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UK: Will I EVER Be Able to Buy a House?!?!

by manicmethods
34 replies
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Recently on the radio I heard "The current generation is doomed. It is going to be a whole generation who can't afford to ever move out of their family home."

Is this going to be the case.

I live in an area where the average house price is £250,000

I know these will all seem like trivial questions, and hard to answer. But if you can:

How much would I be looking at for a deposit for that average house?

How much do I need to be earning as an individual to get a mortgage?

Anyone on here bought a house recently in the UK at a young(ish) age - Basically early twenties.

I'm only just 20 so am looking for the next few years. But just want to know if it's possible. And how much harder I need to work online etc.

Thanks in advance!
#buy #house
  • Profile picture of the author Gary Gomez
    Its a tough call mate, most lenders will be looking for a decent deposit of 20 to 30% so you might have to find 50-75k!!

    Plus you will need squeeky clean credit history and a good employment background.

    some lenders are now offering 100% mortgages but they are securing the mortgage on a third party property (like your parents) so you need someone willing to back this

    disclaimer: Im not a qualified advisor, just going from experience as a property developer.
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  • Profile picture of the author manicmethods
    Thanks Gary.

    The problem I'm gonna have is the 'Good Employment Background" when all my earnings come from my online ventures.
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  • Profile picture of the author Gary Gomez
    You hit the nail on the head there my friend.

    This is why you need to have a proper "business" in this game and not do it as a bit of extra cash on the side. Once you start thinking like a business man then things go much better for you online....apologies if you do this already.

    I earn 100% of my income online but have a proper set up with accountants etc so have never had a problem in this area. If you are not doing this already then maybe make it your goal for next year, if you are then you will ironed out one of the barriers to entry for property ownership
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  • Profile picture of the author Apollo-Articles
    Get in your car and head north, east or west - property is a lot cheaper there!

    Sam
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  • Profile picture of the author Targeted Traffic
    Originally Posted by manicmethods View Post


    I'm only just 20 so am looking for the next few years. But just want to know if it's possible. And how much harder I need to work online etc.

    Thanks in advance!
    Perhaps your sig can help you with this
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  • Profile picture of the author Danny Cutts
    I am kinder in the same position....

    I have a huge deposit over 50% loan to value and only need a tidy mortgage (so small in fact its laughable)

    However because my accountant works hard for his money I will always find it hard to get a mortgage but if I wanted to get a mortgage I would then get hit with a huge tax bill...

    The truth is I would not be spending £200K on a house at the moment as the market is going to crash again... If you spend £200K you can lose £200K....

    I would sit tight for a while :-) Save money go travelling and come back when the property market is settled....

    Im close to the point as I write this to buy my first house using cash :-) But I am not worried that I am a bit late getting on that ladder as I have seen more of the world than most people and I have achieved a whole lot more than most so I frankly dont care :-)

    Build your business up

    Good luck and dont worry :-)
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    • Profile picture of the author Enfusia
      Originally Posted by Danny Cutts View Post

      I am kinder in the same position....

      I have a huge deposit over 50% loan to value and only need a tidy mortgage (so small in fact its laughable)

      However because my accountant works hard for his money I will always find it hard to get a mortgage but if I wanted to get a mortgage I would then get hit with a huge tax bill...

      The truth is I would not be spending £200K on a house at the moment as the market is going to crash again... If you spend £200K you can lose £200K....

      I would sit tight for a while :-) Save money go travelling and come back when the property market is settled....

      Im close to the point as I write this to buy my first house using cash :-) But I am not worried that I am a bit late getting on that ladder as I have seen more of the world than most people and I have achieved a whole lot more than most so I frankly dont care :-)

      Build your business up

      Good luck and dont worry :-)
      Take head of what he really just said. In both the UK or most of it and the USA the housing market will crash yet again. It's just math. We saw what happened when the stock markets shot down a bit.
      But when the derivatives markets crash you ain't seen nothin yet! They are 30 times larger than the stock markets.

      And they are teetering as we speak.

      Go, travel the world with your laptop. See all you want to see. And in a few years buy your 200K house for 100K and save 100K.

      Just a thought.
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  • Profile picture of the author Will Edwards
    Yes, of course you will. I remember having exactly the same doubts when I was in my twenties. House prices were going crackers and we needed to save a 10% deposit back then. It seemed like we would never do it.

