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27 January 2011

Can we afford to buy a home?

I had an email this week from Rebecca who wrote:

I'm about to turn 30 and I live in a rented smallholding in the UK. My husband and I live as simply as possible, rearing nearly all of our own food and spending as little as possible. We are very happpy and love our lives. We're both well educated and work in environmental jobs, which we both enjoy, feeling that they are worthwhile and really contribute something to society. They pay fairly poorly (as is the case with all environmental work) but we don't need much money as we live simply and money simply hasn't been too much of an issue for us in our way of life. The problem is more of a long term one. We are trying to start a family, which will inevitably involve a salary reduction. ... However, ideally we would like to buy a house at some point in the not too distance future. I hope this doesn't just sound a spoilt list of 'wants'. ... We live in a fantastic rural community which we are very much part of and never want to have to leave; but renting is by its nature insecure and obviously we never know when our landlords may want their house back. This is also coupled with the fact that we don't really want to be paying rent in our old age, and have to carry on paid jobs until we die, just to meet rent.

In the UK, as I'm sure is probably the case in Australia and many other countries, house prices have gone through the roof in the last ten years and salaries haven't. You need two reaosnable salaries for a bank to give you a mortgage on the average priced house. As I said, money hasn't been an issue because we live frugally, and have saved a big deposit, but how on earth do you get a round the mortgage issue? Even with a large deposit, it is the mortgage that makes up the bulk of the house value. We work hard, and quite a lot of hours as our work is seasonal, and hard work isn't an issue. However, I don't think moving to take a highly paid, corporate job is an option for either of us - there is no work like that in the area and I think it would go against what we believe in. 

I know that you can't have everything at once. If we want to start a family, we have to accept a reduced income. We can possibly cut back a small amount, but we live very frugally, preparing all our meals from scratch, making as many ingredients as possible and rearing all of our own food. We work form home as much as possible, use the car as little as we can and don't really buy anything.  I know that there are lots of people my age struggling with similar issues and I'm sure there's a sensible way ahead. I'd love to hear what you think.

Hello Rebecca.  Yes, it's a problem here too and probably in many countries.   I hate to keep harping back to the old days but I think we can learn a lesson from our past. Back in the 70s, I lived in Balmain, a suburb in Sydney right on the harbour.  It was definately working class then but now it's been gentrified and a house that would have cost $19,000 in 1970 would now cost between $1 and $2 million.  But back then, $19,000 was an awful lot of money and we didn't think about buying, we kept renting.  I eventually left Balmain but I have friends who stayed and bought a house.  The way they got around it was to buy in an area they liked but the cheapest house they could find.  They then spent the next few years fixing as much as they could on weekends and at night.  Eventually, when the house was in better condition, they sold it and bought another, better, house.  They did that a few times until they had the house they wanted and could afford.  It took a lot of work and time but it was the way it was done then and they were happy to be in their own home, working for their future together.

If you do that, you have to be prepared to work on the house and improve it as you live in it.  It's tough and I'm not sure many people would like doing it but it would be a real challenge and it's a way of getting into the housing market.  Don't aim for the top house, aim the worst house in the best street instead.  When we started out it was common practice to start at the bottom, buying whatever you could afford - that might be an apartment or an old house, and you'd renovate and paint and work your way up. I have heard quite a few young people complain about baby boomers having it all and keeping them out of the property market, but this is how we got what we have.  We didn't think of buying the top of the market, we always started at the bottom, or wherever we could fit in the housing market that was within our budgets. 

In Australia now, ordinary houses in Sydney are selling for $600,000 - $1 million, although here where I live they're half that.  In smaller towns you can get a good house for $150,00 - $200,000.  Can you move to an area where the house prices are lower?  Can you take in a boarder where you are now to help with the rent while you save for a house?

There is an interesting article here about the current over average housing prices in the UK.  Maybe you should keep and eye on this, hold off for a while and see if the prices come down in the next few years.  In Australia, the government pay a first home owner's grant of  $7,000.  Do you have something like that?

I wish I could offer you a definite direction Rebecca, but this is one of those problems that is not so easy to solve.  As you know, our readers offer excellent advice and so I'm hoping we might get some helpful suggestions for you to try.

And now it's over to you.  If you're young and have moved into your own home, how did you do it?  Please share your experiences and thoughts on this as I'm sure Rebecca will be one of many who will benefit.


