To think there’s no good option for first time buyers

[ton29]

Prepared to be told it’s always been like this but I’m not quite sure it has.

On our combined income as it is now (both earn the average UK salary) in 2018 we would have been able to buy a 3 bed semi, possibly 3 bed detached in a really lovely area. We couldn’t buy then as we were still students.

Fast forward to this year and prices have rocketed so much so the same houses are 60-80k more making them unaffordable.

Buying a flat isn’t always the answer if you’re going to outgrow it immediately because if you move fairly quickly after buying, there’s the risk of negative equity and costs associated like legal fees and stamp duty on the new property.

Buying a house in need of renovation isn’t suitable for everyone. It’s ok if you have family help or are quite creatively minded, but if you work very busy 9-5s it’s soon going to get expensive and untenable to rip up flooring and knock through walls.

Moving 30-40 miles away to a cheaper area makes life inconvenient for commuting to work and seeing family.

I’m not sure why you can no longer buy the average sized house when you are on average sized salaries. Buying wouldn’t be an issue either if it was more secure to rent, but as everyone knows renting in this country is huge instability.

People are definitely biased to what they see as a ‘normal FTB’ purchase. I live rurally, there aren’t really any flats or terraced houses in my surrounding villages, so a 3 bed semi is normal here. This was one of the cheapest areas of the country to buy pre Covid (eg 4 bed detached would be £260k). House prices have gone up here by 30-40%, it’s mental. Mainly due to ‘stay-cationers’ and people moving rurally.

@ThankmelaterOkay what do you mean? The housing market is uncertain and we’re all just trying to make the best next move without knowing what the future holds.

Yes, exactly my point! The lowest rung on the ladder where I grew up is a stone-built cottage with views and a back yard. There were no flats. They converted an old mill into luxury apartments in the early 00s but those were met with a collective shrug!

Feel so seriously fed up that we can’t afford that now yet we could have had that EXACT thing if we were of age and stage to buy in 2018.

I don't see what good this thinking does. Most people (who are not baby boomers) would have been able to buy a better house if they'd been ready to buy 5 or 10 years earlier. This applies regardless of what year they bought.

Yanbu
We have 3 kids and no chance of buying a suitable house, we've accepted we'll probably rent forever

That’s so tough, I’m sorry you’re in that position

This.

I bought a flat as soon as I could afford it. Two bed in a student area. Went for two beds instead of a one bed in a better area as I wanted the option to rent a room if interest rates went up.

my friends thought I was insane, tying myself down to a mortgage, who wants to live in a flat etc.

fast forward 10 years and they’re now all whinging that they can’t afford a 3 bed with a garden in an area with good schools as a FTB, I’ve sold my flat after 5 years for a 2 bed house in a nicer area, and am now looking at a 3/4 bed house with a healthy budget.

i’ve paid off 10 years of mortgage instead of that going into rent.

In 2004 my then BF (now DH) and I bought a one bed flat in a rough-but-not-the-worst area that needed gutting and fully updating, on a 100% mortgage at 6% interest. It was the only way back then. Neither of us had help from parents, or inheritance etc. This is not a new problem BUT we also never expected a 3 bed house as FTBs! We then used the small equity we earned from renovating that flat for 3 years to buy the small 2.5 bed terrace in 2007 in the worst area of our hometown (which happens to be a home counties market town that rich Londoners love moving to to have families which has pushed young local families out of the market which is a whole other topic, I digress).

We have been here 15 years, had two kids, both working hard full time, and we are trapped here in a house that is way too small for us. To take the next step up the property ladder to get more square footage we’d need to literally find another £200k, doubling our mortgage, and leave our hometown and support networks, and that’s WITH the ridiculous amount of equity in the house that is totally unearned, and that we cannot access! We can’t move towns - and shouldn’t have to - as DS1 is at a SEN school and we cannot move him at this point for several good reasons. So we are trapped here for the foreseeable.

My point is, you have to make the best of what you have, and plan properly and don’t overstretch. Lots of people, even Gen Xers who were FTBs two decades ago when prices were more inline with earnings etc, are not in detached 3 beds with big gardens!!

I live rurally in a northern area of the UK and there plenty of areas with small terraced houses I would love to know what part of the country you live in. Being called blessed to be born near ex mill and mining and industrial areas with many derived areas is not classed as blessed.

Also those claiming that baby boomers and others had it easy is total clap trap (not a babyboomer myself either). There Re millions of terraced houses and flats, people like OP seem to think this housing is below them. Millions of babyboomers live in these also, there are some pretty skewed views people older than millennials all had huge houses and made massive profits on property.

I bought my first flat in 2000. It was a tiny studio flat. 4 years later I moved to a 2 bed flat then 7 years later bought a 3 bed semi with my partner. Money was tight and I was very frugal. I was 38 when we bought the semi. I'm sorry things are tight but you do need to re+ adjust your expectations.

Because we haven’t ruined it for anyone. All any of us have done is pay the going rate for our house, pay our mortgages and live our lives. Just like our children’s generation.

I’m 50 and all my friends brought ex council houses - three bed terraced or semi detached - because they were affordable 3x salary around £35K

The the government decided they needed to prop up the housing market and build flats and small 2 bed homes on deprived areas, then they needed to prop the market up again and gave builders incentives for converting in cities - big industrial units for one bed flats and city living - you’ve all been conned into thinking it’s ‘normal’

Normal was a three bed starter home for smaller families - not couples housing.

I would be surprised if many peoples first house purchase is thier dream home, my first purchase was in a really dodgy area but it's all I could afford at the time 10 years ago, sold after 2 years and lots of renovation, next home again lots of renovating required for a better area, finally last year moved into what I regard as our forever home.

