How do people afford houses?

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  • TakaeTakae Posts: 13,555
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    blueblade wrote: »
    Great feeling when it is finally done, as your Dad would no doubt testify :)

    Yes, but he didn't stay long to enjoy it, though. He ended up selling it to me in 2002. :D Although he sold it to me at half of its market value, I have to give him 50% of the sales proceedings if I ever sell this house. That's a downside, but I'm not complaining.

    As for the OP's question: I think for many Londoners who rent/buy, it's down to having a network of acquaintances, friends, colleagues, parents and relatives.

    When I was 18, I bought my first flat from a bloke whose nephew was seeing my cousin. A childhood friend recently bought a Hackney Downs property from her former primary school teacher (they kept in touch for decades). Three years ago, a friend bought a Hammersmith house from a long-time friend of her late father.

    My nephew and his two friends are renting a Muswell Hill house from my colleague (the house belongs to his parents, who're living in a retirement home in Hampshire). My husband once rented a flat above his college friend's father's shop. My third brother rented and later bought a flat from the father of his then-girlfriend's best friend.

    So to anyone looking to rent or buy a London property, it's worth your time in letting your colleagues, friends and neighbours know that you're looking to rent/buy a property. A personal connection may help to keep the price fairly realistic, too.
  • UKMikeyUKMikey Posts: 28,728
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    I live a fair way out from the centre of London and even then I needed a lot of help from the bank of mum and dad.
  • tim59tim59 Posts: 47,188
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    The number of owner-occupiers has fallen while those renting privately continue to rise, according to the latest government analysis of the English housing market.

    The English Housing Survey for 2013/14, published today, showed owner occupation fell from 66% to 63% over the year – its lowest level since the mid-1980s.
  • Bulletguy1Bulletguy1 Posts: 18,429
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    I have yet to come across a credible argument as to why high house prices are a good thing?

    How is borrowing far in excess of what you earn a good thing?

    How is putting people into indebted servitude for 30+ years just to buy a place to live a good thing?

    Our society is warped.
    It's peoples mindsets which are warped with many believing they have a God given right to own a house.......but they want it for peanuts and expect everything on a plate.

    My ex-wife is Swiss and they have an entirely different approach to property ownership with a good 60 or 70% living rented. Few own privately or even desire to own private. That said, all the rented property is of a very high standard and rents are very affordable. And of course, moving is simple requiring nothing more than a months notice.

    Her brother held a very well paid job working for the Swiss Government and could easily afford his own property, yet he chose to live rented as it allowed him to move anywhere without the hassle of selling.
  • LostFoolLostFool Posts: 90,624
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    Vast_Girth wrote: »
    Not really. Most people who get a substantial inheritance don't get it until they are at least in their 50's. I would say the majority want a nice house before then.

    That's true. Unless someone is unfortunate to lose their parents early in life inheritances usually mean a lump sum in their 50s to pay down the mortgage or a property which they can rent out for an income.
  • bart4858bart4858 Posts: 11,415
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    LostFool wrote: »
    That's true. Unless someone is unfortunate to lose their parents early in life inheritances usually mean a lump sum in their 50s to pay down the mortgage or a property which they can rent out for an income.
    And often it's split between several beneficiaries.

    If your parents had also have been renting then you're doubly out of luck.
  • wear thefoxhatwear thefoxhat Posts: 3,753
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    AaronWx wrote: »
    Spot on. If you want a house you have to make it happen and buy within your means. I'm 22 and bought my house 6 months ago with no help or inheritance etc. There were a lot of sacrifices and hard work involved, but if I can do it I really believe anybody else can.

    My son bought his first property last year aged 23, he paid £125,000 for a large two bed room flat, he lived with my sister for a year rent free, no bills just bought his own food which meant he could save for a deposit, I also lent him £5000. I don't know how anyone can rent, pay all the bills and save for their property, especially if they're single, a lot of people will only be able to buy with help from their family.
  • Welsh-ladWelsh-lad Posts: 51,909
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    I really don't know how people manage in London and the south east - sounds a desperate situation.

    I'm glad we bought when we did - in the 2011-12 slump.
    Also stand to inherit property.
    I realise this is a very lucky situation and I feel very grateful for it.
  • Welsh-ladWelsh-lad Posts: 51,909
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    Bulletguy1 wrote: »
    It's peoples mindsets which are warped with many believing they have a God given right to own a house.......but they want it for peanuts and expect everything on a plate.

