To think we will never be homeowners?

[GroundToAHalterNeck]

House prices are completely out of my reach now. DH and I are low earners due to life circumstances, no family support and a SN child requiring high levels of care.

We currently rent our home. I’ve been looking at options to buy but even the cheapest home in the cheapest areas would require a substantial deposit. Help To Buy and other government schemes also require a huge deposit we are unlikely to ever be able to save whilst paying rent too.

I met a friend for coffee this morning and she was explaining how they’re planning to upsize and how she will make a huge profit on their current home. It made me wonder how on earth first time buyers with no financial help would get on the property ladder in current times?

Is anyone else in the same position?

House prices may have been lower but when I had my first mortgage on a studio flat in the 80s the interest rate was 15%, although I could get a 100% mortgage.
The cheapest ever 10year mortgage has just been released I think.

Where I live now, colleagues say that their children will never afford a house because the prices are so high and wages low, but again, when I was buying, everyone expected to start with the smallest flat, then sell and move up. Took a few years and some equity to get to a house.
In many ways I think people expect too much, too early on. Not saying this is you, OP, but you have to start small when you’re first earning.

I bought my first home last year as a low earning single parent but I'm just fortunate to live in a cheap area (my 2 bed was £100k) and I'd managed to save a good deposit because my ex earns well and gives me a lot of child maintenance.

It's certainly not a dream home either, my garden is the size of a postage stamp and overlooked from every angle. The only bathroom is downstairs off the kitchen as is common in Victorian semis. It's in the undesirable area of town. But hey, it's mine.

Feel for you OP. It's unfair.

It sounds like you probably wouldn't have ever really been able to afford to buy OP, with such challenging circumstances.

I bought aged 18, when house prices were low but interest rates were 10% with a deposit that was equivalent to 6 months wages at the time which was given to me as a loan from my parents. (Less than 2k) we were so poor, had less than £80 left after bills each month and so cold with a dodgy boiler than frequently packed up in an area that was very rough. But from that first house I've been able to stay on the ladder ever since thanks to maintaining a reasonable equity. (Not always making money though!)

I've pondered how that compared to our most recent house purchase and we put in a similar deposit jointly thanks to over 20 years of paying a.mortgage gaining us some equity. To be fair, we'll still be paying it until we're almost 70.

Buying a house has always been tough and continues to be sadly, but had I had children young, or gone to university instead of buying the house there's no way I'd have been able to get on the ladder when I did.

It's just a shame the successive governments have failed to invest in social housing and instead expected the private rented sector to pick up the slack leading to the perfect storm we now have.

The single most important thing that can help people start out on the property ladder is to buy the first house before they have other commitments. It's easy enough to live with parents or rent a room in a shared house in the cheapest area, cut back on luxuries and activities for long enough to buy a one bed flat when you are a couple (or single) with no responsibilities who accept that life will be tough for a few years to reach their goal. It's just not possible for most people to pay the rent on family appropriate accommodation, pay for all the things required to give children a good childhood and save enough for a deposit on a 2/3 bedroom house in the right area for desired schools/childcare etc.

My Grandparents (late 70s) also despair. They bought their first aged 18, outright. Both had worked since 14. My Grandad had a high paying job on the railways.

@mrsm43s

The single most important thing that can help people start out on the property ladder is to buy the first house before they have other commitments. It's easy enough to live with parents or rent a room in a shared house in the cheapest area, cut back on luxuries and activities for long enough to buy a one bed flat when you are a couple (or single) with no responsibilities who accept that life will be tough for a few years to reach their goal. It's just not possible for most people to pay the rent on family appropriate accommodation, pay for all the things required to give children a good childhood and save enough for a deposit on a 2/3 bedroom house in the right area for desired schools/childcare etc.

I had to leave home just before I was 17 due to addict parents, it screwed me over in many ways but I hadn’t anticipated how it would fuck me financially years down the line either - most of my friends lived at home through Uni and till their mid 20s paying no board and saving like mad.

