Mortgage Rate Rises

[gazref]

I am not saying it isn't harder and for a single person it is really difficult unless you are on a good wage but for two people working getting on the ladder with a 190k house is easy. Even a single person living at home with parents could make it on a decentish wage.

If I was in my mid twenties on average wage of 30k with a girlfriend on similar we would be in our bought house withing two years and even that would get something towards the south too.

The average house price is 300k at the moment. Take home between a couple on 30k each would be around 4k a month. Easily between both you can save 1k a month so in two years you have 25 grand. Just a quick gander on Barclays and they would lend 225k to buy a house worth 250k.

On current interest rates that is 1.1k a month on a 5 year fixed rate 30 years. More than manageable for a couple with no kids bringing in 4k a month.

Get a house worth just 200k and you are looking at £889 a month mortgage on 30 years. Again more than manageable.

Problem is especially for youngungs living at home you can have a very rich lifestyle on a modest wage but they do not want to make the sacrifice to get a home of their own.

I hear you about the at home millionaires. I've known a few. You're focusing on the penny's not the pounds though. This tighten your belt schtick is an over simplification. Don't lose sight of the fact it's gotten harder than it was. Houses prices have increased, wages haven't kept pace, supply is tighter forcing rents up and the state has been cut to the bones and now provides less support to people.

Straight away the solution you math'ed was based on 2 incomes. My dad's generation did it on a solo income. He earned 23k/yr, on a good year, when offered that council house.

So let's thanos single people or people with kids from getting on the property ladder and explore the non wasteful TV buyers on 2 x income.

30k each a year/ 2kmonth/ 4k combined. Let's hope no one splits up or gets pregnant for the purpose of this example. 500 each saving for your 2 year deposit drive leaving you with 1500.

As we're all about fiscal responsibility we're doing pensions, say we're 27, about 300 month will roughly see us maintain that 2k month in retirement.

Living at home is considered a leg up, not viable for everyone so rule that out. 1200 for somewhere to live, something to drive(fuel-insurance), food, clothes, holidays, hobbies & nights out. Assuming a stable relationship and no one loses a job then yes the deposit could be saved. Would take some long term dedication and commitment to a no frills life style but doable to the job and relationship secure. At the same time you have to agree a netflix subscription or a flat screen TV isn't going to be why it doesn't work. The 2 x income and splitting costs is what stirs the drink in your example.

My dad did it on one income with kids. You point out it can be done on two without kids. At this rate are throuples going to a thing for the upcoming generation?

 

[adam cool dude]

£45k on a 60 hour week is only £14.40 an hour. You are only pulling in that wage by doing 50% more hours than is typical.

If you did normal working. Hours you’d only be on £30k. Not everyone lives to work.

I 100% agree with that but then don't expect to be able to buy a house either. You cannot have your cake and eat it without a correct education that leads to better paid jobs. This is a way however for people who are not educated to degree level. You can also use it as a way to fund education too if you wanted to pursue something else as you can do mega hours in a short period and have more days off to learn.

There are plenty of jobs near London paying £20+ an hour and some of the "own house" logistic operations pay extremely well for not a lot of hours. Tesco, Royal Mail etc.

That £14.40 an hour is purely entry level it does scale somewhat when you get into better jobs like tankers, HIAB, cranes etc but there is obviously a ceiling. Also trucking is a weird industry because you get paid from the minute you leave to the minute you come back so even though you may potentially be away from home for 50-60 hours a week. The actual work you do may only accumulate to 30-40 hours.

I did a 13 hour day (7 hours were driving) yesterday but only worked for 9 of them so 4 hours was me going for a walk, watching movies, playing Switch and posting rubbish on forums . Then while I am driving I am getting paid to listen to podcasts and Radio 2.

 

[IvanDobskey]

I was 29 when I bought my first house, on my own and earning a very basic wage of around 16k. I saved the 11k deposit and bought the house for 72k. Only a basic two bed semi, but it was mine. Mortgage payments were nearly £400 a month. I had to make a lot of sacrifices to get on the housing ladder. The early years were tough, had to count every penny.

But it was all worth it. As my pay went up, I started to make overpayments and in the end cleared my mortgage after 17 years. I then met my Mrs and we saved some money together and bought a four bed detached which have nearly paid off now.

I feel a lot of young people today don't want the sacrifices and want nice things instead of saving and commitment to long term.

 

[adam cool dude]

I hear you about the at home millionaires. I've known a few. You're focusing on the penny's not the pounds though. This tighten your belt schtick is an over simplification. Don't lose sight of the fact it's gotten harder than it was. Houses prices have increased, wages haven't kept pace, supply is tighter forcing rents up and the state has been cut to the bones and now provides less support to people.

Straight away the solution you math'ed was based on 2 incomes. My dad's generation did it on a solo income. He earned 23k/yr, on a good year, when offered that council house.

So let's thanos single people or people with kids from getting on the property ladder and explore the non wasteful TV buyers on 2 x income.