  1. My husband and were able to buy our first house with a 5% downpayment (that was a lump sum payment to us at the time). We bought an empty house that had been foreclosed on, in need of lots of repair and cleaning. It had been on the market for a long time because it was just plain ugly! It was also quite a distance out of town and that also effected the price. We lived hand to mouth and barely covered our bills, but 3 years later when we sold it, we were able to sell it for $20,000(Cdn) more than what we had originally paid. Don't underestimate the value that paint, second-hand fixtures and hard work can do for a sad little house! We are now on our fourth house (much fancier!), and we now have enough equity in our current home (because of DIY renovations) that we are selling it and finally buying our dream farm. And I guarantee, that farm is going to be another fixer-upper!

  2. We did it the way Rhonda explained: bought the worst house in the neighborhood and spent years renovating it. I still don't like the house that much but it is in the neighborhood of the best public school I know in our town... and it has 1/4 acre in the back. I grow most of our food there + chickens.
    One day when the market is good again we'll sell.
    I live in the US but I'm European. I never tried to buy a house there but I think it is harder to get a loan, isn't it?
    Also, when we bought our current house I had a 4yo and an 8yo and also had my own in-home business. Although I think it is hard to work during a baby's first year, when they are toddler's it is easier to find people to swap babysitting for a certain number of hours a week to be able to still work without paying for preschool.

    I wish you luck... it is not easy, but worth it, I think.

  3. I actually heard a tip on tv today that said you should go to your bank and figure out what kind of home loan mortage you could qualify for, then search for a house that would only be 75% of's a small way to save. My grandmother, when she was still alive, purchased a definite fixer-upper on a street that had 2-storey homes...this one was still from the 1950s with just one bathroom, two bedrooms. She got it at a fantastic price!! She did tell me that in the earlier years of her marriage, her and her hubby, purchased a really nice home. They were both working. They lived off her husband's income, and she used her salary to pay off the mortage. It was a sacrifice, but they got the home payed off much sooner than all of their contemporaries. Another friend found a house that was the same per month (mortgage) as it was for the rent she was paying on her flat. So it really depends on what you think you can afford. That's my only advice, figure out what you can afford FIRST, then shop/look around based on that!!! Good luck!!! Love and hugs from Oregon, Heather :)

  4. Rebecca

    My husband and I got married in 1980 and our first (of two children) was born in 1981.

    In that time, my husband also started his own business and we purchased a small house.

    How did we do it - I don't honestly know.

    We found a house, with a (single) large tree in the garden, (which was what my husband’s requirements were) on the outskirts of an unfashionable (at that time) part of town, with a small amount of land on which to raise our first child, as opposed to living in a flat and all that that entails. There was only one car, (which my husband used for work, and although I didn't have a car, I had a pair of feet, and my daughter loved being pushed is her pram) and we lived very simply. Living in that area the land was much cheaper - even though that meant that my husband had much further (and it took much longer) to travel to work.

    If one really wants something one makes a plan - which we did. As our family grew, and the business found its’ feet, we improved on our small home. But it was all done within our resources / opportunities. A lot of manual hard work took place (e.g. I was wielding a pick in our garden when I was 7 months pregnant) - but at the end of it, we had a place that was ours - which we had put every free minute into, and every bit of energy that we could.

    One can purchase a house which is "just perfect" but then it is not yours - it is someone else's perfect house - but a house does not make a home. It's just like baking a loaf of bread - if you put some of yourself into kneading the dough, the bread will taste all the better for it - so a house will be more a home, the more of yourself you give to it.

    The sooner you take that leap of faith into your future the sooner you will be free of someone else's mortgage. Start small, build it up, and if it proves too small for your future requirements, sell it and move on to what lies ahead.

    Your future is in your hands.

    Wishing you all the best :-)

  5. Rhonda. thanks for not making fun of us baby boomers! In the US, the problem was the down-payment, not the mortgage (I'm talking 1980.... when we bought our first house.... with help from the grandparents, and with our 3rd child a new-born! We rented for the first 12 years of our marriage.)

    My best advice to all is NEVER GET USED TO LIVING ON 2 INCOMES! Things were always tight, but when our 3 went to college, my income kicked in and went out as tuition. If our monthly house payments had needed my income, life would have been very difficult! As it was I went back to work and college tuition for 3 kids was paid out of current revenue, without dipping into what my husband made.

    I always tell my children that it probably looked easy from their viewpoint, but we struggled so they would not realize how tight things were. Now they are adults, I emphasize the difficulty.... don't want them to think we just had it easy!

    Barbara M.

  6. No one has mentioned the fact that you might be able to rent to own a house. I dont know if there is such a thing where you are but it is an option. We bought a fixer-upper in the 90's and lost everything in a flood. Fema actually gave us enough money to buy a trailer and then we sold it and moved south living in a trailer rent free for a couple of years (my hubby worked on the farm milking cows, he got a paycheck on top of the rent free trailer) and then bought a brand new home in a subdivision. We are now saving enough money to buy a small farm of our own. I never thought we would ever own a home, we rented for the first 5 yrs of our marriage so there is hope for everyone to own one. I think the housing market is going to drop so save your money and keep a sharp eye out. All those overpriced homes are not selling so it means a buyers market!

