Now I know what the ‘squeezed middle’ is

[Romeoalpha]

I thought references to the squeezed middle-income earners was just code for entitled people who don’t like tightening their belts, but I realised today that I am one!!

I have been trying to buy a house for a year. With a 10% deposit I can afford to buy a house up to £200k, but with rising costs of everything, £170-180 would be safer.

Three years ago I would have found something easily, but recently any houses that don’t need major refurbishment are going for £210k minimum.
I live rurally and I just cannot move further away because there is just nowhere to go that is still within travelling distance to work. This is my community, my home.

Now there ARE lovely some absolutely lovely 2 and 3 bed homes being built within my exact price range of £160-£190, and I get so excited when I see them come up for sale, but they are all ‘affordable homes’ and I don’t meet the criteria. The non-affordable houses (exactly the same!) on the same estate are going for £210k!

I feel so deflated and increasingly angry that those better and worse off than me can buy a home but I cannot.

Yes! We had this a few years ago. Houses on new estate that we couldn’t quite afford despite us both working ft, but my friend who worked pt on a low income could get one 😩

What's an affordable home?

www.thebureauinvestigates.com/explainers/what-is-affordable-housing-a-bureau-guide

Wow, I never knew that affordable homes were restricted to people who 'qualify' - except maybe having a stipulation that you must be a private buyer, live in it yourself and/or not own any other property.

I also assumed that the idea was to force developers to include some smaller, more modest houses on new estates and not just 5-bed, 3-storey detached mansions; i.e. cheaper houses that wealthy buyers would probably not choose in the first place, thus leaving them available for the less well-off.

The system is clearly broken, though, when an officially 'poorer' person can afford something that is placed beyond the means of a 'better-off' (but not wealthy) person.

What is 'affordable', anyway? It sounds like one of those many phrases that is designed to be inclusive - but coined by a detached, privileged person who really doesn't have a clue.

Where I live, to qualify, you have to probe that you have:
“The ability to borrow not more than the amount required to purchase the property at its discounted price plus 10% of that price”

*prove

So there are houses going for £170K that I can’t buy because the bank is willing to lend me £195k.

People could argue in theory that as I can borrow £195k then with my deposit I should be able to afford the £210k house - but that would be borrowing the MAX possible and using up ALL my savings! That is not affordable in my view, I think it would be foolhardy in the extreme.
And so, I keep looking…

I think affordable is a wide net. Some shared ownership properties require a minimum salary of £60/£80,000

Also, even though they are advertised as £210k, the reality is they are selling for much, much higher because of bidding wars.

How do you prove that you can't borrow more? We are in the process of buying and we only asked to borrow the amount we need to buy the house we want. So we wouldn't have any other documentation showing that we could borrow more...even though I'm sure we could if we wanted to. I don't understand how they 'police' this, genuinely interested? Or do they use their own affordability criteria to decide how much you could borrow on a theoretical basis?

It really sucks doesn’t it and leaves a feeling of hopelessness. There’s literally nothing I can do, the longer I wait the higher prices go and the more expensive my outgoings get. 🥺

Oh well, we wouldn't be able to buy one of those 'affordable' homes because we don't earn enough to get a mortgage for the discounted price. But you can get a mortgage for more than their price, have a twenty grand? deposit and you sound like you're on your own, so you clearly earn far in excess of our combined income by yourself.

Never mind. I'm sure you'll find something in the end. It just won't be the ones earmarked for people with less money than you.

Can you buy a flat instead? Most people cant afford to buy what they really want at first so you get on the housing ladder in any way you can and then trade up in a few years?

Yes why go straight for a house and clearly it’s a case of saving a bigger deposit, in this market people are needing to save much higher than £10k…

It seems madness that you aren't able to buy an affordable home under the scheme, We're in a very similar position. Does that amount include being stress tested for higher interest rates? There's no way at the moment I'd want to borrow to the limit of what the bank says they will lend me (although thats based on mortgage in principle as we haven't got any further than that)

Because for me: I'm 42-im not wanting to move every few years I want a home, moving is incredibly expensive, I've got 2 cats and a disability and want a garden.

Is it a social landlord such as a housing association marketing the affordable homes? Sometimes if they don't have the demand the can be a little flexible with the affordability thresholds. (Depending on the planning conditions)
Also if you have any outstanding debt see if they'll take this into consideration as it'll lower your "income" and may mean you meet their threshold.
Always worth a shot!

There aren’t many flats as I live in a very rural place. There are a few though, and like you suggest I expect I will have to go for one of them in the end, when one becomes available.

It’s not what I want though, as I am desperate to have a garden, even a small one. Just some outdoor space of my own to dry my clothes and sit outside on a sunny day.

I know we can’t all have what we want, I will have to suck it up, but this post is more about the fact that people on lower incomes than me are helped while I am not. I don’t begrudge them a house of their own, but it stings that I can’t have one too.

Increase your pension contributions so you can't afford to borrow £195k anymore and after purchase reduce your pension contributions back down.

Where I live, to qualify, you have to probe that you have:
“The ability to borrow not more than the amount required to purchase the property at its discounted price plus 10% of that price”

So they're wanting to make sure that the buyers taking advantage of their scheme are borrowing right up to the maximum of their financial capability? Anybody with any leeway at all and wanting to set up a responsible buffer zone is excluded?

They do realise that having money and having the ability to borrow it - and thus having to pay it back - are not the same thing at all, don't they? Especially when interest rates are starting to rise in a government effort to punish us for somehow managing to pay more for the rocketing prices of 'luxury' essential fuel.

If that's what they think is caring and responsible, we might as well just bring back Northern Rock and 125% mortgages and be done with it. I thought the whole idea was to help the poor, not to put in measures likely to create more poor people?

Are you certain you wouldn't qualify? Apologies if you've gone through the process but if not, make sure.

Where I live (also rural) you had to be a first time buyer or have had a significant change in circumstances, have a connection to the local area and be on the social housing list

The last one was more of a check box exercise. Anyone can apply but as a single working person we all know the wait would be rather long.

The pension contribution point was also a good one.

Are they also fully owned? Here the council retains a stake and they must be sold again through the affordable housing scheme

"I live rurally and I just cannot move further away because there is just nowhere to go that is still within travelling distance to work."

IMO, you need to re-think this. Anything up to an hour each way is surely tolerable ? Many people commute for much longer journey times.

I also assumed that the idea was to force developers to include some smaller, more modest houses on new estates and not just 5-bed, 3-storey detached mansions; i.e. cheaper houses that wealthy buyers would probably not choose in the first place, thus leaving them available for the less well-off

The reality is this. At the planning application stage a developer has to promise a certain number or percentage of affordable homes. Once they have planning permission and start building they make an application to reduce the number of affordable units as it would make the development ‘uneconomic’. In other words, not enough profit. The planning authority invariably gives consent.

An hours commute also comes with a high fuel cost now though.

I agree OP, there's a flaw in the system for people in your situation. I find this happens with a lot of things; the intention of a scheme sounds good, but the reality breeds resentment from the group the scheme was intended to support in the first place.

What Random said! Surely that’s your solution?