    Then twenty years later, I lost most of the equity I built up in that time. Again, it seemed like a huge setback. Yet today, I have my own house, fully paid for - no mortgage - and I am contemplating buying a second house as an investment. I say this only to encourage you.

    Yes you can do it if you get your act together, stay positive and save as much as you can. Get some professional advice and investigate co-ownership as an option too.

    Good luck.

    Will
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  • Profile picture of the author KohenD
    I have a mortgage in UK.

    I am in late 20s though.
    I was lucky in a way that I knew about Internet marketing early on and was able to jump on board and make enough money.

    But I also have friends who work normal 9-5 jobs and have mortgages.

    If you save money, cut down your costs with few years you are able to get enough money to take some loans and put a downpayment down. It wont be easy, but its doable.
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  • Profile picture of the author Peter May
    I wouldn't yet be rushing into buying a house in the UK just yet. Instead get your head down to get as much of a deposit as you can then their are plenty of repo deals out their to be had with very little money (heck with hard work you could buy out right in some areas)

    Not far from me there was a property auction with properties that were sold for £200,000 not so many years ago and this week they failed to reach the minimum reserve at £30,000-£45,000, and these are coastal properties!

    Owning a property opposed to renting is a vanity thing now which in the past we have been told for to buy ASAP as rent is dead money but this is not the way now.

    Good Luck with what ever you decide.

    Peter
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    • Profile picture of the author JCorp
      Originally Posted by Peter May View Post

      I wouldn't yet be rushing into buying a house in the UK just yet. Instead get your head down to get as much of a deposit as you can then their are plenty of repo deals out their to be had with very little money (heck with hard work you could buy out right in some areas)

      Not far from me there was a property auction with properties that were sold for £200,000 not so many years ago and this week they failed to reach the minimum reserve at £30,000-£45,000, and these are coastal properties!

      Owning a property opposed to renting is a vanity thing now which in the past we have been told for to buy ASAP as rent is dead money but this is not the way now.

      Good Luck with what ever you decide.

      Peter



      I agree! If you can buy your house outright, at a discount, and still have plenty left over, then by all means do it! But if nothing else, rent! It really isn't all that bad.
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  • Profile picture of the author braincandy7
    Do what i did m8. Leave the country! Best move i ever made! Moved to Singapore, now Kuala Lumpur, Malaysia.

    The quality of life is better. You won't be expected to pay crazy high tax rates. You can buy a really nice house with a pool and club facilities for 100,000 USD or if you prefer central city life you can get a great condo in one of the major cities for the same.

    Sounds like a hell of a move but i did it 5 years ago at 25. Getting a mortgage out here is easy if you can put down 20% and 20,000 USD is a hell of a lot less than 50,000 GBP
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    • Profile picture of the author daprof
      Originally Posted by braincandy7 View Post

      Do what i did m8. Leave the country! Best move i ever made! Moved to Singapore, now Kuala Lumpur, Malaysia.

      The quality of life is better. You won't be expected to pay crazy high tax rates. You can buy a really nice house with a pool and club facilities for 100,000 USD or if you prefer central city life you can get a great condo in one of the major cities for the same.

      Sounds like a hell of a move but i did it 5 years ago at 25. Getting a mortgage out here is easy if you can put down 20% and 20,000 USD is a hell of a lot less than 50,000 GBP
      Don't you have to be a citizen or own a corporation to purchase real estate in most Asian countries? I just about did the same in Thailand but found out that it is a risky venture buying property in many parts of Asia. I been to Singapore a few times and it is crazy expensive there! Instead, I purchased a beach pad in Mexico because it was cheap (70K) and the laws are more stable here for non-corporation ownership.

      The house I sold in Canada was 1/4 the size of the beach pad I have now which sold for over 200K. Property tax in mexico is $ 40.00 a year, In Canada was nearly 2200.00/year and froze my nads for 8 months of the year!!

      Now that I look back, I think that it is truly insane living in Canada, the tropics are where it is at!! Fresh cheap local food, cheap beer, life is truly far better here. Another reason, besides the insane taxes, why I left Canada is that 90% of packaged food is Canada is now GMO frankenfood. I now eat fresh local food and fresh sea food for 1/4 the price and my health has improved tremendously.

