How does anyone ever afford to buy a house? (slightly ranty, sorry)

tbh, I would have thought it is standard that if you want to buy the rest of the property then you will be paying market value

L
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Some might not realise it, my friend certainly didn't. She bought her 50% for £60k if i remember right and then she thought "ok, I can afford the other £60k now" Only it wasn't £60k any more, it was now over £100k. So she was never going to be able to afford the other half.

So, did she think that if she sold the place, she would only have to repay £60k? A system that is based on percentages ought to be quite clear.

L
xx

Exactly - plus if she owned 50% then presumably it meant that the market value of the total flat at the point she wanted to staircase was £200k, so her property had increased in value by £80k, meaning that her original investment of £60k had increased by £40k.

I was lucky and had help from parents when I bought my first flat with my now ex boyfriend. It was 6 or 7 years ago and although we could have managed to buy on our own, it would have had to be in a much less desireable area. We bought a one bed flat for £177k. His dad got a loan on his house for £100k which my ex repaid each month and I had the remaining £77k on a mortgage. We split up about 3 years later and sold the flat and the profit I made went down as a deposit on a new flat. 2 years on and I'd now probably need 2 or 3 times that amount as a deposit. Actually, I probably couldn't even get a mortgage on my own now.

We were lucky I suppose. We bought in 1998 when prices were nice and low. We were both undergrads with no income so his parents acted as guarantors (they didn't actually help us financially just signed to say that they would take responsibility if we did't pay the mortgage). It was a 100% mortgage as we had no deposit. Over 10 years later and it's worth a lot more despite us remortgaging (and getting rid of the guarantors!). We've now moved down south and have let it out while we rent. The rent covers the mortgage and agency fees with about 80 quid left over as "profit".

We're not looking to buy again yet as we're both on contracts but hopefully when we do we'll have a nice big deposit from the sale of our flat. We wouldn't have a hope in hell just now as a) we wouldn't make enough from the sale to have a big enough deposit and b) the flat probably wouldn't sell easily at the moment anyway.

For us it was compromise - by moving into Bedfordshire rather than Hertfordshire, property was over 25% cheaper, yet only 4 mins more on the train (still within 30 mins of London). it's not my ideal village but it was important for me to get on the property ladder - it's also worked out more beneficial as house prices are falling, in that it wasn't as "overpriced" as nearby areas and property prices hasnt dropped narly so far.

Reading this thread, going to Uni for 6 years has a lot to answer for!

It seems those who got on the property ladder younger either didn't go, or somehow managed to graduate with savings or at least no debts.

Pah, someone should've told me that 10 years ago!

? Uni is worth it in the long run though. A friend of ours did 4 years at uni and never graduated. I now earn twice what he does because my degree has opened up so many more doors. I did come out with debts, but was lucky enough to be eligible for the RTL scheme so the only thing I had to pay back was my overdraft. That said, living in London means we're still not on the property ladder and won't be til we leave London. H and I both earn a decent wage, but even on good salaries we haven't got enough spare every month to do any decent saving towards a deposit.

H and I both spent 5 years each at uni - however, like Mel we were lucky enough to get on the RTL scheme after our PGCEs, so no loans to repay, and we both got Golden Hellos which we used as our deposit on our first house. It is very rare for us to have that kind of luck, as there were only ever about two years where teachers were eligible for both incentives! We also moved to a deeply unfashionable town, as opposed to the nicer places nearby, so £5000 was enough for a 5% deposit on a terrace. Not really possible right now. Although the house we bought for £97000 had been £34000 three years earlier, so there's always something to be annoyed about...

Is the RTL thing a teacher thingy?

I'm still peed off after finding out I'm not a key worker.

Yeah, I'll remind whichever twat decided that when they want me to see them in A&E in the middle of the night.

(I can see why they don't want e.g. Consultants applying - though why would they?? - but surely you can just cover that by having a maximum wage limit?)

Yes, stands for Repayment of Teachers' Loans. I also got a Golden Hello, but that went on paying off overdraft after not earning anything for the two months between graduating and starting my first teaching job. At the time, H was earning a pittance and his net wage didn't cover our rent and council tax.

