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.

@Twiglets1 did you also have to pay stamp duty for all these moves? And were these properties 8 times your salary? How much deposit did you put down? You do realise that you can’t go from a 1 bed flat to a 2 bed terrace in 2 years anymore. Flat prices are not increasing, they are decreasing and have been since 2016. So how can anyone make a jump from a flat?

Say it louder for the people at the back!

In terms of our ages and other relevant details, here goes:
Bought out first flat in a shit part of North London in 2005 (we were both 24) for £130,000. It was a 1 bed. The interest rate was 6.5% then. We stayed there for 5 years. Next bought a 2 bed semi right on the border of Hertfordshire/London but still not in an amazing area. The House was £200,000. We have stayed here way longer than we ever should and now have two DDs BUT we have accumulated loads of equity and had a low mortgage. Now we're moving again in a few weeks to a 4 bed detached in a lovely part of Hertfordshire. Doubling our mortgage to afford the £650,000 price but more than worth it. I can't see us moving again as the house is big and has everything on our wish list (we're now 43 BTW).

Who says all flats are decreasing in value now, not all flats are equal, really depends on the land/area they are built in. Also this statement appears to be very London centric in all reports and not applicable to the wider area, certainly not in my area.

Who also says you cannot go from a 1 bed flat to a 2 bed terrace in 2 years anymore, if its your primary residence?

"So how can anyone make a jump from a flat?"
Simple pretty much anyone who has purchased a flat that is not tied down with daft service charges they were not duped with if they bough considerately at the time of purchase. No matter what you purchase, when you buy property no matter how small your payments are being invested in bricks and mortar that you can cash in on when sold if it its not in negative equity (most are not). Renting there is never any return, so purchasing even a flat you are effectively banking the money.

Your entire post is pretty petty and desperate to say the least 🙄

Yes of course we had to pay stamp duty on all our moves. I believe our first flat was 3.5 times our joint salary. Which lender will lend 8 times salary, never heard of a ratio that high?

We didn't intend to move so fast but my partner got a better job in a cheaper area. We moved from London to Norfolk so it was possible to get a 2 bed terraced house for about the same price as our 1 bed flat in London. Of course there were all sorts of complications to doing that while I was pregnant (moved house while on maternity leave) but we couldn't afford a house in London.

We had put a small deposit down on the flat which we actually lost money on, luckily only 2k. Because of this, we had no deposit for our house but were lucky that family gave us a small amount of money to pay off the 2k and towards a small deposit. People do get family help, these days as much as back then.

I am aware flat prices are not increasing at the moment, obviously it is easier if you can buy a bigger place to start with but that isn't always possible as per my daughter buying a 1 bed flat. I just don't see why FTBs think they are hard done by if they can't get a 3 bed semi straight away. We had huge struggles to get to that stage and it involved moving to an area neither of us had any family & having a baby there. To answer your question, people can make the jump from a flat to a house if they get a better job in time or through salary increases at work, if they get some family help or bonuses in the future or if they move to a cheaper area. It's called a property ladder for a reason and most FTBs don't expect to start half way up.

Just move the 30-40 miles away to a cheaper area if you're that desperate for a 3 bed semi @ton29

We would then live near nobody we know and it would make costs ridiculous for getting to work

Which lender will lend 8 times salary, never heard of a ratio that high?

None of them, that’s the point…

Also. Presuming most people plan to buy before kids, if they can. Is it really smart to strap yourself in for 30-40 years of paying such ridiculously high debt off? Nobody is going to come and help you pay a mortgage that you’ve stretched yourself on throughout times of reduced income, maternity leave etc. Okay it’s a means to an end and you’ll own the house eventually but ultimately the bank still owns your house for most or all of your working life, when you’re actually supposed to enjoy life. Wages have stagnated for too long and house prices have climbed which means the current situation is untenable, with people forced to pay more than a thousand pounds each month for a tiny flat or house in possibly a poor condition that they’re going to outgrow soon. Supposing you can’t move because you’ve fallen into negative equity so not only now have you lost your deposit that you saved so hard for, but also have to find the legal fees to move on. Nobody advocates for the risks of buying property especially when you’re junior in the workforce and on low income. We are HA at the moment and although we would love to own our home it would reduce our fun and enjoyment of life. This is backwards.

Flat prices are not increasing, they are decreasing and have been since 2016. So how can anyone make a jump from a flat?

The same as people have always done.