      I been to the U.K. a few times, all I can say is 'no thanks'.. and I thought living in Canada was depressing.. U.K. certainly seemed gloomy and drab, not my cup of tea.. I will stick in the tropics where we have an average of 340 days of sunshine every year and the cost of living is far less.
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      • Profile picture of the author Gary Gomez
        Originally Posted by daprof View Post


        I been to the U.K. a few times, all I can say is 'no thanks'.. and I thought living in Canada was depressing.. U.K. certainly seemed gloomy and drab, not my cup of tea..
        Lol quite possibly...........but on the plus side we have the best sense of humour on earth and can laugh about things that would depress everyone else.
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  • Profile picture of the author manicmethods
    Yeah true, but it's just not for me. I couldn't just up sticks and move.

    And as far as renting goes, it might be single minded etc but it just seems like throwing money away to me. Paying for something but not really getting anything at the end of it when that money could be saved etc.

    It's interesting to see people saying to just save now and wait for the market to sort itself back out. Not something I had thought of, stupidly. It makes sense and I just want to dive in there but really shouldn't... Not just yet anyways.
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  • Profile picture of the author DireStraits
    You could buy a house quite easily - maybe even a detached one! - but it might entail moving here to Hull.

    Wouldn't that be nice?
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    • Profile picture of the author Gary Gomez
      Originally Posted by DireStraits View Post

      but it might entail moving here to Hull.
      pmsl from someone who was born and bred a stones throw from
      Hull.....you don't know how accurate you are
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  • Profile picture of the author rondo
    I say spend a couple of years travelling and having fun before committing to a big mortgage.


    "I live in an area where the average house price is £250,000 "

    Here in Sydney the median price is almost double that!



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    • Profile picture of the author Daniel Evans
      If you're anxious to get out of the family home and get on the property ladder why not consider a flat?

      No matter where you live in the UK you can get a flat for a lot less than 250k!
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  • Profile picture of the author themezoom
    There is such thing as an economy and environment where investing in real estate makes no sense. Several of my multi-millionaire investor friends have moved their assets into flipping web properties- instead of flipping homes. I personally, do not consider home equity to be the highest leverage when I can get an 800 to 1000% return on investment in a properly flipped website. - Russell
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  • Profile picture of the author VinceReed
    Everyone I know who owns a house says they would never waste their wealth on a mortgage again so perhaps you need to revise your vision towards something more useful than a permanent financial burden.

    Refocus your efforts on protecting and growing your wealth.... and work twice as much as everyone else.
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  • Profile picture of the author skydragon89
    You should come to Moldova, houses are cheap here, and beautiful landscapes as well =)
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  • Profile picture of the author NaturalHealing
    Manic,

    I used to feel I was a failure because I lived in an apartment. I bought a big house 6 years ago and learned to hate it. Every time something breaks, you have to figure out how to fix it or pay to have it fixed. My air conditioner died (Texas heat), my fence blew over in a big storm. The fence was over $8,000 to replace, the air conditioner was $5,000. I rued the day I bought that house.

    I had a hard time selling it. I sold it for what I paid for it 5 years prior and people said I was lucky. I had to pay the real estate agent's commission from my savings.

    It would be a big mistake to buy a house right now. There is nothing that will make house prices go up. It will be years before they start to go up again. They will only be going down. Only buy real estate when the prices are rising.

    I agree with the others, go have fun. Travel the world. Experiences are a lot more valuable than owning a house.
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  • Profile picture of the author Anonymous Affiliate
    I want to buy a house...
    Dude, didnt you get the memo?

    Considering the current financial situation and the endemic problems in the Real Estate market in developped countries (inveted population pyramids, new generations with lower average income than their parents, today's immigration repatriate their savings, overflood of properties in the banking system's hands, etc), buying a house is probably the WORST financial decision you can make. It is simply a highly unnefficient long-term investment.

    All macroeconomic experts agree: It's time to rent, not to buy.
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  • Profile picture of the author Ed Micah
    If you don't think you can afford one, then you probably can't afford one - but if you think you are able to afford one, then at least you know you can do it!

