Let's do the math for Kirsty regarding an affordable home

[kirstyalslap]

I'm sure everyone has heard that kirsty Allsopp has came out saying that people can afford homes if they only cut out netflix, the gym and takeaway coffees.

I just worked out a meal deal costs £3 a day. X that by 5 days a week 52 weeks a year is £720. Netflix is £8 for 2 screens (?) so times that by 12 months is £96 a year.
Let's add a £20 takeaway every 2 weeks for good measure. £520. Gym costs £14 a month so £168 a year.

So in one year of cutting back on netflix, lunch for work and takeaways I can save £1504
Wow
Now I need 14000 for a deposit so I'm only 10 years away (probably a little but more actually including fees.)

Right now let's think about increase in property value.
My parents bought their house 8 years ago for £90 thousand. A massive 2 reception with 4 bed and 2 huge gardens with a drive.
Bad condition.
Last year the neighbours sold for £230k
This year the other neighbours has been valued at £280k. My parents are thinking of selling for approx £290k.
So in 8 years their house has increased by £200k
(this hurts me as I started saving 8 years ago, nearly 9 and was looking at saving for a smaller house for about 80k needed 4k at the time and had a 5 year plan to get there. No family helping with deposit)

£90k now would get you nothing at all.
Also you need a 10% deposit.
Also rents back then was £500pcm for 2 bed flat. Now they are £700+pcm for same flat.

So how can we do it? How? Please tell me!

Oh also, everyone I know saving for a house has already cut out take away, meal deals, gym (first to go come on!) and much much more.
Batch cooking, shopping around for deals, having friends round rather than going out.
Every thing is rising in price now, I don't know how my children will afford to live away from us, it is scary because as much as we are okay now, we won't be able to have 3 grown adults living in one bedroom until they are in their 30s! Or will it be 40s or 50s by then?

I'd like to put together two of Kirsty's comments.

1. Move out to where it's affordable. As other PPs have said, commuting anywhere in the SE makes you a prisoner of the rail services and is true everywhere Moving even further out or changing jobs is of course possible but not necessarily for two people trying to continue in their jobs.

1. Women should be getting on with children earlier. Fat chance if you move away from a local network of friends/family which helps you avoid increasingly expensive childcare but allows you to buy a house you won't be able to afford if one or t'other of you lose their jobs or gets reduced hours.

QUESTIONS I'D LIKE TO ASK KIRSTY

Does she know what the minimum wage is?
Does she know what the median income is?
Does she know what rents are across GB?
Does she know how many people in GB are on zero hours contracts?
Can she predict interest rate and mortgage rate rises and the cost of energy, council tax and food (including avocados) over the next five years?

.

From my observation, a young couple with no DC and secure jobs can usually knuckly down and save for a deposit in 1-2 years. Even better if they can live with family and save on rent. The people that really miss out are:

Single people

People who have DC before they get their first home, and have all the expenses of childcare , plus greater housing needs.

People with insecure jobs or self-employed who struggle to get the same LVR as people in jobs.

Anyone who fits into more than one of these categories.

I think her advice can be good for the first lot, who can often make astonishing savings cutting back on things like mobile data, TV subscriptions, car loans, take aways, new clothes, holidays and nights out.

For the second lot, they're probably already doing those things just to get by. And if you're single cutting out socialising and tv subscriptions can be much harder. A big difference to sitting at home with a partner playing games, talking or watching crap tv, to doing it on your own, when all your friends are out at a bar.

Also, maybe you need to consider your wage. You can't decide to work in a minimum wage job then get upset that the money doesn't stretch as far as if you were a lawyer ...
Also, maybe you need to consider being richer! Why did you decide to be poor? Just be rich, you’ll have more money. It’s really very simple and easy!

@BernadetteRostankowskiWolowitz

If you hit lucky and:-

1. Live in an area with lower housing costs
2. Are able to live somewhere rent free for a year or two

Then maybe it's possible.

A 2bed garden flat (non leasehold) near me on a good street will cost £125k
Deposit £12.5k
Fees £2k (obvs can add these to the mortgage)
Mortgage required £112.5k
Salary required £30k

But saving that initial deposit is pretty much Impossible unless you can bunk in with family or friends for a low cost.

Rent on a room in this area (Inc all bills) is about £450.

Salary 30k,
Pcm nett £1500
rent and housing bills £450
Car or travel costs £200
Food (basic) £120
Other bills (phone etc) £50
Bare bones replacement of clothes, shoes etc £50

This leaves roughly £630

So even living frugally and saving £600pcm, it will still take over two years to save even just the deposit.

By which time, housing stock has increased from £125k to £135k (as it has these last two years), deposit required is now 14k plus fees, and you've got scurvy from 24 months of eating beans on toast.