Agree with you Sensibletrousers.

People have to make the best of what they have and often there's trade offs.

If people want to live in the nicer and more expensive areas then they'll need to accept that they will need to buy a smaller property. Or if having the 3 bed house is the priority then they might have to accept that they can have their first choice area. Or if they want both and want to be inflexible then they need to find a way to magic up the cash.

Most people make compromises and trade offs when they buy homes.

I saw a thread earlier about charging a son aged 23 board, how much etc

I see threads like that a lot

I would say as parents if you don't need the financial contribution from your children, make sure they start saving for a deposit as early as possible

Or, put some or all of the money they give you in a high interest savings account for them

This thread shows what young people are up against

But the older generation here will tell you how hard they had it +massive eyeroll+ they just cant fess up to having ruined it for their children.

The older generation didn't do that, the politicians did. The older generation didn't have any say in pensions, taxes, house prices, they just took advantage of what was available at the time which every single person who moans about 'boomers' would have done if they just happened to be born then too. I mean, let's be honest here at least, if the government said tomorrow that everyone aged 30 can buy The house they want for 50k every single one of them would do so. No-one would say or even think 'oh let's not do that because 50yrs down the line it will affect younger generations'.

We bought our first house in 1984, a small 2 bed cottage needing lots of work, for 28k because it was a repossession. We lived there till 1999 then we sold it for 98k (which I thought was overpriced even then) we were incredibly lucky that it was 2yrs before house prices started to really rocket. We bought this house (4 bed detached) for 108k and we were skint for a very long time. Now the original cottage is on the market for 350k and this house is valued at almost 500k, the majority of FTB couldn't afford either house now.

I'm expecting my sons to be home for a long time to come unless they leave the area (south west) because the prices are out of their reach even for a small flat. No point In downsizing either because we would just create 3 smaller homes which are better off in use for FTB. So we will release equity for them when (if) they finally find a foothold and stay put.

I agree OP, I'm in the same situation. We've rented a 3-bed semi for the last 10 years and had 2 kids in that time. We started looking for somewhere locally to buy a year ago now we've got a deposit and still haven't found anywhere we can afford and fit into now we're a family of four. Most of the 2 bed terraces in our budget are really a double and a single and then 2 downstairs rooms, so we can't work out how to fit in even with my kids sharing a room. We're thinking of us using the lounge as a bedroom with a sofa bed and putting the washer, dryer and freezer in the single bedroom as they won't fit in the tiny kitchens, but how long can we live like that?

Well this is depressing! But also what I’m resigned to, to be honest.

I bought a 2-bed flat in London in 2020. I thought it would be a starter home for 5-6 years after which I would upgrade to a house (with DP), but I now think we’re going to be here at least 10 years and well into a future DC’s early years.

I’m sorry to hear that. You absolutely shouldn’t have to live how you’ve described just to own property, it makes me so annoyed. Presumably you’ve worked so hard to save that amount of money and then what, accept worse standards of accommodation than what you’ve already got - just to own it in 30 years? What about actually living and enjoying life in the space of those 30 years. Homes should be fit for purpose and it’s rubbish that they’re not

You are right OP but I'm not sure what the answer is. A sharp decrease in price will put millions in negative equity. I think ideal situation is for house prices stay static for the next 25 years so wages can catch up and people who recently brought are not thrown into negative equity.

I really have never understood why people celebrate massive increases in house prices, at the end of the day your house is worth 1 house as everyone else's will have increased at the same rate, so you are not really winning unless downsizing?

I don’t understand why people for whom owning a property is so important are having multiple children in their early 30s?

I feel like it’s the elephant in the room in this discussion sometimes.

Why not wait a couple of years? Have fewer children? Or accept tighter living conditions if you’re absolutely intent on having a certain number of kids exactly when you want to have them?

Sometimes you have to compromise in life.

Yes the housing situation is a mess.

I think the concept of a ladder has broken. The idea you buy a cheap flat, further out, get some equity and then use that as a deposit to buy a cheap terrace, get some more equity for a bettter deposit, and then get an average size home is unrealistic.

I'm in London (albeit outer suburbs) but even when we bought in 2008 the only way we could get a 3 bed semi on 2 above average (but not massive) salaries was to take on a complete renovation project. We worked on it in evenings and weekends around intense full time jobs, and it took a few years as we had to save a bit, do a bit. So certainly here, it's not been possible for a long, long time to buy a "done" 3 bed semi or detached on average wages.

We thought prices were OTT then, but they're absolutely ridiculous now. We paid £210k for our house, spent £90k on renovations and it's now valued at about £650k. If we were first time buyers now we'd struggle to afford it even in its previous state.

I realise that you think you’re all so hard done by now and many have you have already commented that we moan on about 15% interest rates, but we bloody well DID have 15% interest rates and life was bloody miserable. All of my husbands wage went on the mortgage and most of mine on childcare. We could afford no heating and I was chronically underweight. Many, many people lost their homes.

We started in a one bedroom Wimpy home and at one point my husband was working 16 hour shifts. But we did it just as my son and his girlfriend have done it by bloody hard work, not having children until the home is sorted and being prepared to have more than one job.

Flame me all you like, it’s hard work, you have to evaluate life choices, not moan on about starting at the bottom of the ladder in a cheaper place and make sacrifices but it can be done and is done by many.

I agree going for the area you love/feel most comfortable living in and buying what you can afford there.

To me, cheaper property in a worse/less convenient or less desirable area is a false economy- you may get the bigger house I'd whatever, but you're still living in the area you don't really want to be in

Good luck with your search, buying is very tough at the moment especially as a single purchaser