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?

We don't have kids or any desire to ever have kids, but still like having dedicated spaces like an office, gym, etc so didn't want to go for a small flat for the first place. We bought our first place together in 2019. I wouldn't say prices have gone up significantly since then but as we had a large garden with a sea view during COVID (in Brighton) we were able to sell a few years later for 200k more than we originally paid, so that plus existing equity we had from a gift gave us a 400k deposit for the next house much quicker than we had anticipated. Now we just need to figure out where to buy.

I guess we did this. The first home we bought was a small family home. But that was because we were already married, had been together many years (we met young) and already had one dc! We were 31/32 when we moved in. We'd been moving around a lot with dh work and then couldn't really afford to buy. By the time we'd got everything organised we'd already started our family.

I do have friends who met their partners later in life who had a property each and then bought a bigger one together when they had dcs. They're a lot better off than us as they were able to hang on to the smaller properties and rent them out! That is in a much cheaper part of the UK though. We're near London.

It seems silly to buy a house that won't last you very long and you have to buy again when you have two or more kids when you will probably be quite strapped for cash.

Not London. Our first house was a 3 bed as was the house we rented. It was in an awful location but it got us on the ladder and was big enough for us. Two beds simply weren't because not only did we the. Not have a spare room for whatever but two beds usually don't have separate living spaces to get away from each other. We gave up on the best areas for space. Now we have both.

Also nowadays people aren't able to buy a house until they're older and already need a family home or won't be long until they do.

We were 25 and paid 100k. That same house is. 200k 13 years later.

But you wouldn't want kids growing up in an 'awful' area. It's good if you can trade up before they start school but you're stuck otherwise.
We moved from a 'great' area to the nice bit of a distinctly more downmarket area (think thriving high street with independent shops, cafes etc replaced mostly by charity/vape shops).
But we're in a small close of semis further away from the town centre, towards countryside and detached houses etc.

Sometimes I still think we made a mistake. Only time will tell. But when we bought last year houses in our former area were going for silly money, a tiny cramped 2 bed terrace with no off-street parking going for MORE than our 4 bed with driveway and garden. It was ridiculous.

All prices have dropped obviously but those dropped by more than our current home judging by recent sales data. Which is odd because better areas usually see smaller % drops

Myself and DH were studying in seperate cities and had to travel a lot etc. By the time we were in a position to buy we were over 30 and our first child arrived almost 2 years exactly after moving in. So we bought a 3 bed semi which needed a lot of work rather than something smaller. Not London though. Made no sense to us as the buying process in England is so annoying, long and costly, especially if chains involved.

How can this be? I thought no young people could get on the property ladder because they spent too much on coffee and netflix and all the boomers had caused house prices to rise.

I think this thread is skewed a certain way but people saying it makes no sense to buy a starter home should understand that for many people it’s all they can afford. With most one bed flats in London for example being about 400/450k it’s a stretch even for people in their 30s with good jobs.

London’s an extreme example but in many expensive places it’s only the fortunate who can afford to buy at all, let alone jump straight into a family house. There’s a big north/south divide here I feel. All my daughter’s friends from her uni in the North bought houses as their first purchase. All her southern friends bought one or two bed flats.

I know you're being sarcastic but it's true - young people can't get on the property ladder in their early 20s when a 'starter home' for a few years is suitable. They can't afford it until their 30s or when they receive inheritance, when a 'starter home' is too small and need something bigger as have kids etc.

The idea of moving up a property ladder and having starter homes just doesn’t work for the younger generation and this economy any more.

Saving for a deposit and having to constantly move because of insecure rental tenancies makes the idea of moving up a property ladder an unpleasant stress.

Its an outdated idea for when people could afford a property in their twenties.

Well the key question here is : if you missed the boat in your twenties. Is it still worth trying to climb the ladder? As @lightinthebox says the entire idea hinges upon buying a small cheap property early.

Among my acquaintances,
those who can only afford a one-bed with multiple kids continue to rent or move out of London altogether. They don't even contemplate trying to climb the ladder. Unless they get an inheritance which allows them to buy a family home (house/bigger flat).

So the people who DO buy are the ones who have gotten an inheritance. You don't know about those who can't afford it because they don't buy at all.

I bought on my own in SE London for circa £140k a great 1 bed flat - barely 5/6 years ago. So whilst the average price of flats is high in London there are still lots of options on the outskirts with decent enough commuting options.

To answer OPs original question, it all depends - I went up the ladder flat, terrace and then semi-detached. I know someone else who went straight to a semi but it was a total fixer upper. I know others who did just a flat and then straight to their long term home (10+ years). Others who bought family homes big enough for their first child and now looking to upgrade. All in London Boroughs.

Moving is so expensive!
We ended up first buying a 3 bed terraced house and then a detached 4 bed house (we're in SE).
This is hopefully our long term forever home.

With stamp duty and moving fees as well as the crazy process of buying and selling and conveyancing - I'd rather do it as few times as possible.

