Lack of affordable homes for the 'squeezed' middle

[mymiddleissqueezed]

A moan so please feel free to scroll by! I’m feeling so down and deflated about our housing situation. I earn £52k, my partner is getting a business off the ground and so only pays himself circa 10k at the moment. We are in our 40's and still rent privately (not through choice); currently we are covering our outgoings and saving a small amount each month towards a deposit by living pretty frugally. We live in a very expensive part of the country (not London). What we can afford on the open market would be a small 1 bed flat which is unsuitable as we both work at home. We can't move ares due to job, business and family. We have been looking in to shared ownership as a potential solution. The SO properties that come up around here are usually a fairly high percentage (40%/45%) for homes valued at around £480k. Have spoken with a broker who has said we don’t meet affordability for the SO properties. I despair at the thought that even schemes to make homes affordable are not affordable to us, and we will be stuck private renting and working until we die. I'm on a couple of shared ownership facebook pages; I honestly don’t begrudge anyone anything, but get very downhearted when I see people on much lower salaries than me and/or on benefits having success with this scheme (not bashing anyone on benefits btw, but the scheme in general). Very much feeling like the ‘squeezed middle’. ☹.

I don’t think you are a victim of the system here OP, you are just trying to buy at the wrong time in your life. DH taking 10k a year after being made redundant and trying to get a business off the ground… clearly the wrong time to be buying. Hopefully in another 5 years it’ll be different

Is there anything that DH can do with his business to increase his taxable income and decrease dividends for example so his income on paper is higher? Could he sacrifice growth by paying himself more?

You mention parents. Could they offer to help with a deposit?

If you are making a considerable care contribution to your parents could you plan to buy together with them, both contributions to a larger property? Could they downsize or build an annex?

What about carers allowance?

I'm very curious about DH business. I earn 10k per year doing a day a week term time freelancing.

I would be very very cautious about the viability of this business. My dad wasted hundreds of thousands on businesses that ultimately failed a lot of it was pushing too hard too fast and spending money before he had it.

If it is a business with legs then it should be possible to do part time and still be successful. I think pp mentioned it, but I would be having a serious talk with him about time lines and how long you will try this before he gets a job.

If you want to buy a house then you need to prioritize. Your salary is good but your joint income isn’t, your DH needs to up his salary. You’ve chosen your DH to earn £10k instead of a good salary, you don’t want to move areas, you don’t want a 1 bed starter flat. You’re 40 so have prioritized other things whilst younger rather than buying. If you actually want to buy you need to prioritize buying over those other things, that’s what most of us have done.

Have you shared your current position with your parents. You're living in an expensive area where you can't afford housing to give them support so are they able to help with a deposit or contributions out of income? Would they ge able to gift money to you under the 7 year rule? Your partner definitely needs to pull his weight. Unless his business is likely to become profitable quickly he needs to get a proper job. I am sympathetic to your plight OP but it won't change until you stop your family taking advantage of you.

I own a four bed detached house with garage valued at 250k. It sounds like you can’t afford your location

I clicked on this thread all ready to sympathise as another ‘squeezed middler’ but seriously - your husband earns 10k and you live in a very expensive area and you’re wondering why buying a house would be unaffordable for you? What has he been doing until now, does he have any savings? Do you?

I agree with those who've said buy somewhere and rent it out. Quite frankly, time isn't on your side and property prices in the UK are only going upwards (generally speaking). if you can afford to buy a one bedroom flat, you'll be able to buy a two bedroom flat or house in some parts of the north. You'll need a minimum 25% deposit for a buy to let mortgage.

According the ONS the median household income in this country after income tax and council tax and NI was £34.5k in 2023 so that would make OP’s household above average. I appreciate that may have gone up a bit now but OP will still be above average but not too far from the median.

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2023

Are you saying there is a Shared Ownership scheme that allows people on benefits to buy? I’ve never heard of such a thing.

For what it’s worth, I bought a flat via Shared Ownership, eventually purchased 100%, sold and managed to buy a house with the equity. This is in London. Just wanted to give another perspective as there have been a few comments about the downsides of SO. However I bought many years ago when SO was genuinely an affordable way to get on the property ladder. Whereas now I see SO 2 beds flats near my old property are £700 - 800k fully priced so even buying 25% is out of reach for most once you add on service charges and rent on the remaining 75%.

I do agree that your DH’s income is the issue so think you will have to make peace with
renting until his business gets of the ground or he will have to get a job that pays around £30k if you do want to pursue SO (think you need a household income under £90k).

