To wonder how anyone affords to move house?

[towonderwander]

We are a mid 20s married couple with our first baby due next month. Earlier this year we managed to buy our first home. It is an ex-council house which needed significant improvement in an okay area. Not the best, but good schools around and convenient motorway links. With kindness, practical and financial support from our families, we are slowly turning it into a beautiful place to live. It is now a really lovely home with just a couple of rooms left to upgrade. It is technically a 3 bedroom but the third bedroom is very small and houses our clothes as well as the boiler so would never be functional as a third room.

We are glad to be on the property ladder and feel lucky we had so much support, but the cost to maintain and upgrade this house has been more than I could ever imagine. We have a 4 figure mortgage as it is, thanks to interest rates. If we wanted a bigger house/slightly more desirable area, I can’t see how we would do it. Anything that wouldn’t need this level of work again would be most likely well out of budget plus the new stamp duty thresholds mean we’d have that to factor in as a large cost too. Plus you know, childcare fees and the general cost of living crisis.

How do people afford to move? AIBU to think nowadays it is increasingly harder and not as simple as just climbing the property ladder?

(To add before anyone asks why we didn’t start with a flat, most if not all have been bought by landlords round here, the ones that haven’t are leasehold and exceptionally difficult to sell on.)

I mean monthly repayments!

We moved from a 2 bed flat in a nice area, to a modest 3 bed terraced house in a less nice area.

If we wanted, say, a semi detached 3-4 house with parking, we'd have to move somewhere less expensive.

Couldn't afford it otherwise, and we both work v hard earning ok salaries!

We bought our first house at 21 and 24 for 237k and earned £47k between us

Moved last month at 27 and 30 with two kids. We sold for 320k, bought for 450k and now earn 90k between us.

So we made money on the house plus wage increases, back when we bought we never expected to be able to afford to move

OP you are doing very well in your mid 20s! Fair play to you.

I had a flat in my mid-20s with help from parents.

Mid 30s (with a toddler in tow), OH and I both sold our flats and bought a little house.

Early 40s, with two primary aged kids (a year ago) we moved to a slightly bigger house close to a good secondary school.

Each time has almost completely cleared out savings - around a decade's worth of savings each time.

Did you seriously expect your mortgage repayment to be under £1000?

It’s not asking that much tbh. Mine is £900. My mortgage was for £227,000 to buy a £300,000 house. I was lucky and fixed before the rates went to shit and am hoping to overpay as much as possible before I have to remortgage which should allow me to get another sub-1000 payment as the sum borrowed would be lower.

You’ve done well for your self considering your age. We were early thirties when we bought our house. 7 years later and we’re still living here. We earn above average now but we’re lucky that we bought the max we could afford when we bought (3 bed and a study) with lots of outside space in an area that’s not as desirable. Now we have 3 children and we’ve converted the study to a 4th bed so they all have their rooms, built a conservatory for more living space because all the 4 bed houses here are now unaffordable for us. We’ll be staying put for the foreseeable future.
This area that was undesirable back then is now up and coming because the primary and secondary school in the catchment area are now outstanding and it’s also within a driving distance to another really good girls school. Families are now trying to move here so your area may get better with time. You need to see where you are now as a long term thing. When we bought, all our other friends that bought around the same time still live in the same house, people have made improvements, etc but not moved because prices have increased significantly.
We are prioritising saving, enjoying life now and overpaying the mortgage to moving unless necessary which is not for us.

Where are the costs going when you've moved each time? Curious as I'm hoping to buy soon as a FTB and have been warned about costs of when/if I decide to sell up and move, but can't comprehend where it goes!!

Exactly,

op you’re not alone, there is a multitude of posts where folks ask this sort of thing, the answer is they earn more. If you’re at the mid point, millions earn more than you do. Millions earn less. That’s life. But that’s how they afford more than you. And how others can’t afford what you can.

You are mid 20s and bought a 3 bedroom house a few months ago and are already moaning about how you can’t afford to upsize??

I think you are absolutely right and I don't know why people are jumping down your throat - except they are jealous

Essentially you need to substantially increase your income, or receive an inheritance. When DH and I bought our first house, we were earning approximately £60000 jointly, four years later and our joint income is over £100,000 and we could afford a much larger property. If your income is unlikely to increase in future, or you bought at the peak of your career, then unfortunately you are unlikely to be in a position to upscale.

When you sell you pay the estate agent a fee usually relative to the sale price, if you are during a mortgage term you pay a fee, you pay a solicitor for the sale and also your next purchase, you pay for surveys on the new property, you might need certificates for your current property, you usually have moving costs, stamp duty etc.

People can be really mean about this, yes there is a housing crisis but that doesn't stop the situation being really frustrating.
We are stuck, trying to save enough to move up the ladder and as fast as we save the prices of the houses seem to go up even quicker. We both have decent jobs and have kids in school so it makes moving to other areas tricky.

