How do people afford to buy a house!

[Itonlymakesyoustronger]

Is it me or is buying a house a massive struggle!

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! I don't know how people do it! when I search right move a two bed house is 320-370k.

How do you afford to buy a house, what jobs do you do?

@Upsky you can earn the high salary, and then downsize in later life when you no longer need to be in expensive area. Right now, I can afford to buy a 2 bed terrace in the north in cash just based on the equity in my London flat (and i bought 2 years ago and am 29). Hopefully I would have more when I retire. Also its all tax free (other than stamp duty) and I don't foresee they will tax people's primary residence even if the primary residence is worth a million pounds and so i guess its tax efficient (whch is probably why london properties are so expensive because people worked out that if they invested their money elsewhere, they would possibly have to pay capital gains tax). And council tax is cheaper in London than up north.

But if you bought a cheap house up north and earned an average salary, your net worth is far less than someone with a fully paid up london house (and there are fewer cheap places you can downsize to). Of course its best if you can earn 100k in the north and buy the cheap house, but I don't think I can manage that!

Prices are similar in my area but there are quite a few cheaper less desirable areas nearby you can buy a 3 bed semi for £300k. Most places have cheaper parts so no need to relocate but unless you are prepared to buy a tiny 2 bed or a flat, this is likely to be where you will need to compromise.

We couldn’t afford one so we ended up buying a Narrowboat. Since being in the community it’s amazing how many people are turning to alternative homes because they can’t afford anything else

Area matters to me a lot, so we bought a 1 bed flat to get on the ladder and then moved to a bigger flat 2 bed, 2 bath + loft with a garden.

We'll never live in a house, but I LOVE where I live so am more than happy to make that sacrifice.

I bought a cheap house in a cheap area. I worked every hour legally possible. I also have DH, so two incomes.

Could of done it alone (this house, in this area) but it would've took longer.

Now we have kids, I'm retraining to get a better paid career and will move on to a bigger house in a new area once we sell this house, houses sell well here but they don't go for a lot, I'm not expecting a huge profit but we will definetly get a profit

I think you have to compromise on location. We bought our first home in London 7 years ago. 3 bed Victorian terrace with garden, but in an unfashionable area, much grottier than where we were renting. Paid £420k and borrowed £350k, I think our combined salaries were around £100k at the time. No help from family, we just prioritised saving and lived relatively cheaply until we had enough for the deposit. Now our house value has gone up by 50% and the area we live in has become quite trendy with a lot more amenities. Also our mortgage has got a lot cheaper because of the increase in equity.

So my advice would be just to buy something, even if it’s not exactly what you want. With a child I would probably compromise on the area to get more space, rather than squeezing into a tiny flat.

Bought a couple of years ago in the SE for a similar price to what you're looking at OP and about half the deposit. Had to buy a new build using Help to Buy Equity loan, couldn't have afforded anything on the open market. Used Lifetime ISAs as well. And a really long mortgage term!

Do you have a very insular social circle of similarly situated people? If you expand your horizons you will understand that people have vastly different life circumstances. Basically— pretend someone else posted “how does anyone manage to save £45K?”. Whatever your answer would be, that is the answer here. You want to know why some people have more money than others. It seems obvious to me but it usually boils down to some combination of:

1. They come from families with more money than yours and relatives who are either willing to share it or have died and passed it on.
2. They have a special skill you don’t have, a better education than you, they are willing and able to work more and harder than you, have made clever career decisions and/or simply have better luck than you do. Luck is always a big part of it.
3. They invested carefully and it paid off. Usually that is some combination of skill, risk tolerance, and again luck.
4. Again— luck.

@GrandColombier what expectations or attitudes do you mean?

Of an inheritance? No one in my family (includes extended) has ever expected one because there simply aren’t any. We work if we want to buy stuff.

Of having a house instead of a flat? It’s great you can live well in a 1-bed flat but others don’t have that option. My cousins I mentioned have elderly dependants and are supporting a younger sibling through uni. Plus other reasons why they’re restricted on location. No big expenses but it adds up and they can’t 1) get by with a small flat, 2) save enough for property in a central location. That’s how it is for some families.

What’s so hard to understand, that other people’s circumstances and needs might be different than yours?

