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.)

We bought a nicely renovated 3 bed terraced thanks to an inheritance 25 years ago. We have maintained it DIY style - redecoration, replacing things when they break, but never been able to afford to do any serious remodelling or to move up the ladder. It was a bit of a squash when all the kids were home, but we managed.

It used to be a social norm for siblings to share a bedroom and with the housing crisis as it is now, we're going to have to go back to those days.

It's mostly stamp duty and legal fees, then also removals company etc. We've also put some money aside each time for the costs of fixing stuff in the new house, initial decorating etc and any new furniture.

You’re right to be angry but this problem isn’t new. I’m in my mid 30s and most of my friends still rent (in the north) despite us all having professional jobs.

Most of the people I know who got on the ladder in their 20s had help from their parents, intergenerational wealth is a huge factor in how some people have the average house. We’re both 40% taxpayers and have an average house in a slightly rough area…it took us until our 30s and quite a few promotions to manage that!

Sometimes people don't move because they can't afford to. Life does not pan out the way they thought it was going to. I do own my house outright and managed to do so despite being a single mum who got no child support so paid for everything for my child. I live in a horrible area that has got worse and worse since austerity, the housing crisis and the cost of living crisis. I spent yesterday in floods of tears because it is so vile where I live and there is no way I can afford to move. I know that I am lucky to have my own home, but if I reframe that word "lucky" the reality is that I worked hard to pay for my home. The current housing situation horrifies me, I really feel for young people today trapped by renting. I would say that Buy to Let is one of the things that has all but destroyed the area I live in. Nobody on an average salary can afford to buy a house round where I live so the landlords buy them. They charge high rents and do not maintain them. I have a friend who can afford to move, their house is lovely but they, like me have become so depressed living in an area that essentially looks like a rubbish tip. The OP is young and I really hope that there are positive changes in the housing market. Time will pass and hopefully things will be different

Agree with this - however childcare costs are only for 3-4 years / child so if you increase your salary and upgrade house as long as you can pay mortgage repayments + childcare, once children in school you’ll find that you have a huge amount of disposable income

Quite.

Most of the young people I know have either met with someone who already had a house or flat , they inherited money as a deposit
or they lived at home rent free which enabled them to save

My son inherited from my parents and used that to buy his house last year he had over 100k as a deposit
he got an amazing 3 bed 2 bath house
and it’s just him and his partner and even though they are on fairly low wages they can afford it
it’s definitely not a starter house in any way

They also have a lodger as they want to pay of as much as possible of there mortgage and I gave them cash to buy pretty much all of the furniture carpets beds white goods and stuff for the house so the house has not really cost them anything

but without that inheritance they would be either renting or living at home

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

Had this argument over 15 years ago with IL. They traded up ladder and though our first buy should have been a 2 up and down - we were already in our 30s with 2 kids of opposite sex already.

Price rises aren't same everywhere IL area you can still get 3 bed terraces for over 160K - which seems huge price increase to them but where I grew up in another bit of midlands my parents bought for similar price to IL but now worth 330K for 3 bed terrace - my siblings still living in area are in HA housing.

The more affordable enclaves we found near work - have with time rapidly disappeared.

We rented until we were 30 and then walked straight into buying a large four bed with a decent deposit. We sold when prices were high, so during pandemic and made double on it. That enabled us to by a large house and land. It’s a reno project that we are doing very slowly ourselves. We have twenty yrs on you and dh is a high earner. At your age we rented, paid of debt and then saved

We managed it by waiting until we could afford it 🤷‍♀️ We were in our first house (ex-council 3 bed semi) for 3.5 years). We overpaid loads on the mortgage and now live in a 4 bed detached with a garage. It was always the plan to do that. In that time, we also both got promotions which helped.

1. Salaries increase over time and people are able to save up to move, and then increase their mortgage repayments.

2, Outgoings such as childcare decrease over time which has the same affect.

1. People benefit from windfalls such as annual bonuses or inheritances which make moving costs affordable.

1. Take the new mortgage out over a longer period, or get a better interest rate, to make monthly repayments manageable.

1. Add value to your house so that there is more equity to contribute to the cost of the new home.

Probably a mixture of all of these. But I am surprised that you think that an average income should buy you an average home because that link was broken years ago.

