How do any single buyers manage to afford houses when only able to borrow 4x income??

Autumn868

This is something that severely intrigues and concerns me,
how do people actually manage to afford to buy even just 2-bedroom flats/houses, when you can only borrow 4x income for a mortgage?

And im not talking minimum wage - sub 20k salary people, nor am I meaning the absurd London property market,
instead I mean just normal middle-income/decent-income earning professionals, who live in average regions of the country,
how do they afford it?


Take for example a qualified and experienced teacher/nurse/fire-fighter/social-worker/prison officer,
they all earn between 25k-30k per year (depending on area of the country they work in),
and are classed as good level income jobs that are highly sought after, and take years of training to do.

However even if you are working as a qualified and experienced nurse or teacher earning 30k per year, 4x your income will be merely 120k mortgage loan amount.
Meaning that you will have to find the rest yourself to add onto that to meet the price of a property.

In London/Surrey/Most of the South East, even in the crappest cheapest towns and areas, 120k wont even get you a bedsit, let alone a 1-bedroom apartment.
You will typically need a minimum of 150k-170k for a 1-bedroom flat, and 160k-200k for a 2-bedroom flat, and that's in the most cheap and rundown areas.

Im sure those prices will be about accurate even if ou go up north to any towns or cities like Birmingham, Manchester, Liverpool, Newcastle... ect


But so a qualified and experienced nurse or teacher who earns 30k per year, will only be able to borrow 120k as a mortgage.
Therefore even as a high earning professional, if they want to buy a 2-bed flat they would need to someone manage to get hold of 50thousand pounds cash to use as a deposit! :Z


And considering that after rent, bills, and travel to work costs most people are left with merely a few hundred pounds per month at best, equating to maybe £2,000 - £4,000 per year savings,
their rate of savings would not even be keeping up with house price inflation (10% per year = £15,000+ per year).

But so how on earth does such a huge percentage of people manage to afford to get mortgages and buy homes?
(Especially when the majority of people in this country do not earn 30k per year)

beecher2

Inheritance, bank of mum and dad, a couple both earning, equity from previous purchase, cheaper house prices outwith south of England.

Autumn868

Like i said this question is to encompass the 90% of 'typical' middle/decent income individuals in this country who are in their late 20s-early 30s and so are 1st time buyers,
but so exclude the top 10% who have ultra-rich parents who've got hundreds of thousands of pounds spare cash in their bank accounts to handout to their kids.

And my example of prices is based on average property prices in cheaper/average regions of the country though.

(In London/Surrey any half-decent 2bedroom flat will cost between 250k - over 1million, so 160k would get you nothing except a bedsit)

GreatApe

Its easy

There is >£10 trillion in wealth in this country. Everything from bank accounts to shares to bonds to farmland to factories and shops to patents to IP.

A significant proportion of people either have claim to that £10 trillion or have parents who do or will marry into a family that does.

There were 25 million homes 20 years ago. In effect all of those 25 million homes were build from 1800-1990 and have already been paid for and will cycle through the generations

Now apart from that you have some mistakes in your own post. The average full time working person earns more than £25-30k the average full time worker is in closer to £35k and more importantly if the average full time worker could afford an average house we would need as many homes as there are adults! Instead the criteria should be that an average couple can buy an average home and that is pretty much true for 9 of the 11 regions

GreatApe

The various steps to owning property

Inherit it. More common than realised

Marry someone who owns property. More common than realised.

Get it or a significant part of it gifted. More common than realised.

Get rich (non employed income) and buy

Work as employees as a couple and buy

Work as an employee as a single person and buy in a cheaper region.


The one thing that is not in the list is to moan about why a single person can not buy the average home on one single below the average full time wage.

zagubov

This thread is slowly working its way to the obvious question: who on earth ever suggested that single people should be able to buy a house?
That expectation has no foundation in reality

Autumn868

The average income is no-where near 35k.

Im sure everyone one this thread will pretend that they are in some kind of lucrative job where they earn that salary or above it,
however the reality is that most people earn below 27k (especially outside of London).

The true 'average' salary in the UK (mode salary) is 18.5k per year.

Even qualified experienced professionals such as teachers, police officers, and nurses only earn between 22k-30k.


And so its simply nonsense to claim that the average salary in the UK is over 35k.

GreatApe

Autumn868 wrote: »

The average income is no-where near 35k.

Im sure everyone one this thread will pretend that they are in some kind of lucrative job where they earn that salary or above it,
however the reality is that most people earn below 27k (especially outside of London).

The true 'average' salary in the UK (mode salary) is 18.5k per year.

Even qualified experienced professionals such as teachers, police officers, and nurses only earn between 22k-30k.


And so its simply nonsense to claim that the average salary in the UK is over 35k.

The average salary includes children and part time workers.

You should exclude those that work part time and those that are under 25 years old when discussing wages vs property as presumably you would accept that a boy working 10 hours a weekend in the local newsagents earning £50 a week is irrelevant to house buying stats so why use his wage to dilute the adult figure?

If you look at male adults that work full time it is close to £35k average . If you look at adults and children and part time workers average is about £26k

All figures available at the ONS website no need to guess have a look. They also show average for all the regions and sub areas within regions.

BobQ

beecher2 wrote: »

Inheritance, bank of mum and dad, a couple both earning, equity from previous purchase, cheaper house prices outwith south of England.

Some will also just leave their jobs and work in industries that pay better. Managers in B&Q stores earn more than most nurses and teachers.

Autumn868

The ONS figures include the salaries of footballers, city bankers, CEOs, and property mogul millionaires/billionaires, all which severely skew the figure of average.

9 people earning 18k, 1 bank CEO earning 5million p/a, average salary for those 10people is 509k each.

Autumn868

Please tell me what these jobs are that pay 30k-40k for entry level/few years experience employees?? :O

As ive lived in Surrey/London my entire life, and yet ive seen extremely few jobs which pay over 30k.
The only ones are mid level/senior management in IT, finance, engineering, NHS, and certain public service industries.

B&Q pay min wage for store staff, about £8.50p/h to team leaders, and so probably not much above £10/11ph to store manager (£22,000 per year).