How do people afford to buy a house?
Discussion
Fortunately we have been on the housing ladder long enough to own outright one but I was curious as to what I could afford if we didn’t.
I don’t want to disclose my income but according to statistics on the internet (for the U.K.) it is in the top few percent. I plugged in my net income and a deposit of £100,000, which I thought was pretty decent (presumably not many buying without rolling over a gain on a previous property will have £100,000 lying around).
The only filter was for two bedrooms as I have a child.
Pretty much all that was coming up as within my budget were smallish flats and some small houses next to the airport. The bank website I was using shows available properties as a circle, with unaffordable in red, on the limit in yellow and affordable in green. It was depressing to see so many red circles with just a few with the odd sliver of green.
How are people on average or below average incomes able to buy anything?
More than that, is it not depressing for people trying to work their way up to see that even if you do earn a decent wage your buying power is pretty pathetic. I suspect the only way to get a decent home, short of getting into the top 0.1% of earners, is to be bequeathed a house or cash equivalent.
I don’t want to disclose my income but according to statistics on the internet (for the U.K.) it is in the top few percent. I plugged in my net income and a deposit of £100,000, which I thought was pretty decent (presumably not many buying without rolling over a gain on a previous property will have £100,000 lying around).
The only filter was for two bedrooms as I have a child.
Pretty much all that was coming up as within my budget were smallish flats and some small houses next to the airport. The bank website I was using shows available properties as a circle, with unaffordable in red, on the limit in yellow and affordable in green. It was depressing to see so many red circles with just a few with the odd sliver of green.
How are people on average or below average incomes able to buy anything?
More than that, is it not depressing for people trying to work their way up to see that even if you do earn a decent wage your buying power is pretty pathetic. I suspect the only way to get a decent home, short of getting into the top 0.1% of earners, is to be bequeathed a house or cash equivalent.
It depends on where you're looking doesn't it. My first home was a three bed flat which I bought for £58k with a 15% deposit. I could nearly have bought two if I'd had £100k in cash.
My second home was a three bed house for £140k. Neither seem particularly unaffordable. When people say they can't afford to get on the housing ladder that includes people who can afford to get on the housing ladder, but not for the house they would like. I'm in my 20s but get bored when I hear complaints about how unattainable home ownership is when they're referring to wanting to buy a £300k detached as their first home. But again, this is a regional problem.
My second home was a three bed house for £140k. Neither seem particularly unaffordable. When people say they can't afford to get on the housing ladder that includes people who can afford to get on the housing ladder, but not for the house they would like. I'm in my 20s but get bored when I hear complaints about how unattainable home ownership is when they're referring to wanting to buy a £300k detached as their first home. But again, this is a regional problem.
It is very hard for sure.
Quite a lot of young people can claw their way into the ladder by buying into shared ownership schemes designed for FTBs and so on. Then aim to ladder up over the years. To do this they’re overpaying for new builds that are in -ve equity out the gates. Wow betide them if they need to move for work….
It does all seem broken to me. Houses are too expensive in the south. I don’t think it good for society.
Quite a lot of young people can claw their way into the ladder by buying into shared ownership schemes designed for FTBs and so on. Then aim to ladder up over the years. To do this they’re overpaying for new builds that are in -ve equity out the gates. Wow betide them if they need to move for work….
It does all seem broken to me. Houses are too expensive in the south. I don’t think it good for society.
stuthe
said:
said: Houses are too expensive in the south. I don’t think it good for society.
I think realistically house prices in the south east of England are at least double what is long-term sustainable. We live in a larger than average but otherwise unremarkable modern detached family house in a moderately (but not excessively) nice bit of suburbia of a fairly average southern city, and our house is ridiculously close to having a value in seven figures. We have a household incoming a little above the national average and there's no way we could afford to buy anything around where we live if we were starting out now.
Edited by kambites on Sunday 30th July 10:55
Skeptisk said:
Fortunately we have been on the housing ladder long enough to own outright one but I was curious as to what I could afford if we didn’t.
I don’t want to disclose my income but according to statistics on the internet (for the U.K.) it is in the top few percent. I plugged in my net income and a deposit of £100,000, which I thought was pretty decent (presumably not many buying without rolling over a gain on a previous property will have £100,000 lying around).
The only filter was for two bedrooms as I have a child.
Pretty much all that was coming up as within my budget were smallish flats and some small houses next to the airport. The bank website I was using shows available properties as a circle, with unaffordable in red, on the limit in yellow and affordable in green. It was depressing to see so many red circles with just a few with the odd sliver of green.
How are people on average or below average incomes able to buy anything?
