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'm not saying she is right but I hat gym costs £14??? Local council one is £36 a month per person (no discount for couples) if you sign up for a year. Meal deal is £3.50 at Morrisons a lot more at costa the only place in walking distance of my work, my Netflix is only £5 but only because I pay £41 to sky for my broadband, line rental and tv - we need the broadband to wfh, tried on 4g and it was a nightmare!

You are forgetting - many people I know have £50 a month phone contracts (I don't mine is £10 sim only) and take always here cost £££ the chip shop charges £12 for fish and chips.

We are older and own but only because I saved for 3 years living at home and then traded up,

"Chap, naff gym starts at £40, my mates is £110 a month. And thats each if you are a couple."

No, there are LOADS of cheap gyms now. Under 20 should be quite easy to find.
And 8£ every single day for lunch and coffees? I don't think so. Even then, OP counted 52 weeks of the year so including any holidays.

It is tone deaf statement.

However we didn't inherit money.

Our deposit came primarily from me saving pre kids for years- on a very good wage 1/3 on rent, 1/3 saving and rest to live off. I knew thanks to Dmum would be harder to save post kids and I knew I/we wanted them. First paid of uni debts then save moving money then just saved hard.

Was with DH - then boyfriend he earned same - had same rent yet couldn't save. He got the message from his parents that house prices were insane (and it did feel to me like I was chasing a moving target ) and would come down so not point saving- they didn't.

Even with a sizable deposit we had to match work and area we could afford and we did that when eldest child was coming up to 3 meaning school wasn't far off. Made a loss on first house- and for a while were paying more than we woruld we rent - sold for less than bought and worte of 40k in basic repairs - but did hold out for getting the inital deposit back out needed to buy next house as needed to live there- was told on here that was price gouging.

So saving hard, picking cheaper area, having very small wedding as we paid for it and though house depoist more important, did without hoildays and cars etc it just been possible for us - and I can see it's getting harder ever year. I do worry about of DC ever being able to afford anything and think something will have to change.

It is a bit to have some of DH uni friends say we are lucky - when they won't move out of expenisve SE areas compomise on what they buy, had lavish wedding and have at least two expensive holiday a year and a generally lasvish lifestyle - and then moan they can't get on ladder.

Retired home owner here but even if we were working we couldn’t afford our house now. Glad we got new roof,double glazing, loft insulation, cavity wall done before retiring.
Daughter works abroad and gets generous rent allowance. Son on decent salary but still at home

And I personally only have Netflix, don't bother with a TV package. I can't be the only person.

@stuntbubbles

Ds aged 25 has bought a semi for £170,000. Ds 21 has bought a 3 bed semi for £140,000 Not quite the same price range as £90,000 then. And if everyone moved to the areas where those are the prices, the prices would push up.

This is already happening with the pandemic and people working from home for London jobs. Local people being priced out.

[quote onlychildhamster]@Lolamento the UK is the one of the few countries where people have different preferences as to housing type based on life stage. I have lived in 2 other countries and haven't seen this at least on such a large scale. In european cities, families, professionals and singles alike predominantly live in flats. In the UK, flat living is seen to be for young people, poor people or downsizers in assisted living residences. People want a house with garden when they have a family and this has been the case for many years. So of course many of the houses are inhabited by the elderly who had young families 30 years ago. They are not building any more of these family houses. In london most of the new builds are flats. A lot of the new build houses are very expensive and quite small.

In my experience, it is not that difficult to buy a 2 bed flat (even in London; the main problem is that most people who seem to want to buy flats in London are singles which make it more difficult). What is difficult is to buy the family home. It is hard to find larger 3 bed flats as the supply is limited but they are still cheaper and more attainable than the houses. I am open to apartment living which means that it was easier for me to buy. If i only wanted to buy the 3 bed semi detached in a lush green home counties suburb, i would possibly still be waiting (and I bought over 2 years ago).[/quote]
A two bedroom flat in the area of London I live would cost you £600k. A friend of mine just sold her two bed flat for £725k. That is a lot and is not easy.