30k each a year/ 2kmonth/ 4k combined. Let's hope no one splits up or gets pregnant for the purpose of this example. 500 each saving for your 2 year deposit drive leaving you with 1500.

As we're all about fiscal responsibility we're doing pensions, say we're 27, about 300 month will roughly see us maintain that 2k month in retirement.

Living at home is considered a leg up, not viable for everyone so rule that out. 1200 for somewhere to live, something to drive(fuel-insurance), food, clothes, holidays, hobbies & nights out. Assuming a stable relationship and no one loses a job then yes the deposit could be saved. Would take some long term dedication and commitment to a no frills life style but doable to the job and relationship secure. At the same time you have to agree a netflix subscription or a flat screen TV isn't going to be why it doesn't work. The 2 x income and splitting costs is what stirs the drink in your example.

My dad did it on one income with kids. You point out it can be done on two without kids. At this rate are throuples going to a thing for the upcoming generation?

You keep looking into the past. That time has gone at least for the next 20-40 years. I am merely trying to point out that it is not doom and gloom and it can be done quite easily with the right mind set. Obviously working in Asda from 9-5 will just not cut it now.

 

[200sols]

I was 29 when I bought my first house, on my own and earning a very basic wage of around 16k. I saved the 11k deposit and bought the house for 72k. Only a basic two bed semi, but it was mine. Mortgage payments were nearly £400 a month. I had to make a lot of sacrifices to get on the housing ladder. The early years were tough, had to count every penny.

But it was all worth it. As my pay went up, I started to make overpayments and in the end cleared my mortgage after 17 years. I then met my Mrs and we saved some money together and bought a four bed detached which have nearly paid off now.

I feel a lot of young people today don't want the sacrifices and want nice things instead of saving and commitment to long term.

In which year did you buy this first house?

 

[matt100]

I was 29 when I bought my first house, on my own and earning a very basic wage of around 16k. I saved the 11k deposit and bought the house for 72k. Only a basic two bed semi, but it was mine. Mortgage payments were nearly £400 a month. I had to make a lot of sacrifices to get on the housing ladder. The early years were tough, had to count every penny.

But it was all worth it. As my pay went up, I started to make overpayments and in the end cleared my mortgage after 17 years. I then met my Mrs and we saved some money together and bought a four bed detached which have nearly paid off now.

I feel a lot of young people today don't want the sacrifices and want nice things instead of saving and commitment to long term.

Really? This again?

Ok lets do the maths for the bitter oldie once again.

lets say you've had this second house for 7 years to make the maths easier, I suspect it was much longer so the maths are more extreme.

In 2000 the average wage was £18k, the average house was £75k or 4.1x

Today the average wage is £34k, the average house is £300k or 8.8x. Over double.

So tell us again oh excellent saving one how lazy and uncommitted the younger generations are to the thing they can't buy?

Jesus christ does posting this stuff make you feel better about yourself?

 

[GordyR]

Between two people on the same easily 1k a month.

4k a month take home between the two. 1k on rent, 1k on bills, 500ish on everything else. £1500 left over for the month. It's not hard but you need to be frugal for a good 2-3 years which is easier said then done but after those 3 years you are paying off your own mortgage instead of someone else's.

Average rent is £1,223 per month. Kids? Childcare? Surely having children should be doable for an average earning couple? Add those in to the mix and that couple won't be anywhere close to being able to keep up with house price rises, especially if we're a little bit more realistic about the costs involved in making that purchase. i.e it's not just a 10% deposit that's required.

You're right that it's not impossible for a dual wage, average earning couple, with no children and under specific circumstances, in specific parts of the country. But the cirumstances that allow it have become far less common and squeezed to the point of breaking; which is why there's now such a hugely increasing gap between those who are able to own with the help of mum and dad, and those who simply will never have a shot in hell.

I say this as someone who acknowledges that in comparison, I had it extremely easy. Buying my first house for £350k many years ago, while at the time on a low six figure salary, and with a wife on an average wage, who back then didn't want children.

 

[Freakbro]

I think people just don't realise how quickly and large the gap with housing affordability has grown even in the last decade

 

[Dis86]

I think people just don't realise how quickly and large the gap with housing affordability has grown even in the last decade

I remember having a convo with someone on here and he just couldn't grasp how much more housing costs as a percentage of average income vs when he bought 30/40 years ago. Just kept banging on about interest rates then vs now.

 

[413x]

Average rent is £1,223 per month. Kids? Childcare? Surely having children should be doable for an average earning couple? Add those in to mix and that couple won't be anywhere close to being able to keep up with house price rises, especially if we're a little bit more realistic about the costs involved in making that purchase. i.e it's not just a 10% deposit that's required.

You're right that it's not impossible for a dual wage, average earning couple, under specific circumstances, in specific parts of the country. But the cirumstances that allow it have become far less common and squeezed to the point of breaking; which is why there's now such a hugely increasing gap between those who are able to own with the help of mum and dad, and those who simply will never have a shot in hell.

