Climbing the property ladder - how do people afford it?

[Rorysmum7]

Our house is valued at more than we bought it for 4 years ago but I’m sure the houses in this area have all gone up too.

my question is, unless we had substantial income increases since 4 years ago, how do people afford to move UP the property ladder?

We can still only afford the same amount of mortgage as we took out 4 years ago, yes the house has increased in value now but surely thats only helpful when the next house you buy isn’t the same price or cheaper. If all houses in the area increase too, i can’t see a way to do it unless you just save up the difference or use pay-rises for a bigger mortgage?

These days people want the 4 bed detached straight away

No they don't. It's more that they are older & have a dc on the way.

And as I said moving frequently is too expensive due to stamp duty so it makes sense for some to skip steps.

Exactly @yoyy my first was 3 bed semi as already had one child and other on the way. Plus I had seen friends struggle to sell flats /deal with high service charges so always planned to skip that step. Next house was a five bed and no plans to move again now. Two lots of stamp duty was enough!!

@SweetSakura I actually don't know many people who go straight for a house. In fact the only people I know who have done it are on 150k each and can afford it. But a lot of people don't buy till they are 30 then have their first kid, then move to a house age 35. I really don't know anyone in London able to buy a property age 25 unless their parents gave them a lot of money.

my brother has just bought his first, a 3 bed terrace for 700k. They only plan to move once more if ever.

This is partly what we've done. Find a house that has potential to add value to. In one house it was partitioning a room and moving a bathroom to create an extra bedroom, which was a relatively cheap way of adding a lot of value. In our current house we've done a lot of building work inside - completely changed the layout. We've always bought somewhere that needs updating. People don't like to have to do much work to a house and you can get a great 'discount' for buying something that needs a little work.

I've also been able to afford a bigger mortgage through increased income over the years, finding a partner (now husband) to buy with

@yoyy and thats great - but how old is he, how big was his deposit and how much does he earn. As I said, I do know people who bought a house as their first property. But that was either because - they are really high earners i.e. both on over 150k each and are often already in their 30s, were gifted a deposit, or lived at home to save it. So how did he do it?

This isn’t very relatable, I think I’ve done pretty well to end up in a 500k house after a couple of lower rungs on the ladder.

Selling a flat in London bought 14 years ago and then moving to a much cheaper area to buy a house. Also got a pay increase.

£700k for a first time buyer is out of most people’s reach. I thought I was doing well at 24 to but an £80k flat😂😂. Granted that was twenty years ago.

Buy a grotty one bed, spend four years doing it up, and learning DIY in the process. Then buy a grotty 2 bed and do the same. Then a three bed, and so on.

Just the same as it has always been.

Borrow less in first place so could over pay and then be mortgage free. Then move on up the ladder with a big deposit.

I'm glad I left our ffirst DIY efforts on our first place behind when I sold it and moved on. Mind, I saw it on Rightmove a couple of years ago (about 15 years after we sold it) and a decent amount of our efforts were still present!

Our house has more than trebled in value since we bought it 14 years ago but we were struggling to manage a move upwards because everything else has shot up so much too (dh income not risen all that much in that time unfortunately, I've gone down to part time since having DC and all costs are rising at the moment).

We have had a recent (fairly substantial) inheritance which would have allowed us to move but due to major health issues (to the extent I may have to stop working) it's still off the cards as the money would be put to better use paying off the mortgage and increasing our savings.

@iojlrjgi9893 mid 30s, bought with wife. Joint income 130k ish rest was deposit.

They moved to zone 4 to buy a 3 bed terrace for that. Where we grew up in z3 a flat would cost the same amount.

This isn’t very relatable, I think I’ve done pretty well to end up in a 500k house after a couple of lower rungs on the ladder.

Not unusual for London though.

£700k for a first time buyer is out of most people’s reach. I thought I was doing well at 24 to but an £80k flat😂😂. Granted that was twenty years ago.

20 yrs ago you would get property in London for 80k & some would be worth a million plus now.

Thing is if he bought a 600k flat he would have paid 19k stamp duty & then moving to say an 800k house 5 yrs later would be another 28k, that's 47k just in tax. And as I said flat prices have seen much growth in the last few years in London so that 700k house would be more expensive in the future.

have not seen much growth.

He actually struggled to get a house in that bracket and only managed to be successful on house no 4 simply because he was chain free. The EAs said there was huge demand for 3 bed houses as families were having to compete with older cash buyers, who wanted to downsize.

I bought houses that needed so much work no one else would take them on and then sold with a good profit. I don’t think that would work now as labour and materials are sky high in price and where I live there’s very little price difference between the done houses and the doer uppers.

In London I’m not sure there is an ‘up’. We did the classic parental help to buy a yuck flat, did loads of work ourselves, its value doubled in the time we had it, and our salaries went up massively. We bought something worth more when we sold it, but we traded 2 beds in central for 4 in the burbs and the difference in value is just bigger mortgage payments, which we wouldn’t be able to afford if it wasn’t for the salary thing. The work we did didn’t make that much difference to the value - maybe 10/15k.

Im probably not making sense but it doesn’t feel like a ladder - even though we had all the luck in the world, the main thing was the parental help to get the flat at all, and for the house, our wages. Not to do with any added value on the flat in the time we had it.

buying a house that needed a bit of work and doing a lot of it themselves so increasing equity.

overpaying mortgage

pay increases

inheritance

bank of mum and dad.

We did it by buying places that needed loads of work. Doing the large majority of that work ourselves, making a large chunk and doing the same again.

We also get lucky. We found and bought our current home and got it for an absolute bargain. It was literally good fortune (and a willingness to make snap decisions).

I'm not doing it again though.

I think it’s more like a step rather than a ladder these days. We’ve lived in our house for over 12 years, we decided not to take on a bigger property further out and instead make the best of this one with a more central location. Then we won’t need to downsize later.

Consistent overpayment of mortgage along with increase in value) plus income increases (doubled over the last decade), plus a couple of windfalls (inheritance mainly) along the way. We have been lucky, but also we are pretty frugal, bordering on tight. We earn well, but both grew up poor which really does have a bearing on our spending, in particular caution when it comes to big purchases. Our neighbours have many more holidays to expensive places than we do.