On good money but still can't afford to buy a house-how is this possible?

[piddocktrumperiness]

Hi everyone
Just looking for some advice really. I have my own flat, small and manageable and I am on less than 18k a year. My DP rents a 3 bed house as he has two children of his own, pays nearly £1000 in rent. Utilities, council tax, car and maintenance take his fixed costs, including the rent to nearly £3000. His take home pay is £4300. He has other outgoings such as insurances, pensions and bits and pieces that take up another few hundred
To me, someone with take home pay of that much should be able to afford to buy a home or save for a substantial deposit as this income is above UK average, but looking over his finances it just seems that his fixed costs are high. He can save around £500 a month. How are people doing it?

The place he rents is not great tbh and he's not happy there but is in a location suitable for the kids and their school. We looked around other properties to rent but rent has gone up recently for smaller space and locations that are further away. If we do move into a different area to rent for more, I'll end up paying more towards the bills even if pro rata as my flat and the associated bills are much lower than they'd be if upsizing.

We'd love to buy our own home, but can't figure out how people save for a deposit. We'd need at least 50-60k in cash. How is that doable? The mortgage on these properties is not cheap either.

I was thinking of selling my flat, but I'm hesitant as there is not much equity in it and I'd like to leave it to my son as his inheritance.

I thought about moving in with DP, we pay rota on the bills and maybe that could help, but his house can't accommodate all of us and I don't feel at ease about renting out my home to pay rent on a property that needs a lot of work and effectively paying a landlord's mortgage. It does not make sense in my head.

How are people buying their first home these days and saving for a deposit? If the average income in the UK is what it is?
I'm looking for ideas or solutions so that we can do this, but I'm not the savviest when it comes to the housing market and thought maybe I could get some advice here

People don’t tend do buy a family house as their first purchase, so they don’t need that big of a deposit to start as they use the equity they’ve built up by the time they move to a house of that kind of price. I’m guessing that’s a 10% deposit that you’re describing - look into 5% deposit mortgages and shared ownership options too. And if your DP is a first time buyer, get him a lifetime isa.
On that kind of take home he should be able to save more so you need to sit down and work out where all his money is going.

Thank you :)
I looked into ISA’s but it seems he’s just over the age threshold at 41.

Think another sit down is needed but last time I looked I really couldn’t see holes, just large fixed costs

What's the back story with the two kids? Or has he always raised them alone while renting?
It's hard to go from renting to buying if you've already got a family - you need a bigger place but your costs are higher, because of day to day children costs.
What's his credit score? Has he had trouble in the past so he can't get a mortgage?

Does he pay a lot in childcare? If not, £2k a month bills on top of rent seems very high. Our bills for a 3 bed house are around £600 a month (excluding food) on top of the mortgage.

Hi OP,

With that take home pay your partner must earn 60k + ? So plus your money (if you mean buy together) I think you would be looking at 4 x 80k = £320k house? So a 10% deposit in region of 35k plus stamp duty/solicitor fees.

I used the governnent stamp duty calculator and calculated stamp duty at 7.5k on a 350k house (sole property/yours sold) or 2.5k if your partner bought alone as first time buyer (but doesn't sound like he has the deposit to do this - don't give up your name on the house if you are providing the deposit and helping pay the mortgage to save a few quid!)

I think you would need 45/50k to jointly buy a 350k property. Does your flat have that much equity? If all the deposit and fees comes from you you can buy as "tenants in common" rather than joint tenants and ringfence getting your original money back before any further money is split (if you sold up).

It's a big deal for you as if it doesn't work out you are deeply entrenched with no quick or easy way out.

As for saving a deposit - of course people can save on 60k but perhaps not so effectively if they are a single parent with 1k rent and high outgoings/living costs - basically spending all their money! You probably should consider if you will be compatable financially as you sound quite careful with money and might find someone on good wages spending it all frustrating?

I'm a similar age and bought a flat in a rubbish area at 21. My deposit was 2k.
In fact, we could get 100% mortgages then!

I struggle to have much sympathy as he is old enough to have bought in the good days.

His credit score is excellent to be fair. He has his children half the time so pays accordingly.
He was in the military for 20 yrs and so never could settle in one place until recently

I have a similar take home and it’s really hard because it’s just me at the mo - my house budget/mortgage available is similar to a couple on average salary, so I’m in direct competition with the average couple, so really would benefit from just an extra income to be able to not sit in such a crowded bracket.

Setting regular savings as part of the fixed costs helps so it’s not frittered. Aside from that, I lived in a cheaper rental and bought my car (second hand) outright a few years ago so no monthly payment- that alone must be hundreds every month, so simply reassigning this would build up very quickly.

I’ve been trying to buy since 2019 and had multiple properties fall through/walked away from (been v.unlucky!) and now after a recent property fall through after 9m, I’m in a nice rental in a good position with a 50k deposit - prices are levelling off near me and so I’ve decided to sit back for a year in terms of a house for myself. I’m more tempted to go for an investment property in the shorter term but everything is changing so quickly right now it’s hard to know what to do.

In short though, I agree - it feels like it should be enough but it’s actually a very crowded budget bracket having that income as a single person.

Instead of selling your flat, could you get Consent to Let with the longer plan of sell/B2L and then you can do a joint application?

It’s definitely something to think about. My flat unfortunately does not have that much equity and I’m reluctant to sell it, although not deleting the option entirely.

I do wish he would have bought something when he was young but he was all over the world and it was not a priority for him

the housing market has changed significantly over the last 20 yrs hasn’t it

You can still leave your share of a property you buy with DP to your son? Make sure to be tenants in common and specify the share that is yours. Get some advice on taxation/wills so it’s all water tight and legal. There was a great blog in the news the other day - single Mum who scrimped together a deposit etc and bought a place on £18k a year; she really cut down on a lot so is do-able though undeniably hard work!

