Drastic measures by first-time house buyers

[rockits]

A 1-bed flat in noisy Mill Hill or this house in Ipswich next to countryside? Erm let me think.
Check out this property for sale on Rightmove!

That property near us is maybe £750k. A little bit further in then its £850-£900k. We have moved from being born in Edmonton, to Oakwood, to Enfield, to Potters Bar. So a little further out each time but still close enough to it all. We moved to somewhere with a bit more space, privacy a little off the main concrete jungle (which I hate btw!) and it is the best move ever made. I have friends in Winchmore Hill where our place is pretty much twice the cost and doesn't really existing anyway. We still have a hefty mortgage but have plans to deal with that and with mortgage rates low we will make the most of that situation while it is there.

Do I want something that is twice as good IMHO for half the price? Yes, please! Done.

 

[Darrell]

Yeh I completely understand where your coming from, it’s all dependent on the person I guess. I would rather spend half the money on a house slightly out of London and travel in

It’s an age old conundrum.

 

[Deleted member 65149]

It’s an age old conundrum.

It certainly is. Our move out of London after my first wife and I had been born and brought up there (West London) was purely for financial reasons. After four years in the middle of nowhere we moved to a 4-bed detached house in Ipswich itself. But my wife still wasn’t too happy there because all her very close family still lived in London. So I got myself transferred to an office in the City and we moved down to a 3-bed semi in Harrow and a bigger mortgage. Financially a good move (in the time we were there the house value went from £21k to £400k), but wrong for me moving from a nearby job I loved to a horrendous commute to one I disliked. After a total of 40 years in London I have nothing to draw me back there. My second wife and I don’t have any relatives there anymore and our lovely 5-bed house with double garage in walking distance of several lakes would only just buy us Darrell’s 1-bed flat on the outskirts of London.

 

[Darrell]

It certainly is. Our move out of London after my first wife and I had been born and brought up there (West London) was purely for financial reasons. After four years in the middle of nowhere we moved to a 4-bed detached house in Ipswich itself. But my wife still wasn’t too happy there because all her very close family still lived in London. So I got myself transferred to an office in the City and we moved down to a 3-bed semi in Harrow and a bigger mortgage. Financially a good move (in the time we were there the house value went from £21k to £400k), but wrong for me moving from a nearby job I loved to a horrendous commute to one I disliked. After a total of 40 years in London I have nothing to draw me back there. My second wife and I don’t have any relatives there anymore and our lovely 5-bed house with double garage in walking distance of several lakes would only just buy us Darrell’s 1-bed flat on the outskirts of London.

I’ve actually got 2 one beds on the outskirts of London. Which is only a 19 minute train ride into St Pancras.

 

[Steveml63]

It’s all relative I think. The interest rates are so low and house prices so high (in the south east) means that your mortgage will still take up three quarters of your wages!!

Which would be a real problem when interest rates rise!

 

[renault12ts]

Which would be a real problem when interest rates rise!

This is the real problem!

 

[Darrell]

This is the real problem!

It will happen.

 

[Piff]

Who in their right mind would want to live in Ipswich??

Behave!
My first house was in a run down area of Ipswich off London Road - the red light area before a certain Steve Wright gave it publicity and it has now been cleaned up.
I had conversation with our 2 sons a couple of years ago when they were first looking to buy.
I started work on £30/week = £1560/year. I saved a deposit of £1600 in about 2 to 3 years with my then girlfriend and bought our first terraced 2 up 2 down house for £12000 with a £10400 mortgage.
Move on 35 years to around 2015, a similar house could be bought in a run down area of Ipswich for £120000, their wages were in excess of £15600/year, so a ten fold increase on both counts.
Problem is they have had had it too easy and their expectations too high. Don’t want to live in a cheap terraced house. Don’t want to get their hands dirty. Don’t want to sacrifice their nights out to save hard.
When they started work I took “housekeeping” money off them (£200/month) Low in relation to their earnings to what I paid my parents back in the day. Older son accepted easily as he had lived at uni and had an idea of living costs. Younger son was horrified!
We had no need for their money so unknown to them we set up a savings account and banked their money. When they were ready to buy their own houses we gave them the money & interest back (was around £7000 to £7500 each) this helped them increase their deposit to get a lower mortgage rate and furnish their new homes.