Most people wouldn't have a baby so young, for every year a woman puts off having a baby her lifetime earnings increase by 10%.

How do they afford it? They age, their salaries increase and as the LTV shifts their mortgage rates improve. It feels a little disingenuous to ask how it's at all possible for anyone to do it when you are on page one of that book. Of course hardly anyone can afford to when they've owned for under a year and will pretty much just be paying the interest, but five or ten years down the line it's a totally different situation.

Some people choose to move by renovating and using equity to make it possible. Others opt to stay in the same property for a lifetime. For instance, my partner and I know that our parents have lived in the same home for nearly 50 years. This approach can involve ongoing renovations or multiple renovations over the home's lifetime.
I believe that the constantly changing nature of the property market has led to issues with demand and increased costs when it comes to buying a home.

The price of an average house in the UK is now over £260,000. So about 8 or 9 times the average salary. Most people in the UK are also fuming about house prices and housing availability. You are in a better financial position than the majority of people your age. The “normal” thing to do would be pay off what you can of your mortgage and then in about ten years or so, with equity in the property and increased income from job promotions, you might be able to look at moving to a bigger house. Many people a lot older than you cannot afford to buy even a flat in much of the UK. Enjoy what you have! 😊

but it would be a hard few years.

Now my mortgage is 1282 while household income is 7000 (would be 7500 when DH pays back his student loan by the end of the year) so there is money for the 2k childcare fees (if I conceive)

However if I upsize even to a marginally larger flat and it goes beyond 2k (which is likely for some of the larger flats out there) which is made worse by higher interest rates, then it may make things difficult though I appreciate a lot of families live on less. but why would you choose it. I could go for a cheaper flat but then DH asks what is the point. Might as well squeeze a little and wait till we earn more.

I do notice these days that a lot of the younger people who complain about house prices all expect to jump straight onto the ladder with a 3-bed semi as a first time purchase.
20, 30 years ago people buying a first property expected to buy a 1 bed flat, maybe a 2 bed if they were lucky. They would then move after 5 years to a 2-3 bed home in which to start a family, and then might move again 5or 6 years later once children were at school and childcare costs etc were reduced /mum upped her hours at work.
But these days people expect to buy a house right away..... And wonder why it takes a lot longer....

Yes but most people are in two income households

It obviously makes it very difficult for those in single income households

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

They afford to move because they earn more than you do? Or, they own an existing property which has grown in value and they use the equity from the sale to put down a larger deposit on their next property i.e. climbing the ladder. Or a combination of both.

I would agree that getting on the housing ladder, particularly as a lower paid worker, is now incredibly difficult, but not much has changed for those who are already on it.

Yes I know! I was demonstrating how unaffordable it is!

The rough idea behind the ladder is your property rises in value so you have more equity to be a bigger deposit on the next place. This can give more favourable interest rates.

You pay off some of the mortgage over time and that also is added to deposit.

Your salaries are supposed to go up so you can borrow more and save up.

The property ladder is a bit broken though. It's well documented. Salaries have stagnated hugely, house prices go up quicker than salaries, developers buy the doer uppers old etc.

But council houses were generally designed to be family sized homes and what a lot of people would have moved up into.

All depends where you live.

1. they live in a house share for years
2. stay at home with parents
3. marry in their 30’s
4. have children in their 30’s
5. limit the number of children they have
6. children share a bedroom

Move to somewhere with cheaper properties

I was lucky to meet my DH in university and was literally making plans for my first property at 23 (married at 22). i lived with family and i remember at that time (when I was 23), we were saving 70% of our meagre salaries. 3 years of that and we bought a 2 bed flat in London

I am in my flat 5 years on and as childcare fees are 2k per month, it would be risky for me to upsize significantly even though incomes have increased by nearly 50k combined. the increase in income would literally just pay the childcare fees and a little more, perhaps if i moved to just a slightly larger flat. Moving further out- increased commuting fees times 2, my Dh cycles to work and this saves us money. I am luckier compared to renters who pay 2k to rent my flat (my mortgage is much lower). if you asked why we didn't move further out for a house, the houses in commuter towns were the same size as my flat really once you took out the staircase and we couldn't really afford the mortgage and the commuting costs.

I don't know how I could have done anything any earlier tbh.