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?

Bog standard! Definitely NOT big 🤦‍♀️

@Fr0thandBubble

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.

I was just thinking how civilised this discussion was then you pop with an ageist insult to someone purely because they gave their opinion. It takes a special kind of ignorance to insult people for being something you will one day become. Hopefully with age you will also gain some maturity.

@LonglegsMumtheBlacksmith

How much does the flat cost relative to the house. in my area, the 2 bed house costs £600k, the 2 bed flat cost 400-450k. Big difference.

Can you move further out, thats what a lot of people do.

No car- we don't have one and neither do many of my friends who live outside london.

not everyone can live at home, but maybe studio or 1 bed flat.

Another thought- if either of you have skills that are needed in Dubai, one or both of you can live there and save for a few years, will definitely save a deposit.

Without family money or high salaries, you need to do extraordinary things to afford a place on your own salaries. Stuff that make people go ' I can't believe you did that!' thats my experience anyway!

My children do not stand a chance of buying in our area ever ! They are all graduates with decent jobs but the cheapest flat around here is 250k plus ! So unless they were earning over £70-80 k a year they are completely screwed!

I think the banks should bring back 100% mortgages. If you can prove you are paying more per month on renting than you would on a 100% mortgage, why can't you buy? It's the same costs, you just don't own one.

Yeah circumstances might change and you can't afford it, but that's the same for anyone. Someone who pays 50% deposit could the week after be hit by a bus, forced to retire from working and be on benefits for the rest of their lives. Likely lose their house.

@Whammyyammy
I don't believe that the average young single person could buy a two bedroom flat in central Bath now, even if they were prepared to make a huge sacrifice and rent out the second bedroom.
You obviously bought at the right time, then your (apparently bad) tenants had the great honour of paying off your mortgage for you.
Keep patting yourself on the back though.

@AllOfUsAreDead

I think the banks should bring back 100% mortgages. If you can prove you are paying more per month on renting than you would on a 100% mortgage, why can't you buy? It's the same costs, you just don't own one.

Yeah circumstances might change and you can't afford it, but that's the same for anyone. Someone who pays 50% deposit could the week after be hit by a bus, forced to retire from working and be on benefits for the rest of their lives. Likely lose their house.

My understanding is that the risk of a 100% mortgage is that if prices come down you're in negative equity. If you have paid 10% down you have a buffer from that happening.

Happy to stand corrected if that isn't the case

@AllOfUsAreDead

I think the banks should bring back 100% mortgages. If you can prove you are paying more per month on renting than you would on a 100% mortgage, why can't you buy? It's the same costs, you just don't own one.

Yeah circumstances might change and you can't afford it, but that's the same for anyone. Someone who pays 50% deposit could the week after be hit by a bus, forced to retire from working and be on benefits for the rest of their lives. Likely lose their house.

This is definitely what needs to happen! Unfortunately Boris and his banking mates probably wouldn’t agree!

[quote LonglegsMumtheBlacksmith]@Whammyyammy
I don't believe that the average young single person could buy a two bedroom flat in central Bath now, even if they were prepared to make a huge sacrifice and rent out the second bedroom.
You obviously bought at the right time, then your (apparently bad) tenants had the great honour of paying off your mortgage for you.
Keep patting yourself on the back though. [/quote]
Well said Longlegs.

@Hightemp I think its because if you don't have any equity in your property, whats the loss if you walk away from it if you can't afford to pay the mortgage and its worth less than what you paid for it.

We have sunk £100k in our flat including mortgage payments, overpayments, savings. It is almost the whole of our net worth. I will go hungry before I stop making payments. Its why buy to let mortgage rates are higher than residential rates because banks know that people are more likely to pay the mortgage on their own home than on a home that they own for investment purposes.

Banks used to loan 100% deposits cos they assumed housing prices would go up. So if they loaned £450k and the owner defaulted, they thought they could sell the vacated places for more. If they loaned 450k and house dropped to 400k, the repayments may not have covered the 50k shortfall and then the bank will lose money. Even a 5% deposit may be a lot of money to the owner and the owner will have a vested interest in holding on to the property.

It's not the end of the world to rent. British are obsessed with home ownership. I have been a homeowner twice and would choose renting over owning any day. Instead we have ploughed into out pensions and hope to rent for the rest of our lives. I can't remember the name of the guy but there is an American billionaire who still rents as he says it is crazy to buy. I will try the remember his name!