Buy the cheapest place you can afford in a good area. Renovate it yourself. Wait for it to increase in value. Sell it and use the profit as the deposit towards your forever home.

No inheritance or high wage so took a couple of years to save 10% deposit plus fees. Bought a fixer upper in an up and coming area with good transport links, house value has increased quite quickly and will continue to do so.

Family help & high paying jobs. Also managed to accidentally buy in an area that went up in value massively right after we bought. Even so, our first flat was £310k. DH’s family gave/invested a lot of money for him.

For me/ me and DH;

Living in the north which is cheaper, despite both being brought up in the south
Owning property independently before we met which we sold at a profit
Having good incomes for the area.

But by far the biggest factor has been inheritance which for me is on DH’s side only. I have always saved hard in the knowledge I would not get help to get on the ladder and have sacrificed holidays, travel etc to get a small deposit together. DH has had a huge inheritance in his account since he was 18 so has always spent all his wages knowing he could still buy a decent house. It pains me to say it has made a difference in the way we lived our lives in our twenties and early thirties, and he has done and experienced far more in terms of travel and hobbies than me. In this way it’s hugely unfair although now we own together I am benefitting too.

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! I don't know how people do it! when I search right move a two bed house is 320-370k

How do you afford to buy a house, what jobs do you do

It isn’t about jobs but about starting from the beginning and not trying to jump several steps. I know that when we started out the only thing we could afford was a tiny studio flat. From that we worked up to a 1 bed then 2 bed flat then a terrace house and then a detached.

A couple of people I know started off in one bed flats with 2 children. Children had the bedroom and friends and their Dh’s got a sofa bed in the living room.
It was tight but it was cheaper than renting and they were able to save more.

In some parts of the U.K. £49000 would actually get you a house for cash.

I know that even with 100% mortgages even those who I knew in the early 80s who were qualified solicitors/doctors/accountants etc wouldn’t have been able to afford a 2 bed house as a ftb unless they had serious family help or a large inheritance.
Even when they had bought a flat they took in lodgers and or worked extra jobs to pay the mortgage

If you can’t afford where you work then you move out and commute in and or get a flat instead of a house. Even with small children a 1 bed flat can be ok for a few years whilst you save for the next place

This is from McSweeny's, a US literary site.

JUNE 16, 2021
HOW I SAVED ENOUGH TO BUY A HOUSE WITH MY PARENTS’ MONEY
by ELI GROBER

A lot of people have been asking me how I put away enough money to buy a house. Well, it’s pretty simple: I saved up for a while, and when that wasn’t nearly enough, I paid for the house with my parents’ money.

But simple doesn’t mean easy! I had to make some tough lifestyle changes. For instance, I stopped buying coffee every day and started making it at home. This allowed me to pocket enough money to go ask my parents for a down payment.

The hardcover edition of The Every is available in a dizzying and entirely randomized array of cover variations, exclusively through independent bookstores and here at McSweeney's.
One of the hardest sacrifices I made was suspending my Netflix subscription. (I love my shows!) But with those extra nine bucks a month, I was able to build up my savings, and then have my parents write me a check for ten percent above the asking price.

If you know me, you know I eat a lot of avocado toast. But that stuff is expensive! So I spent two months eating just plain toast. And after those two tasteless months? You guessed it: my parents wired me six hundred thousand dollars.

I even stopped using my phone! As soon as I found out how much a phone plan costs, I threw my phone in the trash can, and threw the trash can out the window. My neighbor happened to be out for a walk and the trash can hit him hard enough that it shattered his shoulder. He sued me and we settled out of court with my parents’ money. Then they bought me a house.

Don’t worry! These aren’t the only ways to buy a house. You could stop ordering takeout and cook at home to cut costs, and then buy a house with your rich aunt’s money. Or you could take on a second job to put away extra cash, and then buy a house with your inheritance. You could even do a GoFundMe and have your parents donate a house’s amount of money. There are a lot of options!

Featuring letters by Sarah Vowell, R.O. Kwon, Jenny Odell, Hanif Abdurraqib, Thao Nguyen, and dozens more.
In the end, the most important thing to remember when saving up to buy a house is that someone else will be paying for it.