You might qualify for a shared ownership scheme? The idea is that the total of mortgage and ‘affordable’ rent you pay won’t exceed the market rent in that area, so if you’re managing to rent you might well manage the shared ownership. Yes you’re having to pay rent and mortgage both, but you’re still building up some equity. Many schemes give priority for households with disabled family members, and some of the housing stock is adapted in useful ways (wiring to fit an elevator, wider doorways, larger bathrooms etc).

@mrsm43s

The single most important thing that can help people start out on the property ladder is to buy the first house before they have other commitments. It's easy enough to live with parents or rent a room in a shared house in the cheapest area, cut back on luxuries and activities for long enough to buy a one bed flat when you are a couple (or single) with no responsibilities who accept that life will be tough for a few years to reach their goal. It's just not possible for most people to pay the rent on family appropriate accommodation, pay for all the things required to give children a good childhood and save enough for a deposit on a 2/3 bedroom house in the right area for desired schools/childcare etc.

It's not always. I had to leave home at 17, I earned less than £170 a week and my rent in the shared house was £90 a week.

Our only chance is a deposit from inheritance from in laws. Obviously we don't want to kill them off and I would hope that they live long enough that we'd be too old to get a mortgage.

There's no other cash likely to come out way and neither of us are in careers where we could expect a substantial pay increase (both public sector).

The only way we, and most home owners, managed it is to buy before having children. You have to make the choice to delay having children and save a deposit while you have the capability to live in a shithole studio flat and save every penny. You can't save enough once you have to live in a nice area, with more bedrooms for more people, and with childcare and Christmas and birthdays and days out to pay for.

Unless you're lucky enough to have a deposit from the bank of mum and dad, or are a very high earner, this is the only way to do it.

@mrsm43s

The single most important thing that can help people start out on the property ladder is to buy the first house before they have other commitments. It's easy enough to live with parents or rent a room in a shared house in the cheapest area, cut back on luxuries and activities for long enough to buy a one bed flat when you are a couple (or single) with no responsibilities who accept that life will be tough for a few years to reach their goal. It's just not possible for most people to pay the rent on family appropriate accommodation, pay for all the things required to give children a good childhood and save enough for a deposit on a 2/3 bedroom house in the right area for desired schools/childcare etc.

This.

It is not always going to be possible, as some previous owners have pointed out. But I and most of my home owner friends lived in a room in a crappy flatshare for years to save. We wouldn't have been able to do it otherwise.

I did it on my own at 41 with an 8 year old. Admittedly it is a 50% share in shared ownership but it's a start and it's a lovely house in the area I wanted.

You asked how people in your position get on the property ladder with no family help and the answer is, sadly and unfairly and completely wrongly, they don’t.

My DB and SIL were looking to buy in 2020 on one income where the base salary was low and most money was made through overtime. They had already lived with my parents for 18 months to try and save and were already moving to a much cheaper area (about half the price). When it came to the mortgage, because of the employment situation and the fact they had 2 kids, the bank would only lend them £90k - nowhere near enough to get the 3 bed house they wanted anywhere at all.

They only managed to buy because my parents had a substantial amount of money and were kind enough to go in as tenants in common with DB and SIL. The house is owned by them and my parents.

If we were not so fortunate to come from a background where this is possible, it simply would not have happened for them

People who say they can't afford to buy- can you not afford the standard 3 bed family home or could you not afford a flat? I understand that british people want houses as they have families, but its not possible for many people in more expensive parts. I know flats get a bad reputation because of cladding and leasehold issues but you can get period apartments which are share of freehold/residents' managed, and thats what I did in London. DH and I bought a 2 bed flat and are planning to upgrade to a 3 bed flat before we have DC (so we have a study and if we want a second child, that would be a possibility too). I posted a thread on mumsnet asking how common this is; and apparently it is!

Yes it probably seems unfair that previous generations could afford to buy houses while our generation can't; but I could also feel resentful about the fact that in 1939, a surveyor working for the council could also live in a huge flat in Highgate with his wife (and a servant)- based on 1939 census. Or that a telephonist civil servant lived in my flat by herself (probably not possible today) in 1939. Times change and our expectations need to change too.