And that's in the cheaper than cheap North East of England.

Would the take home pay not be closer to £2000 a month on £30k PA?

The other factor that no-one has considered is that rents are rising, in our area they have gone up 10% in a year, and now rentals are hugely expensive. Couple that with the cost of living rises, and money isn't going as far for everyone, which then impacts what you can save. It's a shame that paying your rent on time isn't taken into account when making mortgage applications as there are lots of people paying far more in rent than they would for a mortgage, but they don't have the hefty deposit required, partly because they are paying ridiculous rental sums. It really is a rental trap.

Would the take home pay not be closer to £2000 a month on £30k PA?

30k is around £1880 take home (assuming basic workplace pension)
If there were greater pension contributions or a student loan then it would be less.

@stuntbubbles
Also, maybe you need to consider being richer! Why did you decide to be poor? Just be rich, you’ll have more money. It’s really very simple and easy!

Yes considering how quickly, easily and cheaply you can qualify as a lawyer, doctor, accountant or architect, I'm not sure why people waste time in minimum wage jobs . Perhaps they should have reconsidered the type of parents they had too, and chosen ones who can lend/give them a decent deposit or at least have a second home that they can live in rent-free while they save and ideally have titled ancestors

I'm sure everyone has heard that kirsty Allsopp has came out saying that people can afford homes if they only cut out netflix, the gym and takeaway coffees.

People who own multiple properties and have started in a priviliged position like to churn this untrue bollocks out because it makes them feel less shit about contributing to the problem and stops them from feeling like they have to help people.

Send her the maths and ask for her that if she is wrong to correct her statement, or if she thinks your maths are wrong, then to give you her version of them.

Perhaps she was taking about using the £1500 you would save on crafting a home out of felt and ribbons. That might be doable.

Allsopp, 50, bought her first property with family help at the age of 21, when the average house price in the UK was about £51,000. Adjusted for inflation that is £112,000

@Mothermorph

Would the take home pay not be closer to £2000 a month on £30k PA?

30k is around £1880 take home (assuming basic workplace pension)
If there were greater pension contributions or a student loan then it would be less.

Agree - I was on 30k until about a year ago and after tax, ni,pension (5.5%) student loan (12%) and Union subs (necessary in my role and only about 15 quid) came out I got about £1660 p/m net pay.

I managed ok because my mortgage was only £350 p/m (over 35 years which was why it was so low!) - the house next door to me which was exactly the same rented for £700, and that was cheap for the area. I agree it's mad that the fact you've paid (often a higher) rent successfully isn't taken into account in Mortgage affordability.

Kirsty loves to talk doesn't she? We should all bow to her superior knowledge. Swooshing around making shit out of twigs is clearly the best way to get that country house. Stop watching that awful Netflix and craft instead

@OnwardsAndSideways1 If I was a FTB, I would be very happy about the inflation because it means interest rates will probably go up. House price rises are linked to low interest rates which is why this problem is bigger than the UK and is global. Money is cheap.

I just had an idea- perhaps Kirsty is saying things like that because her job is directly linked to property prices i.e. in the last financial crisis, her show 'Relocation, Relocation' was axed due to the economic climate that most people could not afford a home let alone 2. metro.co.uk/2011/10/10/channel-4s-relocation-relocation-axed-179047/

I bet a lot of people are holding off on house purchases in the hopes the bubble would die down this year and she think there might be a crash. A flat in my development sold for £450k in 2016, I bought my flat for £392k in 2019. someone earlier upthread was bemoaning spending £51k on rent since 2016 (more than 5 years). well renting can save you money if you don't buy on the wrong end of the curve!

@OnwardsAndSideways1 So hence she is trying valiantly to preserve the bubble by telling young people that they should save all their pennies to buy at the absolute peak! Well ok, but how would they feel if their house drops 100k in value a few years after buying it? Would they be able to stomach higher interest rates?

I mean, i am an owner but when i bought, I thought that as I had a 15% deposit and could afford to make overpayments, i had a good chance of avoiding negative equity and upgrading cheaply. For people who scrimped and saved to make a 5% deposit and maybe overstretched themselves wouldn't have that option.

It may all seem futile, and if you live in London on minimum wage it probably is, but what is the alternative? You have to start saving for a deposit and yes prices might go up quicker than you can save but saying it's pointless and spending it on whatever you unessential things you're into won't help. Not everybody who owns a house in their 30s got helped by their parents. The whining is so frustrating for those who made sacrifices and are treated like "they don't get it".
At the end of the day you may think your £50 gym, £50 phone, £50 sky isn't that much, but it also affect what the bank decides you can afford in terms of repayments, so these little savings also help with getting a mortgage approved.