    My ex-wife is Swiss and they have an entirely different approach to property ownership with a good 60 or 70% living rented. Few own privately or even desire to own private. That said, all the rented property is of a very high standard and rents are very affordable. And of course, moving is simple requiring nothing more than a months notice.

    Her brother held a very well paid job working for the Swiss Government and could easily afford his own property, yet he chose to live rented as it allowed him to move anywhere without the hassle of selling.

    Yes but the circumstances there (and in Germany) are very different, with strict rent controls, and very exacting standards applied to the rental properties.

    I don't begrudge anyone in this country for wanting to own a home when the alternative is often a stinking rat-hole rental, owned by clueless buy-to-let landlords, at extortionate rent charges.
  • ppaupyppaupy Posts: 2,729
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    Same boat as you OP - moving closer to our son's school.

    Our budget is around £450k for Surrey (KT postcode) and do you know what that buys you? Bugger all!

    Just been through the soul destroying process of applying for a new mortgage. Existing lender wont give a penny more. Another lender has given us a decision in principle for an additional 60k so we have options now. But MY GOD it was painful. You have to tell lenders you don't eat or drink. Just work and sleep. Don't spend money on anything. And the lord help you if you have loans and a credit card! Thankfully I paid those all back ages ago. I checked my Experian credit report and I have a full score of 999/999 so am not that surprised another lender gave me the ok in principle.



    Good luck. House hunting and getting the finance is hell.

    We live in the KT Surrey postcode and are putting our cottage on the market on the 9th March..for what I think is crazy money..when I see the houses my family have in other areas IE much bigger but for some up to 150k cheaper than our tiny place.
    Good Luck.
  • wear thefoxhatwear thefoxhat Posts: 3,753
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    Welsh-lad wrote: »
    Yes but the circumstances there (and in Germany) are very different, with strict rent controls, and very exacting standards applied to the rental properties.

    I don't begrudge anyone in this country for wanting to own a home when the alternative is often a stinking rat-hole rental, owned by clueless buy-to-let landlords, at extortionate rent charges.

    I don't want to buy my own home but I'm lucky enough to live in housing association property in a really nice area.
  • Bulletguy1Bulletguy1 Posts: 18,429
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    Welsh-lad wrote: »
    Yes but the circumstances there (and in Germany) are very different, with strict rent controls, and very exacting standards applied to the rental properties.

    I don't begrudge anyone in this country for wanting to own a home when the alternative is often a stinking rat-hole rental, owned by clueless buy-to-let landlords, at extortionate rent charges.
    The point i'm trying to get over is peoples expectations and priorities are all wrong.

    There are rental properties near my locality. Standing outside each one you will find BMW's, Merc, Audi (this is the 'common' preference), all top of the range models and often two or three years old. How much their monthly finance repayments are God alone knows, and for what? A tin can on wheels which will be worth a fraction of the price once the finance is up, but what do they do? Continue the finance and go and buy another new one!

    Channel 4 News ran an article this evening on a Housing Asscociation who offered 130 properties to the Council for just one pound! The Council turned the offer down. :o

    OK the properties are in Horden, County Durham and yes they are very run down.

    http://www.channel4.com/news/horden-county-durham-bedroom-tax-one-pound-housing

    However i found one in the same area for auction with a guide price of £19k. Who knows, it may even go for less.

    http://www.rightmove.co.uk/property-for-sale/property-50708042.html

    In short the answer to the OP's question is you cut your garment according to your cloth which may well mean you moving to another area. This might well mean a drop in income.....but as much as we'd all like to, you just cannot have it both ways.
  • Turnbull2000Turnbull2000 Posts: 7,588
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    tim59 wrote: »
    The number of owner-occupiers has fallen while those renting privately continue to rise, according to the latest government analysis of the English housing market.

    The English Housing Survey for 2013/14, published today, showed owner occupation fell from 66% to 63% over the year – its lowest level since the mid-1980s.

    Tut tut. Aren't you listening to the experts on this thread? It's all down to under 35's having unrealistic expectations and demands, and frivolously wasting their money rather than saving.

