How the hell is someone form a poor background ever going to own a house ?

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Ostne
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Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
And if you're single that basically confines you to a flat but even those are expensive!
I've got this horrible image of being forced to work every day until I am 75 and not even having anything lol.
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!
Last edited by Ostne; 1 year ago
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Dancer2001
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Generally your first house would be a very cheap one (price depends on area, but where I live cheap is around £50,000). Then when some of the mortgage is paid off, and your wage is a bit better, you can move and get a mortgage on a more expensive house (eg. £100,000). You can move every few years, and gradually get better houses until you can afford something big enough to have a family.

This obviously doesn’t work in expensive areas like London, but I have heard parents have been re-mortgaging their own houses to pay for their kids to move out. This way they can pay them back gradually, and start on the housing ladder.
Last edited by Dancer2001; 1 year ago
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londonmyst
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It is achievable outside of London, even within London with a lot of luck.
Minimise personal spending, accumulate overtime, save up as much as you can, choose an area where property prices are lower and then look for a bargain property that requires some work.
Maybe an auction property, fire damaged property or one with a history that scares off more sensitive buyers/families with young children.
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Drewski
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(Original post by Ostne)
Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
And if you're single that basically confines you to a flat but even those are expensive!
I've got this horrible image of being forced to work every day until I am 75 and not even having anything lol.
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!
Live somewhere where houses are cheaper. Simple.

Which is basically anywhere North of London.
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SpinningLizard
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It's doable, you just have to tighten the belt up. My house cost £150k, 3 bed semi in a northern city. I was a student so all I really contributed was whatever I had left of student loans and a bit from a crappy part time job I had, he earned £21k or so. We spent 4 years saving up for the deposit of £25k and then mortgaged the rest of it. My wage didn't count for the mortgage because I was a temp and we didn't have help from anyone else.

Rent was £450pcm for a studio flat so bills weren't much and I can't remember what food was but we basically didn't really do anything so that we could save up enough for the deposit. We were keen to do it because the mortgage is less than the rent was so we cut pretty hard but neither of us were into clubbing or anything else so it was fairly easy not to spend it all on booze. It's definitely possible if you're prepared to scrimp a bit though obviously your geography makes a difference too.
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errrr99
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(Original post by Ostne)
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year.
If you really commit to following through this plan, something would "turn up" after about 3 or 4 years. So you'd have a sizeable deposit for an agreed mortgage, and the perfect partner will turn up - hopefully to contribute a similar amount...the "perfect" bit is likely but the "contribution" part is not so likely - good luck with that

However so few people actually have the willpower to save money, it's just difficult. Some people say, "if I see the money, I want to spend it".

Also, home ownership might look like a status symbol (that you want to have today) but it does not suit everyone. There are maintenance costs of running a home.

Saving money tip: try going without debit/credit card/cashless payments. Commit to using cash only. See if it changes your spending habit. Writing all your spending down daily will also help.
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Balloon Baboon
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Buy a smaller house in a more affordable area.
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NJA
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Middlesborough
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username47781
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Small house in Derby or further North
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the bear
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you can buy a small house in a "vibrant" area with some friends.
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RogerOxon
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(Original post by Ostne)
Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
Earn above the average wage and buy with a partner (you probably don't really need 3 bedrooms). If owning an expensive house is your goal, you need to get a career with good salary advancement, or your own business.

I started by buying a flat with my (now) wife (we were both 27 IIRC), although I couldn't afford the same flat now (on our adjusted salaries from then), so appreciate the issues.

(Original post by Ostne)
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
Home ownership is not a right, so you're not "supposed" to do it. Many will though. It is a competitive market, so you need to have an edge, be it a high salary, large deposit, two incomes, cheaper location, higher credit score, self-build, buy small and extend later, etc.

(Original post by Ostne)
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
As you advance in your career, if you're good, you should expect pay rises far beyond the average increase.

(Original post by Ostne)
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol.
Compound interest, or higher investment growth (with some risk).

(Original post by Ostne)
but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!
There have also been house price crashes in the past. Just put yourself in the best financial position that you can, and be ready to buy if that happens again.

When you do buy, be very careful to get a good mortgage deal - so many people don't shop around enough and end-up paying much more than they could, or get into difficulty when the rate adjusts.
Last edited by RogerOxon; 1 year ago
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BurstingBubbles
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(Original post by Ostne)
x!
Moved to the money and finance section

Not sure if someone has said it already but have you looked at help to buy ISAs? The interest is much higher
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Siberiaan
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anyone else moving north for a better qol
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brainzistheword
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(Original post by BurstingBubbles)
Moved to the money and finance section

Not sure if someone has said it already but have you looked at help to buy ISAs? The interest is much higher
Help to Buy ISA applications finished in November last year but a Lifetime ISA is a great alternative, provided you're definitely going to use it for a house (or retirement)
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-Eirlys-
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(Original post by Ostne)
Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
And if you're single that basically confines you to a flat but even those are expensive!
I've got this horrible image of being forced to work every day until I am 75 and not even having anything lol.
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!
My aunties got their first mortgages in their early 30s on their own and only after they got decent salaries (£25K+), which will probably be the same situation for me. My brother got a mortgage sooner but that was because he was in a relationship, but he still had to move home to save for a deposit.

