Tell me how you got the first step on the housing ladder .

[Mollymarvelous70]

The pressure to get on the housing market has just been getting me down recently and I’m losing motivation.

DH and I have reasonable paying jobs but we just can’t seem to save enough to get on the housing ladder in the south east whilst living comfortably. In the past 2 years we’ve saved about 8k sat in Lisa’s but it just feels like such a slog to get anywhere near what we need. I did make the mistake of posting on Money Saving Expert a while ago for budgeting advice but got ripped apart for our level of earnings and lack of ability to save which made me feel a bit embarrassed tbh. Some people are really struggling and I realised that i didn’t want to penny pinch to the extremes and receive the critical judgement lots of people on their face But equally I do want to move forward.

We earn about 45k ish each but outgoings are high due to area mans student loans.

I wondered how many had to save for their deposit and how long it took them. Did you have any crafty or innovative ways you got the money together so you could just get going ?

Just interested to hear others experience really for some motivation.

We sold both cars and bought one cheap car to share.

Before the crash, I bought a house with my stbxh. We got one of those dodgy mortgages for more than the house cost and were fortunate to be able to sell just after our mortgage was sold off as a bad debt.

If they come back, I would not recommend.

We saved like mad for 3 years, and were given a helpful monetary boost from family. It wasn't fun, "penny pinching" but we thought about what sort of house we wanted/could afford, and worked out what we needed to save, in what sort of time frame, and the end goal of owning our own home would be more than worth it. We had to say no to meals out, except birthdays, had to really watch our shopping budget, no luxury items, or unnecessary spending. Limited driving to save on petrol, sold stuff we no longer needed. Actually made over £1k alone doing this, selling our old games consoles, CDs, clothes, household bits, furniture etc. It wasn't fun, no, and alot of times I thought why are we doing this, when everyone else our age was enjoying spending their money and having fun. But 9 years on, we're now on our third and (hopefully) forever house, having successfully moved up the ladder, and alot of friends are still renting, and just thinking about trying to get a deposit together, and I feel relieved we're well out of the other side of it all.
I don't want to sound dismissive or rude op, but between you, earning 90k a year, I do find it hard to understand how you really can't save enough to get yourself on the ladder in the next few years? Even if you put aside £500 each a month, that equates to £12k a year... 3 years on and you have almost £40k in savings! Are those figures really not doable? £500 a month off a 45k salary isn't going to be unachievable surely, unless you really are living paycheck to paycheck, in which case, maybe time to re-evaluate your outgoings. On 45k, I'd like to think I could cut back, live a basic lifestyle and easily put aside 1k minimum a month, to make that end goal even closer. X

Some people are really struggling and I realised that i didn’t want to penny pinch to the extremes

You're going to have to if you want to save enough to get a house. There's no way around it. The reward is worth the minor sacrifice.

We bought an average house in a terrible area for our first home, stayed about 3 yrs and then moved onto a nice area where are still.

but we just can’t seem to save enough to get on the housing ladder in the south east whilst living comfortably.

The "whilst living comfortably" bit is a clue here.
Seriously, I know house prices are ridiculous in some parts of the SE, but you are both on healthy salaries, so there is an element of how much you want it.

You have asked us to tell you what we did....... I lived at home longer than I wanted to (paid hose-keeping, but not a commercial rent). I worked my day job but then also worked in a bar on weekend evenings and picked up some earnings babysitting too. This not only meant I could bring more money in, but there wasn't any time to spend money, so double bonus.
I didn't pay out for holidays or cars (as in, I bought and drove old bangers), didn't really buy clothes except where essential, etc etc etc.
I knew it was what I really wanted, and made it my goal.

Also, I don't live in the SE of the Country

but we just can’t seem to save enough to get on the housing ladder in the south east whilst living comfortably.

Then you're going to have to live uncomfortably for a while. And get second jobs.

Then when you've brought you're house, things gradually get better.

I worked three jobs - days, evenings and weekends. I was on minimum wage and young, so I didn’t even get the full minimum rate. I was renting somewhere very dodgy so I was motivated to get out of it. It took me three years and nearly 2,500 hours of overtime in my extra jobs to save a 10% deposit and some moving costs, although i was able to add most to my mortgage and the actual moving day involved hiring a van. I bought a small but servicable house with a long front garden from a local authority (ex council) for a better price.

