The Student Room Group

Buying a House

With house prices rocketing and at a stage of 10x your salary for a decent home, I'm sure many of the people on this forum are worried about purchasing a family home for themselves in the future

How many of you realistically think that you will become a home-owner before 30?

I think we have already sold ourselves out and it would be incredibly difficult to get house prices to go back to a nice level ever again

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Reply 1
Avatar for Reue
Reue
20
Original post by Makaveli_The_Don
With house prices rocketing and at a stage of 10x your salary for a decent home, I'm sure many of the people on this forum are worried about purchasing a family home for themselves in the future

How many of you realistically think that you will become a home-owner before 30?

I think we have already sold ourselves out and it would be incredibly difficult to get house prices to go back to a nice level ever again


I think 10x an average salary is a bit high. Suppose it depends on your definition of decent. I've just purchased a 3-bedroomed semi with driveway and garage in a quiet area, home counties for way less than 10x my salary.

Combine this with most people purchasing a property as a couple and it brings it down to less than 5x your salary. alot of money, but not unachievable.

I saved my £30k house deposit in 3 years, even whilst renting.

It depends whether people value their £50 a month iPhone contracts, £200 a month clubbing budgets and £50 a month sky tv subscriptions. Cut these out and in 3 years you have almost £15k - the required 5% deposit amount for a £300k mansion.. or 10% of a reasonable 2-bedroomed starter home.
Original post by Reue
I think 10x an average salary is a bit high. Suppose it depends on your definition of decent. I've just purchased a 3-bedroomed semi with driveway and garage in a quiet area, home counties for way less than 10x my salary.

Combine this with most people purchasing a property as a couple and it brings it down to less than 5x your salary. alot of money, but not unachievable.

I saved my £30k house deposit in 3 years, even whilst renting.

It depends whether people value their £50 a month iPhone contracts, £200 a month clubbing budgets and £50 a month sky tv subscriptions. Cut these out and in 3 years you have almost £15k - the required 5% deposit amount for a £300k mansion.. or 10% of a reasonable 2-bedroomed starter home.


Congratulations. You are a wise (wo)man. If only the rest of the country could act like this.
Reply 3
Avatar for Reue
Reue
20
Original post by Makaveli_The_Don
Congratulations. You are a wise (wo)man. If only the rest of the country could act like this.


Im actually rather content if most of the country dont act like this. It means more people having to work until 67 which fuels my investments while I retire in my 40s :smile:
Original post by Reue
Im actually rather content if most of the country dont act like this. It means more people having to work until 67 which fuels my investments while I retire in my 40s :smile:


I'm with you on that one also :wink: I plan to purchase my second property next year too
Investing in the UK? Good luck with that one. All my money is currently being put in property abroad which I'll then rent out to rinse and repeat. Easy money.
Original post by Sanctimonious
Investing in the UK? Good luck with that one. All my money is currently being put in property abroad which I'll then rent out to rinse and repeat. Easy money.


In which countries are you investing?
Original post by Makaveli_The_Don
In which countries are you investing?


All over the map.
Original post by Sanctimonious
Investing in the UK? Good luck with that one. All my money is currently being put in property abroad which I'll then rent out to rinse and repeat. Easy money.


My parents have just bought a buy-to-let student property (5 double bedrooms) in Brighton for £295k. Assuming £100 pppw rent, that'll bring in £26k annual rent, giving a gross yield of 8.8%. With that, they'll be able to clear off in mortgage (£221k) within about 10 years or so, and then have the property mortgage-free and probably worth a lot more if property prices continue to rise like they've been doing for the past few years.
Original post by thegodofgod
My parents have just bought a buy-to-let student property (5 double bedrooms) in Brighton for £295k. Assuming £100 pppw rent, that'll bring in £26k annual rent, giving a gross yield of 8.8%. With that, they'll be able to clear off in mortgage (£221k) within about 10 years or so, and then have the property mortgage-free and probably worth a lot more if property prices continue to rise like they've been doing for the past few years.


Most important word there. If its making you money its an asset otherwise its a liability. The scenario you describe is somewhat different to that of most first time buyers of which many students on here will be.
Original post by Sanctimonious
All over the map.


What's been good so far?

Original post by thegodofgod
My parents have just bought a buy-to-let student property (5 double bedrooms) in Brighton for £295k. Assuming £100 pppw rent, that'll bring in £26k annual rent, giving a gross yield of 8.8%. With that, they'll be able to clear off in mortgage (£221k) within about 10 years or so, and then have the property mortgage-free and probably worth a lot more if property prices continue to rise like they've been doing for the past few years.


