I’m never ever ever buying a house. How do people even do it?!

[misstartan]

I’m 26 and I just feel like giving up. I currently flat share with a friend but want to move in with DP soon.

I have £2500 saved up and that’s it. DP has about the same so we’re nowhere near a deposit. We’re both earning a decent amount but we’re not putting enough away. I’ve tried budgeting etc and put about £300 a month away if I’m lucky.

But realistically deposits will be around 30k now, so I’m only about 28 away… 😂😭

Thing is, I’ve always had it in my head that I’d have bought a house and got married before I have kids. And I’ve always wanted to start having kids by 30. Only gives me 4 years..
I genuinely genuinely do not see how this is going to happen and it really upsets me 🙁

How do people do it?! The

It’s about truly assessing your finances and careful planning. Get the cheapest accommodation you can, house share where rent is split more ways for example. Reduce your phone contract down or go pay as you go. Cancel all subscriptions to anything/everything.

I had to buy two ex partners out of my first house (3 bed terrace) because I needed to keep it otherwise it would have been a nightmare to get back to where I was on my singular wage and I didn’t want to lose money selling and buying if I could avoid it. It took some serious saving and cutting back on EVERYTHING. I took a second job serving in a local pub in the evenings and weekends, walked or biked to anywhere I could rather than driving, had basic freeview TV (no point in anything else as working meant I was rarely at home which also allowed me to cut my heating back to the minimum). When I didn’t get to eat at work on shift I made all food at home and ate cheap basic meals like beans on toast with cheese on top, pizza, etc. Used crap brands for personal hygiene products (I don’t wear make up much anyway thankfully).

12 months I lived like that, I live comfortably now with my now husband, in a new small 4 bed home, most of the deposit form which came from me being able to hang onto that first home.

In some ways I am actually quite thankful for the experience as it taught me things about budgeting and cutting back which came in truly helpful when I set up my own business and it has come in so handy in teaching me to manage money to be successful, but at the time I had to remind myself a lot of the end game!!!!

It is low for a full time worker in the SE. The average is dragged down by part time workers and people who live in areas where wages are lower but so is the cost of living/housing.

You both need to get a lifetime isa. You get 25% from the government towards your first home.

@orangegato it may not be to you but to many it is. Private renting for a modest family home near me is £12/1500 per month.

Post-2012 student loan repayments don’t even kick in until just over £27k so yes I would say that is a particularly low salary for a graduate.

Im 45 we don’t own the house we live in. I have a 5 year old. We earn a decent living but just about break even. We live a nice life in a very good area. We don’t have rich parents so we just do our best and are content. Do what you can cost of living is high. Wait until you have £1k per month to spend on childcare - def can’t save a bean

Childcare help supposedly coming in

Only she would be eligible, her partner isn’t a first time buyer.

For me, knowing where you will be living and having secure jobs is the biggest barrier to owning a home. If you have these, save as much as you can, and if you are young, start at the bottom of the ladder.

We’re 35, so I don’t particularly want to start on the bottom rung.

If we’d both had stable jobs in an area we wanted to commit to long term, we’d have bought 10 years ago (for a fraction of current house prices). Would I exchange the last 10 years for the circa £125k we’ve spent on rent, and probably same again in “lost” equity? Nope. I’ve been happy and that’s worth more than a few hundred grand to me.

We rent at the moment, cheaply - only 600 a month for a very small two bed. This is fixed for a few years. To get a mortgage on the very same house we’d be paying 1100 with current interest rates. 500£ extra a month which would remove our ability to save/go on holiday etc, and for what? To say we own the house in 35 years? It doesn’t help us enjoy life NOW. All I would have is the extra worry of repairs, maintenance, repossession if one of us was to get ill or lose our jobs. We want children soon like OP and had always planned to buy before to give them a stable home. We are young and can wait but I would rather not wait too long as we both have older parents. Whilst we have the deposit, we will be more skint if we buy. This would be a house the same size too. We would need a bigger house for it to be worth it, which is surely smarter to avoid further costs down the line of remortgaging, solicitors fees and stamp duty. That would be like 700£ a month more just in mortgage payments. I would love to buy for the security but can’t see another good enough reason to waste so much money. It’s not an investment at the moment. Rent is ‘dead money’ but so is interest and negative equity.

I’m in my 50’s and do sympathise but tbh most of us who bought ‘back in the day’ (without parental help) were all well into our 30’s. Deposits were much lower but rates much higher. I paid 5% deposit but my rate was 6.9%. I lived on a garden chair and mattress for the first year and couldn’t afford holidays or even food often. I had to save yearly for everything else. I think it took 4/5 years before I had managed to furnish the place properly. Yes we are in a privileged position now but for many of us, especially those of us who alone it was tough. I would definitely aim for somewhere ‘on the up’ as well so you get some growth in these uncertain times.

Hiya!
I understand your worry totally.
Do you both have a decent paid job? It's the mortgage you will need to look into more so, rates are very high st the moment but will hopefully come down.
I was in the same position but quickly realised that as a first time buyer, buying a new build house you can get a help to buy equity loan from the gov which you pay back after 5 years.
This meant that we got a £270k house and only had to put down a 13.5k deposit. This helped us massively to get on the ladder and in 5 years time when our mortgage is up for renewal we will add the loan onto the mortgage to pay it back.
Seriously look into new builds, that will mean you both only need to save about £7k each which is a massive reduction (even less if you get a cheaper house!)
Hope that helps (it's just my experience - hopefully you can find something similar to help you too) Xx

Much of this is about taking the long view and being able to see beyond now to 5 years, 15 years, when in retirement etc.

