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?

@seekinglondonlife Tell him that I know a civil servant up north who earns 31k in wolverhampton (which is apparently a good salary for the area) and still doesn't have a car only an electric bike. Also know a solicitor in the london suburbs who rather commute on the tube (he can definitely drive to work as he works in outer london) than get a car; his parents gifted him his house. They are both single guys so I guess don't feel the need for it.

If you don't need it, don't get it. A car might be absolutely essential for some professions and some lifestyles. But if you spend all your money on non-essentials, its very easy to spend even a large salary. Upgrading your car is probably a non-essential...

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.
But I think people used to start with the much smaller flat much younger, when it made sense to be in a small flat as one person, or two without kids. But the small flats are now so expensive that by the time the deposit for one is saved, people are at the age to be married and have a baby. We’d all start with the smallest flat and trade up if we could do it in our early 20s, but most first-time buyers I know are in their mid to late 30s and have partners and ticking biological clocks.

@onlychildhamster he definitely needs a car, but the one he's driving now is fine. I think the younger generation want it all now, which is a lot of the problem.

It really depends on where you live, your income, house prices, many factors. I managed it because I have a decent salary (47k) and managed to save about 20k over the previous 7ish years by living in cheap house shares. I bought a one bed flat because I’m single and childfree but if I moved out of London I could’ve afforded a 2 bed house. Obviously that’s of no help to you because you have a child and presumably due to childcare and his SN neither of you can increase your hours. I would advise against help to buy or shared ownership anyway as the associated costs of those can keep rising

My friend just bought with 4 kids on one wage. Its doable in the North. She has had to save for 10 years for the deposit though and I mean really really save. She wouldn't even buy a pack of crisps for the dc at the park and bought the smart price food and bulked meals out with lentils/beans etc to make them stretch. Shes had nothing new for years and has all second hand furniture.

We also bought after id had one dc. Like you mine is disabled so I was not working until she stated full time school. I did study so that when that time came I could earn a bit more than before. Just an average wage mind you. My only saving grace is that dh had bought a small flat before we met and had built up some equity. We have now managed to upsize a couple of times. But again this is in the North. There is no way either of us could do this in the south.

Without inheritance, a large gift or subsidised living, then distibct advantages are:

Buying young
Buying with someone else
Really compromising on area, type of property and condition
Saving hard for a deposit
Being frugal in other areas and having some job prospects longer-term
Buying and also upsizing before DC
Upsizing again when childcare costs have passed
Being fortunate enough to avoid difficult outcomes from redundancy, ill health etc
Not splitting up if you’re a couple

@stuntbubbles we bought the 2 bed flat at 27 and 29. same age as my MIL who bought her flat at 27 in 1989. Our flat is bigger... the difference is that the victorian workers' terrace she upgraded to is a lot more sought after than it was in her time (when it was probably looked down by the middle class). Now the middle class have no qualms living in something like that in London, and they will build all sorts of extensions! my MIL said as she is originally from Europe, she looked at big flats but found them more expensive than the worker's terrace ! It is kinda the reverse today so we are looking at big flats :)

My point is that if you want to follow what is in vogue at that time, you will pay a premium for it. What is expensive now is the 3/4 bed house with garden in a leafy suburb in a big city or near a big city. People are also wanting to buy the big house to save on moving costs and stamp duty. So no matter where you are in the country, its expensive to follow the fashion due to higher demand.

@stuntbubbles

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. But I think people used to start with the much smaller flat much younger, when it made sense to be in a small flat as one person, or two without kids. But the small flats are now so expensive that by the time the deposit for one is saved, people are at the age to be married and have a baby. We’d all start with the smallest flat and trade up if we could do it in our early 20s, but most first-time buyers I know are in their mid to late 30s and have partners and ticking biological clocks.

Plenty of people in London raise children in one or two bed flats. It seems (and this is purely anecdotal) that the culture of apartment living being a perfectly normal and acceptable thing to do and a place to raise children doesn’t extend much outside of London or major cities

It's on my mind constantly. We live in a really expensive area and rent because we needed a big house. Now we're ready to buy and downsize, and it seems we can't even do that, despite having savings and earning quite decent salaries. It's so depressing. We could move to a cheaper area but would still struggle, and anyway our lives are here, all our friends, our business. We're stuck! Not a chance of social housing for us.

@TedMullins the flats could be different? Like in London, there are more conversions and if you get the top floor flat, you can extend into the loft and bam you get a 3 bed. Developers are willing to convert houses in London as they can sell the flats for a decent amount. I don't see the economic gain in converting a 400k house, as you would not be able to sell the flat for more than 250k and your building costs could easily exceed 100k (if not more).

