To just be so upset about house prices

[spuddy56]

We started looking in December after scrimping and saving for years and its got more and more out of reach with every passing week since then. We've had two sales fall through due to downvaluations, so not only did we need the huge deposit we had saved up for years, we needed 10k on top of that which is impossible for us. We are paying rent and have no family help. We viewed a tiny house that we love and has been on the market since beginning of April with no offers but the seller won't budge on the price. Based on one year of sold prices in the area its about 40k too much, even taking into account the 10% rises over the last 12 months. Theres just no way a mortgage company would lend that much. Been to view another one and it's tiny, has had no offers and is worth a lot less but agents don't think they will go lower. We've had to adjust our expectations down and down despite being what we thought were healthy earners. How are first time buyers managing to buy right now without help?! I'm so so upset at not having somewhere to settle and call a permanent home.

Op you’re not unreasonable to be frustrated with the situation but what kind of salary are you both on? What house budget are you looking for? I don’t know if this makes it better or worse but almost everyone I know either had 5-6 figure help from family, is a high earner (like 2 six figure salaries) or bought a doer upper as you described and basically lived in squalor for years and did a lot of work themselves. Or has a cripplingly big mortgage.

I am being misquoted here.

I live in the 'low end' of the property market nationally.

A house we bought for £75K in 2004 is probably only going to sell for £85k now. (had we bought 2-3 years earlier it would have been £40k, but hey ho). The prices are relatively stable, because they generally can't go much lower (i.e. two people working on minimum wage with a small deposit could buy one). No-one that we knew wanted a house like that. But actually it was lovely, cosy, safe and fun.

When you can't rely on big increases in property values due to location, or it being a low base to build from, you have to do it in small steps. We literally cleaned and decorated our first house. Got rid of the manky old wallpaper and carpets. Painted and decorated throughout. New, cheap flooring. Did a bit of work on the damp. New tiles in the bathroom. Made what was there the best it could be. It was bought as a BTL. But we'd paid a pit of the mortgage off, lived affordably whilst we were there, and had the deposit for the next house.

We then moved somewhere that it took us years to sort out. No heating for ages. Plaster and muck everywhere. Living with a decrepit kitchen and bathroom for a few years, draughty windows and doors. Eventually it was finished. We'd paid down the mortgage a bit, had converted the house from a do-er upper to a 'move straight inner' and we moved on. Despite all of this (and a cash spend of about £40k,) the value of the property had only increased by £20k (£20k!!) in 11 years. But we'd paid down the mortgage a bit, lived affordably while we were there, and had the deposit for the next house.

We rinsed and repeated. I did a masters degree in that time too. I've lived with babies and bare floorboards. Commuted over an hour to work each way at times. Had promotions and run a business. DH, but not a rich DH by any means. Had no heating in the house for long periods of time. It was difficult, but it's OK now.

And there are still people who wouldn't look sideways at where we live.

And the average Ftb deposit is about £60k.

You’re not being misquoted. This is what you said. And this is what you also said:

OP I don't know where you are but you probably need to move north. Where I am there is a choice of property under £100K.

Houses on my estate are now going for 120k + more than what we paid 5 years ago. It’s over 65% increase and still going up. We would have never been able to purchase here now. I really feel for you OP. House prices are crazy in regards to our earnings, trying to manage a rental ( which are ridiculous) and save for a deposit , fees is so hard.

I bought a tiny 1 bed starter home in the 90s, it was £30k and my salary was £7k. So multiple of 4.3. DPs helped with 20% / £6k deposit (doable for them on fairly average incomes and my mum working p/t), and I got a mortgage for the rest.

I've just checked, and the same role now pays £18k, and the same house is now valued at £150k. So a multiple of 8.3. Parents would need to cough up £30k for a 20% deposit, which is totally out of the question for a lot of people on average incomes today, and then you'd never get a mortgage on that multiple anyway. Just a few years ago it would have been valued at around £100k so possibly slightly more achievable, but still tough.

It's a TINY house - has no garden, it's in a bit of a rough area, has no kerb appeal. If you were looking for a 'cheap / undesirable' property around here (outskirts of an average provincial city), you couldn't drop much further. You could move much further out, but commuting costs would then presumably take up a bigger chunk of your salary each month. Either that or buy in a real no go area, but then the resale value of the property long term is unlikely to be great as others have pointed out.

Young people today are screwed, they really are. I really feel for you OP, I hope something comes up for you soon. Downvaluing is horrid, it's happened to us and we had to go all out with a broker to get a bigger mortgage as we simply didn't have the cash differential to give, and we really wanted the house. Have you tried a broker to see if you could borrow more? We managed to get an extra multiple of salary on top of what we could get direct from a lender.

You're the one that seems to think it's possible for anyone to do it. Just need to make enough 'sacrifices' right? But what if you can't do that? Could be any reason, caring reasons, family reasons, childcare etc.

Op has given many reasons why they can't do what you've suggested right now and you think she's just making excuses. So explain how you'd manage in the above situation. You know all the answers after all.

The ‘live in a camper van and take showers at the gym’ suggestion did it for me.

