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.

Neither marriage, nor divorce stops one working and earning at least an average wage. A poor decision to rely on someone else's earning potential might, but that's obviously a decision that's taken knowing the risks.

Homes were almost always 3.5 x the household income, ie. Both salaries. This is in the 1980s. I didn’t know anyone who could buy on one salary, especially with kids.

I bought my first house as a single mum with a one-year-old in nursery in 2001
Earning 26,000 and I paid 67 500 for a three bedroom semi detached with the garage and a garden

As a single applicant for a mortgage you are deemed a risk and each child that lives with you has a percentage of your income deducted from your affordability calculation.
So actually, it does stop you
Additionally, it makes earning at least an average wage more difficult and increases your outgoings
Marriage is a gamble that some people win and some people don’t . There’s very little skill involved.

That is an incredibly low salary for 2005 for a graduate. We were on double that back in 1998 when we got together in our twenties. We bought a 62k 3 bed house in 1999, I was on 22k and DH was earning 26k. A basic starter home can be had for 115k where I live, I just had a peek, our house is worth probably 330k now.

Where I grew up has loads of second homes because of the down from Londons who are loathed locally. I’m someone that could afford a second home easily but I don’t because I have seen just how awful it is for a community.

I had no idea journalism was so badly paid. I know people including my DH who are not journalists but have been paid for one off articles and thought pieces. I remember one specifically telling me he was paid around £300 per obituary or piece written for the Yorkshire Post but that was a good few years ago.,

I don't think there is a set price for a house, in the same way that there isn't a set price for butter or electricity. It's about supply and demand and how much it costs to create something. Ultimately the market will dictate the price. The idea that a house 'should' be a certain price is usually an expectation rooted in the last century which actually was a blip if you look across the rest of human history. Most of the time it has been a struggle to survive for most people and the idea that you can get housing, food, utilities cheaply only became a viable concept in the 20th century and as we burn through the Earth's natural resources and our population increases, it may become less viable again quickly.

I’d say £250k should be reasonable for mid-20s couple these days. Where I live, they’d be lucky to get a 2 up 2 down for £350k.

Given that full time minimum wage is now £25k, I’d say that “affordable” would be around £250k. A mortgage of 4 times joint salary plus a deposit of a years salary, less if either party are on more than minimum wage. But I don’t think there is such a thing as how much a house “should” cost, it’s all down to location and supply and demand. People certainly don’t have the right to live exactly where they want if they can’t afford to.

Ex and I bought our starter home (small garage, small garden, 2 beds) in the South East 2005 for £150K. The mortgage cost £750 ish at the time.. I think that was pretty affordable and would still be affordable for a young couple now even on fairly low wages and with interest rates a bit higher. I think it'd be worth around £300K now and to rent would be maybe £1300 or so a month.

The 2 bedroom house that I'm writing this from is currently valued at around 200k, in Southampton.

2 bed flat around £360k in SE London

It's so variable depending on location.
I know of 150k 2 bed end of terrace in qite nice area here, but if you happy to be in less desirable one you can drop to 120k for the same. That's houses, flays are cheaper but come with service charge and leasehold.
But that doesn't apply to other cities more south

Location is the issue. Have been looking around the country on behalf of DC in my role as BoMaD. For a two bed terrace, tiny garden, in Surrey, it's about £350k and up, or £2k pm in rent; the West Midlands, £300k gets you three beds. In SE Cornwall/Plymouth, a decent 2-bed flat or a small cottage would be around £220k, but wages are mostly very low and lots of work is seasonal.

Interesting @Hardhaton1 . I bought 10 more than 10 years earlier.

if All the numbers were still the same now and I was still earning 26,000 and let’s assume the house is still 67,000. I wouldn’t be approved for the mortgage because they would deduct not only the nursery fees in their entirety but they then take another percentage off for everything she would cost me in food and nappies.
I also remember colleagues not having to prove their physical income but banks and building societies taking a letter on Head paper detailing expected commission which was included in the calculations whether it transpired or not

Yeah the self certified mortgages were a way of helping people who were commission based or self employed. Unfortunately they got used and abused, you could borrow ludicrous amounts without any basis for it. This pushed the house prices up as everyone could access high amounts. It was a mad time! It led to prices being built on a glass floor

I think they’ll be coming back. I’m seeing more and more commission only roles being advertised in Saas and tech sales

I’d imagine if they do come back they will be under much more stringent conditions and more proof of actual income rather than just a letter.

even renting now you have to meet affordability criteria that isn’t a million miles away from the affordability to buy.

Average full time UK income is £37k so I think a basic 1 bed flat should start at roughly 3x that, maybe £115k.

A starter home for a couple, with a spare room to allow for a baby, maybe £175k

You can buy an old terrace 2 bed in my area for under 100K.
New build 2 bed terrace £160.

Prices where I live and it's a small village are insane £250k minimum it is very hard for young people. There are also too many people in the country whether it be through migration or just people living longer, having 2.5 kids. I only see it getting worse. Hopefully some of the lower priced areas up North get gentrified. I lived in Salford as a teenager, when back in my 30's wouldnt recognise it now.

I bought a two bed stone front terrace in NW for £85k around 2011. Sold it for £150k ten years later in 2021.

My parents bought their first home in 1991 in a town in Somerset. They paid £65k for it and were able to get a mortgage based on just my dad working as my mum was a sahm. They've just had it valued and it's now worth £475k

DH & I have been looking at buying our first house, £200k here gets you a small flat with no garden or parking

My advice to the younger generation is to go as far up the ladder as you can first time. My nephew has just bought 3 bed house in the Midlands for £320k. Their mortgage is just about affordable but it will see them through if they start a family. It’s so difficult to move to a bigger property now from a starter home - the price gap is huge, especially in London.

Where I live in the North you can get 2 bed flats with gardens in nice areas for between 50-80k.