The property market is very different today. With the high cost of stamp duty tax and moving costs and slower growth in property prices, it makes so much financial sense to buy as high up the ladder as you can. Like I said earlier, avoid flats due to stagnant prices- you will not be able to build up equity to move to a house like previous generations did. Gone are the days of buying a flat in Central London, then a terrace then moving to the commuter belt. The houses in the commuter belt would have increased so much faster than the price of the flat so you would either need an inheritance to move or a huge increase in salary to make up the difference

Mostly true in out circles, in early/mid twenties over the last couple of years we've bought 3 or 4 bed semis
Only one couple bought a starter flat and are now desperate to sell as they've started a family

We always wished one of us managed to buy a home pre kids, but we never did. So we had no choice but to wait to buy a smaller home to fit us all in :) But that being said the house is a good size, just smaller bedrooms for the dc. I wish they were double the size. But at least they have their own rooms.

We’re skipping, late thirties. We have a high budget as we are both high earners, just can’t find anything we like. Very little properties of quality on the market lately. I think it’s sort of the trend now.

We both are ambitious and knew we’ll do well in our careers. So we chose to enjoy our money, travel and invest some elsewhere in our 20s. Tbh buying a flat in London wouldn’t have made a huge difference, since they hardly went up in value in the past 10 years. Whatever we’ve paid in rent, we would’ve spent on service charges, maintenance and bank interest etc.

Yes, went from renting a small place to buying forever home.

Me! I genuinely prefer flats. Less to clean, and less space means I don’t accumulate needless crap and clutter. I like the social aspect as well, making friends with neighbours. I bought a tiny cheap 1 bed flat in SE London as it’s all I could afford. It might be classed by some as a starter home but I’m unlikely financially to be able to upgrade. If I could’ve afforded a bigger 2 bed flat I’d have bought one with a view to it being long term/forever, but as I wanted to stay in London I had to get what I could on my budget. I don’t care about increasing value as much as I care about security. I also don’t get the MN obsession with 4 bed detached like it’s the one and only thing to aim for in life and if you don’t have that you’ve failed

Tbh a lot of 3 bed flats in London are much more spacious than Victorian terraced or semi detached houses. Majority are so narrow and utterly unimpressive. But I imagine people like to have gardens, hence the obsession. I am exception to the rule, because I don’t like DIY gardens with sad fencing, and having a gardener is yet another expense I’m not willing to incur. So I much rather prefer beautiful balconies/terraces.

Yeah I feel similarly, there is a massive communal garden where I live and a gardener is included in the service charge! In towns where there aren’t many flats except retirement or maybe student flats I guess people just don’t perceive them the same as in London and other major cities where flats are the norm

Our first home was a 2 bed flat in zone 1. It was 860 sq ft so not too small but no outdoor space. We moved up to a 4 bed Victorian terrace in zone 2 so we've skipped a few rungs on the ladder (we didn't build much equity in the flat, but had other stock investments growing which paid for a big deposit on the house). We stretched a lot to afford the 4 bed and minimising stamp duty was definitely one consideration, plus the general cost and upheaval of moving and stress of the legal process of house buying. We're planning to stay in this house until the dcs have grown up (we aren't interested in moving any further out than zone 2, and detached houses are rare and out of budget around here).

We wouldn't have wanted to skip the cheaper flat entirely - we wouldn't have been able to afford a small house in a central area when we first bought and living centrally was amazing pre-dc and in their early years too. We've never found it too problematic not having a garden tbh, but I've always made time to get outside with dcs. But I wouldn't buy a place without a garden now mainly because of resale value. Apartment living was actually far more convenient with our first dc - pushchair access was all level thanks to a lift, no stairs indoors, so much easier to keep track of dc (compared to chasing them up 5 flights in a townhouse). We sold our flat this year fairly smoothly, it took a few months to get an offer but once it was agreed it was fine. Other flats in the area are selling too - it's a popular area for going out, and there are lots of companies with nice offices and a young, highly paid workforce. So there's definitely still a market for central flats for FTBs.

We didn't buy a starter home and I'm glad we didn't because there's no way we would be able to afford to move to where we live now!

We moved straight into a 3 bed terraced house, it took us years to save and there’s no way (approaching 40) we’d be doing the ‘property ladder’.

I find it highly unfair to blame people for having children and wanting a house to live with in rather than doing the property ladder. People just want security and to settle down.

It’s hugely expensive to move, most people have been faced with the insecurity of private renting and will have been forced to move multiple times. It’s not desirable or financially sensible any more.

Yes and no.

My first place I bought alone for £250k (2 bed)
I met DH he was about to buy / thinking about it but put it on hold to move in with me.

We then decided to buy after 2 years together.

We looked at 3 beds semis at 650kish mark but felt if we had kids we'd outgrow it quickly and TCTC (total cost to change) on housing at that price level is significant. You have Sellers fees, mover fees, stamp duty, mortgage fees, possible need for rental accommodation... it's a lot and would all be wasted £ if we moved in 5 years.

So we went for 5 beds (£0.9m - £1.2m bracket) that were "future proof" ie if we made loads more cash we could move up the ladder in 8-10 years but if we didnt the house was good for 20-30 years.

We were lucky to have the option and if we'd gone for the 3 bed we'd still be stuck with it now as we likely couldn't afford a 4.5%+ mortgage on a £1.2-1.3m house with 2 sets of FT nursery fees.