More than that, is it not depressing for people trying to work their way up to see that even if you do earn a decent wage your buying power is pretty pathetic. I suspect the only way to get a decent home, short of getting into the top 0.1% of earners, is to be bequeathed a house or cash equivalent.
With a deposit of £100k and a salary high enough to fund a 90% mortgage, there's not that many places in the UK you wouldn't be buying the best place in town. I don’t want to disclose my income but according to statistics on the internet (for the U.K.) it is in the top few percent. I plugged in my net income and a deposit of £100,000, which I thought was pretty decent (presumably not many buying without rolling over a gain on a previous property will have £100,000 lying around).
The only filter was for two bedrooms as I have a child.
Pretty much all that was coming up as within my budget were smallish flats and some small houses next to the airport. The bank website I was using shows available properties as a circle, with unaffordable in red, on the limit in yellow and affordable in green. It was depressing to see so many red circles with just a few with the odd sliver of green.
How are people on average or below average incomes able to buy anything?
More than that, is it not depressing for people trying to work their way up to see that even if you do earn a decent wage your buying power is pretty pathetic. I suspect the only way to get a decent home, short of getting into the top 0.1% of earners, is to be bequeathed a house or cash equivalent.
But most people don't have a massive income, and if they are renting don't have money to spare to put down as a deposit, so yes it can be impossible.
If people are serious they will cut all expenditure to the bone, to.build a deposit, work 2 jobs, butter up thier relatives, try to get promotion at work, through extra qualifications, or hard word, or back stabbing thier Co workers.
Our house sale fell through because the first time buyers at the bottom of the short chain had the valuation come back £10k low and thier vendor (our buyer) won't budge. We've offered to come down £2.5k.
Those first time buyers sound pretty flaky. Their deposit is a gift in lieu of future inheritance, and according to our agent, they are restricted in which lenders they can use. They clearly haven't got a pit to piss in, and finding £7.5k isn't possible.
On the other hand my daughter has saved over a years salary in the 5 years since she graduated, by not having the latest car on PCP and not having the latest gadgets.
But she has a clear view of what her target might be (my wife has indicated that we might gift her money but that just delays my retirement. But her boyfriend of a year is a few years younger but there's family money, so i reckon in a few years (2 or 4) they will make the move onto the ladder together. (Or not)
But it depends where they end up living too. Avoiding the south would seem a great idea.
My boy’s managed it. He and his girlfriend saved hard, put down a decent deposit and signed up to an eye watering (to me) mortgage on a two bed new build terrace. Both are very happy, both can comfortably afford their bills - they did an awful lot of research before hand - and all without any financial help from anyone.
So it can be done.
So it can be done.
Puzzles said:
If you’re on an average salary, you might need to team up with a partner and be flexible on location.
Simple as that.Its doable. I'm an average earner and we have a house.
Its not located where I'd choose if I were rich, not is it the size I would ideally like but there you go.
2 incomes, savings, compromise with holidays/cars and a reality check ref size/location and it can be done.
Is it ideal? Absolutely not but I've little other choice without a huge cash windfall coming way (no chance!)
just don't live in the south east easy. Just a few tins of paint and away you go, sort out the kitchen when you get a bit more cash.
https://www.rightmove.co.uk/properties/134767070#/...
https://www.rightmove.co.uk/properties/134767070#/...
I feel so sorry for young folk, rent being more than mortgage means many are trapped
If you both worked in Tesco full time in southampton for example, didn’t have help from family and you had kids you’d probably be very lucky to get a mortgage
Some people say you shouldn’t have kids until you have a house, but it’s making the window for doing this very small for some
Having lived on an estate with social housing it’s very frustrating, those not putting in the effort get a nice house given to them, breed away and get a better house.
Young sensible people who work, get sod all and then can’t afford to or won’t have kids because their environment isn’t right
If you both worked in Tesco full time in southampton for example, didn’t have help from family and you had kids you’d probably be very lucky to get a mortgage
Some people say you shouldn’t have kids until you have a house, but it’s making the window for doing this very small for some
Having lived on an estate with social housing it’s very frustrating, those not putting in the effort get a nice house given to them, breed away and get a better house.
Young sensible people who work, get sod all and then can’t afford to or won’t have kids because their environment isn’t right
I feel lucky I got on the ladder as I couldn't afford it now. It got to a point where I was in my 30's living with my parents then brother saving £1000/month which sounds great but houses in my budget were going up £800/month.
I feel sorry for renters too. £1200/month for a basic house here in Cardiff if you can find one likely to be nearer to £1500. How a working class family affords that I don't know.