Property purchase has always been difficult My own parents (in the 1950's) could only afford to buy a property with a sitting tenant on the top floor, and had to wait for her to decide when she wanted to move out!
When I married in the early 70's the only people in my peer group who could buy properties were those who worked for banks or insurance companies (cheap mortgages) There was a shortage of affordable housing and people would queue overnight to put a deposit on new builds on housing developments.
DH and I had to rent as no-one would give us a mortgage as he was self employed, I could not get a mortgage in my name unless I signed somthing to say I wouldn't get pregnant for five years!
We bought our first property in 1994 with an interest only mortgage, it was mega tough.
House is all paid off now and is worth £1.2 ml BUT My 4 DC's have lived here rent free for years in order to be able to afford their own places, 3 have suceeded but one son plus his wife live with us while they save.
Its always been difficult, different but difficult, I think you have to be very single minded about what is important to you, is house ownership more important than fancy holidays etc. I think the main difference now is that renting is relatively more expensive nowadays than it was up to the 1990's (Blame Thatcher!) so everyone aspires to home ownwership.

" Local council one is £36 a month per person (no discount for couples) if you sign up for a year. "

Cheap private gyms are cheaper than the council ones.

Not read all the replies

OP, you've completely ignored the fact that Kirstie also suggested moving back in with parents. (If possible) I know that doesn't suit your OP but if you add in what you would save doing that then it would make a massive difference.

Rental + bills could easily amount to over £10,000 a year. Do that for a couple of years along with frugal living then it MAY mean you can get deposit together.

...and also, she said that she didn't want to belittle those who can't buy so has clearly acknowledged that it will be impossible for some people.

I think her point was more to do with people assuming they cant scrape together a deposit when they may be able to.

Someone on the previous page talked about flats and how new homes are now mostly flats and we need to lessen our dream for houses with big gardens…..I don’t actually disagree with that but do have a point to make.

My first home was a flat. Lovely new build. Much more affordable than a house. I loved it. I felt safe, I was in no way “ashamed” of being in a flat (which I think many once were and I think many still deem them as inferior)
Why did I move? Because of the service charge. £140 a month. Plus an extra £250 a year ground rent. Plus if there was a big bill, for example when once idiot decided to crash through the car park gate when he had forgotten his fob, we all got the bill, not just the responsible person.

That’s the downside to all these flats. If a new company took over the lease they could rocket the service charge costs), I could argue my house costs me more potentially (for example at the flat it wasn’t my job to fix the roof but in my house it would be). But flats also don’t increase in value as much so as houses go up and up, flats increase much slower (certainly where I live, 5 years on from moving, flats in my old building are on the market for about £10k more than I received, whereas npmy house has just been valued for £30k more than I paid. It’s madness)

It is possible. My dd has 50k for her deposit. She works full time now and went to uni for 4years. She pays me rent monthly. She's 24. She saves and saves.

We have been fortunate to have ridden the property roller-coaster since the late 1980s. It wasn't quite as effortless as it must seem in retrospect. DH worked overseas to earn the deposit on his first house, as I did. A young relative is currently doing the same so they can in time buy a home in London or Sydney.

When we downsize from our family home (which has earned more than us) and relocate somewhere closer to family (and slightly cheaper) for our retirement, the bank of Mum and Dad will make a substantial down payment on DC's first property.

@Boood

The Times worked out that cutting out coffee, gym membership and Netflix/Sky would enable you to save an average-sized deposit in 37 years.

But by then you will be too old for a mortgage.

@BoredZelda

Also moving to different 'cheaper' areas might mean moving further from family/friends/support networks.

Which means when you start a family you then have to pay for childcare which means you can’t afford your mortgage or, go on benefits because you’re actually financially better off.

They do the affordability calculation for the ONS on the basis of the average LOCAL wage.

So if you move area, your earning potential moves accordingly. If the area still has a affordability ratio of move than 5 times, that kind of is a problem, given that most mortgage lenders won't do more than 5times multiplers anyway.

Taking the example of Bury (5.8 times - £27,652) v Didsbury which is part of Manchester Central (6.4 times - £25,000), its worth noting that the multipler ratio of both areas is still above 5 times the average wage. Even looking at wealthy Trafford - thats 8.1times - £32,047 a year. If you know anything about Trafford, there are not many parts of Trafford you'd get a house for £160,235 these days.

Telling people to move elsewhere, pushes demand and prices up in less desirable areas. So that increases the affordability gap there too.

What happens to those people who aren't able to move to the next cheapest place and dont have a driving licence / public transport?

One of the reasons these places are cheaper is because there isn't employment average.

Not to mention that the AVERAGE wage. So by definition 50% of people will be earning LESS than amount...

What happens to then?

We know that home ownership in older generations is well above 70%.

You do the maths here Kirsty, why aren't 70% of younger people able to purchase a house?

Not helpful or useful to this conversation but since when did maths become math?