    That the under 35's are for the first time ever poorer than the over 65's, that earnings for the young have fallen since 2007, that drinking, driving and consumer spending for the under 30's has been falling for years and now lower than the 90's, that new buyers are now typically in their 30's when a start flat may be unsuitable for starting a family...well, that's all pretty irrelevant compared to their outrageous expectations!
  • ShrikeShrike Posts: 16,592
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    Bulletguy1 wrote: »
    The point i'm trying to get over is peoples expectations and priorities are all wrong.

    There are rental properties near my locality. Standing outside each one you will find BMW's, Merc, Audi (this is the 'common' preference), all top of the range models and often two or three years old. How much their monthly finance repayments are God alone knows, and for what? A tin can on wheels which will be worth a fraction of the price once the finance is up, but what do they do? Continue the finance and go and buy another new one!
    Maybe these renters are perfectly happy renting? People in jobs that require them to move about a lot may not want the bother of buying a new place each time. It could be they themselves do own a house somewhere as an investment. Its quite common practice in the forces to live in accomodation but have a 'nest egg' house they will one day move back to.
    Bulletguy1 wrote: »
    Channel 4 News ran an article this evening on a Housing Asscociation who offered 130 properties to the Council for just one pound! The Council turned the offer down. :o

    OK the properties are in Horden, County Durham and yes they are very run down.
    Are there jobs in the area? Are there decent schools? Is it a very high crime area? There are lots of reasons why properties won't sell, even for a quid.
  • QT 3.14QT 3.14 Posts: 1,771
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    By studying hard at University, getting into a good industry with a good salary and then buying in an area where the house prices are low. The price I paid for my house wouldn't get me a one bedroom flat in certain parts of the country, let alone a five bedroom detached property with extensive gardens.
  • Bulletguy1Bulletguy1 Posts: 18,429
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    Shrike wrote: »
    Maybe these renters are perfectly happy renting? People in jobs that require them to move about a lot may not want the bother of buying a new place each time.
    That's just it....they don't move! I've lived here 20 years and i pass their houses when i go to one of the shops. They are still living there. The expensive cars are the only things that change!
    Shrike wrote: »
    It could be they themselves do own a house somewhere as an investment. Its quite common practice in the forces to live in accomodation but have a 'nest egg' house they will one day move back to.
    No idea if you were in the forces or how long since you left but my son has only been out three years. The majority lived on base, including married. When he located to Germany i visited once and was surprised at the number of 'high end' cars on the base. Outside his block were a couple of Ferrari's and an Audi RS.

    Hhhmm.....must belong to Officers i thought. Wrong!

    The Ferrari's belonged to a couple of Sergeants and the RS was owned by a Corporal.

    Shrike wrote: »
    Are there jobs in the area? Are there decent schools? Is it a very high crime area? There are lots of reasons why properties won't sell, even for a quid.
    No idea. I don't live anywhere near there.

    Some people do travel to work though. Where i used to work we had three guys who travelled 100 miles a day five days a week.
  • wampa1wampa1 Posts: 2,997
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    I've just bought a nice two bed flat. I'm in my mid-30s so it was pretty much now or never in regards to getting on the property 'ladder'. Being a first time buyer I could take advantage of government schemes which may or may not be a pain in the bum in years time. I'm already grinding my teeth at service charges and the lease reads more like a rental than a purchase : /

    But whatever, it's mine, cheaper than renting and no-one can kick me out at a moment's notice.
  • LostFoolLostFool Posts: 90,624
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    QT 3.14 wrote: »
    By studying hard at University, getting into a good industry with a good salary and then buying in an area where the house prices are low. The price I paid for my house wouldn't get me a one bedroom flat in certain parts of the country, let alone a five bedroom detached property with extensive gardens.

    Unfortunately, the areas which have lots of good jobs usually aren't those with low house prices.

    In some professions the pay is about the same everywhere in the country so if I was a newly qualified doctor or teacher then I'd be looking for a job in a cheaper part of the country rather than the expensive South East. For other sectors you really have to go where the work is. There isn't much call for corporate lawyers, aerospace engineers or cancer researchers in Northumberland or Cornwall.
  • TissyTissy Posts: 45,747
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    unklesam wrote: »
    Back before my OH and I moved in together in 2005 we looked about a mortgage for a house, The house was an average semi, £90K, we couldn't get a mortgage, didn't earn enough apparently. The irony is we have been renting the house next door to that house for the past 7 years, can afford the rent/rates fine and it is more per month that the mortgage was. We've gave up now of affording a house as it will never happen

    I've had to move back home to look after an elderly mum, so have rented my place out for the time being.

