Do most people who buy a 300k+ house...

[PinkTriangle]

Have a hefty deposit (possibly from making a profit on a previous house sale?) in order to afford mortgage payments?....

Or are can you tell me your secret? What is your line of work?

Our budget is £200k, we only have a£20 deposit ( from our last mortgage, we made a loss in the sale but had paid of about a 1/3 of mortgage). We have okay paying jobs (£25k each) but we're so not looking forward to paying £1000 in mortgage each month. It makes me wonder how others do it :/

[eurochick]

I flat shared until I was in a position to buy (and then took a lodger for a little while).

I bought my first flat in 2003 for 250k with a 95% mortgage and a deposit from savings. I moved to a 3 bed house for 465k in 2008. We've just moved to a bigger house for 750k, so we have climed the ladder.

This is in London, btw.

[Londonbased87]

Me and DH (late 20s/early 30s) were the first of our friends to buy. We spent £400k in 2013 on a two bed terrace, with a £75k deposit half from DH savings and half from his parents (I'd just started working the year before after 7 years of uni). Joint income about 80k then 90k now. The area has kind of rocketed (London) though so our friends buying nearby spent £550k on a flat.

We are overpaying like mad but still won't be able to afford childcare for a while.

[Amummyatlast]

Bought our first house, a 3 bed semi, for £210k 4 years ago. Used 70k of savings, which we had saved up over the previous 8/9 years (definitely no parental help). I've been looking online at some 300k houses near us and they honestly don't look much different. If we wanted to upgrade significantly we would have to look at at least £350k, which won't happen now that we are on one salary (planned). I'm glad we bought a family home, even through at the time a family looked unlikely.

When I lived in central London, approx. 7 years ago, we were paying £1,200 a month on a one bed flat and weren't even paying market rate! My mortgage (admittedly outside of London) looks tiny in comparison.

[sunnydaylucy]

Our house was £305k 18 months ago. We have moved 4 times since we bought our 1st house in 1997 (we were quite young to do this!). Equity increases have certainly helped us get to this stage but we have always bought houses to do up (DH is handy!).
We have really stretched ourselves with this one though (& it's not quite big enough for the 5 of us until we can afford to extend it) but we took out some of equity to put into our own business and have extended our mortgage term aswell.
This house is in a location that DD's can walk to high school and that was our main objective when moving this time. Mortgage £1100pm. Won't be moving for a long time now!

[shabbycaddy]

To the person who mentioned people don't have a choice but to take high mortgages is questionable, what people get trapped into is the thought they must be doing the same as there piers/parents etc, following the norm and being tempted by high saleries. There are a lot of People today are obsessed getting bigger better houses, most of the time this is not necessary, all you end up doing is filling it with stuff. When people say they need a bigger place than a 3 bed when they have a one child amazes me, it wasn't that long ago the 2 up and 2 down Victorian houses would if had huge families in them. People today seem to also get persuaded to keep moving jobs to get the extra pay rise, think this has a lot to do with the vast amount of greedy agency's leaching on people. This extra money though especially down south leads to moving to moving to a more expensive area on traveling more so resulting in minimal gain as everyone else is doing the same, and sadly away from families. Tv programmes like location location and all the other types in that genera protray yes you need to move up the ladder bla bla bla, but in reality like my grandparents, you would of possible had a flat at first then got your family home, there was no obsession of moving home for no real reason. The real sad storey is families who want to live in the area their families have been in the area for generations but are being pushed out because of outside money coming in pushing everything up. Sorry for the rant, but the government, and banking sector have a lot to answer for in this country what has been left to go out of control probably since the 80s, I feel really sorry for the people that have to use dodgy government schemes like htb which are propping this mess up.

[BeeInYourBonnet]

We bought our house for £60k 16 years ago when we were in our early 20s. We have almost paid the mortgage off (would have done it early but prioritised working PT/paying childcare), and house is worth £150k. Its on the small side for us (average 3bd semi), and it would be lovely to move to a bigger house, however you need to pay £300k+ round here to make it worth moving (ie to get decent size 4 bed).

Currently trying to decide whether to sell mortgage free 3 bed and buy generous sized £300k+ house (joint income of £80k due to recent pay rises), or rent current house and buy slightly bigger house for £250k. This would allow us flexibility if one if us lost our jobs or just wanted to jack things in and do something different.

[ipadmad]

Totally agree shaddycaddy. I'll admit that we do have a slightly bigger house than our strict needs but we see many friends buying bigger and bigger houses just because it's sort of expected to continually move up the ladder. It's a trap IMO.

[Minkypinky]

We bought our first house around 4 years ago for £420k with a 10% deposit. Three bed terrace in not glamorous outskirts of west london. Our combined salary was around £110k at the time. Next door (identical house ) just sold for £740k!

[TeddyBee]

We extended to bigger than we needed to allow for my mum needing to live with us possibly in the future. Then I discovered I was pregnant. So that extra bedroom will be bloody useful as it happens. Right now we have a lodger in it, but hope to be able to afford to live without one and keep the room for an au pair when kids are older (newborn plus au pair doesn't really work). We have a five bed (one bedroom is a box room) and three kids and out next move would be to downsize in twenty years unless we have a massive change in income. We couldn't afford to buy the house we needed, but we did manage to extend to get what we wanted (extra bedroom, bathroom and utility room).

[Apatite1]

I'm more than happy to stay on my rung of the ladder and be mortgage free by our 40s! But I appreciate that's because we already own a family home as a couple (our LTV is 25% so we've not stretched) so it's easy for us. What do you do if you need to move to a bigger house because your family grows? Let's not get too judgemental!