[quote onlychildhamster]@LonglegsMumtheBlacksmith

How much does the flat cost relative to the house. in my area, the 2 bed house costs £600k, the 2 bed flat cost 400-450k. Big difference.

Can you move further out, thats what a lot of people do.

No car- we don't have one and neither do many of my friends who live outside london.

not everyone can live at home, but maybe studio or 1 bed flat.

Another thought- if either of you have skills that are needed in Dubai, one or both of you can live there and save for a few years, will definitely save a deposit.

Without family money or high salaries, you need to do extraordinary things to afford a place on your own salaries. Stuff that make people go ' I can't believe you did that!' thats my experience anyway![/quote]
I appreciate that you are trying to help but these suggestions are ludicrous.
I am not about to split my family up so that one of us can work in Dubai. Do you really think that is what people should have to do now to get onto the property ladder? Isn't that a bit crazy?
Only a generation ago couples could raise a mortgage on a single wage. Sure, they made some reasonable sacrifices to do that but it was achievable without one of them moving to the Middle East?!

Grant Cardonne

@Summerof74

It's not the end of the world to rent. British are obsessed with home ownership. I have been a homeowner twice and would choose renting over owning any day. Instead we have ploughed into out pensions and hope to rent for the rest of our lives. I can't remember the name of the guy but there is an American billionaire who still rents as he says it is crazy to buy. I will try the remember his name!

It's great if you can afford to do that but people who can't afford to save for a house deposit probably can't afford to save enough into their pensions to cover the cost of private rent after retirement. They'll end up relying on housing benefit to pay the rent which isn't ideal.

My eldest son carried on living at home with us whilst paying towards bills until he was 31. He managed to save about 8 percent deposit and we made it up to 10 percent for him. He moved up to Hull and bought a 2 bed terraced. It is lovely but he is £750 per month net worse off financially. He is finding it so very tight to manage as he is used to having more money each month. Now my you get son is still at home and saving hard. He does not want to move up North though. He is using LISA and saving full punt he can each month but yesterday I heard on radio houses in our area went up on average 11 percent since November. How when not many people move over Xmas? I know youngest son will need more help as houses more expensive here. Our mortgage will be repaid in 25 months so we will be able to help more then but youngest son is 27 later this year and will have to do the dreaded 35 year repayment. Neither of sons have DC yet or they would never have get a mortgage.

There was a thread a while back asking people to be honest about how they were able to afford to buy/ get a deposit. Very many were helped out by family/ inheritance.

@AllOfUsAreDead

I think the banks should bring back 100% mortgages. If you can prove you are paying more per month on renting than you would on a 100% mortgage, why can't you buy? It's the same costs, you just don't own one.

Yeah circumstances might change and you can't afford it, but that's the same for anyone. Someone who pays 50% deposit could the week after be hit by a bus, forced to retire from working and be on benefits for the rest of their lives. Likely lose their house.

Are you not aware of the 2008 financial crash at all?

[quote onlychildhamster]@LonglegsMumtheBlacksmith

How much does the flat cost relative to the house. in my area, the 2 bed house costs £600k, the 2 bed flat cost 400-450k. Big difference.

Can you move further out, thats what a lot of people do.

No car- we don't have one and neither do many of my friends who live outside london.

not everyone can live at home, but maybe studio or 1 bed flat.

Another thought- if either of you have skills that are needed in Dubai, one or both of you can live there and save for a few years, will definitely save a deposit.

Without family money or high salaries, you need to do extraordinary things to afford a place on your own salaries. Stuff that make people go ' I can't believe you did that!' thats my experience anyway![/quote]
Also to answer your questions:
flats in our area are rare and very popular- a little cheaper than houses but still out of our reach.
Property prices in all the surrounding towns (within 15 miles) are still out of our reach.
My car is an expense. I understand that.

The fact is that I would sacrifice my car and live off of beans on toast for a few years if it realistically meant I could save a deposit. But it wouldn't be enough.

In contrast, family member bought a house in 1970s for 1.5 x husband's annual salary. House needed a fair bit of work, sacrifices were made and I am not taking that away from them. But it was all possible. Same house now worth more than £1million. So that's 20 times our household annual income...

@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.

