why is buying your own place so difficult?

But you don't pay a leasehold. The cost would be divided by eight if the worst were to happen, hardly like you're footing the bill for a new roof!

Rents have a bit of a floor at £350/month. Obviously HB wouldn't be paid, but neither would it if you were on £1k after tax in normal circumstances.

Are you one of the muppets that took out PPI... :P
That depends on circumstance, if I were to be made redundant I'd get a months salary for each year I've been there (a little over six months salary for me) with the first £30k being tax free. In such a situation you should be able to get another job. Even if you couldn't thats what mortgage interest support is for.... why on earth would you get PPI?!?

Owning a property also makes it easier to do decor to your style.

There are no downsides of renting then? No upfront costs...? Your housing is secure....?

I don't think PPI existed when I took out my first mortgage, the rules were certainly very different. There’s no guarantee that you’ll get SMI for a loan you take out, as many people have found out to their cost. If you got 6 months salary that could prevent you getting it.

The cost of a new roof, even divided by 8, could be a nasty shock to the system, yu've obviously never had to pay for one.

There are usually some upfront costs to renting, they are smaller than for buying and anyone renting currently is likely to be aware of them, they may forget the costs of a purchase. If you have enough money you dont have a problem finding accommodation but there are laws to protect tenants that give you time to find somewhere else.

Being able too decorate to your own chocie can be fun or a chore. When you are young it takes time and money you could spend on enjoying yourself.

In this country we have become fixatd on house buying. Anyone considering a purchase should go into it fully informed - and having considered where else they could invest their money.

The op asked if they were missing anything - they were, they shouldn't be now.

Wouldn't a new roof come off house insurance? No I've never paid for one, I thought they were about £15-20k...?

How can you buy a flat for £50k-£60k when you are earning £1K a month after tax?

To earn £1k a month on tax code 1000L, with no pension/student loan etc, you would be earning not even £14,500 a year.

Nobody on that salary with half a brain would attempt a mortgage. You rent/live at home until you earn more and when you earn a sufficient amount you get a mortgage.

Running the numbers through a mortgage calculator, a 20 year mortgage with the minimum (10%) deposit on a house that costs £60,000 would have a monthly payment in the region of £300. Unless that's wildly wrong, the replies suggesting you can't buy with a minimum wage salary are off the mark; you certainly can.

If you think about it, there's no logical connection between one's income and ability to buy versus rent. Rental properties are bought by someone (a landlord) who hopes to pay off his own mortgage with his rental income, so the rent must at least cover the mortgage. If the sale prices of houses became very large in comparison with rent incomes then landlords would simply sell off their rental properties, which would reduce house prices again.

I suggest the main reason many people consider it hard to buy a house or flat is that their aspirations exceed their budget. They prefer to rent somewhere they really can't afford, paying a very large fraction of their income. After a time a 20-30 year mortgage with deposit seems unattainable because they are getting older, have no savings, and have become too comfortable in an expensive rental property to stomach a reduction in their standard of living.

People who live within their means from day 1 probably do not find it hard to buy a property provided they are in long term employment, regardless of how much they earn.

http://www.pricedout.org.uk/

https://www.facebook.com/pricedouthousing?ref=ts&fref=ts

Give us a like!

This belief seems to be pervasive but taking out a £45-54k mortgage (50-60 minus 10% deposit) on £14.5k/year is a 3.1-3.7x salary multiplier which is totally ordinary.

Most people living in £600k houses don't earn £400k/year; if anything the higher tax rates paid at high salaries reduce the possible salary multiplier.

Now for sure a place worth £50-60k will be a small flat or in an unfashionable area or both, but the question wasn't, "Can I buy a five bed detached in the Home Counties on £15k/year?", or, "Can I buy in Zone 1 on £15k/year?", the question was whether you can buy your own place: the answer is yes. For that matter someone on £15k isn't likely to be renting a five bed detached or in Zone 1 either.

Re higher earnings, generally banks will lend on higher multipliers. Whilst marginal tax is higher a lot of costs are the same or not proportionally higher. Your food bills can be the same whether you earn £20,000 or £60,000, you do not spend three times as much. Whilst more expensive houses may be larger and cost more to heat, often they are better insulated (if fairly new) and have more modern heating systems that are more efficient. Banks these days look more at disposable income after living costs to gauge affordability, and interest only mortgages only really work when there is house price inflation.