Sometimes you make choices that certainly make you worse off NOW because of the much longer term benefits. It’s about delayed gratification.

We will all be old and retired one day (if we are lucky to make it that far) and need somewhere to live.

Having choices is the key difference between those who are doing well and those in poverty. People who think ahead and don’t just live for the moment, but who can see the bigger picture, usually have more choices. Those who recognise that at an early stage of adulthood, often manage to have more choices than those who earn substanuslaly more than them.

And yes, there’s a balance….not all pleasure should be deferred or life made miserable for years and years on end. But people need to recognise that lots of those who DO own property didn’t have help from family and didn’t necessarily earn much more, but simply did make some choices that put them in a position to buy. Often people don’t ‘own’ the consequences of their own choices of the past. It sounds harsh, and clearly there are aspects of good and bad luck that come into play too, but actually, much if it often comes down to choices and especially early choices.

All this ‘you can have whatever you want’ with the suggestion if no consequence is crap. If you decide you want 3 kids by 25, then that’s fine, but there are financial consequences. If you decide you want to have a new lease car every 3 years, there are financial consequences. If you choose to have a takeaway every Friday, there are consequences. If you choose to take in an extra 10 hours of work per week, there are consequences. If you choose to live a shared house or to lodge, rather than renting a whole flat/house, there are consequences. Circumstances are hard and house prices are high….we all know that. But you have to do what you can to take control and improve your situation, rather than being passive and not making changes. It’s not always a popular idea.

I’ve never looked into as I wouldn’t want to buy a new build, but isn’t the equity loan interest crazy low compared to mortgage rates? Like, shouldn’t you just not pay it off until you move? Unless BoE rates drop to ultra low again? (Unlikely).

Re new builds and Help to Buy schemes, the common advice seems to be to consider if you can avoid them…..because they restrict you to new build houses, which are typically more expensive and the schemes often have all kinds of restrictions which make moving later etc v expensive.

Some people will find that if they save for an extra 6 months, they can buy an older property without help to buy or shared ownership. It might not be new and shiny or so seemingly easy, or possible quite so quickly…but long term you will probably be glad.

Shaed ownership/Help to Buy really is the absolutely only way for some people…and for them, it does seem to make sense. But lots of people do it who could avoid it. They end up paying more and often only later realise the full costs and inconveniences involved. Really, it’s the house builders who benefit from it.

Also, isn’t HTB: equity loans closed to new applicants?

We bought our first house when I was 34 so you aren't running out of time. We had loved with my parents for 3 years which allowed us to save up for the deposit. I would look at ways to maximise your income and minimise your outgoings. Put as much as possible into your LISA. Moneysavingexpert website is excellent on all of this stuff.

We only managed as first mortgage was when you could get a 100% mortgage.
housing market now is broken , insufficient social housing , limited private rentals, rents too high so private landlords subsidised by tax payers paying housing benefits , banks loaning at increasing rates of interest and deposits too high . All ideas are great though needs systematic change - it’s a political issue

I’m 47 and you have more savings than me , I work full time low paid , bringing up a child I rent I’ll never be able to buy . You have time on your hands try not to be despondent ( easier said than done )

I quit renting at 25 and lived with my parents as I knew I'd never be able to save a deposit while renting. Bought my house at 29 on my own after saving a 15% deposit and extra for solicitor fees and household items, though I recognise I was very lucky to be in the position of moving back with my parents to save.

Take a serious look at your finances as you can probably cut more than you're being honest with yourself about. Get an app to help.

Most importantly stop putting this pressure on yourself with having to do things by a certain age.

I'm sure I read somewhere that 100% mortgages are coming out this year to help people get out of renting...

There are lots of different ways to live a life. In 1900 90% of people in the UK rented from private landlords life long. I have looked at all my family's census records back to the 1840s. A lot of them were in poverty and almost all of them rented although i found one chap in the NE where I am from who was coal miner in 1841, over seer at the mine in 1851 and in 1861 proudly put down "proprietor of houses" so he must have bought a couple of cottages to let out.... No family wealth then followed through after that....

However my advice to teenagers if pick work that is high paid if you possibly can as that will make buying easier (if owning a place matters to you); then buy with 2 professional salaries before you breed, even if you have lots of commuting as I did (could never afford to live in inner London eg) and we moved hundreds of miles from family to find work. Borrow as much as you can just to get started owning a property and take it from there.

You're young

Don't get despondent. I was 40 when i got on the ladder

You are young op. The average person lives to 80+ and we will all be carrying on working to 70. I'm sure they will be offering longer term mortgages soon if they aren't already. Even if you don't get on the housing ladder until 40, you still have 30 working years to pay off the mortgage as long as health allows you to keep working obviously. We didn't get our mortgage until I was 32 and DH 36 and had overpaid and paid it off by the time we were in our mid fifties. I honestly wouldn't worry yet.

You can get 95% mortgages so £350k you can put down 18500k go and speak to mortgage adviser - we’ve just done this 👍🏼