We saved a lot for a good 2 years but we live in the North East so houses are much more reasonable here. Saying that we earned a lot less than you at the time.

It's about prioritizing, sometimes you need to sacrifice for a year or two of buying a house is what you really really want...we also bought a new build with a 5% deposit so that helped. I was really young when we bought it but it was very important to me so I sacrificed a lot to get there.

We earn about 45k ish each
whilst living comfortably
penny pinch to the extremes

The answer to your question is staring you in the face, OP, and I think you are going to be told here exactly what you were told on MSE. Your combined earnings are way above the national average and if you are serious about wanting to buy a property you need to get serious about saving and that will require significant lifestyle changes in the short-term.

Thanks all for your responses. It was good to hear your experiences and that not everyone is gifted a nice healthy deposit from family .Not that I begrudge those that do but there is a seed of jealousy we are not from wealthy families.

Absolutely don’t mind hearing some home truths. Reading your responses I think we’ve been thinking just too short term, like how can we aggressively get the money together for next year then falling behind but still saving slowly , paying off debt (yep! I know ) and living comfortable but within our means. So we are getting there but lose motivation along the way.

I should have also said we are expecting our first baby at Christmas so savings have been redirected into covering my mat leave and baby stuff . That’s put a longer and less definitive timescale on things so it’s just demotivated us from our goal of buying.

Realistically we will need about £35k for a 10% deposit . We’re 20% of the way which feels better than nowhere !

We moved just out of the south east as it was just bonkers pricing when we were looking around a derelict 2 bed for £300k and there were 12 other people, 8 of whom put in an offer, I think it eventually went for £375k

Changed our commute from about 15 minutes walk to 10 minute walk + 40 minute train but we managed to buy a good sized 4 bed here for less than £290k.

Definitely agree we some of the others you’ve got to penny pinch for a bit sadly but it is worth it in the end :)!

Deposit wise we set up a separate bank out and put a standing order in for the first of the month so we’re weren’t tempted to spend the money. We took about 2 years to save the deposit (£29k) plus about £5k extra for all the fees etc. It’s definitely doable on your salaries to save a little more - really make a list of every single outgoing, it really helped us challenge some of our spending.

Equally be as open minded as you can about location and know what your must haves, nice to haves and maybes are so you can think about compromises. You might be surprised about what you can get just outside where you are looking.

Keep going maybe get yourself a savings chart and celebrate together every £500 you add to the pot!

OP, is there anyway you can take that 8k and make it 15 in the next month or so? Sell anything you can including second car, engagement ring, beg from family etc then buy a 2 bed flat ASAP before the baby comes? Once you have that baby, it will be SO hard to get on the ladder with reduced earnings or childcare costs. Not trying to panic you but with 90k salary you should get a mortgage offer if you can say scrape that deposit together for a 150k flat. Won’t be forever but once you are on the ladder, it is so much easier to move up.

Thanks @smileyplant that’s probably similar to us . Looking at 350k for a 2 ,maybe 3 bed somewhere commutable to London. I lived in a ‘rough’ area growing up which I now loath, bikes stolen, friends beaten up for no reason , lots of crime and poverty etc etc and have been a bit snobby about area since I left for university . Need to think , short term ( 5 years ) pain for long term gain !!

Have you looked at help to buy which only requires a 5% deposit?

Hi @SandysMam we were aiming to buy before the baby and really we should have which I regret. Properties for £150k literally do not exist here and if they did you wouldn’t want to live in one . I have resigned myself to living in rented for the foreseeable until we can buy something reasonable.

Yes the childcare costs are on the horizon , no family or help nearby to cover childcare. I wouldn’t move tho as it would risk the ability to keep my career profession which has much higher earning potential in the future.

@Mollymarvelous70 it’s so difficult! Both my husband and I are SE born and bred so it was a bit daunting to move a little away from family (we can still get to them in about 35 minutes) but value for money and where we could buy in this area made the decision for us. Totally get that it’s not for everyone though.

