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?

Inheritance basically. DH and I between us have a 6-figure annual income (mostly his!) but honestly, if I hadn't inherited, resulting in us having two properties to sell when we last moved, we'd have had to have moved out of London to afford a family sized home.

Bought the crappiest house is a popular area which sold for twice the amount we bought it for. Meaning a big deposit. We still have a pretty big mortgage though but had to move out of the popular area to get the kind of property we need for the money we had.

We're on around £100k a year between us, and we still have to budget a lot to afford to live.

Which county are you in OP?

We didn’t rent before we bought….both lived at home so we’re only paying a nominal amount in board money and were able to save.

Obviously that only helps if you work and want to live in the same area as family, but choices.

Don’t have kids before you buy property. If you’re having to pay childcare fees, it must be next to impossible to save at the same time.

I’d love to know where all these inheritances come from when people seem to be relatively young-are you all killing off your relatives? I’m 51 and am only receiving inheritance now, and we’ve already made what will probably be our final move!

@5329871e

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.

This 10000 times! I've renovated twice now and you get so much more bang for your buck.

My current place has truly horrible bathrooms but I'm willing to live with them until we can get them replaced in exchange for living in a flat with great bones in a fantastic area.

Bank of Mum and Dad

Bought a house in our early 20s that needed work done in a cheap area, over paid the mortgage we now have about 150k of equity and can finally now afford a nicer and bigger home. We are in our 40s though!

I bought a modest house in the late 90s in the Midlands on a very small (first permanent job out of university) salary. House prices went crazy just after and my house is worth over 4x what I paid for it. If I had to buy on my own again, what it's worth now is still the maximum I'd want to take on despite now earning just under £50k.

How did we save up to buy a house -
Having lived together in rented property decided to go back to renting rooms while we continued to save for deposit.
Bought a basic 3 bed semi and with hard work up dated it and sold on.
It was tough in the early years

3 bedroom townhouse £165k combined earning of £50k and started with a cheap one bedroom flat, part exchanged to buy a better flat then sold and bought our house. We started small.

I worked two jobs for about a year and saved £10,000, while renting a 1 bed flat. Had no social life as I worked long hours - started my office job at 9, finished at 3, started by restaurant job at 4 or 5, finished between 12 and 2 and did it all again the next day
Got my entry level job in the career I wanted and worked up from £17k to £21k.
Used that £10k as a deposit on my first house, worth £109k in 2014.
Qualified in my career, then earning £30k.
Sold in 2017 for £20k more than I brought it for.
Used the equity from that house to buy with now DH. We brought our family house for £270k, but moved to a more expensive area to reduce commutes. We used DHs savings to renovate it and increased the value to circa £330k.
We have £190k left on the mortgage and 20 years, but hope to half this once we don't have to pay a nursery bill.
Between us we earn £80,000 on two professional salaries.

Both worked two jobs for years (both in professional fields not nmw) for both deposit and annual earnings. Bought a flat before a house, bought a house before having DC. No inheritance or deposits gifted

Oh the house we bought was also a wreck

@Corrag I obviously didn't mean it like that🤦‍♀️

You just have to buy what is within your budget. If all you can get is a two bed flat then so be it.

The only useful thing I got out a relationship with a very useless boyfriend was you 'just get on the property ladder as you'll never save fast enough'. On that advice, I bought a one bed flat in a good area. I put down a 6% deposit and borrowed 4.25 times my salary. It was tight but manageable. A few years later, DH moved in (from his rented place) and a few years after that we bought a house.

For me, it was very much timing. I do think I just managed to get on the property ladder before it was too late. If I could have travelled back in time I would have bought when I was much younger and property prices were reasonable.

No advice other than just get on with it. Property prices are not going to be heading south anytime soon.

It's possible without inheritance and high end jobs.
We started from no saving in 2012 , i was earning 12k and husband earnings was 21k . Also had a 4 months old baby snd renting. For two years we managed to save 35k which was hard , no holidays , no day outs . DH did overtime as much as he can .
Bought first 4 bed house which was outdated for £175k. Did all the work on it by putting everything on credit card and loans etc.In 2017 remortgaged it and took 38k out to buy Buy to let property. with rent cleared all loans and credit cards.

Sold both houses this year , buy to let got 78 k profit out in four years plus rental income.
Other house sold it for 280k .

Now buying a big family house for £550k.But our earnings are improved, i am earning 20k still part time and dh earns 55k and three children.

Hardly 10k savings left. will remortgage this house to get some equity out in five years to invest in another house which will be used to pay off this current mortgage. Plan to be mortgage free by 55 and mortgage is 375k and i am 33 years old.

It can be achievable but saving hard to get on ladder was tough. now we have had several abroad holidays .

@flowersmakeitbetter but they will. interest rates are increasing which generally leads to a fall in property prices. look up the 18 year property cycle. I say this as a home owner. When I bought in 2019, I did expect property prices would fall at some point but probably not immediately so I would have some time to build up equity to upgrade cheaply (hopefully) and I didn't think I would save much by renting even if prices did come down. But OP is buying in 2021 and given that she is buying in an expensive area, it could be that the total rent she pays might still be less than the amount she saves by buying at a better time.

Were lucky enough to buy back in 2006. That’s the only reason I’ve ever been able to afford a house.

You buy in a cheaper area. We bought our 4 bed detached house for £217,500. A house of a similar size nearer where my mil lives cost £230k in 2017 which is when we bought. Easier said than done, I realise.

