How do people afford expensive houses

abster31

Choosing the right career and buying at the right time worked for us. My partner bought his house for £175k in 2002. I moved in 2008 and we sold it last year for £350k.

I went to college then uni as a mature student and graduated last year. Being a Building Surveyor is a good career choice. We bought our current house in October for £380k. My wages have increased 21% in this first year because of hard work and the career I chose.

Making a good profit on the last house has meant only a £180k mortgage which is more than affordable. The low interest rate has helped and we are in a five year 2.4% fix (mortgage is 18 years)

However, we do not have any other debts than our mortgage. I save and buy a car when I want one, and we save and pay for a holiday when we want one.

seven-day-weekend

u0362565 wrote: »

Hi all,

I'm in the process of buying my first flat and it's got me wondering how people ever afford to buy houses say more than £400k. I used to think, oh you sell your old home, make a profit, pay off the mortgage and buy something more expensive. However I realise that all property in general will increase in value so you would never get nearer to your goal of a bigger house as everything moves relative to each other, salaries on average don't change that much and you probably can't borrow much more as time goes on. Am I missing something here? Unfortunately I'm perhaps buying at a bad time investment wise for a start as prices are pretty high again, hopefully they continue upwards for a while before there's another big dip like 2008.

Sometimes one can have a 'sideways' move. We sold our inner-city three bedroom terrace for £143k and bought a two-bedroomed bungalow in the leafy suburbs for slightly less than we got for the house. It does however have a bigger garden. So although we have got a 'better' property (being a semi instead of terraced, and in a nicer area), it hasn't actually cost us any more money to buy (although we did spend money on renovation).

ukcarper

SG27 wrote: »

A lot of people extending themselves now will be in a lot of trouble when they rise. Be that next year or 5 years.

Can you borrow more than you could when rates were higher.

SG27

yes quite a bit more, at least could when I bought, I think its a bit more strict now to ensure you can afford higher rates.

My brother in law bought a house about a two years ago, he earns roughly the same as me but his payments are £1000 per month, mine are £600. I would struggle with £1000 now as he does, but if rates rise or if his wife becomes pregnant he will be in real trouble!

moneyistooshorttomention

SG27 wrote: »

yes quite a bit more, at least could when I bought, I think its a bit more strict now to ensure you can afford higher rates.

My brother in law bought a house about a two years ago, he earns roughly the same as me but his payments are £1000 per month, mine are £600. I would struggle with £1000 now as he does, but if rates rise or if his wife becomes pregnant he will be in real trouble!

Well they can control one of those factors - ie decide not to get pregnant till later.

But ...yes....there are still all too many people that seem to live in blissful ignorance of the fact that interest rates are usually MUCH higher than at present and may well rise at some point.

ukcarper

SG27 wrote: »

yes quite a bit more, at least could when I bought, I think its a bit more strict now to ensure you can afford higher rates.

My brother in law bought a house about a two years ago, he earns roughly the same as me but his payments are £1000 per month, mine are £600. I would struggle with £1000 now as he does, but if rates rise or if his wife becomes pregnant he will be in real trouble!

You can definitely borrow more than I could 30 years ago but I don't thing you can borrow more than you could 10 years ago.

u0362565

Wow wasn't expecting to read do much. Very interesting comments though. Thanks to those who answered. Really I'm just happy to be getting on the ladder whether it leads to lots of profit, that would be nice but not essential. I do see buying as a necessity but there is a balance to be found between spending and saving. I'm 30 and personally want to see lots more of the world before I die and pay off my mortgage in my 50's which all seems feasible, but from 20-30 I probably didn't have the time of my life, studying and saving for deposit but I've still got time on my side.

Waterlily24

Mrs_pbradley936 wrote: »

Not a mansion but it was in London. At the time the choice was a cheaper house outside of London but then fares and time getting to work (for me university).

I didn't realise there was such a price difference in those days. We looked at few houses in S E London but chose N W Kent because I worked in Bromley. My pay was outer London rates but not taken into account for the mortgage. Hubby worked all over the country so for him it didn't matter where we lived.

makeyourdaddyproud

Bought first house age 22ish, paid off in 9 years. Mortgage free since 31.

All not through being employed but contracting in the City.

No business, no inheritance, nothing.

Just contracting.

Now married into a wealthy family.

GDB2222

clint_S wrote: »

Just searched Rightmove for Cardiff £400K, first to pop up was a 6 bedroom detached house.


http://www.rightmove.co.uk/property-for-sale/property-57799385.html


Manchester has this 5 bedroom semidetached first on the list
http://www.rightmove.co.uk/property-for-sale/property-57799385.html


Cities are more expensive but London just seems silly when you look elsewhere.

£400k in Hendon (a suburb of London) will just about get you a two bed flat.