I cannot stand her 'live with your parents and save on rent' idea. And what about those parents who would quite like to enjoy their retirement/middle age without adult children living in the house for free?? (and I say this as the child, not the parent!)

@RuthW yes its's possible because she lives with you to save,so ask her to save and save with bills and proper rent

Look, all you have to do is make sure that you’re born with a sizeable trust fund and it will all be fine. Simple forward planning folks, just make sure the little zygote that turned into your was implanted into a sufficiently wealthy uterus and you’re set. If people can’t be bothered with such simple measures, they can hardly blame Kirsty for that.

/sarcasm

@Mariposista

I cannot stand her 'live with your parents and save on rent' idea. And what about those parents who would quite like to enjoy their retirement/middle age without adult children living in the house for free?? (and I say this as the child, not the parent!)

And indeed those whose parents may get their housing benefit reduced if they allow a non rent paying adult to move in.

I think the main issue is the explosion of house prices in certain regions, mainly the South and South East. The wage for a young person x the amount of borrowing + deposit need will be out of reach for many and really do understand OPs point of view.

Other regions, ( live in the NW) a combination of an ok salary ( might be below average in some cases) , a reasonable cost of living and house prices still quite affordable ( in general) means that a young people, especially if they are a couple, can buy a house a lot easier than their counterparts in the South.
I had a look at a house similar to DS1's was and the price was crazy. I can't remember exactly but it was more than 850k with a much less land.
Clearly there needs to be a big drive by the government to support affordable houses for young people in the south. Otherwise over time the area will lose young people and their skills.There will be a skill shortage which will have knock on consequences.
It has been an issue for a long time but I don't see much being done to help the younger generation. I could be wrong, I am only aware of our local area and the buying schemes that have been available.

@bananabuddy3 my flat's freehold is owned by the residents. my service charge is £150 per month but my DH is a director of the residents management company and he sees the account. Half of the service charge goes to building a sink fund for roof repairs/refurbishment. People who own houses would have to do the same too!

Also a house with the same square footage would cost £200k more! That is way more than £150 a month! You are right that there is a downside but at the same time, it does cost less (a lot less in expensive urban areas where flats tend to be built). A house in my area is easily £1 million or £1.2 million. Even if you could afford that, surely that money could be better invested in something else? Of course if you are rich, then go ahead but I do question average families spending all that money just to get a house with garden. A lot of them may downsize but at the same time, many people don't for various reasons. I would rather buy a flat that I can definitely live in for the rest of my life than buy a house that I would have to rely on downsizing to fund my retirement.

Even being generous and assuming £70 a month for the gym, another £60 for a phone contract and a tenner or so for Netflix... that's only £140 a month. About fifteen hundred quid a year. Even if you add on some takeaway coffees, avocados and a few Zara outfits a year you're still only talking about three grand a year.

No one's scraping a deposit for a house on three grand a year.

The only way this works, even at a stretch, is if someone moves back in with parents. The big savings to be had, in theory, are on rent.

But, of course, this is not an option for everyone. And it massively favours people from backgrounds whose parents have houses big enough for their kid/s to move back in, and/or can afford to allow them to do that on a reduced/zero rent agreement to enable them to save. It's Bank of Mum & Dad again, just in a slightly different format.

And what if the child left home for very good reason? Gay people who move out of homophobic or intolerant environments, people who move for work based in specific locations, people who escape violent parents etc. These people aren't going to want, or be able, to move back in with parents.

I'm no socialist but the rabid commoditisation of housing in the UK has slavishly fluffed a generation of people who were lucky enough to be the right sperm at the right time and screwed over absolutely everybody else.

OP, you've completely ignored the fact that Kirstie also suggested moving back in with parents. (If possible) I know that doesn't suit your OP but if you add in what you would save doing that then it would make a massive difference.
That “if possible” is doing a lot of heavy lifting here. Not everyone still has parents. Or parents with spare rooms. Or parents in the same area as their work. Or parents that will let them live rent-free. Etc. My parents live somewhere eyewateringly expensive so I can’t buy near them, therefore I don’t work near them, so everything I “saved” by moving in would have been spent on commuting.

So you save £1500 per annum.
For my Dd add on phone £720 p.a
Holidays £1500 pa
Hair highlights extensions £800 pa
Cocktails twice a week £1000 pa
That adds up to £5220 pa for her and the same for her boyfriend £10440
So if they need to save £14000 as per your example it would take less than 18 months.
Not that long really.