@Itonlymakesyoustronger

I could relocate, but both our jobs are local and we have elderly parents, who really need us at this moment of time.

Also would need a 2 bedroom as we have a LO. I guess I should just buy small like most have recommended. Maybe a two bed flat which is still around 250- 300k.

For some people, it’s simply unattainable, income vs house prices.

For many others, it’s choices.

So many of these type of threads start off about house prices, and then a subsequent post mentions children.

So how do people afford to buy a house?

• they don’t have a child in their 20s
• they accept that their first home will be a flat not a house, which you haven’t as you were straight in with house prices
• they don’t spend their 30th in NYC or Tokyo but bank the money towards the house

Yes, that’s from a previous thread - wondered if there was something useful from those as a suggestion - for example, if an area is mentioned another good location for options could be suggestions.

You’ve had an inheritance, and you already have a mortgage but have halved your salary since getting it.

Have you cut your hours? If so - go back full time and work towards promotion, that will help.

What’s the deal with the mortgage you already have?

Totally agree about interest only mortgage, we were doing our own savings for capital and intended to pay a present a year but my husband lost his job and failed to get another proper one, so I was the only regular income so couldn't keep that account going. Our plan was to pay off capital with an inheritance but 3 out of 4 parents are still going and my dad has put mum's legacy into a trust fund.

We've now come to the end of our mortgage and we have enough equity in the property to be able to sell and move back home, but his parents are near here and in their 90s so DH wants to stay. We've a few months grace to sell the house but it's tense.

My children may never own their own home as even splitting the value of our house doesn't seem to be enough for a deposit as there are three of them.

I think it’s so hard for people nowadays. Im under no delusions that are where we are today because we bought in the 90s in London (also DH’s job / efforts). No inheritances. I’ve NC for this, but this is how it went -

In about 94/95 DH sent his CV in to a Swiss Bank and got an interview. I don’t know how as he had no experience. They said, if you can start now - off you go. He had a year of hideous bankers shouting at him and he was working from 5am to 10pm or later. But... they gave him £70k starting salary (which is a lot when you’re 25) and his first bonus that year was about &100k. He couldn’t believe it. Meanwhile, I had left uni and was earning about £20k in a social services role.

He bought a flat near Liverpool St in London (handy for those 5am starts) for just £70k! It was a large 2 bed in a converted warehouse.

We went back there some months ago randomly, and the area has changed beyond all recognition (very hipster now) and the flat is worth £700k!!! What the hell are young people supposed to do nowadays!

We had to go to Singapore and NYC with his job very suddenly and we’re going for a couple of years. When we came back, we bought a tiny flat in the attic of one of those stucco townhouses on a square near Victoria. We sold the East London flat for £150k and bought this new (2 bed with a roof terrace) flat for maybe £250 with a mortgage. But two years later (after a bit of renovation) we sold it for £400k. (These days, you would barely get a studio for that).

Then DH left banking as he hated it intensely and went self-employed. We bought a 3/4 house in SW London for £600. This is when I was pregnant. Within 3 years (so it was about 2006 by this time) that house was worth £1m. So we sold that and bought another (bigger mortgage) in the same area for £1.4m. Within about 2 years, this house doubled in value. It kept this value through the recession and up until when we sold it three years ago for £3.2m. We bought this house now for £4m, spent £300k on renovations and now it’s worth £5.2m. We just paid off the mortgage, but there were a lot of fees got this. Also when we moved here we paid about £300k in stamp duty (as we hadn’t sold the other house before). In London it’s crazy prices and a different economy really. There is no way I would be here if DH hadn’t started out in banking and been successful in business since - or if we hadn’t been lucky to be able to buy at a time London was booming.

[quote onlychildhamster]@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![/quote]
Reading this thread it's not about buying a home to live in. It's all about profit.
If you can buy a house in a cheaper area you can have a higher standard of living even if you earn less. Quality of life above "net worth".

In our area you can still get flats for 100k and houses starting at around 120k that would be ok to move in to (as in, not full on renovation projects that need builders and capital, just dated and a bit run down terraces in not great but not dangerous areas)
For those prices it's not impossible for a couple, pre-kids, to save on a relatively low wage if both are working.

I do feel sorry for people born in the SE I totally get that moving away from family/the life you know is hard, and staying seems impossible. I have friends in the SE in specialist roles where they can't get work anywhere else (arts, publishing etc) but their jobs are never going to pay enough to buy property in those areas.

Husband and I have a fairly large combined income (mainly his salary, mine is quite low), no kids and no massive outgoings of debt (just a few grand on a couple of credit cards that will be paid off within the next few months). DH is a company director and I work for a charity.

High rent coupled with a preference for moving every couple of years, stuffing money into our pension pots and a liking for being able to go on holiday as and when we fancied kept us from buying anywhere.

When we did buy, we did it quickly - having saved only a tiny deposit - with a 95% mortgage, a fantastic financial advisor and moved area to buy somewhere that cost less than a third of what we could have borrowed with a bigger deposit.

We didn't need or want a big house (or the mortgage to go with it), had the luxury of being able to live anywhere in the country (both WFH permanently) and were determined to spend no more than £250,000.... and we didn't. I still can't quite believe we've managed to get on the property ladder with hardly any deposit and pay less per month on the mortgage than we did in rent.