Location, location, location or impractical, unrealistic and impetuous?

I’m sure you’ve heard about Kirsty Allsopp’s recent comments on young people buying a property. If you’re not inclined to read the article, lemme break it down for you:

  • Kirsty stated that young people could easily afford to buy a property if they cut out luxury expenses such as Netflix, gym membership, coffee and going on holiday
  • Kirsty believes that we’ve fallen into a trap of saying buying a property is impossible for everybody, when it’s more a case of ‘where’ you can buy, not ‘if’ you can buy
  • Kirsty herself bought a property at age 21 with family help whilst living in an era of 15% interest rates, low salaries and modest expectations of lifestyle

So is she right?

I have many, many opinions on this that are all very differing! But first, a bit of context – I spent a large portion of my career working in financial services (some of which was as a mortgage adviser) and am pretty cautious about budgeting/spending most of the time. However, like Kirsty, I bought my first home at age 22 with help from my family whilst earning a fairly low salary. I also live in the Hull/East Yorkshire area, which is widely touted as one of the most affordable places to live in the UK.

There’s a lot to unpack within Kirsty’s comments, so I’m going to take them point by point. A reminder that these are my personal opinions; based on research I’ve done on this case, my industry knowledge and the experiences of myself and those around me.

1. People could afford to buy a property if they cut out luxury expenses

So, to read that as a standalone statement is arguably 100% correct. If we’re trying to buy something expensive and we’re not the secret millionaire, we need to budget and save to do so. We know this. But, if we taking a deeper dive, the examples and generalisation of the comments are where some of the argument starts to unravel.

I think that Kirsty could’ve been trying (not very successfully you might argue) to levy her comments at a group I’d refer to as “champagne lifestyle on a lemonade budget”. These are the folks who curate an image of an outwardly ostentatious existence – head to toe designer attire, VIP table at the hottest nightspots, driving a top of the range car and jetting off to the latest trendy destination. All of which, is documented on social media. Potentially spending all of their disposable income in a manner that in no way contributes towards being a future homeowner. And that’s their choice to make. Everybody has their own set of priorities, and for some this doesn’t include owning their own home from a young age (or maybe at all). There are many places around the world where renting for the long term is a standard practice and view the innate desire to buy a home as quite unusual. Maybe some young people just want to have a few years of being young; going out, making memories and learning a bit about the world, and there’s nothing wrong with that.

The main misfire what Kirsty’s saying is the examples she’s used when describing luxury items – streaming services, coffe-shop coffee, gym memberships and holidays. These are things many of us have and do, but not always to excess, and are things most people would re-assess or reduce if they were saving to buy a property already. However, I geuinely believe that completely cutting everything “non-essential” is not only unrealistic but unhealthy. Going to work day in, day out and not having ANY kind of release to relax and enjoy your downtime a little? Because that’s all it is in a lot of circumstances, a little bit. As I said earlier, everyone has priorities – for some this means hitting the gym a few times a week, a weekly coffee date with pals or having an hour with your family each evening to watch your favourite Netflix series. All experiences that contribute towards having a happier and more fulfilling life. A house should be the icing on the cake to your life, if it’s what you want, not your whole reason for being.

My personal opinion has always been this – what’s the point in buying a house if all you can afford to do is sit in it?

2. It’s not a case of “if” you can afford to buy, but “where”

Again, the statement said by itself does hold a ring of truth. I know lots of people who have bought their first property in an area they can afford rather than the one they would prefer to live in. Their priority was to get on the property ladder as soon as possible, so to them it was a sacrifice they were happy to make. But, being from a very affordable area of the UK, the difference in location was very short. In other areas of the UK, it be not be quite so simple. There are other things to consider in when you’ve move – the location of your support network, your place of employment and how you can get to and from the places you need to. If you rely on family for childcare and they live 50 miles away, is a change of area likely to be feasible? I have an example of this in my own family. 3 years ago, my mother decided to move to the next county. There, she was able to buy a large property for much less than it would’ve cost where she lived before. The new property is 20 miles away, across a large bridge and hidden in the depths of the countryside, vs the 5 miles away she was before. She’s the primary carer for a family member who, in the event of an emergency (and there have been a few since she upped sticks) is now a 45 minute drive away with the risk that the bridge could close in the event of damage ir bad weather. That move, although it seems minor on paper, has caused difficulty within the family support network that she’s part of.

3. Buying a property with family help

Simply put, It’s just not that easy. I’m know that I was fortunate to have had help to buy my first home, and I’m very aware that it’s not something everybody is afforded. Some families can’t afford to help, some may not want to help.

And it’s not just getting on the property ladder; its making sure you can afford to live there too. Once you’ve bought the house there’s monthly bills to pay, furniture to buy and the cost of fixing things that break, such as the boiler.

In conclusion – I think that Kirsty’s comments were a bit too general and lacking in any context to the present day experience of being a young person or buying a home. My understanding is that the people she helps on TV are presented to her and ready to go: deposit saved, know what they can afford and a set of criteria for her to work with. Perhaps it would be advisable for her to concentrate on the area that she’s the expert in and leave the financial and mortgage advice to those expert in that area.