If I was using a crude rule of thumb, on modest earnings mortgage payments should be circa a third of take home pay to give some headroom- after all appliances break and need replaced, carpets need replaced and repairs are required every so often even if not to the extent of new roof- outside window painting every five or so years if not upvc windows.

Estimate the following:

Food and cleaning products etc
Clothes
Transport
Council tax
Heat and light
Entertainment
Books, music, phone, internet
Buildings and contents insurance
Allowance for repairs
Pension contributions (unless already taken from net pay)

Take total from take home pay

see what is left

If you cannot cover minimum 1.5 times mortgage with remainder you possibly are borrowing too much. Also ensure you have minimum savings of three months salary, ideally six-job losses can happen.

Re higher earnings, generally banks will lend on higher multipliers. Whilst marginal tax is higher a lot of costs are the same or not proportionally higher. Your food bills can be the same whether you earn £20,000 or £60,000, you do not spend three times as much. Whilst more expensive houses may be larger and cost more to heat, often they are better insulated (if fairly new) and have more modern heating systems that are more efficient. Banks these days look more at disposable income after living costs to gauge affordability, and interest only mortgages only really work when there is house price inflation.

If I was using a crude rule of thumb, on modest earnings mortgage payments should be circa a third of take home pay to give some headroom- after all appliances break and need replaced, carpets need replaced and repairs are required every so often even if not to the extent of new roof- outside window painting every five or so years if not upvc windows.

Estimate the following:

Food and cleaning products etc
Clothes
Transport
Council tax
Heat and light
Entertainment
Books, music, phone, internet
Buildings and contents insurance
Allowance for repairs
Pension contributions (unless already taken from net pay)

Take total from take home pay

see what is left

If you cannot cover minimum 1.5 times mortgage with remainder you possibly are borrowing too much. Also ensure you have minimum savings of three months salary, ideally six-job losses can happen.

It's pointless complication; all of those same costs must be paid by renters too.

I also think you're saying more about your own, possibly skewed, life priorities here than any question of necessity. Why do books, music, nights out, clothes (assuming expensive/fashionable ones) come before housing costs? I think most people would start with their salary, subtract housing costs, and see if they can live on the remainder, not subtract all possible discretionary spending from their income and see if the remainder is big enough to buy a house.

even when only a third of net income is consumed by the mortgage payments, can be daunting and the early years are often the worst.

Because most people underestimate the real costs of these other items. Looking at it from a lender's perspective they are less keen to lend if there is little slack in the numbers. Calculating affordability with some discretionary spending within the figures allows some headroom.

Unlike renting a mortgage on a house is for a very long time, if one is happy to commit to very little disposable income for possibly quite a few years then fine, but having been there and got the T shirt, so to speak, ensuring funds are always available to meet the mortgage payments, even when only a third of net income is consumed by the mortgage payments, can be daunting and the early years are often the worst.

As time passes expensive items like children come along, if mortgage maxed out on say a joint income basis the choice of either losing one salary or paying expensive childcare adds another factor to the mix.

I am not saying don't buy a house, I am merely saying that realism and a safety margin is important to allow for the unexpected e.g. one's employer moves premises so that travel to work costs increase substantially.

And the maxim of all one's eggs in one basket springs to mind, if your house is really your only long term savings vehicle you take a significant sector risk.

Can someone explain to me whether I am being really dumb or what?

Say you want to buy a flat and you have some in the area that you want to buy going for 50,000 -60,000

And you are in a job which pays you £1000 a month after tax taken.

Then surely , it can't be hard to set up a plan to pay for that mortgage in about 10 years. It wouldn't take longer than that surely?

Am I missing something?

And for a property like, what would be the deposit -

Renting is better anyway.

1000 is not enough.

500 Mortgage
100 In council tax
30 Mobile phone
40 Car insurance
10 Water
40 Gas
25 Electricity

That leaves you with 250 or so to live from.

That's not enough. I put over £100 in fuel into the car each month.....

First as has been pointed out, a mortgage of this size costs in the range 250-350, not 500.

Second, you don't need to own cars at all. I don't own a car. In fact I'd suggest that if you are on minimum wage and driving to work then you could do better quitting and setting up an ebay business or something, while if it's just for weekends, you're not being serious at all.