Skipping a starter home

[Phlappy]

I was reading on here the other night that especially in London, people are skipping buying a starter home and going straight for a small family home/flat.

Has this been anyone’s experience?

In our case, yes. But my husband had a high bank loan for studies we were paying off - £700 a month. That loan finished the same time we moved away from London. And nursery fees £1500 a month stopped then as well as DD started at a state pre-school once we moved. So all combined we were finally able to buy. On top of that the house prices where we moved to are a LOT lower than London prices, plus DH kept his London job (and related pay) whilst I found something paying not a whole lot less locally. Long story but this allowed us to buy a 5 bed detached house as our "starter" home, very comfortably. Cost us less than a 2 bed flat would have done where we used to live in zone 8.

Not London. But yes I noticed that for many younger colleagues, unless already bought a home early pre marriage and children. They will a 3 bed house with their partner, preparing for children. I think those who managed a small city center apartment must have built up a lot more equity towards their starter family home purchase, but I am not noisy enough to ask.

But DH and I also combined our income and got a 3 bed semi instead of a 2 bed apartment for our first house for the same reason. It might not be a just a recent thing.

Yes, but not in London, DH was on a good wage and we were buying in a cheap part of the country.
I was 27 at the time, we bought a 4-bed detached, I'm in my 50s now and we're still in that same house.

Yes but we were not London - although we bought in an area with prices a fair bit higher than average for the North West. With some help from my parents and a little bit of inheritance from my grandma (<£10k), and the fact we bought in 2011 when prices were a lot lower than now, we managed to buy a small 3 bed semi as our first home. It more than doubled in value during the 12 years we lived there and we were recently able to move to a larger home in an even nicer area.

I sort of did this, in that we bought a decent sized flat with two bedrooms and two bathrooms, most other residents had a child. We then moved to a 5 bed house before having children ourselves.

I think back in the 70/80/90s people moved straight in to “family” houses much younger as they married younger and house prices relative to income were much lower.

I would guess the reason Londoners in particular are skipping the starter homes is that by the time they’ve got enough of a deposit together their income has increased/they’re of an age where parents are looking to gift money to avoid IHT…

We did. Bought a cheap starter house instead of a flat. It needed a lot of work and had compromises like distance to transport, but we were in our 30s and it was a house for the same price as a flat. Moving is so expensive if it's possible to skip the flat stage that's great. Age is a factor: how many decades before retirement can limit mortgage ten.
Rent is also so expensive holding on renting for years burns through money and mortgage repayment years too.

Flats don’t increase in price now like they used to so it's very hard to build up equity with a flat to then buy a house which have seen much bigger price rises. Coupled with FTBs being much older now, these people may need more space for children

Same with us. Late twenties recently bought a 4 bed family home in the North West.
We're fortunate to be on good incomes for our age and can do a lot of overtime etc so it all adds up. Our plan is to overpay as much as possible so that we can afford to go PT once kids arrive.
We also WFH (even before Covid!) and a 2 bed flat + kid would be very very crowded. Especially as we need to take calls etc.

North london ftb in 2019 3 bed semi. So yes this was our experience. Still on RM most days looking to move but this house will do fine long term.

Yes us, by the time you accounted for the overbidding on the first rung from desperate ftbs having to compete with cash btl landlords then it was only 10-20k more to get 3 bed houses in need of a bit of work.

So no brainer comparing a 150k 2 bed back to back terraces (which were going for 170k-180k) to 3 bed semis starting at 200k (we got one which stuck around on market for 190k).

This was 6 or so years ago now. Have since moved again.

Rather than a starter home, I went for a scruffy 1950s maisonette in zone 4.

Two beds, a garden thigh high in weeds and a hideous 1950s kitchen & bathroom but it was warm, spacious and well built. I learned how to decorate, and how to plan/budget a new kitchen.

I stayed 3 years, during which I sorted the garden, replaced the kitchen & installed heating. I learned a lot and added 50% in value..

I think it's likley if you wait for these price falls to work through you should be able to skip a starter home. Just keep saving and wait a year or so and get on at the bottom of the dip.

We’re SE and we skipped a starter flat because we had kids already, so instead bought a starter 3 bed terraced house. We’re a few miles out of where we wanted to be, but to be in that area we’d have needed an extra 100-150k and it just wasn’t doable. The good news is we’re in catchment for the secondary school (just!) and this house will do us if we get stuck (recession, property crash etc) for life which hopefully we won’t be.

It makes sense to my mind to buy as far up the ladder as you can afford to future proof in case you get stuck with it. We could’ve got away with a 2 bed, but the 2008 shit show taught me to think in terms of getting stuck and to future proof for my family.

If finances allow this is definitely the way to go, as it costs a lot to move house. Plus, who wouldn't want a house rather than a flat??

I don’t think most people can afford to go straight to a house especially in more expensive areas. It makes sense financially but so does buying property before you have children rather than afterwards and starting to pay off a mortgage before you have childcare fees etc.

I think a lot of people are avoiding flats because of remembering being stuck inside during lockdown, they don’t like leasehold and due to cladding bureaucracy. You can’t really increase the value either, so unless the market is very buoyant or you are lucky to find a genuine “up and coming” area you won’t build up that much equity for the next move.

We skipped the flat when we bought our first house 27 years ago.

Surely you buy the bet house you can afford .

We moved out of rented accommodation straight into our own family forever home. We fell fortunate with timing and finances, so it was a logical step.

When I bought my first place I deliberately chose a 2-3 bedroom place and rented out one room until we started ttc. It costs to sell and buy, so why deliberately set yourself up for that extra cost? And upheaval.

Is a starter home not just a small family home or flat? What is a starter home then?

I would say the lowest rungs of the ladder.

Here maisonettes, flats and back to back terraces are first rung. Next rung is 3 bed semi, then detached and onwards etc..

I'd consider a one-bed/small 2 bed a 'starter' home.
The idea used to be - you'd buy one young, single and childfree. Meet someone else with similar. Sell both flats to buy a family house.
Then, it was people buying starter homes as a couple but using price increases + salary increase to afford the next step up.

The issue is that flat prices have somewhat stagnated compared to houses but also people are older when buying the first property as @Fretfulmum has stated. No time to gain equity.

I suppose in London a lower earner can still afford Shared Ownership but they're notoriously difficult to sell which is why many steer clear. Here in the NW a lot of lower earners stay home to save, then buy their first flat by their mid-twenties.

In Scotland, but partner and I opted to rent single rooms rather than entire flats/houses for longer than our peers, which allowed us to buy a 3bd/2bth house with garden, extension, and a log cabin for our first purchase in our mid 20s.

Was hard work scrimping and saving, but we did it this way to save a lot of hassle down the road. We looked into buying a flat, but both felt we'd just be biding our time until we could afford a house. We'd preferred to save for another year renting a room and buy a house rather than buy a flat and be stuck there for another 3/4 years as we built another deposit. Plus would rather use our FTB benefits like stamp duty discount and LISA bonus on a property we planned to stay in long term.

This was our experience in London as we only in a position to buy in our 30s when we already had DC.

Friends who were gifted a deposit in their 20s bought starter flats and accrued equity moving up the property ladder, but lots of people I know bought a small home as they were already past the small flat stage.