• Promotion or a new job, means your salary improves
• you get a lodger, who effectively covers your mortgage, or a large chunk of it, and you save
• You continue to work at your 2nd job, and save
• You meet someone and then have 2 incomes rather than one
• some people will be in the position of coming into a chunk of money - maybe through inheritance, maybe through winnings
• you do work on the property that improves it's value
• you save what you can, when you can in the same way people try to save a deposit whilst renting

Often a combination of these.

We are HA at the moment and although we would love to own our home it would reduce our fun and enjoyment of life.

Well, if that is the way you feel, I am not sure why you have started the thread, tbh.
If you feel the reasons not to buy, outweigh the reasons to buy, then no-one is forcing you to try to buy your own home. It is a matter of personal preference (for those in a position to choose). Lots of people would choose the home owning route, others wouldn't.

What is your point exactly?
Why when mention 8 times your joint salary?

@UsingChangeofName

Spot on. If you are really smart:
•Take in a lodger. They pay rent and do 10x loads of outsourced ironing. Plus they cook a chicken and create 5x meals for the week for the household.

You would live fairly near people you know as 30-40 miles isn’t that far. Plus you can make new friends. And loads of people commute longer distances than that.

Obviously there are things more important to you than owning a 3 bed semi so why not just buy the 2 bed you can afford and count yourself lucky?

Who’s trying to go from a flat to a house in 2 years? That’s a ridiculous expectation - as much in 2018 as it is now.

I bought a flat in 2020, aged 31, and expect to be there for 5-10 years. Luckily it’s a 2-bed so a future DC will have their own room.

You either comprise or you stay renting, I don’t think there’s an alternative 🤷‍♀️

I think they are referring to the fact I said I moved from a flat to a 2 bed terraced house in 2 years. Though as I explained that wasn’t the initial plan & we had to move from London to Norfolk to achieve it. A much cheaper area but it wouldn’t suit OP as they think 30 miles is a long distance move.

Not sure what you are hoping to achieve by mocking ?

A poster asked how people make the move from buying their first property, to the next (bigger, or in a better area) property. So some of us are pointing out how they did it.

why does that bother you?

The unwillingness to compromise on anything is silly (30 miles is nothing… I live 200 miles from my family!)

I think I win on distance from family - my Dad lives in Australia!

I think now OP has added the detail that they live in a HA property, maybe the best thing for them is to stay put? I believe those places are gold dust.

It is what it is.
Though I just bought a house so I’ll shut up 😂

We do, we rent with a small discount on market value prices but in two years it’ll be full whack rent like any other place. So it might be a secure tenancy but it’s still set to get more expensive. We’re looking at shared ownership

Congratulations x

@ton29 i think YABU I’m your refusal to make compromises I’m afraid. I bought my first property age 27 on a single wage (2 bed flat with garden). I had to buy a doer upper in a horrible area not near family in order to do so. I also worked long hours but paid workmen to do the hardest bits of the renovation (kitchen and bathroom) and then did the painting etc late at night and on weekends. Took 6 months as only a small property.

now DH and I have bought a 3.5 bed semi with decent garden. To do this we have moved 30 miles away, so didn’t know a single person in our town and have a v long commute. But I think that’s to be expected unless you have rich parents or a v high paying job! We could also have moved less far but to more dodgy areas so we chose the longer commute to feel safer.

basically nobody can get a decent size property in a nice area requiring no work unless they are rich. That has always been the case unless you are lucky to be a high earner relative to the area you live in. Otherwise compromises are necessary.

Okay it’s a means to an end and you’ll own the house eventually but ultimately the bank still owns your house for most or all of your working life, when you’re actually supposed to enjoy life.

The bank owns your house to the value of your mortgage. You still own the equity you wouldn't have while renting. Our house has increased by just under 40k since we've been here. We've spent about 15k on maintenance like replacing the porch, getting concrete fence posts and panels, fixing the boiler. That's still 25k of profit compared to 0k if we'd rented. On top of that, the interest rates when we bought in 2017 means our mortgage on a small 3 bed house was £550 which is less than rent for a 1 bed flat around here. We're on a tracker and because we're moving, we didn't want to lock in to an interest rate so our mortgage has soared to £900 but it's still less than renting a 2 bed flat. We could have locked it earlier in if we weren't planning to move.

I think YABU on the basis that you seem to have high expectations (being able to buy pretty much the dream house aka a big house with 3 bedrooms and nothing to fix) but not willing to sacrifice anything in the process?