    Think positive & have faith.
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  • Profile picture of the author seasoned
    £250,000 in early twenties? Let's see. Historically, that has been about $500,000. Historically, that has cost 1-2 MILLION dollars USD!(after interest) In the US, and probably in the UK, it is illegal for a bank to loan a person under 18 that much unless there is a cosigner. In the US, with traditional lending practices, the average american can only afford $360,000(A home of about $90-$180K)!($40k*.3*30) So a decent loan officer would tell the average young person to TAKE A HIKE! IMAGINE, you would have to make $222,222 to afford an $800,000 home! And that assumes you have NO debt, etc...

    BTW it is HARDER for self employed people, at least in the US! If an employed person has a lowdoc with $100K income, a self employed may require MORE documentation and $200K!

    SO, DON'T expect a good loan unless you have a good pay history for like 7 years, and good credit, and are over about 25. Expect to be able to buy a home no more than about 2-4 times your salary. If the rate is about 10%, about 2 times. If the rate is about 5% or less, about 4 times. But HEY, my credit wasn't PERFECT, and I DID have debt, so I was limited to about 3 times!

    If inflation hits, it could cut your buying power to HALF, or less.

    Steve
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  • Profile picture of the author stiflex
    move out somewhere cheaper, because 250,000 pounds is serious money, and its just the house!
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  • Profile picture of the author seasoned
    BTW if it makes you feel any better, I seem to have hit a 10 year mortality! Garage door frame DEAD! (about $1000) Water heater DEAD!(about $1000) Refrigerator DEAD!(about $1000) A bad vacume cleaner ate my carpet! (about???)

    I am averaging about $1000 a month! For REPAIRS!

    Steve
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  • Profile picture of the author Danny Cutts
    lol

    I will always say travel..... I have travelled far and wide with only my laptop for work Perfect!!

    The only reason why i am back in the UK at the moment is because My long time Girlfriend is training to be a maths teacher so we can leave....

    I spent £20K on travelling in 2009/2010 and where my friends said it was better spent on a house, I have the wall in our flat filled with photos where our guests just stare at asking questions....

    To be honest it nearly killed me with dengue fever in Vietnam but I survived (just about) and I have no regrets... I have more friends around the world than I do in the UK.

    I use to spend the days on my netbook blogging while sitting by the pool or on the beach 100% relaxed.... In fact I made more money while I was away than I do when I am in the UK....

    There is sooo much more of the world left to see that you dont want to be tied to one place just yet :-)
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  • Profile picture of the author michael26a
    Houses are pretty expensive where I live too. The best way to get into the property market is to start with an apartment, or buy in an area that's pretty cheap. The only reason I could afford my house is because my mum and big brother helped me, otherwise I'd still be living at home probably lol
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  • Profile picture of the author GT
    Originally Posted by manicmethods View Post

    Recently on the radio I heard "The current generation is doomed. It is going to be a whole generation who can't afford to ever move out of their family home."
    Generalizations like that are designed to frighten the weak-willed into perpetual servitude. Don't believe it and don't let it influence your decisions. That's only the people with money trying to convince you not to take any chances on losing your job at McDonald's or Wal-Mart. People who are financially well off NEED the mindless masses to serve them.

    Instead, strive to build your knowledge and your abilities. Dream big. Act boldly. Stay focused, and be committed to doing whatever it takes, no matter what obstacles may temporarily slow you down.

    If you want to buy a house, find a way to do it.

    GT
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  • Profile picture of the author Fernando Veloso
    We're seeing the same thing in Portugal. Lot's of single people living with their parents OR renting houses with 2 or 3 mates. Economy is so f$#"#$# up and the expectations are so bad that renting seems a good option right now.

    And Danny has a point too. Traveling between 24-30 is/was awesome (at least for me). Too bad I can't get back in time.
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  • Profile picture of the author Dennis Gaskill
    Originally Posted by manicmethods View Post

    Recently on the radio I heard "The current generation is doomed. It is going to be a whole generation who can't afford to ever move out of their family home."

    Is this going to be the case.
    The one thing that matters the most is what YOU believe. If you accept the premise offered then it is likely true . . . for you. It won't be true for everyone though. Which group do you want to be a part of -- those who are doomed, or those who are not? It's your choice.
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  • Profile picture of the author derekwong28
    If you are just 20, it is best not to think too much about it. You earning power is likely to increase substantially as you get older. Also most first time owner buy a property that is considerably lower than average. In addition, you may be well be working and living in another area by then.

    The chances are that there is still some house price correction to go in developed countries. However, major cities will hold much better since they attract a lot of wealthy buyers from overseas.
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