[Cantdecideondinner]

It depends what one considers to be a large mortgage and ones outgoings. Our mortgage as I said above is £270k which I consider quite modest given the size and location of our house. We have nearly £500k equity in it so barring an absolute catastrophe we can downsize. Why do I assume our income will increase? I know it will, I will work more and DH's career is still on the up and we anticipate will be for the next 10-15 years. People simply can't do his job without his level of experience and mine is the same. We have enough insurances through work and privately to cover such a mortgage incase of illness and bereavement so no, not a risk. Mortgage is fixed for 5 years too so agajn, not a current worry and as I say, if we need to we will sell, not a big deal.

[SqueezyCheeseWeasel]

The last mortgage we took out was for £425k (the loan amount not the value of the property). We paid it off in 10yrs and are now mortgage free. Paid off early through a combination of overpayments and investments coming good. No inheritances or cash help from relatives.

[TinyCaterpillar]

shabby it was me who said that people didn't have a choice about taking on a large mortgage if they wanted to buy somewhere. In many areas, including where I live in the SE (and much worse in London) this is true if you want to buy at all - I'm talking bog standard flats certainly not 'aspirational' moving up the property ladder type stuff. I've just checked on right move and in my area grotty one bed flats are going for £170k+, to rent they would be £700+ a month so the monthly cost would be pretty much the same, therefore a lot of people choose to take on the large mortgage and buy in the hope that eventually they will be able to move somewhere larger. Many areas are like this, it's not people paying silly money/ taking on large mortgages for the sake of it, it's just what it costs and many would rather pay off their own mortgage than a landlord's and get some security.

[wonkylegs]

We worked up to a 300k and now 500k plus house (last big house) but we've always had a decent deposit.
Our biggest jump was when we moved in together and pooled the equity we had from 2 properties.
My first house deposit was put together from a very lucky break with a job (9mth well paid contract with a good bonus whilst I lived at home) and no spending at all for a few years.
We have always overpaid where possible to reduce costs.

[Devora]

I've just checked how many 2 bed flats you can buy for £300k in my area (and I'm outer London suburbs - zone 6). There were two. Both pretty shabby. Oh, and a couple of houseboats.

[AvonCallingBarksdale]

DH and I bought a flat in London in 1999 for £80,000 and sold it in 2003 for £180,000 and that's how we bought our house for £310,000.

[birdslife]

I agree with not necessarily having to trade up. Our mortgage is quite high (£1800) but fine with our income, that only gets us a 2 bed flat where we are but we have no intention of moving and can see us remaining here for at least another decade, by which time we'll have paid off the mortgage through overpayments. I don't relate much to the expectation about wanting the same kind of home/area your parents had, since DH's parents live abroad and my parents moved here when we were young kids, there is not any one place where either of our families have lived for generations. As for having to move because your family is growing, we have taken steps to ensure we won't be expanding our family so there's no excuse there!

[Snowberry86]

5 years ago we bought a £129k house with a 5% deposit as being fresh out of uni it was all we had.

We are now looking for a £270k house with a 10% deposit (15k equity in our current house, 10k in savings to cover rest of deposit, estate agent and solicitors fees).

We earn £45k each and so can afford the £1k a month mortgage repayments we are expecting.

[Snowberry86]

Eta- we are both fairly young still (28 and 30) and so haven't have time to save a much bigger deposit but we need to move now as we have outgrown our first house.

[Feckeggblue]

Trade up?! Many areas £300k will get you a very average house and many areas it won't get you a house at all

[IsabellaofFrance]

We moved to the Midlands from East Anglia, where we couldn't get a decent 4 bed for our budget. Now we have managed to get 5, and its under budget.

House prices in some areas are ridiculous, and I know people upthread have suggested moving away from the area you grew up in, but not everyone wants to do that.

[Jackieharris]

I assume people talking about recent house price rises are in the se.

I bought in 2006 on an interest only mortgage. If I sold it now I'd get my deposit back but wouldn't get back anywhere near the cost of work done (new kitchen, new floors, new central heating, total redecoration).

It wouldn't be enough to use as a deposit on anywhere else. I wouldn't even be resold that mortgage again! (Even though I've never missed a payment)

I'd have been better off never buying.

[TheFullGammon]

I still don't really understand how we afforded this house. When we moved here (our 3rd), I mentioned the playroom to a colleague and he said, "I bet you never thought you'd say that 5 years ago, did you?" He was bang on. When we bought our first house I couldn't imagine ever affording anywhere bigger. But with paying the mortgage, and overpaying on top after the first year or so, and salary increases in the early years of our careers, it really does come towards you.

Our rent on our first one bed flat was about £700pm and we've paid between that and £1000pm since, whether renting or mortgage, and everything from rented (beautiful, central) 1 bed flat to mortgaged 4 bed detached. I know some people who bought earlier have much, much lower mortgages and they are lucky, but equally we are luckier than those who bought later.

[hereandtherex]

I think I know where the OP is coming.

Looking at the current mortgage offers + rules, a 300K would require about 80K of income + 100K deposit.

UK salaries do follow the bell curve distribution. The UK average salary is ~27K, about 60% of the working population earn that or lower. Once you go above the twice the national average (52k) the number of people earning that or more are in the top 5% of salaries - might be top 2%. For a 80K salary AND a 100K deposit and you could probably hand write a letter to all those people in the UK and ask if they wanted to buy your house.

Talk about 'salary increasing etc' just has not been happening in the UK for the last 10 years - most people are earning the same or less than 10 years ago.

Looking at Land registry sales data, the obvious jumps out:
1 - very few houses are selling. My local area is showing transaction at ~10% of the 'normal' market.
2 - the houses that sell are much lower than the houses listed on Rightmove.

There appears to be a housing stalemate/logjam/constipation for the last 10 years. Almost 12 years in my local area - sales dropped off in 2003ish and have never come close to recovering.