I feel frustrated that 20 years ago my mum was able to buy a massive detached 4 bed house with a drive way, double garage etc for £150k, I saw the same house for sale a few weeks ago, offers in excess of 800k. Its absolutely crazy how fast housing prices have risen around here.
We live in the poor bit of a pretty affluent area and its hard to find what we need under 1million! Our house is worth 400k on a good day so it is completely impossible for us to make the jump. We can't extend the property any further so for now we will have to put up with it. I count my blessings that we have a roof over our heads and we are lucky to have got on the property ladder- my kids are going to have a much harder time of getting on the ladder than we did.

It is now a really lovely home with just a couple of rooms left to upgrade. It is technically a 3 bedroom but the third bedroom is very small and houses our clothes as well as the boiler so would never be functional as a third room.

@towonderwander You may be surprised to learn that many families bring up at least 2 children, to adulthood, in the size of house you are describing. Third bedrooms are often very small/tiny but as long as a single bed will fit in it and you can look at clever storage ideas throughout the house, people do manage ok without feeling deprived. Lots of very clever storage solutions out there if you need them

You are correct that many people find it difficult to move with the costs of moving being what they are, even if they manage to get a mortgage in the first place, but you are really doing very well if you are only in your 20's and have a 3 bed house.

At the start, buying a new house tends to be at the top reach of your affordability. After a few years, lots of things happen to change that situation. The amount of equity you have in your home, increases as you start to pay off the capital, so changes in Interest Rates has less drastic impact on your expenditure as time goes on. You get higher rates of pay/promotion so have more income to play with. After a few years of paying your mortgage, while rents have continued to do nothing but continue to go up, you will find you are paying less for your Mortgage, than you would have been if you had still been renting, but have much more security. In fact, rents are now so high that you could easily be paying the same or less right now than it would cost to rent a similar property

It will get better, you are expecting a baby ( congratulations) and you do have room to have a second while you are living there. You are doing really well, so try not to worry too much about whether you can afford another house in a few years time. Just consider the position after your child ( or children) start school?

Everything to do with owning a house and moving to a new property costs a fortune nowadays. I'm constantly surprised at what people manage to afford and can only conclude that a lot of people are quite seriously in debt. Your current home sounds lovely and hopefully you'll be able to upsize eventually.

We bought ours 10 years ago and have in that time built up equity and had pay increases. It's always wise if you can to buy a property that you can live in for a good number of years. We have also done a lot of (mainly cosmetic) work to the house.

The housing ladder doesn't really exist anymore, especially in the south. People start much later and the jumps are just too much money.

We bought a three bed house in our mid-30s then had a child. We now have about 100k in equity thanks to house prices increasing and paying off some of the mortgage, but we've been there eight years and can't afford to move somewhere bigger. For it to actually be worth moving (extra bedroom, more space downstairs, and to be in an area we like) our mortgage would go from £900pcm to £2000pcm. Liz Truss did not help.

So - we stay. Perhaps eventually we'll pay off enough of the mortgage to afford the move. Perhaps we'll inherit something in future. I'm just grateful we own our house and can't get evicted anymore.

Not much at all, even these days. A 30 year mortgage with a 10% deposit for a two bedroom terrace house in an average part of my (relatively expensive) northern city is £934 per month for the repayment. OP and her partner overstretched themselves.

It’s the stamp duty. My dream house - which still comes with a few compromises - comes with stamp duty of over £200k. So upsizing will include the ‘sunk cost’ of stamp duty which goes up disproportionately for anything over 925k or so. Wages do NOT keep pace with house price growth. Interest rates are still high compared to a few years ago as are renovation and material costs. The only thing that might help your generation is baby boomers downsizing (no I’m not suggesting this is done in a forced way!) and passing their wealth onto their children. This will disproportionately help those with wealthy parents but it may also free up a few larger homes.

Arghhh I hadn't thought of all of that - thanks so much! I am very much looking to buy with the intention of not moving for a very long time, but so glad I have a better sense of what it entails - it sounds so stressful, not to mention expensive!!

All my friends had help from family. My mum had 3 houses and squandered it all so nothing for us! Obviously not saying it’s our right but could have been easier than renting forever with a disability!

they have family money. i know 3 people who were gifted houses/flats in full and those are the people who told me! if you have higher income, it would be easier to hide it.

wouldn't the increased income just go to childcare costs if you have a child.

And if you didn't have a child, you wouldn't need to upsize.

thats how it is for me. I have fertility issues so while i want to upsize, i am not keen on getting a larger mortgage for just the two of us. and if we did have a child, childcare fees would put a major lid on affordability. On 121k up from 75k 5 years ago.

Also you have no idea of people's circumstances. I know someone who inherited a beautiful four-bed house, very unexpectedly. She has a low-wage job so on the face of it shouldn't be able to afford the house.

Literally everyone I know who bought in the very expensive city I grew up in had significant inheritances or gifts from family. Like, 100k plus. There is a lot of generational wealth in the boomer generation.

AIBU to think nowadays it is increasingly harder and not as simple as just climbing the property ladder?

No. It is very widely reported that it is hard. YABU to be wondering about this.