Buying property on a single salary

[BeachTree]

I have owned a few very small propeties/flats and have always bought these on my own as a singe person.

I'd love to move, but feel a bit stuck. I'm currently saving to build up a deposit in order to purchase a new and slightly bigger house, however it feels almost impossible on a single salary. Even pre-covid and the currently inflated property market. I see many people buying new build houses which come with a huge price tag and wonder how people do it? Say a couple in their early 30's, each earning an average salary of around £30k per year how do they manage to buy a new house at say 200k upwards I just don't know how it's done.

Average mortgage is 4x salary - so 2x30 is £60k x 4 is £240k mortgage plus deposit

Two people earning £30k would easily be able to buy something £200k plus by borrowing up to 4.5X their joint income, the multiple most lenders will extend to.

To upsize, you start small and work up. As you pay your mortgage down on your current home you use that equity, combined with rising value, to increase your deposit for your next home; most people also expect their salary to increase as they get older also, allowing them to borrow more.

Obviously there’s a limit, few people can have exactly what they want, so you learn to be content with what you do have and stop hankering for bigger and better simply because “everyone else” seems to be doing it.

My current property has around some equity but not a huge amount, so I feel pressure to save up a large amount in order to move, which is the part I find hard on a single salary.

I had not appreciated you could get 4.5x your salary for a mortgage, I thought it was about 3x.
@ComtesseDeSpair I think you hit the ail on the head that few people can have exactly what they want. Though on the surface when I look around, people do 'appear' to be getting the homes they want.

Many will have their own property to sell
and combine to buy with a partner. Every person I knew bought as a single person, one or two bed flats for example, then sold when their salaries increased/market increased/met their partner. The sale of my property paid the deposit on the house I had with my husband, I had owned it a few years so had built up some equity.

If you're a firefighter; police officer; NHS doctor, nurse, paramedic; teacher in the public sector; accountant; lawyer; barrister; civil engineer; dentist; architect; surveyor or vet you can borrow SEVEN times your salary with HABITO!!
www.thisismoney.co.uk/money/mortgageshome/article-10342453/Home-buyers-borrow-7-TIMES-salary-Habito.html

[quote Didyousaysomethingdarling]If you're a firefighter; police officer; NHS doctor, nurse, paramedic; teacher in the public sector; accountant; lawyer; barrister; civil engineer; dentist; architect; surveyor or vet you can borrow SEVEN times your salary with HABITO!!
www.thisismoney.co.uk/money/mortgageshome/article-10342453/Home-buyers-borrow-7-TIMES-salary-Habito.html[/quote]
Wow! What makes those specific professions more appropriate for 7 x salary over other professions or industry? Interesting...

Don’t forget with new builds there have been a lot of help to buy schemes which made houses more affordable.

I don't think most people do get the homes that they want. That usually wish they could go a bit higher than their price range. Sometimes this is 10k or it could be a million.

Well Doctors and Surgeons increase their income significantly throughout their career, they have excellent overtime/locum opportunities, job security and good pensions hence mortgage companies feel fairly secure lending but 7 x is still crazy.

'What makes those specific professions more appropriate for 7 x salary over other professions or industry?'

@BeachTree the data would have been analysed over decades and concluded that people in those positions rarely fall behind in payments or end up jobless for long periods. And/or that these professions see a good career/salary progression over time.

It would have been calculated that these people can borrow 7 x salary with the same risk factor as everyone else borrowing 4 x salary.

'but 7 x is still crazy.'

@Somanyquestions1984 crazy in our opinion maybe, but the data would have been carefully analysed with strong algorithms.

Yikes, those 7x mortgages sound horrendous - locked in for 15 years and with rates more than double what they are on normal mortgages. No thanks.

And most people wouldn't be able to comfortably afford the repayments on a mortgage of 7x their salary.

I'm someone who would be technically eligible for those 7x mortgage.

1 - terrifying to owe that much! Recipe for disaster!

2 - isn't this what happened before 2008 crash?

Loads of people also don't disclose when they have help from family/ generational wealth.

But It's definitely easier In a couple though.

Single property owner here too and also a bit stuck, I'd like to upsize (actually same floor size as my flat but with outdoor space would be fine) and whilst I could get a bigger mortgage I don't want to go too big and still be paying it off when I retire, or overstretch myself, and still i'd have to compromise on location because my current property is worth around £250-270k and "next step" up the ladder locally would be £400k+ in need of serious renovation works. I had help from parents with money towards deposits for this property and my previous flat (although I was willing to fund both myself) but couldn't expect them to do that again and it wouldn't be the sort of money that would make the difference between it being not affordable and affordable. It sounds awful, but I honestly think my only chance of moving up the ladder will be if I inherit part of their house.

I own a flat on my own.

I'm in a relationship now but People don't seem to appreciate how much more expensive it is as a single person.

Not only do you have no one to split expenses with but you are fucked when it comes to mortgage affordability.

No wonder people put up with mediocre relationships really! There is a very big financial incentive to do so!

I'm buying a house on my own, however have earned a high salary for the last 15 years which has made that possible. Is there any way you could take on extra hours or retrain to bring in more cash to increase your deposit more quickly?

As I'm in a sector which is seen as stable (finance), I've also been able to borrow up to 5 times in the past, although on my current purchase I've asked (and been approved for) 4 times my salary.