As others have said help to buy might be worth a look, it works well if you know you can pay off or remortgage the equity loan at the end of the five years. A couple of friends have done this and it has enabled them to buy a 3 bed rather than 2.

Hard to say without knowing your outgoings but on that salary you should both be comfortably saving. The problem is you can’t have it all. There’s no magic solution other than saving hard.

Hi @modargh , yes I’ve looked into it a bit and actually viewed some new builds last year . I wouldn’t mind going for a new build (although not preferable ) but I’m nervous that the price is way over inflated because of the help to buy scheme and ending up in negative equality in a few years time . I don’t know anyone that has used it. The articles I’ve read all seem very positive about collecting the keys but we haven't seen how they pan out yet . What do you think ?

@peachypetite yes I know you’re right. We should have saved more when we had the chance and had been living beyond our means.
Sorted out act out about a year ago and started saving and paying down debt ( wedding we wanted but couldn’t afford) . It just takes some time and focus that we struggle with. DH is absolutely not a saver. Now with baby on the way we are saving £700pm but it’s all to cover my maternity which I plan to relax and enjoy as much as possible . The odd coffee and cake , clothes for DS but living within a budget .

There’s no magic answer I know, just needed to talk it over .

I live in a much cheaper area of the country, I saved £5k which was a 5% deposit and bought my house 12 years ago. I've just sold it and because I've paid of equity I now have a £40k deposit for a much nicer house in a much nicer area. So maybe consider buying a house elsewhere, it could be in a less desirable location in uour area or in a completely different area altogether. Our deposit only took us about 6 months to save and we basically just scrimped for that at the time. The only way to save a big deposit is by cutting things out for a bit.

700 a month doesn’t sound like much to save on your income. We earn a similar amount and can save 2500 a month.

DH was made redundant and got redundancy pay. We moved and lived with my parents for 6 months as managed to get new jobs closeish to them (250 miles from where we had been) and saved up about 15% deposit. FIL gave us an extra 10% deposit (eventually, he reneged a week before we were due to actually buy the house but then agreed again). We needed the 25% deposit to get a better rate plus mortgage company were iffy about my temporary work contract.

I would not recommend any of those means to get a 25% deposit. Incredibly stressful and still living with some consequences 10 years on.

@Mollymarvelous70 new build prices are inflated, but then you've got to think everything you're getting is brand new: carpets, boiler, appliances, windows, roof etc. Barring getting the house set up the maintenance will be minimal in the short to medium term and of course you have a warranty if there is a problem. Banks wouldn't lend if the house was a risky investment, although many banks will only lend a minimum of 90% LTV and won't take the risk with a 95% LTV (even in normal times)

If the home is a long term investment any depreciation should be slight, if at all considering south east, if you fix for 5 years it's very unlikely (not that anyone can predict at the moment of course) that the house will be worth less than what you paid for, but the good thing about help to buy is the government is taking 20% of the risk. I'd rather take out a help to buy loan with 75% LTV mortgage right now than a 90% LTV mortgage.

If it's a shorter term investment then no I wouldn't recommend a new build, unless your area is very strong and they hold their value well, and I'd be a bit more apprehensive about the London scheme where the loan is much larger but they really to seem to inflate the prices (from what I've read).

Similarly we didn't want to impact our lifestyle too much, we already have children. HTB is getting us into our forever home, our mortgage payments are reasonable with the 75% LTV interest rate and HTB loan and I am relatively confident we will be able to remortgage the loan out in 5 years, but worse case if we don't we have to pay interest on it so it wouldn't be the worst thing but would rather pay off a larger mortgage if possible.

That's just my interpretation for a few reasons it suits us but it won't suit everyone, I recommend talking to a broker to really explain all the ins and outs to you. It could be a really good option but you just need to be aware of the downsides, as it isn't perfect. It isn't free money sadly!

And it's always having in the back of your mind interest rates can (and will) only go up, so be careful if borrowing up to the max, think about childcare, if you want another child etc. That is true of any purchase of course.

We saved hard, cut our budget to the bone, did go on a holiday a year but cheap holidays, nice cottage usually.