A sure sign that sense has deserted the market.

Yup.

I know - a completely bonkers suggestion. Where is the OP supposed to park said campervan on a permanent basis anyway? In her work carpark? In a dodgy lay-by?

Agree @majorquimby my parents couldn't afford to buy their SE London started home bought when my dad was the sole Warner with a new business...housing stock needs to increase

'Trading up' is not the same as 'acquiring a portfolio' of property. It means leaving one and moving on / up to the next one - and living in each one after the other. It can work. I did it. I could still do it.

Anyhooo... I'm going to leave it there.

I'm sorry that this is hard for you OP.

But honestly, with two incomes and a £40k deposit, there are lots of properties in lots of places that you could have the choice to buy. It's just a shame that what you want, and where you want it isn't doable for you.

Do you need to have the maths shown to you again? Or are you still wedded to the idea that ‘trading up’ on the supposed ‘property ladder’ is something that anyone can do?

And how did your DS get that deposit?

Some first time buyers can afford £600-700k. We were outbid by FTB's on our last house move for that budget. They had saved up more for a deposit than we had gained in our equity, they were also "older" FTB's in their late 30's who were on high salaries.

It's just a lot FTB's try to be cheeky and offer lower prices so they have money to renovate.

@SlightlyGeordieJohn love the dig about being chippy. Not really but you can’t see the irony about having a million pound house in the SE and a lovely house in Newcastle whilst lecturing other folk about cheap property in the north. Love it how those pontificating about how cheap property is up here never move to Barnsley or Bolton or Oldham 😂the thing is you have the choice about where you want to live up here, I don’t because I’m priced out of ‘naice’ places. Call me chippy but I think it’s understandable.

It’s truly awful. DH and I would not be able to afford our house now if we were in the same jobs and had a 10% deposit. The house over the road has just sold for 500k, when it last sold about 18 years ago it was 100k. I know wages have not increased to keep up but it feels more as if the housing market has run away with itself.

Our new neighbours have a top of the range Tesla and Audi. The approaching 80 year old couple the other side worked in factories when they bought their house 50years ago. The road I live on is a nice road but now you have to be really well off to afford to live on it whereas people in pretty regular jobs used to be able to afford to.

House buying seems next to impossible for many people. I can't imagine how any body in my area manages. We have a lot of housing being built but the reality is that for most people it will be unaffordable and will be purchased by wealthy landlords then rented out.
People are also paying well over the asking price for properties still. My niece and her partner are currently trying to buy and can't afford a particularly expensive property but despite offering 10k more than the asking price on one there was still an higher offer.

"Our new neighbours have a top of the range Tesla and Audi. The approaching 80 year old couple the other side worked in factories when they bought their house 50years ago. The road I live on is a nice road but now you have to be really well off to afford to live on it whereas people in pretty regular jobs used to be able to afford to."

Yes this brings back memories of how disappointed I used to feel in our first flat. A retired factory worker or cleaner would be nextdoor in a whole house bought in the 70s, while we were in a flat created by splitting the same house into two, with supposedly "professional jobs".
But the madness of the market meant that flat increased by £50k in 4 years (2010-14) and our next place - a 2-bed terraced house - increased by £100k in 3 years (2014-2017).
The result is we're now in a 4-bed detached with smaller monthly mortgage payments than we used to pay in rent as students in 2006.
We were insanely fortunate to buy when we did.
The UK housing market is beyond help.

I really sympathise with your situation @spuddy56 and YANBU to be upset about it.
However, I think the lenders have probably done you a favour in down valuing over priced properties. The market was flying after it reopened in June 20 and I think some estate agents and sellers have now got unrealistic ideas of what their property is worth. In some areas, things have already cooled significantly and other parts of the country will follow. With a combination of higher interest rates, increased cost of essentials, stagnant incomes, higher taxes and recession which is likely to lead to increased unemployment, house prices will start to reduce. Of course, the problem may then be the difficulty obtaining a mortgage. Hopefully you and your partner have stable jobs and can continue to save as much as possible.
I haven't read the whole thread but, from the posts I have read @Iamthewombat speaks sense.

No stigma with flats here @minuette1 . I live in a high rise that has just gone through the nightmare of cladding remediation. I speak from the bitter bitter experience of my own life, my neighbours, and the people I am helping to campaign for, many of whom have been unable to sell for years because of the cladding blight. Millions are in the same situation which MUST be having an effect on the market for flats. In fact I know it is in the city I live in.

Definitely wait to buy, house prices are going to crash I'd say in the next 6-12 months so I'd personally wait until then and save up more of a deposit in the meantime. The prices are so over-inflated atm, you'll be robbed.

I'm not sure. I'll be sure to ask my friends who did it for a year in order to buy their first house. It was either that, or move back in with their parents. It's perfectly possible to save for a first house if you're creative and willing to compromise. It's not easy, but it is possible. Or, continue to rent forever.

Why are you parking it anywhere on a permanent basis? The key thing is to make sure the van you live in doesn't actually look like a campervan. Then park it wherever suits you - every weekend in the summer could be near in the coast.

Just wait, keep saving, think they will go down over the next year.