My final thoughts are these: it’s not your age, it’s your stage. There’s no set age by which you need to have bought your first home, getting married, have kids or do anything life changing. Why rush into the most expensive purchase of your life just to keep up with an imaginary timeline of what your choices should look like by a certain point? Goals are great but make them to suit YOUR life and YOUR terms, then make the best decisions you can to help you achieve them.

Thanks for reading,

J xx

LIFESTYLE / Buying a house – getting started

Welcome to my new mini series!

I’m going to start by saying this post is going to be long and definitely more on ‘functional’ side of things you’re likely to read in the blogosphere, however it may also help you immensely when taking those first tentative steps in to a house that you’re considering turning in to your home. It’s a huge commitment!

I decided to write this for a couple of reasons – firstly, because I’ve seen more than a few posts on social media lately from people looking to get their foot on the property ladder and buy their first home, secondly because searching for a new property consumed a large chunk of my life for a good 18 months between last year and the year before sorts something I feel equipped to talk to people about.

I’m by no means a property expert – I’ve bought and sold three houses over the past 13 years and viewed legit close to 100 properties of varying size/price point/ seller in a variety of different financial markets so I’m comfortable in saying I believe I have a good deal of experience. I also spent three years working as a mortgage and insurance adviser, so I have experience from a slightly alternative prospective there too.

Before you start to look

First things first: you need to know how much you’ll be able to borrow. There’s no point in looking for houses you can afford, right?

You’ve got a couple of different options for doing this – speak to a mortgage advisor (face to face or on the phone) or do some research online. Even though I used to work in the business and done this both ways in the past, I’d probably lean towards going, at least in the first instance.

Mortgage calculator tools have significantly developed to provide more and more accurate information, and many times mortgage advisors will use something similar to provide the information you’re looking for.

Internet research can be done at any time of day so you can fit it around work/family/social life easily, and you can look up as much as you want for as long as you want without being constrained to a set appointment time.

I’d suggest starting with your own bank/building society’s website first; they may be able to offer a better deal to you as an existing customer (for example, I get cashback into my current account every month at a higher rate because I have my mortgage there too). Comparison sites are also a really good resource as they have access to a large portion of mortgage providers in the UK, including special deals for first time buyers or larger deposits etc.

One key document you should look to get at the end of this process is an Agreement in Principle (sometimes called a Decision in Principle). This is official confirmation from a mortgage provider that they would be happy to lend you the funds you need, subject to supporting documentation (e.g. Payslips) and valuation of the property. When you starting making appointments to viewing houses, saying you have an AIP shows you’re a serious buyer who can afford the property you’re like to look at. Most of the time now you can get an AIP without having to go through a credit check; this is better as too many credit checks in a short space of time can actually lower your overall borrowing limits when you’re ready to go ahead. For this reason it’s better to do just one before you’re ready to apply for a mortgage, even if you decide not to use this company to go ahead.

Key piece of boring adult advice here: tell the truth and MENTION EVERY SINGLE THING – if you have credit card balances, loans or bad credit these could affect what kind of amount you can borrow, it’s better to know exactly where you stand from the jump than waste time on a situation that end up not being able to move forward.

Let the house hunt begin…

Now you know what you can afford, you can start looking for your dream home, eek! There are three main ways to do this:

– Online

Back online you go, same reasons as before – you can look whenever you want and for as long as you want and change parameters of your search. Sites like Rightmove or Zoopla are good because they have almost all estate agencies registered with them and can show all of the houses for sale within your price range (with possibly the odd exception).

Some sites have a function that shows you average house prices in a certain postcode area/street too, so you can get an idea of property prices for the areas your interested in living in.

When clicking on individual property information, pay close attention to two areas:

1. Listing history. This tells you the date the property was put up for sale, if you can see how long it’s been on the market for you’ll be able to get some idea of the level of interest other buyers have shown and therefore what room there is for negotiating on the asking price. If a house has been on the market for a while the sellers may be more open to a deal, if it’s new to market that’s when they usually attract the most attention and sellers aren’t usually as open to this.

2. Properties sold nearby. This tells you the date and value houses on the same street have sold for. This gives you an exact picture of what properties down the street are selling for and therefore what you’ll need to pay to live there. Remember though; some streets have several different style of house, so try and check that the property is similar before comparing.

– Drive bys

You probably have an idea of the area/s or event streets you’re interested in living in, so simply jumping in the car or taking a walk there and looking out for ‘For Sale’ signs could narrow the search pretty easily. Plus, you get to see the area as people are living in it – types of people, parking, local amenities – which will help confirm that it feels like it could make a nice place to live.

– Register with estate agencies

Estate agents typically have mailing lists that will send out an e-mail every time they list a new property that matches your basic criteria (usually area and price) which are worth signing up to alongside the above two options. Some of the more attentive / organised agencies are also happy to give you a call with this information as soon as they take on a new property if you ask them to.

In the next instalment of my ‘Buying a House’ series, I’ll be talking about the next stage of the process – viewing houses. This will include valuable questions to ask and why, as well as things to think about whilst you’re viewing.

Thanks for reading,

J xx