Genuine question - how does anyone afford to buy a house?!

princeofpounds

What kind of a divvy spends loads of cash renting a flashy pad?

Whilst I admire your frugality, not sure I agree with you on this. For some people it makes sense not to impair their quality of life so much to defer gratification. For others, they might take an economic view that renting is better than buying for a given period (after all, getting a mortgage really just means that you are renting the money from the bank rather than the house from the landlord).

Mind you, I think I'm replying the comment with more seriousness than it was probably meant.

BitterAndTwisted

People do what they have always done: give up luxuries or don't acquire them in order to save the maximum they can. No car, no holidays, no meals out. For years and years if necessary.

Some people can't deal with that sort of deferred gratificiation and some can.

puddy

claire16c wrote: »

I agree that you need to give things up, but where in London could you rent a flat for anywhere near that? I live in the South but not in London and you still couldnt. My friends who live in London pay about that much for 1 bedroom in a shared house. If theres 2 of you the price generally goes up to around a grand or more. And if you live outside of London but travel in on the train to get to work like many people do where I live, there goes another £350 a month down the drain.

£350? my OH works in london and we live outside of london in east kent, his petrol is £600 a month, no small amount

Running_Horse

Caveat_Mortgagor wrote: »

Possibly the least helpful comment Ive ever read on these boards.

If you think telling people to prioritise their spending, and that unusually low interest rates may not not last forever, is the least helpful comment you've ever read on these boards, then you are entitled to your opinion.

I repeat, it is your choice how you spend your money, and the current low interest rates may not last forever.

Idiophreak

DannyboyMidlands wrote: »

The same expenses that you spend £1200pcm on cost me and my OH no more than about £750pcm

Happy days, eh...Again, just as an example....
coucil tax - 130
utilities - 60
food - 240
fuel - 250
car ins x 2 = 55
car maintenance = 30
contents insurance = 12
tv - 13
phone - 12.50
broadband - 6

That's just off the top of my head and isn't complete, but. I don't see much there I could cut out to get down to your £750...I could skip eating, maybe...or driving to work, but neither seem like a great long-term solution....oh, and that's giving neither of us a penny, so far, for any kind of "life". I suggest the cost of living must have risen somewhat since you were in this position...

Wickedkitten

Idiophreak wrote: »

You mean they should be able to save around 1700 out of the 3500 (ish) they'd earn each month?
So given that OP's stated they pay 950 in rent, you're allowing them 850 for coucil tax, utilities, food, fuel/travel, social, holidays etc, tv, phone...I can't speak for OP, but in my own budget that stuff adds up to around £1200/month, easy...

It may *just* be possible for OP to save 20k in *a* year, but to do it *per* year would result in a fairly lousy quality of life...

If that's what you have to do to prioritise buying a home, then that's what you do. I think the last time we actually went out socially was back in June for a birthday because we are spending any excess money to overpay our mortgage. We've only just been on our first holiday in years in July and even then it was only to Cornwall and the OH's parents paid for it.

princeofpounds

I think people are deviating here from the true question the OP asked.

No amount of frugality would help if you bought a house at the moment on a variable interest rate and rates reverted to some kind of historical mean. Arguing about Heinz beans vs Tesco's beans is irrelevant when your payments triple.

DannyboyMidlands

Idiophreak wrote: »

Happy days, eh...Again, just as an example....
coucil tax - 130
utilities - 60
food - 240
fuel - 250
car ins x 2 = 55
car maintenance = 30
contents insurance = 12
tv - 13
phone - 12.50
broadband - 6

That's just off the top of my head and isn't complete, but. I don't see much there I could cut out to get down to your £750...I could skip eating, maybe...or driving to work, but neither seem like a great long-term solution....oh, and that's giving neither of us a penny, so far, for any kind of "life". I suggest the cost of living must have risen somewhat since you were in this position...

No, I still have to pay bills.

Idiophreak

Wickedkitten wrote: »

If that's what you have to do to prioritise buying a home, then that's what you do. I think the last time we actually went out socially was back in June for a birthday because we are spending any excess money to overpay our mortgage. We've only just been on our first holiday in years in July and even then it was only to Cornwall and the OH's parents paid for it.

But it's *not* something the OP has to do, that's my point.

They've got enough savings for a deposit (albeit not a large one) and they've indicated that they want to move out of London, but a home and get on with the next chapter of their life. I don't see how the advice "stay in London, reduce your quality of life as far as you can" is particularly helpful. It's clearly not what the OP wants to do...

sonastin

I wouldn't base the calculation on historic rates but I'd certainly be taking them into consideration.

How comfortably can you afford it at current rates? How much can you squirrell away now while rates are low? How bad would it get if rates did rise to the historic mean and above? What would you need to do to be able to survive that? What sort of bail out options would there be if you couldn't survive it? etc.

From the numbers you've given, I would think that you could manage fairly comfortably in the immediate future. If rates start to increase to a point where you can't manage, you could both go back to working full time if there's family around to help with childcare. If you can pay down as much mortgage as possible while things are good, you've got more to play with if things get tight. e.g. some mortgages would let you take a payment holiday if you've made overpayments, or withdraw any overpayments you've made. If you use overpayments to reduce your term, when things get tight you could look at extending back to the longer term with an equivalent reduction in mortgage payment, etc.

Only you can say for sure, depending on your appetite for risk and debt but in your shoes I would take the plunge.