With luck and a fair wind we may be looking at buying in the near future. But it's only possible as my DH was made redundant.
He had been a long time at a big firm, unusual for his age now, and was lucky to walk into another job straight away.
Had we needed to live on that redundancy, or if he had quit only a few months earlier (which had been a close thing) then it would have remained a distant dream. 2 kids and in the southeast, prices are insane.

@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?

No one is, we all pay up front rent to the Crown who own the home throughout and can take it back at any time they wish, say an emergency. If you want the deeds to a building you have to first spend 30 years with a huge liability debt that locks you into paying or you are removed from the property.

My advice; get socially housed and go from there. You can then get a mortgage on the house if you wish, you can move via swap, and you will have low rent, no costs for repairs, and no liability but a permanent home.

I'm renting, but the house I rent is in a gorgeous, safe, quiet area. If I bought, I'd only be able to afford to borrow enough to live in a grim area, rife with anti social behaviour. Obviously I don't have long term security with my current situation. But I feel happy and safe so I'm counting my blessings for now anyway, and prefer not to think about the fact I'm paying someone else's mortgage off!

Flat now paid off and we still own it (won't rent it out ever again) but still paying a mortgage on current home.
Have you considered house prices are what they are because of things like hanging on to flats even though you’ve bought a house?

@VerveClique is it that important to upsize before DC?

I stuck out 4 years in the cheapest bedsit I could find, didn't go on holiday, didn't spend anything, no social life, lived as cheaply as possible. It was grim but it was a means to an end.

Then I bought an ugly but study 1950s maisonette with original kitchen & bathroom, and did it up gradually.

@stuntbubbles

Flat now paid off and we still own it (won't rent it out ever again) but still paying a mortgage on current home. Have you considered house prices are what they are because of things like hanging on to flats even though you’ve bought a house?

No, I haven't thought about it. I bought the flat when I was young, it wasn't really expensive then, but i struggled and had to rent a room out for 5 years. At first when I got married and bought a house, i kept it for security, then rented it out until the mortgage was paid off for me. Have had some bad tenants, so would never rent again. The family use it as a holiday home or when visiting. Its ours, why should I sell it? Also doesn't cost me anything as I rent the 2 car parking spaces out as in town, which covers all bills.

Buying before having DC is much easier. Childcare costs and going part time reduces the amount of mortgage you can get. Everyone I know whose bought made sure they bought before having DC.

The family use it as a holiday home or when visiting. Its ours, why should I sell it?
Because there’s a housing crisis and a massive shortage of housing stock and no one needs a second home?

@Overthebow i really really hate the term forever home, but did they buy their forever homes before having DC. Cos Homes that you intend to live in forever tend to be much more expensive!

@stuntbubbles given that it is central bath, if she sold it, it would just be for airbnb and serving tourists instead of her parents? No difference to local population.

@stuntbubbles

The family use it as a holiday home or when visiting. Its ours, why should I sell it? Because there’s a housing crisis and a massive shortage of housing stock and no one needs a second home?

I hardly think my ownership of a 2 bed flat is causing any housing crisis 🤣 there is a lot of things in life that we "don't need", but still have. It's ours, we've paid it off. My home is a cottage and cannot accommodate all family at special occasions, so serves perfectly. Plus it's a pension fund if needed or Inheritance for my children. Why should I sacrifice that?

[quote onlychildhamster]@stuntbubbles given that it is central bath, if she sold it, it would just be for airbnb and serving tourists instead of her parents? No difference to local population.[/quote]
My parents are long since passed. My kids(adults) often use it. And agree, it would be air bnb or more likely student accommodation

Oh God didn't take long for some boomer to start bleating about 15% interest rates did it? Anyone who tries to argue that paying 15% interest (for a very short time) is comparable to house prices which are 10x what they were back then (in real terms) has got a very fragile grip on basic mathematics.

OP I feel for you - it's awful. I am a home-owner (luckily got onto the housing ladder when 100% mortgages were available) but I worry how on earth our children will be able to buy a flat when they are older.

In the same boat and seriously pissed off with older people (70s) basically saying that we're just not prepared to make the sacrifices that they did.
In our area a big standard 2 bed terrace (no parking, tiny yard, bathroom downstairs behind the kitchen) costs around £450K...we both work in this area but earn below average.
What the f*ck am I supposed to sacrifice in order to afford a house?! We never go on holiday, my car is an old banger, my clothes come from the supermarket.
We do have small amounts of money to spare and we do buy little treats / occasionally eat out or get a take away. I suppose if we sacrificed those things we would save a deposit in around 300 miserable years?