Being old has a lot to ans for! My deposit of 10% was only 6k on my 1st property. But I was another one that bought before a lot of my peers did, and lived somewhere less trendy so I could afford to buy. But at the time I also didn't need to push myself and despite my salary only being about £16k at the time I could afford a mortgage, I know I couldn't do that now.

Its all about compromise, on location, on lifestyle whilst saving and once you have moved in. Its not easy but I think that as a society we expect a lot more than our grandparents did. So what if our children have to share a room and have no outside space it won't affect their development.

I hear you SC, unfortunately we already like in one of the most deprived areas of London and eat only value own brand foods, not sure what else we can do?!

I shared a room until I left home, and actually I think I would actively encourage my kids to share bedrooms, I honestly think me and my sibs are much closer because of it.

A garden would be nice, but at this stage a 2 bed flat in our borough is what we're aiming and hoping for....

Well I don't think I'm old ? I'm 29 and H certainly isn't - he's 26!

i went to uni for 4 years but graduated with no debt and no loans - H didn't go to university.

His job has always been highly paid though so we've been lucky - although my lack of debt was more management than luck!

Any clever secrets you want to share? ?

I have spent my whole life living off beans on toast, never been on a holiday that cost more than £100, drive a banger etc etc..... And worked 3 jobs all through Uni! Not sure what else I could possibly have done?

? erm worked crap jobs over summer holidays that paid a fortune because no-one wanted to do them (like worked in a dog food factory - I made £8k in 10 weeks doing that one!)

Didn't drive and used subsidised student public travel.

Worked a pub job 5 days a week and got fed there...

Nothing really - did you go to Uni in London? I was in Leeds so imagine there were price differences

I also went to uni for 5 years, H for three. And I do have some debt (mainly student loans) but also worked my way through uni - like hectate, horrid jobs but paid well or provided me with lots of hours. i also have never had a new car, and until this year when i needed one to get to work survived without for 4 out of my 5 working years.

Yep, done the crap jobs, done the public transport (learnt to drive after graduation), didn't do getting fed at work - that's a good one!

Yeah, I think it's a) being in London (rent 4k for starters...) b) doing a degree with no fricking holidays and c) doing a bloody long degree (6yrs)!!

We were lucky in that we could take advantage of 100% mortgages, but less lucky because a two-up, two-down cost us £119k in 2004. Okay, I could have lived in a cheaper area but chose not to. I was a student when we bought our house, and OH had an okay-ish job. It took some wrangling to get than on a non-guarantor basis. And then we took out a small loan to renovate the house, sold it for a nice profit and bought a larger house in Leeds. And the day we moved in, Northern Rock went down the tubes ? Talk about timing ?

TBH - buying a house young (I was 24) has its downsides, and whilst I like being able to put up stud walls with the rest of them, some of the other financial sacrifices we made have been quite tough. Not sure I would do it the same again if I had the choice.

I'm not sure I'd buy a house young if I had my time again either. stress you don't really need to be honest.

If it helps, I always find the people who harp on about you having to own a home usually come from background where homeownership wasn't the norm, so doing it is seen as an achievment - its like they only had one shot at doing it- even if it doesnt work out to be the most sensible thing to do. They know this, so they try and make up for their inadequences by making others feel bad ?

I have very close friends who I've only found out due to circumstances changing (selling the house, or losing their jobs) that they didn't have mortgages, they bought their London flats outright. You'll notice those people don't usually give a flying feck whether their friends own or rent.

I can't answer the actual question as MrH put down a 10% deposit on our flat as he used to earn far more- but most of my friends (we're all in London too) bought with 100% or 110% mortgages with friends/ partners. My best friend bought her flat in new cross 5 years ago for 160k and both her and the friend she bought it with earned 18k at the time.

Scrimped and saved and lived with parents - thn luckily got onto the ladder in 2000 before prices rocketed.

But it was hard and we were terrified we couldn't afford it.

Agreed H, if we'd stayed in our pokey rented flat for a few more years we'd have paid all our other debts off, and been able to move now to near where my job is, then again, I wouldnt have my kitchen!

Yours on the market?

And it is one bad arse kitchen!

our should be up by the end of the week, need to get the EEC thingy bobby.

we are really bad at home improvements, even at times when we've had the spare cash its not been done. Part of the reason I am happy to rent again is so someone else does it for us! ?