This is another one of those 'I don't want to make sacrifices but I want to earn more/buy a house/have a pony' threads. OP, your dh isn't even making NMW. You don't sound like you are in the squeezed middle for an area where £450k only buys a one bed flat. Many people have worked very hard their whole lives and will never be able to afford to buy a property. Your DH is making the choice to earn £10k in order to fulfill his business dreams - you have to accept the consequences that goes along with that choice.

They're right though. If the goal was a house you need to plan for that. I agree with you that houses are ridiculously expensive though, and no one would disagree with that.

If he had a very good job plus your age and not married and no kids what have you been doing as in hiw long have you attempted saving?

I was anticipating a husband-bashing to be honest! I agree, I would be happier if my husband had a job and was earning loads more, as he used to (in fact earned shedloads more than me)

Why didn't you get yourselves a starter home or flat when you had a much higher joint income ?

I mean, I do have sympathy with many people who can't afford to buy, but from reading the thread, in your case it is to do with choices you have made, as a couple.

I know quite a few young people who moved areas when they were young, because they knew they would never be able to afford to buy where they were living. A choice they made.
I don't know many people where one is on £60K and the other "shedloads more", but I can't help thinking - if you want to own property - that would be the time to buy it.
I know a couple of people who wanted to start their own business, but who decided, with their partner, that it was more important to get the deposit for a first home together first, so instead of shelling out rent every month, the same money was going to pay off their own mortgage.

You have had choices along the way.

It’s not a great idea to rent out anywhere. You might struggle to pay the mortgage if you have vacant periods. Also casual landlords are very much on the back foot with new legislation. It’s a minefield plus you might be spending a lot on maintenance and getting rid of an unsuitable tenant.

52k isn't that much these days, especially as the main earner.

I think very few people earning £10k a year would expect to be able to rent a home never mind buy one.

It's fine if he's building a business but that inevitably means some sacrifices now. Hopefully the business will work out and the lean times will be worth it.

Comments here a so unhelpful. OP's income is £52k. That's in the top 20% of incomes. She should be able to buy a house outright! It should be fine! Any other generation could have done this. She shouldn't be told off for not having made incredibly specific lifestyle choices.

also, "move to a cheaper area" comments are the worst, a lot of people have to live where they work. Teachers in London get paid less than OP, please tell me why they don't deserve to live in a house

Where s all the savings from when your husband was earning shitloads of money?
If he prioritised putting these into his business that is a choice

Still if you and he believe his business will take off you will be fine in few years right?

if your parents are entitled to social care they can take it ?

I don't get about SO are you saying you do not earn enough? Or too much? What does it have to do with benefits?

Anyway reality is that housing is costly and you make compromise whether small property or location or change job, for higher income .

You need to move to a cheaper area. Sorry but that’s how to afford a house

The government could fix the housing market in one day by capping new house prices for people not on the ladder and stopping house builders from charging extortionate prices but like everything else in the country which is a simple fix they don't want to do it.

I don’t think most people are talking about your partner earning 10k is the issue (or maybe they are who knows!?).

But your partners job is an issue here. Not because of the 10k. He could be earning 100k. But as a new business and self employed you’re still going to have trouble here. You will need 3 years full accounts. They will half that to 50k equivalent or so. Give you a decision in principle. Then the underwriter cuts it further on full application.

Honestly it’s a nightmare mortgages as a director.

Dont get down heartened. Buy the one bed and maybe with a view to keeping later as a rental property or Airbnb. Because realistically you will have to hold out many years to get the full dual salary home even when your partners earnings do increase.

My DD is 25 and has nearly raised a deposit with her DP without financial assistance, and based on that experience I acknowledge that it is harder to buy a property today compared to when I bought my first house in the early 1990s. But you have made financial choices in your 20s and 30s that has lead to this predictment, and the Government / market forces cannot take the flack for that.

DD has made sacrafices, she lives in a cheap area and has stayed in her current job despite its challenges because she wants to earn a decent salary. Nor has DD or her DP have frittered money on gadgets, holidays, clothes, takeaways etc. Short term pain for long term gain.

Also, I only know one person who managed to buy a house on benefits and that was probably 25 years ago.

You have three choices really:

• Move - could your parents move too?
• Your DH gets a stable job, and save like crazy.
• You buy the bedsit.

Ultimately, it was a very self indulgent path to give up a high paying career to start a business

it wasn't self-indulgent, the OPs DH was made redundant. People should read the OPposts before sticking the boot in,