy first house we'd have to compromise even more - we'd probably still get this house as our first house area has gone up by about the same amount as this - but we might have had to compromise more.

I don't think it looks great for our children TBH - locals are being priced out here by people working in nearby cities because they've been priced out from people from London and SE - same as where I grew up everyone going further out as prices go up and up.

Anon992 · 20/10/2021 16:16

Many people have to compromise when buying their first home - be it a compromise on size, condition, or location.

We bought our first home at aged 26 when we were on a fairly average combined income. We bought a big house in a nice area with a deposit we had saved - but it was a total wreck. We’ve slowly done it up over the years and it’s lovely now (and has more than doubled in value) - but we did have to put up with having no hot water/no oven for months and years/living in a building site whilst we improved the house as time and money allowed.

Other friends compromised on size (and have since moved to somewhere bigger), or on location (many are moving somewhere slightly more desirable when they move to a second home).

I’m afraid it sounds like you are going to have to pick what to compromise on!

notanothertakeaway · 20/10/2021 16:16

@randomthings

Yes, I agree it's a gamble, and I think that's why interest only mortgages are less popular than they used to be

MargosKaftan · 20/10/2021 16:17

Oh and I know one man who was buying alone and couldn't afford anything in the city he lived /worked in. In the end, he decided to buy a small house in a cheaper part of the country, he rented that out and continued to rent a flat in the city he worked in. After a few years he remortgaged the rental and using that equity was able to buy a flat in the place he lives. (Rather complex situation, effectively has 1 mortgage that covers both properties, rent coming in makes it affordable, and house price increases has meant it was a much better way to invest his savings than any other option). 1