I say this as someone who acknowledges that in comparison, I had it extremely easy. Buying my first house for £350k many years ago, while at the time on a low six figure salary, and with a wife on an average wage, who back then didn't want children.

You definitely can't have kids. You have to wait until you have a house otherwise it's so much harder.

My sister did the sensible thing. Waited to get a house before having a kid.

I'm sure she'd want more than 1. But time/money/fertility and stress of holding down a responsible job and her bf having to work means it may well not happen.
Shes mid 30s and just had her baby.

And the wealthy worry about fertility rates.

 

[413x]

I remember having a convo with someone on here and he just couldn't grasp how much more housing costs as a percentage of average income vs when he bought 30/40 years ago. Just kept banging on about interest rates then vs now.

Its always .. But interest rates back then...

And the 17pc figure pops out

 

[adam cool dude]

I remember having a convo with someone on here and he just couldn't grasp how much more housing costs as a percentage of average income vs when he bought 30/40 years ago. Just kept banging on about interest rates then vs now.

You can still get away with it now. You are just kicking the can down the road and basically working till you die.

Average house is about 100k more than what it was in 2010. Instead of paying your house off in 20 years. You are paying it off in 30-35 years so 0 pension pot.

 

[413x]

Also. Salary multiplier.

Back when we got our house I was only on low 30s and GF was on mid 20s.

So for the house we wanted (as we were close) we had to oversave the 5pc deposit. In end we had 15 percent as our earnings multiplier was just not enough.

Due to paying land tax and cost of moving, stress, etc I was determined to skip the "first house" step as I was 33.

Its at that point that average earnings isn't enough for many houses.

This is a cheap area. In many areas you're salary multiplier won't get you anything.

 

[IvanDobskey]

In which year did you buy this first house?

Around 2004, so yes prices were cheaper, but 72k was no small amount for me back then.

 

[Sythe79]

People need to stop with the young people just waste their money excuse, they just waste their money on different things. 40 years ago the town I grew up in had 12 pubs, it's now got 2. every town even fairly small ones had at least one nightclub and big cities had multiple superclubs.

How many people back then bought albums for £20 a pop, for example, instead of downloading the music for free and saving for a house ?

 

[b0rn2sk8]

It’s not just got bad over the last 30 years, even just measured over the last 10 it looks dire.

My first house was originally built in 2005 and sold for 150k.

We bought it in 2013 for £155k, the £130k mortgage was 3.7 our combined £35k salary.

The same house now is worth £270k so in 11 years, its price has gone up £115k. A 90% mortgage would need a combined salary of £60k to stick within a 4X salary multiplier.

 

[IvanDobskey]

Really? This again?

Ok lets do the maths for the bitter oldie once again.

lets say you've had this second house for 7 years to make the maths easier, I suspect it was much longer so the maths are more extreme.

In 2000 the average wage was £18k, the average house was £75k or 4.1x

Today the average wage is £34k, the average house is £300k or 8.8x. Over double.

So tell us again oh excellent saving one how lazy and uncommitted the younger generations are to the thing they can't buy?

Jesus christ does posting this stuff make you feel better about yourself?

No bitterness here.

I just see lots of people in their twenties driving top of the line cars. How do they afford these?

I was driving round in a knackered old rover in my twenties and early thirties

 

[slinxy]

I wouldn't have be able to afford to buy this house 6 years ago, if it wasn't for help from my family. It's not the cost of the mortgage payments, as it was roughly the same as my rent back at the time. It's getting the 10% deposit together.

It's easy to say in a position where you have managed it, but if you cast your mind back to how difficult it was at the time... no one had it easy. But with certainly cost of living being increased disproportionality, like car insurance and other bills.

Heck, I'm still shocked at the prices of used cars at the moment. Wasn't that long ago I could pick up a top of the range A3 that was only 4 years old for around 7k, now that money would pick me up one that's over 10 years old.

Honestly speaking... I think I would be strugged maintaining this house with the cost of living the way it is without my salary going up by 25% due to switching jobs.

 

[413x]

No bitterness here.

I just see lots of people in their twenties driving top of the line cars. How do they afford these?

I was driving round in a knackered old river in my twenties and early thirties

I do see this as well.
And sure, if you're doing this I can see how the sympathy can fade.

But not everyone is. It's hard without overspending (flash car on pcp for example).

But 2nd hand cars are expensive now too. And a cheap pcp has no unexpected maintaining costs. Which are also very expensive now.

Sure. If you pick an flash car and not a cheap I agree you can't beg sympathy.

 

[200sols]

Around 2004, so yes prices were cheaper, but 72k was no small amount for me back then.

Things have changed a lot though. The sums on your example just dont add up any more. But very good you took 17 years to pay off a 70k small semi then almost paid off a 4 bed detached in 3 years.