 

[NOMONEYBUTAMERC]

Last year we finally paid off our mortgage ( at the age of 65 ) and I have to say it was a great feeling . Two of our three children have recently purchased their first houses , although both had flats with their partners which they have not been able to shift ( the flats that is) at a decent return , so rented them out. Our middle child has two children and is a much lower earner than his siblings. Caught in a catch twenty two as he pays a high proportion of his income in rent , and his salary would not give him a particularly good mortgage. looking at the present gearing of salary/mortgage requirements I do not envy the youngsters at all . Would love to have had interest rates as low as they are now but unfortunately I fear they will soon be heading to a crippling rate for a lot of current buyers.

 

[Scott_F]

We all know that London prices have shot up faster than most of the rest of the country. Even in 1968 when I bought my first house we had to move away from London to afford somewhere, something that others can do too. Where we bought our first place (Ipswich) 1-bed flats are going for £50,000 now. Even 22 year old plumbers could afford that, they just have to get off their mollycoddled backsides.

A flat costing £50k in Ipswich (or anywhere else for that matter) would be in a neighbourhood where no sensible person would choose to live.

 

[Scott_F]

You don’t need to go as far as Ipswich, look up houses in the Northamptonshire country side. Truly stunning and only an hour down to London if you need.

There are some lovely locations there but with 30 minutes to get to your local station, park and get onto the platform and 30 minutes at the other end to get to your work location you're looking at a 4 hour commute every single day on top of a long day's work - and that's before factoring in the inevitable train delays.

So if you're considering moving to an area of cheaper housing away from the Capital, suddenly your country pad "conveniently located only an hour from London" starts to look a lot less attractive.

 

[TheFoX]

The place I sold in 2010 for £280,000 is now worth just shy of £500,000, or half a million beer vouchers, but then who would have the money to buy this place? I know the prices are governed by supply and demand, but if the lowest rung is out of the reach of the next generation of buyers then how can these prices be sustainable?

 

[E53AMG]

Not sure why you think that.

My first flat in 1989 was twice my salary at the age of 22. £25,000

A 1 bed flat in the same area is now £320,000. Show me a 22 year old plumber on £160,000 a year.

BTW I still have that flat!!

My parents first place was a 3 bed bungalow in Hendon. My dad was 23, my mum was 21 and a housewife with a baby. Show me a young couple in today’s climate able to do that.

A 21 year old single mother has just bought a 4 bed detached house 2 houses away from us for £440,000, she has a nice modern car too, not spoken to her yet, at my age she would probably think I'm some old pedo if I did so I only know this as the old 76 year old neighbour selling the house advised me, made me think that school vouchers/benefits must be good these days [emoji6]

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[Deleted member 126251]

The youngsters (I'm generalising) today want it all spoon fed to them.

In my early 20's I never dreamed that I could afford my own house. I didn't have a particularly good education and with the idiotic military commitments in South Africa at the time (after my initial 1 year conscription, 3 month service every year for 10 years), companies were reluctant to hire me as they had to keep the job open while I was doing my 3 months each year.

I was eventually offered a job in construction (totally different to the career in Marketing (proper marketing not what they call marketing today) that I had wanted) living in central Africa in a jungle construction camp.....I took it...it wasn't what i wanted to do but it was a job and paid my bills. Then I went to West Africa and lived in another jungle construction camp. I've worked In Africa, Irian-Jaya (bet you have to look it up ), Kazakstan, Japan, Australia, UK, USA and Holland and much of that time was living away from my family in really crappy conditions.

During the first 20 years of our marriage, we didn't have any fancy holidays, no fancy cars, takeaway and hired videos were a big treat. Fancy nights out & latest fashions were a distant dream. I kept my first TV for 15 years - now they all want the latest and greatest as soon as it is available. You have to make sacrifices to get what you want. I don't think most young people these days are prepared to do that.

However, I was able to put my son through university (no loans to pay back for him), pay the deposit on his first house and I now have a comfortable retirement.

My son was lucky in that I (with my loyal wife of 40 years who has stuck with me through good and bad times) saw to his future but, that is why I worked where I did. He in turn, is a highly successful businessman and and I believe would have made it without my help. So my efforts were not wasted. My son has the same work ethic as I do and I assume that children seeing their parents working hard will do the same when they grow up.