You would have to move somewhere cheaper, though some are too cheap and are in terrible areas. It's not worth committing so much money to something substandard that you'll be stuck with for a while.
I am aiming for a one bedroom house and they're about £90-120k. My brother got a lovely open plan, balcony style one for £110k which I really like. I've got a help to buy ISA so the government will help a little with the deposit (I want to put a bigger deposit in).
I'm aiming to look at houses after I graduate in a couple years and after getting a better paying job. I have a decent amount of savings but all of that will be gone in a flash when the time comes, just to be living off like £100 a month. :rolleyes:

What sucks more than anything is being judged for staying home. I have little choice (I refuse to rent!), but if I want to get a decent first home, it makes sense to stay home if I can to save up. I see many middle aged people who are stuck renting and never owning their own home, yet I'm being judged (brother included) as being a lesser adult somehow for actually planning out my future without a second income to support me and throwing my hard earned money at a landlord.

The situation for us not on the property ladder is pretty dire unfortunately.
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Fruli
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(Original post by Ostne)
Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
And if you're single that basically confines you to a flat but even those are expensive!
I've got this horrible image of being forced to work every day until I am 75 and not even having anything lol.
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!
I moved out of London to achieve my house ownership dream and I did it. That said, it is a struggle getting a well paying job outside of London, but those with good degrees and good experience manage to get well paying jobs with global firms that have locations outside of London, i.e. in other cities and towns. Insurance firms are one example, pharmaceuticals are another.

Those with good business, finance, law, IT and STEM degrees are usually well placed to get well paying jobs, even outside of London.

We need to see our towns and cities develop science parks and mini silicon valleys, just like Reading and Oxford.

I hope in the next 10 years we see more investment and startups outside of London, as the Conservatives are the party of business and enterprise. There’s only so much the public and social sector can do in the way of creating well paying jobs and usually this requires higher taxes. I’ve noticed just how reliant people in the smaller towns are on local authority and NHS jobs. It’s such a shame because there’s a much bigger world out there. We need more investment from the private sector in our towns and cities.
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brainzistheword
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(Original post by Ostne)
Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
And if you're single that basically confines you to a flat but even those are expensive!
I've got this horrible image of being forced to work every day until I am 75 and not even having anything lol.
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!
This depends massively on location and other factors (like your committed outgoings/affordability, job stability, credit rating).

I've just bought my first house and to be honest I was surprised I could do it so soon (not in a big-headed kind of way, but because of circumstances). That's because I'm an apprentice and I was originally told I wouldn't get a mortgage because apprenticeships aren't considered 'permanent employment' by some lenders - which I can understand. This narrowed my options down a bit, but I surprisingly found one! Admittedly, I'm up north which is much cheaper but I saved up all I could from my apprenticeship for the deposit (which was less than 15k/year salary). I sacrificed getting a car so that I could put more towards the deposit. My parents were in no position to help me financially either - and I wouldn't have been comfortable accepting it even if they could.

I'd say a lot of it's down to planning and self discipline with your spending/saving habits. You may have to sacrifice a few things for a while, and maybe consider the option of moving further afield to a cheaper area.

I didn't buy a house to prove a point, it was more down to personal matters but I'm glad I've done it when I have (I'm under 20) because it's a foot in the door and I can use this property to slowly climb up. My mortgage is also half the price of the cheapest rent round here too, so that's always a great way to look at it.

Getting on the property ladder is possible, but I understand it's much more difficult in certain areas. If I can help with any of your questions, by all means just ask
Last edited by brainzistheword; 1 year ago
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BurstingBubbles
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(Original post by brainzistheword)
Help to Buy ISA applications finished in November last year but a Lifetime ISA is a great alternative, provided you're definitely going to use it for a house (or retirement)
Oh of course! :facepalm: thanks for the correction
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Quady
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(Original post by Ostne)
Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
And if you're single that basically confines you to a flat but even those are expensive!
I've got this horrible image of being forced to work every day until I am 75 and not even having anything lol.
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!


By doing better maths.



The average wage is more like 28k rather than 20k.



I started off on over £27k and that was over a decade ago. 30 I was on over £50k (though I'd bought a place then).


You dont start off with a three bed house. I'm 35, own a 2 bed flat but I dont even bother living there as I stay with my fiancee. We are now each on £60k+ so looking at stuff about half a million.



Dunno how you think rent always rises faster than wages, that's mad.
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harrysbar
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(Original post by Ostne)
Assuming a 3 bed house (like near where I live) costs 250,000 pounds and the average wage is 20,000, how are our generation supposed to ever afford it ?
I mean if you start off on 20,000 in a graduate job and lets say by 30 you're on 30,000, after you have paid tax and the existing rent costs (which are always going up more than income) How are you supposed to do it ?
you can get a mortgage for 4 times your salary, but house inflation is double that each year of the average pay increase, how is it even possible without inheriting something ?
And if you're single that basically confines you to a flat but even those are expensive!
I've got this horrible image of being forced to work every day until I am 75 and not even having anything lol.
Even if you saved 200 pounds a week, that's roughly 9600 a year so even after 5 years you would have 48000 which would still put you short, you'd have to work for 10 years and save that just to get a mortgage lol. but ithe 250000 pound house will be about 370006 assuming a 4 percent increase each year. Most of this mathes is rough working out
I know you can invest and stuff but most people do not do that, then if a financial crash happens you could lose it all!
It’s really hard for young people these days to get on the property ladder in the South unless their family are rich or someone dies and they inherit a lump sum. As a double whammy old people are living longer
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