Caddycat there is a big difference with going without luxuries when you know it’s temporary and you will get your house and not knowing if it will ever be possible. Mental health is important too.

@Caddycat My experience in London is that prices went down as I saved! :)

When i first started, I was looking at 2 bed flats above a shop and wondering if I could wing it. When I managed to save a little more, the price went down by 50k and we managed to buy a 1930s flat with communal garden! I mean last year was peak pandemic, where people were buying anything in an idyllic location with some outdoor space. Now that the model is hybrid working; some people may realize even guildford is not feasible due to childcare commitments and demand will drop. Great if you are a FTB in Guildford.

@Caddycat poor Kirsty is trying to keep demand up. She knows people's incomes are squeezed and interest rates are going up- this affects sentiment and property prices are all about sentiment. Even people who can afford it are not going to want to buy a house for £500k if they know that they wouldn't be able to sell it in a few years for a profit!

So the next step is telling people to save £5 here, £10 there so at least they have a little more to spend on the house.

Oh come on, Kirstie knows all about saving money.

Isn’t it her who flies first class and puts her children and the nanny in economy? That’s about £6k saved already.

This thread is bonkers.
It is not Victorian times.
This is 2022 and things are going backwards.
I understand what people are saying regarding cut back but what is the point of living miserably to pay a stupid amount for an overpriced property?

There has to be a balance somewhere!

I'm 'up north', I think a lot of these comments are very south oriented. I'm late 20s, all of my friends have been able to buy decent houses on the commuter belt to Manchester. There was no living miserably we could still get coffees, have holidays, go gym, eat avocados etc it was 50/50 who lived at home and who didnt (I didn't).

No big paying jobs, support worker, student, paralegal, pharmacy assistant etc, nurse etc. Partners salaries similar level.

I dont think cutting back on those things would have made much difference in our ability to save, perhaps maybe made us in a position to do it a few months earlier at best.

@goodnightgrumble

This thread is bonkers. It is not Victorian times. This is 2022 and things are going backwards. I understand what people are saying regarding cut back but what is the point of living miserably to pay a stupid amount for an overpriced property?

There has to be a balance somewhere!

I agree - there’s a post upthread talking about how people’s expectations of standards of living have gone up in terms of quality of rental properties and owned ones, so we want more from our homes and thus they’re more expensive. But we should want quality of life to improve! Both my parents grew up in houses with only an outdoor loo – of course it’s better to have an indoor loo, and at some point that improvement has to be paid for, but not at the prices we’re currently seeing, and nor is it an “ideas above our station” expectation.

And rentals absolutely should be expected to be high quality – I had a bloody hole in my bedroom ceiling in my houseshare and a faulty boiler, combined that meant coming home from work to squishy damp sheets, black mould on the windows, and ruined books. Took the landlord an age to fix it and they had all the power. Of course we should have higher expectations of rentals than this, and people shouldn’t have to live in hovels in order to save to get on the ladder, or indeed buy hovels to fix up to get on the ladder. The state of housing stock in this country is grim and appalling and it’s not wrong to want and expect better.

@Caddycat

It may all seem futile, and if you live in London on minimum wage it probably is, but what is the alternative? You have to start saving for a deposit and yes prices might go up quicker than you can save but saying it's pointless and spending it on whatever you unessential things you're into won't help. Not everybody who owns a house in their 30s got helped by their parents. The whining is so frustrating for those who made sacrifices and are treated like "they don't get it". At the end of the day you may think your £50 gym, £50 phone, £50 sky isn't that much, but it also affect what the bank decides you can afford in terms of repayments, so these little savings also help with getting a mortgage approved.

That's just it. Like I've had a reply to my experience on this thread, and whilst I can't deny it was polite, it suggested I'd been able to live at home or got parental help when neither are true.

I did have a fairly miserable existence for 18 months, but it was worth it.

And that’s if you can find a property in ten years! I don’t know where we’re going to put everybody!

It’s ok the Dailymail have proved Kirsty right! They have found a young girl who has spent the last 3 years living with her parents, not having one night out or having a takeaway. She has worked 3 jobs whilst training to be a nurse and has managed to save £17,000 for a deposit.

Her reward for all this sacrifice….. a 40 year mortgage!

Seriously if this what we want for our kids? 3 years of barely existing just so they can spend the next 40 years paying way over the odds for a home!

I don’t understand - why didn’t the girl’s parents just give her the deposit? And why was she at university? Has she got a boyfriend? And presumably she’s planning on getting pregnant while she’s still in her 20s? It’s almost like she hasn’t read Kirsty’s memo.