 

[E53AMG]

The youngsters (I'm generalising) today want it all spoon fed to them.

In my early 20's I never dreamed that I could afford my own house. I didn't have a particularly good education and with the idiotic military commitments in South Africa at the time (after my initial 1 year conscription, 3 month service every year for 10 years), companies were reluctant to hire me as they had to keep the job open while I was doing my 3 months each year.

I was eventually offered a job in construction (totally different to the career in Marketing (proper marketing not what they call marketing today) that I had wanted) living in central Africa in a jungle construction camp.....I took it...it wasn't what i wanted to do but it was a job and paid my bills. Then I went to West Africa and lived in another jungle construction camp. I've worked In Africa, Irian-Jaya (bet you have to look it up ), Kazakstan, Japan, Australia, UK, USA and Holland and much of that time was living away from my family in really crappy conditions.

During the first 20 years of our marriage, we didn't have any fancy holidays, no fancy cars, takeaway and hired videos were a big treat. Fancy nights out & latest fashions were a distant dream. I kept my first TV for 15 years - now they all want the latest and greatest as soon as it is available. You have to make sacrifices to get what you want. I don't think most young people these days are prepared to do that.

However, I was able to put my son through university (no loans to pay back for him), pay the deposit on his first house and I now have a comfortable retirement.

My son was lucky in that I (with my loyal wife of 40 years who has stuck with me through good and bad times) saw to his future but, that is why I worked where I did. He in turn, is a highly successful businessman and and I believe would have made it without my help. So my efforts were not wasted. My son has the same work ethic as I do and I assume that children seeing their parents working hard will do the same when they grow up.

That raises another good question, should we be helping our children with deposits to get on the property ladder? My eldest at 21 is just beginning to save for a deposit and is desperate to move with her partner instead of sharing a bedroom.

She is still planning on taking 1 last major holiday this year before committing all her disposable in a lifetime ISA. I commend her for trying to buy than rent and eventually she will inherit from us.

The question is would it be better to try and help her with the deposit now when she needs it or will we be "spoiling her" again, I was thinking of saying whatever you save toward the deposit over 2 years we will match it....

I would be interested in what other parents on here in a similar position have done/think, we did not receive parental help at her age but managed to secure a 100% mortgage with 12% interest rates....

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[Yugguy]

Forced to do overtime???? Does overtime make the poor snowflakes melt?

 

[markjay]

I think the issue is slightly more complicated than that.

There is no shortage of affordable housing.... but people don't want to live there.

People rightly want the best jobs, and these tend to be in or near our main cities.

So house prices in London are rocketing due to demand, while house prices in Grimsby are plummeting due to lack of demand.

I think the term 'housing crisis' is misleading, instead the 'housing-jobs balance crisis' is more appropriate.

Nothing wrong with house prices in the UK as such:

Top 10 most affordable places to live - Zoopla Mobile

....apart from the fact that the good jobs are not spread across the country.

 

[Rich H]

The price of houses is linked to the availability of borrowing.
If you couldn't borrow the money they wouldn't be able to ask the high prices.
When we bought our first house the mortgage was limited to 2.5 times the higher salary or 2 times the combined salaries (or something similar).
If that was still the limit then house prices wouldn't be as high because not enough people would be able to afford them.

And I expect to help our daughter out with a deposit. Although it may depend upon how I feel about whoever she is buying with.

 

[E53AMG]

The price of houses is linked to the availability of borrowing.
If you couldn't borrow the money they wouldn't be able to ask the high prices.
When we bought our first house the mortgage was limited to 2.5 times the higher salary or 2 times the combined salaries (or something similar).
If that was still the limit then house prices wouldn't be as high because not enough people would be able to afford them.

And I expect to help our daughter out with a deposit. Although it may depend upon how I feel about whoever she is buying with.

I think it was 3x salary or 2.5x joint, if I help with deposit will insist she buys as Tenant in Common, her partner will be matching her deposit including our contribution.

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[Rich H]

I think it was 3x salary or 2.5x joint, if I help with deposit will insist she buys as Tenant in Common, her partner will be matching her deposit including our contribution.

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It would be something like that or if the partner couldn't match the deposit I would want to own a share so that if they split up the partner wouldn't end up with my money.
Maybe I shouldn't be so pessimistic.