I don't really regret it as I guess the money would have been wasted otherwise, but its been stressful.

Eek, it takes ages to rent. We're (I am) thinking about doing the same as you to move sooner for about a year, in about a years time, so may be picking your brains for advice!

I managed to afford it by:

1. Buying in 2000 when prices were cheaper (my 2 bed house was £77k)
2. Saving up a 5% deposit which was acceptable then. I actually saved up nearly 10% but some of it went on fees etc. That took me a year or so to do.
3. I stayed living with my Mum so I could save as much as possible.
4. I got a second job as a bar maid to get some extra cash.
5. Buying a house that needed work doing. This meant I could afford the house I wanted in the area I wanted. It took me nearly 4 years to get it how I wanted it.
6. I then lived very close to the breadline for about 18 months until my salary crept up a bit and things got more comfortable. My weekly shop was about £12-£15 then!

Just to add another perspective to the shared ownership debate. I was a public sector employee on a low salary when I went for SO and it's the best thing I ever did. I kept the flat for 3 years and then sold my 50% share and moved on.

R-A I sympathise, although I think you'll be better off in the long run as you'll be able to get a much more reasonable price when you eventually do buy while lots of people who scraped to get on the property ladder in the last couple of years may end up in negative equity.

I bought my first place fresh out of uni. I did an English degree so managed to hold down an almost full time job whilst reading and writing in the evenings. I got little or no sleep when you consider the social side also, but it Meant i could take my full Loan, put it into high interest bonds, work to pay my rent, spending money etc and come out of uni with a £10k deposit. I bought a flat in bath, a year later sold it, bought a house needing work next, used my equity for the work and got a 100% mortgage. Sold that 18 months later and made a nice sum which was used as a deposit on my current property. with job rises occuring concurrently, we have moved quite swiftly up the ladder (3 properties, in 3.5 years). However, given the current climate, i can't continue in this way as my house now, which i have been in a year, we'd probably only break even on. And I bought this hoping to move on again in a year or so as we could see where to add value, but didn't fall in love with it as our home. Although i moved up the ladder from a 1 bed flat to a large 3 bed house in the same area, I could have done it if i hadn't have been able to save at uni, if 100% mortgages weren't available and if i wasn't with someone who could share the mortgage payments with me!

R-A there was a tv programme called pay off your mortgage in 3 years on bbc2 and there were some good ideas in it for really living to save. Was quite interesting (none of them had big mortgages though) and all of the people they chose had another skill (like being a musician!)

You may also need to think out of the box as they say does your OH need to work from home, could he share space in some community type project / teach at people's homes, then suddenly 1 bed to rent / buy is more feasible.

Also, both me and H went to uni, both graduating in 2000. In mid 2000 I could've bought a terraced house for £45k, I didn't as it went to a bidding war and the house was sold to a girl \i worked with for £60k. At the time I thought this was overpriced so pulled out. She sold it in 2002 for £120k ?

Luckily, by investing in university degrees both me and my H have both got jobs in which we earn a salary that we wouldn't earn if we weren't dregree educated (my H a barrister and me a nurse). To me it seems that a degree is a pre requiste for a high paid job so well worth the investment.

It might have helped that we both started uni the year before the govt brought in tuition fees so student loans went on rent and booze!

Sorry to everyone else to bounce this again

R-A Have yoiu actually read the Evening Standard or the Metro recently??? Only today on one of my rare train journeys in the metro was full of adverts for various shared ownership schemes, how to get grants to help you buy ads and all sorts of other things that possibly mean you haven't looked further than the local estate agents. Anyhow may I suggest you have a look at them?

SC thanks for your continued input.

We haven't been looking too much into specifics (although I have perused several of the SO links on this thread: haven't yet found anything in my borough) because we are not in a position to move currently. We simply couldn't afford to and I haven't yet heard whether I've got a job for the next year. Mortgage wise, H has only been self employed 18 months and most lenders want at least 3 years accounts, and my salary would only get us a mortgage to buy a shed currently ?

I try to avoid the Evening (sub)Standard if possible (it just gives me rage) but I am honestly grateful for the recommendations.

Unfortunately I have a nasty feeling that by the time we can afford to move, everyone else will too, so these nice attractive looking offers might not still be around ☹️