Real Estate Money Privilege Generational Wealth

It's tough but I think you must live in a particularly expensive part of the country - the South East?
I never thought my children would be able to afford to buy a house for years but my daughter came back to live with us after finishing University, saved money and 3 years later is buying her first home. Its a 3 bed Victorian terrace with a small garden, gorgeous and ready to move in to for just over £150,000. She is moving to a town in the North West near to where she works - not a lot going on there but still a half hour or so train ride into Manchester city centre.

Saving 45K is a real achievement, well done. Keep saving? Sell things? Get a side hustle?
Could you use the savings and mortgage eligibility to buy something smaller to do up and then sell at a profit? Or a buy to let to earn from it?

@berlinbabylon fair points, but those suggestions don’t work for us as my husband in particular needs specialist equipment, and we both often work late into the night due to the nature of our jobs so having space to work at home was very important. I was just describing our own circumstances, not saying everyone who WFH needs an extra bedroom necessarily.

In our case and those of our friends, we've noticed a pattern:

• gifted all or a decent part of a deposit from parents, to get onto the ladder initially
• at least one 'good job' (a profession like solicitor or teacher or accountant etc) held by the couple, to meet the affordability criteria and get a mortgage from the bank
• buying a doer-upper which allows them to increase equity in the property and then sell it and climb up the property ladder to a bigger house/more desirable location

OR

• an inheritance, enabling them to climb up the property ladder and find a bigger house/more desirable location.

I think it's bloody hard to get onto the ladder if you don't meet one of the criteria above.

Unfortunately you live in the wrong part of the World, you've got enough to buy a sizeable place outright with in 2-3 hours flight time.

Not much use though unless you want to up sticks.

@jakiechilies nailed it.

We picked our first house in a up and coming area that we knew (hoped) prices would rise in. Waited till they had then moved to the area we really wanted after making a profit selling first home (we do have a big mortgage that takes a fair whack of our earnings)

[quote EileenGC]@GrandColombier what expectations or attitudes do you mean?

Of an inheritance? No one in my family (includes extended) has ever expected one because there simply aren’t any. We work if we want to buy stuff.

Of having a house instead of a flat? It’s great you can live well in a 1-bed flat but others don’t have that option. My cousins I mentioned have elderly dependants and are supporting a younger sibling through uni. Plus other reasons why they’re restricted on location. No big expenses but it adds up and they can’t 1) get by with a small flat, 2) save enough for property in a central location. That’s how it is for some families.

What’s so hard to understand, that other people’s circumstances and needs might be different than yours?[/quote]
I did not mean in terms of inheritance.

And it’s not hard to understand , but it’s a very different picture from the post I quoted.

Just a couple trying to buy a first place, with London professional salaries are capable of buying a place, which you positioned wasn’t possible in your post, is what I questioned. Because that likely would be due to expectations of what they want rather than can get.

Backstory in follow up post of multiple dependents and tied to a specific location - very different picture and more apparent why that was not possible 🤷🏻‍♀️

People also used to work their way up. Started with a small flat, perhaps with some shared facilities and in a less desirable area, then used that equity to get a bigger mortgage and went up the housing ladder that way. We didn't all start with four bed detached.

I bought in 1999 so not truly comparable. We were 31 and did have well paid jobs and hadn’t had DS. I had already bought back in 1989 but walked away from it. Ex made about 10k on it in the end.

A friend of mine is buying through the help to buy scheme, I think it’s closed now but there was some sort of grant or subsidy matching savings to a certain level. They are both professionals, one is on 50k pa unsure what the second income is, both aged 30,

They are buying a small 2 bed apartment for about 280k. That buys a big three bed semi with big garden in a really nice area where I live.

DS is already saving for a house deposit, he is 20 and working. Should start his degree apprenticeship next year and will earn 20k while studying. He pays £20 rent per week as a token amount, my Father left no will and it was decided that DS could have the money left in his accounts by my brothers. He doesn’t know he has 12k already. We will also help him.

Move to a cheaper area. We bought a 4 bed, 3 reception, 2 bath house in a decent area 4 years ago for £220k. Mind you it would cost another £100k now to buy, which is just nuts