I have talked about real estate with my family (multi generations of people) at length and even my grandparents who clearly paid their house a lot cheaper than we do today, still started off with a small flat with no bathroom before eventually getting to owning the 4-bedroom home they built. My own parents went from renting a flat in the middle of the city to owning a home in the countryside (as cheaper and could have never afford a house in the city) and it was a 3-bedroom fixer-upper that required a lot of work and is now a 4 bedroom house that looks nothing like it used to after years of renovations (made by them). They could have never afforded to buy the house they have if they had bought it in its current state vs its original state.

I am in my late 20’s & I have now just bought a 3-bedroom flat, by the beach in a fairly big/touristy city (mortgage-free). But it’s in a completely different country to my family. I absolutely couldn’t have afforded a 3-bedrooms place, especially by the beach, close to my family. The place I have bought didn’t require any major work, just decorative, and to make it look a bit more modern and so I have spent my free time doing some adjustments that didn’t require that much time but yes a bit of effort and moderate financial investment and in doing so, the value of my property is now at least 25k above what I have paid for it much less than a year ago.

But to be mortgage free and get something this big I had to work 24 shifts for months on end and had to accept I wouldn’t be buying close to family.

Personally for me those were easy choices to make because I think buying a home is the best way to invest in one’s future and I knew that if I made the sacrifices now they would pay off and provide me with a better future and there is literally no incentive to rent, renting a flat like mine would be so expensive, renting near my family would also be extremely expensive, and every rent would be money lost, and rent will continue to increase I fear meaning you will still be spending the best of your working years paying for housing, except you’ll be paying off someone else’s mortgage. So it seems crazy to me that one would see renting as less of a prison when each paycheck you make a landlord is money away from your pocket into theirs, and off their mortgage (not yours) whilst any mortgage repayment is money invested into your own pocket and own equity.

Personally the flat I bought still isn’t my dream flat but it’s a strategic investment as it’s in a (beautiful) city that still offers lower real estate prices than my home country (meaning I can get more for my money than I would elsewhere) but with great resale value and a great quality of life (one I could not afford back home). If I had tried to invest back home, I could have probably afforded a one bedroom apartment with a mortgage in my city and it would have probably taken me years and years to be able to upgrade to something bigger in a nicer area. But now I own a property mortgage free, I can save what I would pay on rent, for a deposit for a second place and use the flat I own to get better offers from banks regarding mortgages on a bigger or better situated flat, and if I wanted to move back to my city (I don’t) I probably now could do it, and afford a much bigger place than I would if I didn’t invest in the first place and with a better mortgage/easier time paying for it, as I could just rent out one of the properties (essentially paying of the new mortgage with the rents).

Yes, I could have used all the money I have spent on the flat on fun stuff but it was more important to me to be on the property ladder because I understood that the money I am investing would get back to me in some ways if I bought while it never would if I spent it on frivolous things or rent. Now because I own I ironically have more financial options and more financial freedom as owning gives me access to properties I wouldn’t have accessed to before as the gap between not owning and such places was just too big for me to make up for with just my income (or it would have taken many many years).

So my advice to you, if you do want to buy (which I recommend) accept it comes with sacrifices of some sort. Which ones, you can almost pick for yourself as it’s going to be based on the property you select as to what you will have to sacrifice for it, but I see a lot of my friends of a similar age “wanting it all” without being willing to make the temporary sacrifices to get where they want to be. You wouldn’t run a marathon without training and even trained you likely wouldn’t expect to finish first. I think real estate is a bit like that. Training (sacrificing) sucks, but getting there is worth it. In a marathon most people accept that they will likely need years of sacrifices & training before they get a good timing, let alone a chance to end up first, and they still partake because every time they partake they probably get at least as much back from doing the race as they have invested and they get better & more prepared for the next one, well it’s the same with housing and the housing ladder. If you aren’t willing to do the long race you will likely think it’s unfair you can’t get to the finish line without giving up so much of you in the process but if you see the race for what it is, an investment in yourself rather than in a finish score then you will start understanding why it’s important not to jump step and why it can be quite smart actually to start with a small race but well prepared rather than with the hardest marathon but unprepared and how you’ll probably get more out of it from the first scenario than the last.

Good luck OP, and reconsider what it is that you want from buying and if those things are worth a little distance with family and friends/ a little more important commuting costs etc… only you can know that and decide for yourself, but I do think there are options for FTB to buy, that are likely good investments still, but just that a lot of FTB simply don’t want to start small or invest in something that’s not already to their taste and just like they have pictures meaning most people feel like they can’t afford anything when really they just can’t afford exactly what they want.

The OP was talking about living a driveable distance from their preferred area, not a drastic move up north or to Wales. And nlt all areas north of Birmingham are deprived 🙄🙄🙄