What percentage of your income was on monthly mortgage (FTBs)?

Tancred

khgibb wrote: »

The generation thing is interesting. My parents lived in a time where you could get on the property ladder early when earning modest amounts and were able to upgrade as time went on. We lived on hand me downs and didn't own anything branded and it was all fine. But it is really tough for most people to even save for a deposit these days unless they have help from their family, and its terrifying to think how much we've spent on rent over the past decade paying someone else's mortgage.

In the 60s and 70s the main problem was high interest rates (12-13%), but at least they had MIRAS, so the interest payments we made from gross, not net salary. Houses were cheap in relation to incomes and most people bought in their early 20s. Today people are having to wait until well into their 30s before they can afford to buy, and this often means paying a mortgage until retirement, which was unheard of in the olden days. There are deep and far reaching social and economic implications to all this.

Tancred

khgibb wrote: »

And the starting a family we would hope to do in the next 2-3 years, but you never know if it is possible until you try! We can afford a house in the region until we have a family, then things are likely to be a really tight unless I'm working part-time. But we would like to invest in a house where we would stay for 15 years or so (unless job/circumstances forced a change) so we don't end up wasting thousands on fees, taxes and moving costs after buying a smaller place and then having to move again after only a few years. But of course who knows what the future will bring, so even the best laid plans are likely to need revising!

Well, I would hope you have a plan, otherwise you could be in trouble. When we married we made the conscious decision not to have children due to all the stresses and personal demands that this involved - it was an emotionally painful decision to make but we only married fairly late in life and didn't want to have to go into late middle age with the task of managing a family. So we bought a cheapish house and are now moving to a slightly bigger one because we need more space and a garage. That's the only reason.

Tancred

Lots of intelligent and talented people live in Reading, and Wokingham is one of the areas with the best state schools in the country, so your comment is as moronic as it is rude.

sinbad182

Tancred wrote: »

Lots of intelligent and talented people live in Reading, and Wokingham is one of the areas with the best state schools in the country, so your comment is as moronic as it is rude.

Intelligent and talented people live in places all across the UK - that doesn't mean some of these places aren't dumps.

As I previously alluded to - this person might not be looking to buy anywhere near where you live, rendering the standard of Wokinghams stats schools entirely irrelevant.

Gonzo33

OP - complete a budget plan for now, and then complete a budget plan for your 'dream house'. Include:

Existing Mortgage/Rent
Personal Loans
C/Cards
HP
Maintenance (if there is any)

Electric
Gas/Oil/Fuel
Water
Council Tax
Telephone and Mobiles
TV/Satellite

Car Expenses - Fuel
Tax & Insurance
Servicing
Breakdown Cover
Commuting - Train/Bus
Other

Food
Clothes
Holidays/Birthdays/Christmas
Haircut/beauty treatments
Sundries (cigarettes/magazines)
Other

Private pension contributions
Private health cover
Socialising
School Fees
Regular Savings
Hobbies/Club Fees

Then work it on just your partners income and reduce the things you know you are going to be able.

Also you said that you may have to give up work due to your health after having children. If that is the case it may well be worth having some form of income benefit insurance (assuming you are able to get the insurance due to whatever condition you have). Have a chat with a good local broker they will definitely be able to go through all of this with you.

Most of all happy house hunting.

khgibb

Tancred wrote: »

Have you not heard of commuting?

Actually, my current commute is 1.5 hours each way at the moment as I work in central London (which is not an affordable place to live, and also not a good location as my husband does not work in London). There are plenty of cheaper places to live but they are no where near train stations so I've had to give up work to live there.

HAMISH_MCTAVISH

khgibb wrote: »

it is really tough for most people to even save for a deposit these days unless they have help from their family,

Yes, that's the problem with the current situation, the mortgage market remains completely dysfunctional, requiring people to save absurdly high deposit percentages while paying record high rents.

Nearly impossible for many/most without help.

and its terrifying to think how much we've spent on rent over the past decade paying someone else's mortgage.

Yes, buying a house is hard enough without being forced to also buy half a house for someone else while you save the deposit!

Lizling

My mortgage is 42% of my monthly pay. It's manageable and I'm putting money aside each month to overpay, but I wouldn't want to go much higher.

Still, beats paying rent of 66% of income and trying to save for a deposit on top!

redonion

HAMISH_MCTAVISH wrote: »

When we bought our first house just over a couple of decades ago as dual income borrowers, mortgage interest promptly went up to double digits, and almost 100% of one income was needed to pay the mortgage, whilst bills and basics took up the rest of the other income.

...

When we bought a second house in 2007, with a mortgage at 3.5 times joint income, it was far, far, far easier and took up a much smaller percentage of income. That mortgage is now down to just over 1 times joint income as we've taken advantage of low rates to overpay, and saved a fortune versus what renting would have cost since then.

...

You'll have it much easier than previous generations, I wouldn't worry at all.

I think you're right about interest rates (though house prices are not a small matter, and that has not improved for FTBs).

In fact though, nobody knows for sure whether rates will go up a lot or not. The economic situation in the EU seems pretty dire, and some even predict that we'll get hyperinflation soon. That would tend to reduce the value of the loan drastically, but that would be not much comfort if your income drops to nothing and mortgage rates go through the roof and you can't keep up the payments.

They don't call (macro) economics "the dismal science" for nothing.

Tancred

sinbad182 wrote: »

Intelligent and talented people live in places all across the UK - that doesn't mean some of these places aren't dumps.

As I previously alluded to - this person might not be looking to buy anywhere near where you live, rendering the standard of Wokinghams stats schools entirely irrelevant.

I know that. I mentioned those areas as an example of a typical location in the south-east. If you want a real dump, go to Luton or Slough.