Thank you! Everyone who says this doesn't seem to realise that there is a biological clock and the average age for buying a first property has shot up.

It's the same with people saying buy before children...that just means huge numbers of people will risk never being able to have children. We have what should be good salaries but keep getting outbid on houses. When we won one bidding war the house was devalued so we couldn't get the mortgage anyway. We will hopefully be able to buy before it's too late for children but it's getting close.

And that's on good salaries but with no family help or inheritance (also no car contracts, phone contracts, tv, tv licence, avocados, new laptops, no new furniture, and no holidays abroad) just to pre-empt all of the preaching.

@onlychildhamster we upsized the guest time pre-dc not because of space (although the first property was big enough for DC) but because it was the only way we could gain value. We bought pretty near the bottom of the market nationally and unless you want to stay in a house long term it’s best not to over-develop it. And I’m not really talking about over developing here… in two years we cleaned everywhere, fixed up the kitchen and bathroom without replacing, new flooring and decoration throughout, tidied up the garden. Sold for a very modest profit buy it meant we could move.

Like PPs have said, if we’d have had DCs then, we wouldn’t have had the time, space, money or energy to improve the property and move on.

@Summerof74

It's not the end of the world to rent. British are obsessed with home ownership. I have been a homeowner twice and would choose renting over owning any day. Instead we have ploughed into out pensions and hope to rent for the rest of our lives. I can't remember the name of the guy but there is an American billionaire who still rents as he says it is crazy to buy. I will try the remember his name!

But you could be told to move with just two months notice at any time? You can't hang a picture on the walls or grow vegetables in the garden. It's a ridiculous way for hard working people to live.

[quote LonglegsMumtheBlacksmith]@Whammyyammy
I don't believe that the average young single person could buy a two bedroom flat in central Bath now, even if they were prepared to make a huge sacrifice and rent out the second bedroom.
You obviously bought at the right time, then your (apparently bad) tenants had the great honour of paying off your mortgage for you.
Keep patting yourself on the back though. [/quote]
I agree, timing was good. Mid 90s. And sharing your home with a stranger so you can afford a home is a sacrifice, how many on here that are saying they are renting as cannot afford to buy have a lodger living in their home? Not many I bet. Do you?

And bad tenants, yup. I had one that attacked a neighbour and kept his moped in the flat? One that was a friend of a friend that I helped out, she didn't pay rent for nearly 2 years and cost me 1000s to evict her,.
Its not been an easy run yes I've now benefited, but it took years of saving to buy a flat, while all my friends were out drinking, having holidays... hone ownership doesn't come easy to most
I've not inherited, but I'm.making sure my kids do and that I can retire early. If that's a bad thing 🤷‍♂️not bothered. I'm.lookimg after me and my family.

I suppose it depends on your life choices.
We are very minimal and choose experiences over 'stuff'. I don't feel attachment to property although I know others feel differently.
I think we have become indoctrinated that we must own a house. All personal choice but I don't feel the need anymore. I would prefer to invest my money in other ways and for us we decided pensions are the way forward. We will probably buy a 'tiny home' and live minimally in retirement. I intend to give my children some money whilst I am still alive as it is more use to theme

If you can prove you are paying more per month on renting than you would on a 100% mortgage, why can't you buy? It's the same costs, you just don't own one

@AllOfUsAreDead that’s incorrect, though, isn’t it. We’ve spent 10k on repairs/maintenance in the last 3.5 years and we could easily spend another 10k because it still needs new windows/doors and other bits as I said in my pp ! That’s £240/m roughly, ON TOP of the mortgage.

Rent includes everything; the tenant lives there has ‘free use of the property’ or whatever the line is when you sign the documents and the landlord bares the cost of maintaining it. If the roof caved in the tenant doesn’t pay a penny, if my roof caves in it’s a few thousand in unexpected costs.

Unless you buy a new build which are at a premium anyway houses will be money pits.

@Whammyyammy
Correct: I do not have a lodger living in my rented home. I can't see anyone paying much to sleep on the sofa as we don't have a spare room.
My point is that a young person would not be able to buy your flat in central Bath now, whether they were prepared to take in a lodger or not. That's not an option, so what are they supposed to do?
Taking a lodger is a sacrifice, but lots of people do it. A PP has suggested that I leave my family to work in Dubai for a few years in order to save a deposit for a massive debt to the bank house. Would you have done that?