Yep, the student BTL market is great atm
Original post by Reue
I think 10x an average salary is a bit high. Suppose it depends on your definition of decent. I've just purchased a 3-bedroomed semi with driveway and garage in a quiet area, home counties for way less than 10x my salary.

Combine this with most people purchasing a property as a couple and it brings it down to less than 5x your salary. alot of money, but not unachievable.

I saved my £30k house deposit in 3 years, even whilst renting.

It depends whether people value their £50 a month iPhone contracts, £200 a month clubbing budgets and £50 a month sky tv subscriptions. Cut these out and in 3 years you have almost £15k - the required 5% deposit amount for a £300k mansion.. or 10% of a reasonable 2-bedroomed starter home.


Where I live, 10x average income is generous. On the estate I live on for instance there are 3 houses for sale in the range of £350-400k, for what are essentially cheaply built post war 3 bedroom starter homes for families. Saw a one bedroom flat where I live for for nearly 200k also and some of the larger, more secluded houses will easily reach prices of £2-3m+.

Telling people to save is all well and good, but for me, that just isn't an option at the moment, I barely have enough money to make it through the month, let alone have extra to go hide away.

On a more general point though, I have no real interest in owning my own house, I just don't really see the appeal over renting from a reasonable landlord.
Reply 12
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Reue
20
Original post by mojojojo101
Where I live, 10x average income is generous. On the estate I live on for instance there are 3 houses for sale in the range of £350-400k, for what are essentially cheaply built post war 3 bedroom starter homes for families. Saw a one bedroom flat where I live for for nearly 200k also and some of the larger, more secluded houses will easily reach prices of £2-3m+.

Telling people to save is all well and good, but for me, that just isn't an option at the moment, I barely have enough money to make it through the month, let alone have extra to go hide away.


What area do you live in? And what is your savings rate?
Reply 13
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Reue
20
Original post by Sanctimonious
Investing in the UK? Good luck with that one. All my money is currently being put in property abroad which I'll then rent out to rinse and repeat. Easy money.


Foolish. What if the pound suddenly shoots up in strength? Almost all conventional investment advice will suggest you should have at least some exposure to your home market.
Original post by Makaveli_The_Don
With house prices rocketing and at a stage of 10x your salary for a decent home, I'm sure many of the people on this forum are worried about purchasing a family home for themselves in the future

How many of you realistically think that you will become a home-owner before 30?

I think we have already sold ourselves out and it would be incredibly difficult to get house prices to go back to a nice level ever again


Unfortunately the combination of the middle classes having a vested interest in rising prices (often swing voters) and a lack of house building means that government won't leave the credit market alone and allow affordability to rise. When mortgage lending dropped to levels seen in the late 70's, that was banks having learnt their lesson and picking a safe level of lending, the side effect of which would have led to real term falls in prices.

Personally I'm 25 already and in Leeds but I think I should have 2 properties by 35. Luckily I'm poor so if I can use my parents right to buy I can get a 110 house for under 60 (less if help to buy ECT...). I should also be able to buy an apartment or another house, I'd never take out more than a 10 year mortgage though.
Original post by Reue
Foolish. What if the pound suddenly shoots up in strength? Almost all conventional investment advice will suggest you should have at least some exposure to your home market.


You assume I wish to stay in the UK. By the same token what if it gets weaker?
I do plan on buying one as soon as I can, my uncle is going to help out as he's done quite well and doesn't have any children. He's going to give me a loan as my 21st present, even though I was 21 last year lol.
Reply 17
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Reue
20
Original post by Sanctimonious
You assume I wish to stay in the UK. By the same token what if it gets weaker?


So you hold all your investment returns in the local currency?

I didnt say all investment should be in the UK, just that you ought to have some. If the pound gets weaker that's great! Your UK investments return the exact same value and your offshore investments return greater value.
Original post by Reue
So you hold all your investment returns in the local currency?

I didnt say all investment should be in the UK, just that you ought to have some. If the pound gets weaker that's great! Your UK investments return the exact same value and your offshore investments return greater value.


I am not staying in the UK. Having an investment here for me would be ludicrous when I want to leave in the near future. It would mean I'd have to manage it or pay someone to do so. Once I leave I don't wish to return. I'd also be tied up to something that if I couldn't shift would make it harder to relocate exactly when I wanted.

I currently own a number of cheap properties near a ski resort and rent them out for money. These are assets and I own them outright with no mortgages. These are in a country I can manage and frequent due to my parents living there. If I sell the four properties I have enough to buy a decent house in Australia or Canada when I move to one of the countries.

Had I invested in the UK I'd have not made the same money. Its as simple as that. I'd have made less. Actually, I'd still be paying off a mortgage probably.
Reply 19
Avatar for Nigella
Nigella
I know I will be able to afford a mortgage, however I'm not sure I actually want one....

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