Your partners costs seem very high. What is included in the £2k a month?

I think your Dp difficulty is that although he is earning a lot, his life stage and DCs mean he needs to spend a lot on renting and the house he needs to buy needs to be family sized.

Did he own a house with a previous partner? What happened to the equity in that?

Oh I’ve not heard of consent to let before? What is this exactly?

He hasn’t owned a property, but rented as he wasn’t based anywhere for a long period time. He lived at barracks or was stationed all over the place.
I admit I would have put some aside for a house but people think differently and didn’t know where he would be living when he left

Op why is he paying maintenance if he has the kids 50% of the time? That will be making his affordability less.

If your flat doesn't have enough equity to provide a deposit you might as well keep it and rent it out then at least you have an escape plan if it doesn't work out.

You have mentioned you are reluctant to pay rent to a landlord but don't forget someone will be paying you rent so some of that balances out (albeit taxable).

You say in the past buying property wasn't a priority for your partner but to be honest it doesn't sound like it is much of a priority for him now. He has £3,300 income after paying his rent and spends it all. That doesn't sound like someone keen to get on the property ladder.

I think you should consider if you are assuming this should be your partners priority/blaming the market. They spend £3,300 a month after rent. That isn't the fault of the housing market and unless their maintenance/childcare is 2k a month that is simply a high spending person.

Child maintenance, water, gas and electric (which have gone up again), council tax, broadband, fuel, insurances, pension payments- some other things that I can’t quite remember right now I’m afraid

Sorry my mistake he has them less than recently that as they moved further away, so that means more maintenance

People do it by saving more money, increasing their income, moving to a less expensive part of the country, or buying a house before they have expensive outgoings like children. Obviously the latter one is out for your boyfriend, but he can look to do one (or more) of the first three. Agree with others that you need to get to the bottom of his outgoings, they’re very high and if he has genuinely shared care of his DC then his maintenance should drop accordingly.

This is what I was thinking tbh. Even if its a biggish house he should still get spd so council tax would be, what, 150 per month? What does the other 1850 go on for "utilities" for one man living with 2 kids part time?

As to your "overall" q of how people afford to buy i think its all down to doing it in the "right" order.
E.g graduate and/or go straight into an ok-paying job. Live with parents or in the cheapest house share you can afford. Use a h2b isa (or a LISA now?) and pay in the max £200 per month for 4 years with the government bonus. Meet someone you want to buy with who has done the same and and within 4 years (by age 25ish) you will have 24grand saved (plus more you might have been able to save or if you are lucky money gifted or an inheritance) which is 10 percent of a 240grand house, which is fine for a starter house in a lot of the uk.

Home sorted you can then look at saving for a wedding and having kids, and when you need a bigger house hopefully you'll have enough equity in your first one, plus hopefully a promotion or an inheritance to take the next step up the ladder.

Put like that it doesn't seem impossible and explains the "give up avocado toast millennials" argument as giving up £200 of non essential spends per month is not too far outside of the realms of the achievable. This is pretty much how everyone I know who has bought got there, including me, in my circle (aged mid 20s to mid 30s) - even if most of us didn't get there by quite 25.

Other means include those who lived in really affordable areas so only needed a small deposit, and some worked abroad for a few years to earn a lot, quickly. So it is, on paper, and to some extent in practice, doable.

But the moment something goes off track - you get pregnant, or you can't find a permanent contract in your field, or you rent a flat on your own rather than in a grotty house share, or you live somewhere where rent is just too expensive to save anything, or you have a big wedding, or you never get a cost of living pay rise, or your car breaks down so you can't save anything for a few months, or you never meet anyone you'd want to live with so you have to look at buying alone, or you have a partner but they don't have any savings, or you want to live close to your famiky and friends in an area thats suddenly became insanely expensive, or you leave off buying/saving for a few years to go travelling or just have fun without realising how much prices will shoot up to unaffordability in the meantime....and suddenly, without doing anything "wrong" other than being a financial genius or fortune teller aged 21- you've missed your chance.

Can you look into help to buy if you sell your flat?

I do think I’d need to really take a look forensically to see if I can help him shave some of the bills, maybe giving the car back and downsizing it.

How old are all the kids?

This is spot on. I'm the same age bracket as this PP and agree with this completely. My friends of similar ages are a mix of homeowners, people who are private renting, and people who are single and still living in their family homes. Everyone I know who is a homeowner has either lived for am extended period of time rent-free in their family homes and/or received a significant monetary donation from their parents towards the deposit. I don't know anyone who has bought a house without doing at least one of those things. I'm not saying nobody does, obviously, but in my circles I don't know anyone who has. Me and DH are in the process of buying a house now, in our late 20s with two young kids but it's only been made possible at this time because we've lived rent-free in a property family owns for the last 2 years and with the pandemic we've saved more on leisure and travel spends etc too. If we hadn't had that family support we'd probably be stuck in private rented sector and unable to save as for various reasons we feel wedded to the area we live in, which is the area I am from, but it's very expensive now.

Thank you
i do see that and wish I was given such opportunities. Unfortunately my life wasn’t as ABC and nor was his. Both are divorced, both have little generational wealth in the family and I suppose the economic cycle didn’t help. I graduated straight into a recession for example, and work in public sector now which isn’t seeing pay increases, he was in the military during all the messy meddling in the ME. It’s not been as easy as I’d hoped but I’m looking forward now to see how we can sort this out and compromise :)