To ask what you think a reasonable price for a small “starter” home is?

[TeenLifeMum]

We talk a lot about housing costs being too high but what would be affordable for young people wanting a 2 bed property in your mind? I’m intrigued by different perceptions and perspectives on this subject.

dh and I were very low paid (local newspaper journalists, graduates on terrible pay) when we purchased our first home. We did have 2 incomes but in 2005 I was on £11,500 and dh was on £10,500 when we bought our first home.

We initially worked in Kent on £9k each but moved to the south west for affordable homes and a different lifestyle. Our £98k home is now worth £150k - very tiny but there’s a ceiling for that size home. 2 people on minimum wage could earn enough for that. We moved for affordable housing but there’s an assumption these days that you should be able to afford a family home where you grew up.

I was looking on rightmove and it struck me there’s actually a lot of homes available under £200k and wondered what people are asking for when they want “affordable” homes. And no, I don’t live in a rough area - a car is needed ideally for the location.

Firstly, a "starter home" is a studio or a 1 bed flat, surely? A 2 bed house is the next step up the ladder.

Sensibly, a studio (for 1 person) should be 4-5 times the annual salary of 40 hours at min wage, or 1 bed starter flat should be up to 4-5 x 2 40 hour minimum wages (based on lending criteria).

Family homes, 2 bed+, should be based on 2 people having moved up the payscale to average wage, so be priced at approx 2x annual salary of 40hrs at average wage x4 or 5.

No need to apologise. I realise that the attention seekers can't help themselves and need to 'post for traffic' like a teen shouting out in class.

Firstly, a "starter home" is a studio or a 1 bed flat, surely? A 2 bed house is the next step up the ladder.

Is it? Surely it depends on age? Also moving frequently and climbing up that ladder is expensive & a bit outdated in the current climate

I agree with limiting lending amounts to around that multiple

But a median salary wouldnt be a starter salary. So I would like to see a starter home at around 70ish, up to 90ish max

Depends where it is. I would say perhaps a studio flat in a cheap area.

Wow, mean girls are out tonight. Only one attention seeker on this thread and it’s not me 😂

I am not sure about this assumption OP. I think it's desire, but it's quite often not possible.

I bought a 2 bed semi back in 1994 for £42,500 , I had a £5k deposit on a £20k salary , it's now worth £335,000.

Haha 😂 Have a good evening!

Well, yes, it depends on age.

But if you're a single in your late teens early twenties, then a studio is fine, and affordability should be based on 4-5 x one persons annual salary on average wage.

If you're a couple in your 30s, then you should have reached at least average wage, and there's 2 of you, so affordability is based on 4-5 x 2 full time average wage annual salaries, and that would probably get you a 2 bed in all but the most expensive/desirable areas.

Bought our first and only home in 2005, when I was 21, in a relatively nice Northern town for 85k. We wanted a 3 bedrooms house, with a garage and a garden because we didn’t want to ever move again! It’s paid off now. The area is still nice, we have lots on our door step and it’ll be our sons eventually. I really really wish young people today had the opportunity we did 20 years ago. Our house is worth about 160k now, that’s a ridiculous increase.

But if you're a single in your late teens early twenties,

The average FTB is not in their teens or early 20s....

£175k-ish

Did I say they were?

Just that expectations around affordability and property size should be based on reasonable age related salary expectations and the number of people buying.

If you try to raise a family, in your 30s, on one minimum wage job, then it's not reasonable to be able to expect to buy a family size property.

Affordability should be broadly based on 4-5 x annual full time salary per person, based on expecting starter homes (studios/1 beds) for young singles or couples to be minimum wages, but family homes to be based on the same multiplier of average wage.

I do think that property ownership of a family home is an unrealistic expectation if you aren't prepared to bring in at least 2 x average wage (split across you however you choose) by your 30s.

We bought a 2 bed starter home which had a loft conversion added by the people before us, turning it into a 3 bed.

We bought it in 2015 and paid £415k for it. It is a nice area and not too far from London, but even still, that's about two and a half times what my parents paid for their 6 bed, detached, victorian villa in the early 90s

That means you’re ruling out people on lower salaries being able to have a family home - it effectively forces people to stay in relationships they can’t afford to leave

I’m 41 and don’t even earn 30k, not through choice but through health issues

You seem to be misunderstanding, I just don't think that a starter home is necessarily a studio flat because the average FTB is 32 and as I said the concept of climbing the ladder doesn't really exist now. But you can disagree.

I think it's fairly normal that only those that earn at least averagely can afford property ownership with its associated costs and responsibilities, and I don't see a problem with that. The problem is actually the lack of affordable, long term, secure rented housing for those who are low earners.

I can’t believe people are saying under £200k! I was in uni when I bought my house and so thankful I did because it’s a nightmare now.

We don’t really have 2 bed properties (other than new builds) and flats are almost non-existent. I actually think the first house you buy (in my area) is the hardest to achieve because there are not that many “starter” homes.

Ok then, for two 32yr olds, I think that 4-5 x 2 average wages would be a reasonable cost for a "starter" 2 bed. Weighted to broad area.

The average wage is not what I associate with starter homes. Someone on average wage is not on a low wage, by definition, so NMW yearly income x 3, is a one bed home ( dont consider a studio to be appropriate for purchasing to be honest) and a NMW yearly income x 5 for a couple to buy a 2 bed flat/house.

Cheapest house round here just looking which is a 2 bed is 170k but there are plenty of flats of a good size, 2 beds from 140k upward.
I didnt look at 1 bed flats

About 4 or 5 times the national average wage, allowing for regional variations.

AIBU should be changed to General as 99% of the posts are not AIBU

We bought a 2 bed Victorian terrace in 1994. Good area in zone 5 London but. On a main road. Downstairs bathroom. No parking. Salaries were £14k and £15k. House was £88k. That sounds about right for a starter home.

Same job now pays £47k. So house should be around £270k. It sold recently for £600k.

My children are going to have to move up North or somewhere far away from London if they ever want to leave home.