Is the property ladder now a myth?

m0t

We currently live in a 4 bed semi-detached house in South East London which we bought as a 3 bed in 2014 for £290k.

It was valued last year as part of a remortgage at £560k, which seems like madness to me. The house has about 120m2 of internal space and with two kids and a dog is feeling quite tight. Aside from the main bedroom all the others are only single bed size, we struggle a bit with storage since we had our loft converted and the garden is pretty small with no scope to extend further. My wife and I have been thinking about moving as a result.

Looking on the usual property websites seems to suggest that to buy anything appreciably bigger around here (close to family and friends) would cost us around £850k before all the costs are included. All in that's almost the price we paid for the original house on top of what we'd get for this one to make it happen!

As public sector workers our pay hasn't risen significantly since we bought the house (1%/2% a year). How does anyone raise that sort of additional funding to move up the 'ladder'?

Looking back to my childhood we moved 3 times as my parents moved up and that seemed fairly normal back then. Should we be looking to go further out and swallowing the additional commuting time and costs?

Windofchange

So your current property has £270k in equity given your figures, and assuming you are on a repayment mortgage you will have cleared maybe 90k of the original loan in the last 8 years? so you have equity of about £360k? You therefore need a mortgage of around £500k which depending on what you do in the NHS isn't completely out of the question. Of course there are many variables - dependents, debts, whatever else that may well impact what you can borrow, but as two public sector workers ourselves we weren't far off achieving that amount of borrowing a couple of years back when we brought. Maybe you are trying to jump up more than one rung of the ladder? 120m2 is hardly small - it's pretty much bang on what we have, though all four of our bedrooms can admittedly fit a double bed in (just about in the 4th one). Need to look at a new area? Move out further? Go up north and buy a detached 8 bed house for your half million? If you are in a medical / nursing / AHP profession there are jobs aplenty wherever you look. 

Alias_Omega

Windofchange said:

So your current property has £270k in equity given your figures, and assuming you are on a repayment mortgage you will have cleared maybe 90k of the original loan in the last 8 years? so you have equity of about £360k? You therefore need a mortgage of around £500k which depending on what you do in the NHS isn't completely out of the question. Of course there are many variables - dependents, debts, whatever else that may well impact what you can borrow, but as two public sector workers ourselves we weren't far off achieving that amount of borrowing a couple of years back when we brought. Maybe you are trying to jump up more than one rung of the ladder? 120m2 is hardly small - it's pretty much bang on what we have, though all four of our bedrooms can admittedly fit a double bed in (just about in the 4th one). Need to look at a new area? Move out further? Go up north and buy a detached 8 bed house for your half million? If you are in a medical / nursing / AHP profession there are jobs aplenty wherever you look. 

Naa, they cant move. Nothing exists outside of London. 

Meanwhile,

This morning I went to the gym. I parked in car park, which over looked the sea. The tide was in, the beach was nice looking & plenty of dog walkers.

After lunch, I went to meet a friend in the Lincolnshire Wolds. The drive was through open countryside, with rolling hills. We had a walk, it was 5 miles and saw 1x car during that time. 

I then went back to my 120m2 4-bedroom box (with garage & driveway), it was £190,000, thus my mortgage is tiny. Just over 6% of our joint income. I dont know how to live, with "Working from Home" and my 300MB broadband

m0t

My wife won't move too far away from where we are now because she wants to be close to her parents.

I've been working on that for years but no luck so far.

I don't feel I really benefit from being in London. It's cramped, expensive, full of traffic and crime and I rarely visit the city itself.

If it wasn't for family I'd be happy in a moderately sized town anywhere.

Windofchange

Guess you're stuck then. I know SE London really well and there are plenty of places outside / nearly outside of the M25 with really fast links into town. Redhill, Reigate, Crawley, Warlingham, The Tunbridge / Tonbridges although admittedly they are pricey. 

lincroft1710

120 sq m of internal space is actually quite a lot! Either you've overestimated the size or your house has a very unusual layout if there is 1 Double Bed and 3 Single Bed.

Thrugelmir

The entire property market depends upon a ladder to climb. Takes a minimum of two parties to trade and make the transaction possible. . 

SavingPennies_2

To me, if we're speaking about "property ladders" the one you have sounds more like a "second rung" so if it's the first home you bought then maybe you skipped the "first rung" which is why it feels harder to move up - iykwim! I think quite a lot of people now save/wait longer and spend more on a house that is more like a "second rung" home than a first one. You mention your parents moving three times, but I'm guessing their first home wasn't a 4 bed semi in the SE. Perhaps times have just changed...(or I'm just poor lol)

maisie_cat

The original property ladder was surely based on buyers also climbing the career ladder. Between buying my first house in 1984 and my previous in 2006 my salary increased by a factor of 10 due to career progression. Coincidentally the purchase price between the 2 properties was 11x.

theartfullodger

Ladders, property Ladders included, go in both directions.

Property prices have ALWAYS gone down and up.  Not what some wail-ing papers and agents and "gurus" remember...  Funny that.

m0t

lincroft1710 said:

120 sq m of internal space is actually quite a lot! Either you've overestimated the size or your house has a very unusual layout if there is 1 Double Bed and 3 Single Bed.

Its closer to 116 but we have a large rectangular entrance hall that feels like it wastes a lot of space and the living room and main bedroom are oversized for the house at the expense of everything else.

Changing any of those things would mean major structural work that wouldn't be worth it.