    The rent I'm getting is £300 a month above my mortgage repayments and I know my tenants are paying well under the going rate than they would for other local properties.

    They love the house and would like to be in a position to buy it from me but despite both having decent full time jobs they would never get the mortgage to buy it.

    I thank my luck that I managed to buy it before it tripled in value ! Feel so sorry for anyone trying to get on the property ladder in this day and age.
  • QT 3.14QT 3.14 Posts: 1,771
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    LostFool wrote: »
    Unfortunately, the areas which have lots of good jobs usually aren't those with low house prices.

    In some professions the pay is about the same everywhere in the country so if I was a newly qualified doctor or teacher then I'd be looking for a job in a cheaper part of the country rather than the expensive South East. For other sectors you really have to go where the work is. There isn't much call for corporate lawyers, aerospace engineers or cancer researchers in Northumberland or Cornwall.

    Which is why I compromised and decided that an ~80 mile commute was acceptable price to pay, luckily though it's a straight shot up the M6.
  • dylan99dylan99 Posts: 10,004
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    Don't think i know anyone that owns their property. You just need to find one you like, convince the bank to buy it, and tell everyone it's yours! Sorted..
  • LostFoolLostFool Posts: 90,624
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    QT 3.14 wrote: »
    Which is why I compromised and decided that an ~80 mile commute was acceptable price to pay, luckily though it's a straight shot up the M6.

    80 miles would be too much for me but I know people who do that and more every day. As you say, you have to decide what compromises you are prepared to live with.

    I could make more money if I worked in London but that would either mean
    a) commuting and leaving home at 6am and not getting home until 9pm
    b) relocation and only being to afford to live in a shoebox

    On the other hand, I could afford a much bigger house in other parts of the country but wouldn't have the career possibilities.
  • Bulletguy1Bulletguy1 Posts: 18,429
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    QT 3.14 wrote: »
    Which is why I compromised and decided that an ~80 mile commute was acceptable price to pay, luckily though it's a straight shot up the M6.
    Exactly what those three guys did i mentioned earlier. 100 mile round trip every day. The alternative was casual work in a Supermarket no doubt min wage too.
    LostFool wrote: »
    80 miles would be too much for me but I know people who do that and more every day. As you say, you have to decide what compromises you are prepared to live with.

    I could make more money if I worked in London but that would either mean
    a) commuting and leaving home at 6am and not getting home until 9pm

    b) relocation and only being to afford to live in a shoebox

    On the other hand, I could afford a much bigger house in other parts of the country but wouldn't have the career possibilities.
    Where do you live LF?

    There was a documentary a few months ago about long distance commutes. One involved a single mother who lived on the Isle of Wight and commuted daily to and from London. Yes she had to leave home early......but she earned damn good money and lived much cheaper than relocating to London!
  • LostFoolLostFool Posts: 90,624
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    Bulletguy1 wrote: »
    Where do you live LF?

    Cambridge-ish. In the sector I work this is one of the best cities in the world for job opportunities.

    I know people who commute into London every day and some earn more than me but I really couldn't cope with their long days. I'm 30 minutes from my front door to my office desk which suits me fine. I know someone who has taken a big pay cut to get a job closer to home as the commute was destroying his life.
    Bulletguy1 wrote: »
    There was a documentary a few months ago about long distance commutes. One involved a single mother who lived on the Isle of Wight and commuted daily to and from London. Yes she had to leave home early......but she earned damn good money and lived much cheaper than relocating to London!

    Yes, the distances some people go is amazing. I couldn't do it but all respect to them. At least they are getting up off their backside to do something with their life rather than moaning that there is no work near where they live.
  • barbelerbarbeler Posts: 23,827
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    molliepops wrote: »
    No idea we are looking to buy in a year or so time, but we are moving hopefully to Lincolnshire or even Northumberland and are not worried about buying a not traditional construction home so prices will be more like 50-60k
    In your dreams (as far as Lincolnshire is concerned) You might find a tiny terraced house for under £110,000 if you're very lucky and not too fussy.

    On the other hand, I remember watching Location, Location, Location a while ago and being amazed what £120,000 will buy you in some areas of Middlesbrough. Bigger than you'd get for half a million in London.
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