How is anyone affording to move right now?

[LifeisHard73]

We want to move, it’s just 2 of us but we want more useable downstairs space, eg big kitchen diner with room for a sofa, bifolds to garden etc. We need a garage and parking as currently we only have street parking. Oh and our neighbours are really noisy and their cat is an arsehole so we want detached! But I can’t believe the cost of taking on an extra 100-150k mortgage and I wonder how on earth anyone is affording to do this? We’re in the SE and our house is worth 400k, our perfect hse is on for 550k ( we would offer less), but it needs renovation inside so perhaps 100k needed for that.

Should we go for it or hold our horses for a rate decrease after the election? Obviously the house I mentioned will be long gone.

If you can afford it and it’s your dream house I would move now. It’s always been expensive to move that cost won’t change.

If you can’t afford it. Don’t move. If you are relying on a rate decrease this suggests you can’t afford to move. You should be able to afford it on a stress test upto 10% interest rates.

Personally I would not be locking in the high interest rates at the moment unless I actually had to upsize.

If I was downsizing it's a different story.

I think interest rates are probably on their way down and if you can hold out longer I would do.

Personally I would choose to move at the right time for me, not wait for any market changes. Market changes will affect your sale as well as purchase so in the long run, it's unlikely to be material.
You simply need to decide how much you can, and want to, afford and whether it's worth proceeding or not. Nothing new!

I think if I really wanted to move I would make it a 5/10 year plan and be overpaying on my mortgage in the meantime instead of holidays/trips out and reduce the amount of extra debt you have to take on. As others have said any market fluctuations will affect your sale as well as purchase.

I struggle to understand how people are bemused. The answer is op they have more money than you do. You surely don’t think everyone has the same income and outgoings as you?

Lots of people can afford to move - they just earn more than you.
Likewise lots of people would kill for a £400k house and are living in a flat - and there’s lots of people jealous of those people… etc etc

These interest rates aren’t that high compared to the 90s!

I understand you want to move but this particular house sounds too expensive for you once you factor in the renovations.

Interest rates are expected to fall, but not by that much. You are talking about spending another 200k on a new house assuming you could get it for 500k and spend another 100k on renovations. That’s a lot of money! I would be looking for a smaller house or one further out to reduce the price.

I live in the north you can buy an older decent sized 3 bed for 120k

I wonder if we are facing a switch and the north will be the stable home owners

Doubt much will change. Property has always been significantly cheaper in the North than in the South and continues to be so.

@Twiglets1 true our wages would need to increase. It's all relative

Ok I’ll explain better. We can afford it. But currently we have 2 holidays and 2 short breaks per year and we wouldn’t be able to
afford to do all of that. I’m fine with this but my OH who also wants to move, isn’t. I guess the answer is people have a lot more money than we do or they make more sacrifices!

For work reasons I need to be in South and my family including elderly Mum are here. But I do often look at properties in the North and Scotland and im astonished by the difference.

You have just answered your own question......... Some people are willing to make more sacrifices (or they just earn enough money to be able to manage).

i want to move too to a bigger flat but i have only been in my flat for 4.5 years. I have put my flat on the market but expect it would be slow as it is for london flats. I keep telling myself MIL only moved after 7 years and the average flat owner stays in their flat for 10 years.

We have been TTC but not very successful so in a sense that buys us some time. Its only two of us and flat is good enough for that

Ah but in 90s house prices were a lot lower and the average was 3 x salary. Now I’m reading about 6 times salary and longer and longer terms.

Ah good luck with TTC and good luck with selling the flat! We spent loads doing the house up during Covid but we still want to move!

@Cotswoldbee you're right! If we want this we need to get comfortable with less disposable income or earn more x

Put like that, I would go for the "perfect" house as sounds like you can afford it as long as you make some sacrifices like cut back to only one holiday and one short break a year for a while. I've made that same choice in the past and not regretted it despite being hard up financially for a few years. As long as you know it's not forever, it feels ok to not have much disposable income because you are pouring nearly everything into buying the best home you can afford.

I agree with PP that you have answered your own question about how other people afford to move.

Most of the people I know with mortgages in London have ridiculously long terms given that they're in their 40s. You're essentially renting from the bank.

yes but at least the mortgage gets paid off eventually and quicker if they overpay when can afford it, unlike actual renting.

Agree.
Everyone I know has done this and ends up paying the mortgage off years early, even modest overpayments can make a significant difference to the term.
As time goes by and your payments are taking less % of your salary there will always be some who can't (or choose not to) make use of the reduction and instead spend this money elsewhere but if you can do it, it pays dividends.

Property prices are where they are today because of mortgage rates being where they are today. You can wait for mortgage rates to come down, but other people will also be doing that and IF they do, there will suddenly be lots of competition in the market, house prices will rise and that £550k house will be £600k or more.

I don't say that to mean now is a great time to move - I just mean it's always a gamble, and all you can do is weigh up what you can afford and what matters to you.

Although, agree with others above, I don't consider the current interest rates "high". The period of extremely low rates was the anomaly and no-one should expect us to ever go back there. Base your affordability calculations on current rates being "normal" - might go down a bit and you'll feel lucky, but also might go up and make sure that's doable.

Husband and I sold our 1 bed London flat for £310k, upgrading to a 3 bed house in Hertfordshire for £475k. It meant we didn't make any profit but we were taking advantage of selling for lower also meaning we're buying for lower, the house we bought was perfect for us and expect it would be above £500k in different circumstances.

Due to various reasons we ended up having to be on a tracker rate for almost a year so actually fixing at 4.02% for the dream house ended up only being about £500 more per month between the two of us.

As other PPs have said, it was more that it was the right time for us having outgrown our flat after 8 years and the right house came up. We are fully aware this will mean being more conscious of our spending and fewer holidays, nice dinners out etc, but it's a sacrifice we were willing to make to upsize.

How is anyone affording to move right now

By not having two holidays and two short breaks every year.

Saving up for a new house? You visit friends or relatives or have two weeks self-catering in the U.K., and the year you move, you forgo the holiday altogether.

That’s what everyone did before “right now”.

Sorry but I have to ask about the arsehole cat.