I feel sorry for renters too. £1200/month for a basic house here in Cardiff if you can find one likely to be nearer to £1500. How a working class family affords that I don't know.
Trendsetter said:
It depends on where you're looking doesn't it. My first home was a three bed flat which I bought for £58k with a 15% deposit. I could nearly have bought two if I'd had £100k in cash.
My second home was a three bed house for £140k. Neither seem particularly unaffordable. When people say they can't afford to get on the housing ladder that includes people who can afford to get on the housing ladder, but not for the house they would like. I'm in my 20s but get bored when I hear complaints about how unattainable home ownership is when they're referring to wanting to buy a £300k detached as their first home. But again, this is a regional problem.
Very much this. There are still very affordable places to live in the U.K. you won’t be buying anywhere close to London that’s for sure but the further North it would be easier to get on the ladder. My second home was a three bed house for £140k. Neither seem particularly unaffordable. When people say they can't afford to get on the housing ladder that includes people who can afford to get on the housing ladder, but not for the house they would like. I'm in my 20s but get bored when I hear complaints about how unattainable home ownership is when they're referring to wanting to buy a £300k detached as their first home. But again, this is a regional problem.
Spare tyre said:
If you both worked in Tesco full time in southampton for example, didn’t have help from family and you had kids you’d probably be very lucky to get a mortgage
If it pays £11 an hour, they both work 37.5hrs a week they might be able to get a mortgage of £193-£214k. You’d get a 3 bed house for 200k-210k in Southampton.
Id be snookered if i wanted to buy now. Would have to live in a tiny flat.
Mrs and I bought 10 years ago for around £200k, 3 bed semi, southheast, near motorway and station iish. Similar houses are now £350k but our income hasn't changed. 1 bed flats in the area are £150k+. We had 20% to put down back then about 2/3rd savings and 1/3rd my dads share of my nans house when she passed. So even then we had help.
We were looking at moving soon but our fixed rate ends in Feb and interest rates are shi'ite. Reallly wanted that house with a big garage or space to build one!
Mrs and I bought 10 years ago for around £200k, 3 bed semi, southheast, near motorway and station iish. Similar houses are now £350k but our income hasn't changed. 1 bed flats in the area are £150k+. We had 20% to put down back then about 2/3rd savings and 1/3rd my dads share of my nans house when she passed. So even then we had help.
We were looking at moving soon but our fixed rate ends in Feb and interest rates are shi'ite. Reallly wanted that house with a big garage or space to build one!
We are in the southeastern suburbs of London and have been fairly lucky, I bought my first house in 2005 when 100% mortgages were still a thing. It was a small 2 bed terrace that was halfway to falling down. When the 2008 banking crash happened I sold my car, bought a push bike and lived on tinned beans for a while so I could pay the mortgage and bills. It wasn't great but a couple of years later the work I had done to the house and the increase in house prices gave me 20% equity and the mortgage came down quite considerably.
My now wife came into some money from an inheritance so we moved into something a little bigger in a nicer area. If you believe the figures on right move we own about 50% of this house but most of that has come from the increase in its value not paying down the mortgage. We have 2.5 years until our 5 year fixed rate is up so we are saving every penny we can to pay a chunk off and reduce the impact of the rate rises.
My little brother is looking to move out of my parents house now, he's worked for 7 years, has a good job and managed to save £40k+ but can't get a mortgage for a 2 bed flat. Admittedly he could quite easily buy something like my first house but wants something nicer with parking which is fair enough.
2 bed flats, admittedly nice ones are £300k+ around here which is an obscene amount of money.
My now wife came into some money from an inheritance so we moved into something a little bigger in a nicer area. If you believe the figures on right move we own about 50% of this house but most of that has come from the increase in its value not paying down the mortgage. We have 2.5 years until our 5 year fixed rate is up so we are saving every penny we can to pay a chunk off and reduce the impact of the rate rises.
My little brother is looking to move out of my parents house now, he's worked for 7 years, has a good job and managed to save £40k+ but can't get a mortgage for a 2 bed flat. Admittedly he could quite easily buy something like my first house but wants something nicer with parking which is fair enough.
2 bed flats, admittedly nice ones are £300k+ around here which is an obscene amount of money.
House prices in isolation might be a regional problem that affects the SE in particular, but there's no doubt salaries are higher here. I'd probably earn less than 2/3 of my London salary if I did the same job in (randomly chosen) Doncaster. And whilst housing might be cheaper oop north, every other essential costs roughly the same. It's not always that easy to move, you lose easy access to all your friends and quite likely family, and have to start over with a whole new life really. And once you've gone to a cheaper area, you can kinda get stuck there as it's even more expensive to move back later on.
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