How can people afford houses??

[Zerorush]

The housing market is cooling finally but only after becoming so hot that an average house costs nearly £300k. How!? How many people are earning 60-70k - maybe the top 5% of the population? Before you say supply and demand, the population of the UK has grown by 20% over 30 years. So why has a house quadrupled?

As soon as boe feels like it, interest rates will get slashed again. When it does the cost of housing will continue on a rocket path to the moon. It's taken oppressive rates just to keep it level, let alone reduce it. How are people getting these huge deposits and access to massive loans - where on earth are they getting all this money!??

 

[Annie Beau]

I was talking to my son about this the other day. he has virtually NO chance of saving a deposit. He lives with his partner and their child, both work full time. Even though he is on a reasonable salary, once rent, bills, food and vehicle costs are taken into account theres not much left to live so putting a chunk away to save a deposit ..isnt really viable as the amount they can afford to stash it would take years and years to save enough, by which time house prices will have risen again...its a vicious circle. It concerns me that I see so many houses up for sale which are part of a landlords portfolio and they are selling to cash in, forcing families to lose their homes.

We reckon the only way he will ever own a house is when he inherits mine - at least then he will own it without having to worry about mortgage payments. Same thing happened with one f his neighbours, as soon as he lost his mum he inherited and sold up, used the money as a deposit for a house in a nicer area.

 

[EdibleDormouse]

I technically 'inherited' one when my father died, although my mum had to sell up and move to London (where I need to be for work), and now she needs residential care - in other words, I'm currently trying to release money from it to pay for her care costs. I keep telling myself that getting lodgers in upstairs will be great if it's converted into two flats, and I'll be able to relive my student house days, but to be honest, they weren't that great at times and I'm...much older now.

If by some miracle I don't have to sell up, and IF there's anything left, I hope it will enable my godson to get on the housing ladder. However, since (hopefully) he'll be in his 50s by the time I kick the bucket, perhaps it will be helping HIS children get on the housing ladder.

 

[Topaz]

My youngest and her husband have a house. But to do so, they had to rely heavily on the bank of Mum and Dad to put down a hefty deposit and have taken out a 40 year mortgage. They'll be approaching retirement before they've paid it off! This is for a Victorian 3 bed terrace, so nothing posh.
We've just given them another large amount in order to complete an extension that cost them more than they were expecting.
They both work full time, but without our help, they would never have been able to afford to buy and would have ended up in the rental trap.
When I think back to when we got our first house in the 80s, it cost £18K. We were bringing in £5K a year at the time and it seemed a fortune. But now its valued at £220K, which just seems like madness. On our income, we wouldn't be able to afford to buy it today.

 

[homie]

My old next-door neighbour. (died 5 years ago aged 97) bought the house new when he came back from the war in 1946. Cost £590. Average annual salary was around £230 then. Lived in it all his life.

It sold last year for £450,000

Imagine someone coming back from a war today on a soldier's wage trying to buy that same house.

 

[Sherliarty]

I think it is all so crazy, and I imagine for my two to afford something, we will have to help out. I do wonder who is buying all the new builds, I suspect very rich overseas investors. I think there should be a limit to what non-residents can buy in terms of residential property but of course that would need a Government who cares enough about these things.

 

[Annie Beau]

my son was recently talking to a customer who is having a bit of work done on his house. As a couple, he and his wife set out years ago with a property goal. They bought a flat in an area which was due for redevelopment, did it up, waited til the area was at prime price & demand, sold it with a decent profit bought another one.. rinse and repeat. They dont have a rental portfolio, theyve lived in each property.

With hindsight, I couldve done this many years ago. At one point I was mortgage free.... if only I had known how the property market would pan out.

 

[Frugalgal]

I understand opening up a LISA or Lifetime ISA is what many young people are being advised to do. Flipping properties if you are good at that sounds like a good way of moving up property ladder quicker. We bought our house in a not such an affluent part of town years ago and lived in the same house all our married lives and got to pay off our mortgage like 10 years ago. I suppose not moving house has saved us loads of money.

The good news for first time buyers on news today is that house prices have dropped, but mortgages are still probably unaffordable?!

I can't see my kids moving out of house for a long time yet, but that is fine by us. I suppose families continuing to live together if you are able to should mean that it cost of living should be cheaper? I see how life is all about cycles and history repeating itself.

 

[Sherliarty]

Unless you have building skills, flipping houses is much harder these days The cost of building work and materials especially where houses are expensive is shocking.

 

[LaurenKnox]

Wow, diving into the housing affordability debate feels like venturing into a labyrinth, doesn't it? From soaring prices to elusive mortgages, it's a puzzle many are trying to solve. Personally, I've found that a combination of diligent saving, savvy budgeting, and exploring alternative housing options like co-living or tiny homes can make a big difference. Also, dipping your toes into real estate management can be surprisingly fruitful. It's not just about buying a home; it's about understanding the market, finding opportunities, and making smart investments. But hey, everyone's journey to homeownership is different!

 

[takekuma]

Transporting such a large appliance can be tricky, but if it fits, a van might just work.

 

[LeeS]

Well, hiring professionals could be a more stress-free solution. I did the same after deciding to buy a new house. The advantages mentioned on https://threemovers.com/should-you-buy-a-house-in-2022/ were pretty convincing. They have experience with oversized items and can handle the move safely and efficiently. I recently found a company for shipping oversized and heavy items that was very helpful for a similar situation. They offer services at reasonable rates, which might fit your budget.

 

[takekuma]

Yeah, it’s crazy how prices have skyrocketed. A lot of it does come down to supply and demand, but also, cheap borrowing costs over the past decade have fueled higher prices.

Even with the population growth, the pace of building new homes hasn’t kept up, creating more pressure on prices.

 

[Glasgowbeta]

Interest rates play a huge role. When they’re low, people can afford larger loans, driving prices up. It’s taken these higher rates just to slow things down a bit. As for where people are getting the money, many rely on family help, inheritances, or they've built up equity from previous homes.

When I was looking to move, I was shocked at the prices too. I ended up finding out how much the council house was worth and sold it, which helped me get the deposit I needed.

 

[LeeS]

I totally get how tough it is to buy a house nowadays. When I bought mine a few years ago, I had to rely on a combination of savings, a small inheritance, and a lot of budgeting. Even then, the mortgage payments are tight with rising living costs. It’s crazy to think how prices have jumped compared to what our parents paid for their homes.

One thing that helped was looking into tax-saving strategies to keep more cash in hand for home expenses. Real estate investors often use cost segregation to maximize deductions, which can make a big difference in managing finances. You can check out more about it on https://costsegregationguys.com/.