Housing is mentioned in Gove's new levelling up plan.

www.bbc.co.uk/news/uk-politics-60216307.amp

More rules for landlords, harder for S21. Lot of landlords saying they'll sell now - might free up those FTB type houses and flats.

But housing is broken in UK, the rises are too rapid. Sunak's stamp duty plan just put a rocket into it all.

We need far more social housing.

@onlychildhamster

People who say they can't afford to buy- can you not afford the standard 3 bed family home or could you not afford a flat? I understand that british people want houses as they have families, but its not possible for many people in more expensive parts. I know flats get a bad reputation because of cladding and leasehold issues but you can get period apartments which are share of freehold/residents' managed, and thats what I did in London. DH and I bought a 2 bed flat and are planning to upgrade to a 3 bed flat before we have DC (so we have a study and if we want a second child, that would be a possibility too). I posted a thread on mumsnet asking how common this is; and apparently it is!

Yes it probably seems unfair that previous generations could afford to buy houses while our generation can't; but I could also feel resentful about the fact that in 1939, a surveyor working for the council could also live in a huge flat in Highgate with his wife (and a servant)- based on 1939 census. Or that a telephonist civil servant lived in my flat by herself (probably not possible today) in 1939. Times change and our expectations need to change too.

Depends where you live. My house was half the price of a flat in the next city over, so if I had to live there for work I could not have afforded a flat there.

@mrsm43s do most people buy the second house before they have DC. My gut feeling is that its better to buy the second family sized before DC as it would be impossible to save once you have DC. And at the same time, in expensive areas, its very hard to find a family sized flat or house for less than 500k in a city like London in an area with good schools. Or even in the commuter belt.

@Waxonwaxoff0 but there would be people in your location who can't afford your house...Are they going for the flat or are they moving further out? Not everyone can move further out for work or other reasons so are they just renting then?

If you haven't bought by the time you have kids, you are unlikely to.

@Waxonwaxoff0 the flat in your cheaper location! I think most towns would have flats, unless it was rural or something.

We saved by living at home even after graduation at 21. My parents were poor/ on benefits. I paid mum £250pm and saved the rest.

That was the only parental help we had, there was no mortgage deposit help.

@RedToothBrush is it much harder to upsize once you have DC. A lot of the older people I know upsized after DC and also colleagues, but logically it looks much harder...

My youngest DC is 21 and earns a good salary for his age and also runs a small business. He lives at home, doesn’t spend very much and saves a lot of money. He also saves into a work share scheme where they match his contributions. I think he could actually be on track to buy a flat in three years.

@onlychildhamster

People who say they can't afford to buy- can you not afford the standard 3 bed family home or could you not afford a flat? I understand that british people want houses as they have families, but its not possible for many people in more expensive parts. I know flats get a bad reputation because of cladding and leasehold issues but you can get period apartments which are share of freehold/residents' managed, and thats what I did in London. DH and I bought a 2 bed flat and are planning to upgrade to a 3 bed flat before we have DC (so we have a study and if we want a second child, that would be a possibility too). I posted a thread on mumsnet asking how common this is; and apparently it is!

Yes it probably seems unfair that previous generations could afford to buy houses while our generation can't; but I could also feel resentful about the fact that in 1939, a surveyor working for the council could also live in a huge flat in Highgate with his wife (and a servant)- based on 1939 census. Or that a telephonist civil servant lived in my flat by herself (probably not possible today) in 1939. Times change and our expectations need to change too.

There is hardly any difference in prices between house and flats here. A lot of the newly built flats round here are more expensive then houses.

@BertieQueen very different from London then.

London 2 bed flat- 400k, 3 bed flat- 750k, house-£1-1.4 million

Even in St Albans, i see large flats for £440k-500k (smaller ones for £325k), but the house can even be up to a million, mostly around £600-800k.