  7. My husband and I own a house, have a son, and live on one income, kinda. I telecommute (via the Internet) so I can be home to homeschool and raise our son(6 yo). This has also increased the amount I can cut the bills at home through frugal measures and environmental benefits like rainwater harvesting and preserving. When I worked outside the home, we used austerity measures as well, but nothing like we can with me home. Working from my house is great and a good option for any kind of side money. I contribute the "play money" to our house that works as a cushion to keep us from feeling strained.

    As for buying. We are looking to purchase a house that is outside the city due to our desires for more of a farm lifestyle. I do not know if they do it in other countries, but here in the US it is called an Owner Held Contract. This means you are slowly paying off the owner of the property instead of a bank. Much like a mortgage, you give a down payment, have an interest payment which is settled on, and then make a monthly "mortgage" payment directly to the owner of the house. In many cases there is not as steep a credit check (if at all) and you are not bound by all the rules a bank is for clearing to purchase.

    We would never pass a bank mortgage in this economy solely because I choose not to work full time. Secondly, in freelance writing, it is difficult to prove a "boss" or a guaranteed income for me which makes it even more difficult with a bank. However, we can get an owner held contract without much issue.

  8. I was very lucky to have purchased my house without any money as down payment. I bought a 1953 single story house 2 bed 1 bath but with good bones. I was very lucky that the sellers' paid all the closing costs but I was very realistic in buying what I could afford as monthly payments by myself.

    There is a lot of good advice being given by the other followers. I agree with Heather into checking with the local banks first and see what you qualify for first.

    I don't know about the housing opportunities in the UK, but here in the US there is opportunities for 1st time home buyers or buyers in a limited income. Have you checked all the programs available in your area?

    Please don't give up on your dream to own a house. I never did and if I can do it in one income, I'm sure you and your husband will be able to do it also.

    Best of luck.


  9. Hullo Rhonda and Rebecca, When hubbie and I got married (March 2000) we were renting. We were living in Sydney and decided if we wanted to have our family and me be a stay-home Mum we would have to get out of Sydney. It was a scary choice for me as all my family and life-long friends were there. We moved to the Mid-North Coast of NSW (about 8 hours drive from my parents) for a test run. Found a block of land, hubbie luckily got a transfer with work, and I found a job at the local Council the second day I arrived here. We moved in with hubbies parents for 12months (that was hard for them and us, but I am forever grateful as this helped us enormously), and stashed every penny we made, working overtime, gathering all we could. We bought a house 'from the plan' cause it was cheaper, however, we got something that complimented the block we were living on to make the most of the sun in winter and protect us from heat in the summer. September 2001 we moved in, no carpets, no lawn, no driveway. It was bliss, it was ours (the banks), it was a house that we would make our home. Oh we had no honeymoon when we got married either, we couldn't see the point going on a holiday when we wanted our own home. But being in our own home, became our belated honeymoon. Working the yard together, planning and saving. We had only the one car, often I walked home from work as I didn't even drive back then, but that is part of the journey. Today we have two darling little boys, are still in our home sweet home, I am studying to be a teachers aide, but have been a stay-home Mum just as we had dreamed and this also enabled me to be involved in various committees from preschool to soccer coach. I love op-shopping, I sew, I cook from scratch (don't like the taste of fake stuff), I purchase non-perishables in bulk when on sale. Hubbie now has a motorbike to get him to and from work because I taxi the children where they need to be, we also have a little caravan for our holidays which we absolutely love. Life is grand, we have all we need.
    I wish you well in your journey as a family. It's hard work, but oh so worth it in the end. Start small, set your goals, and the best part, you have a wonderful partner to share them with and work with to make your dreams come true.

  10. When we bought our home 5 years ago we bought a very old, ugly house at the lower end of the market as we also wanted a family shortly after. We have been slowly doing it up...
    The crazy thing is that when we applied for a bank loan they said we could borrow $800000!!! So ridiculous. We ended up borrowing $360000, and even that is hard to pay back, especially now that I am not working and home wtih our 4year old instead.

  11. We're in our fifth home (purchased). The first one was a condominium and tiny. The second was a nightmare that had terrible interest rates .. first mortgage in the double digits .. and a balloon payment (interest only) on a second mortgage. It wasn't until we sold these properties .. went through a period of unemployment .. and learned to live on one income that we started NOT living from paycheck to paycheck. This took place in the early 1980's .. add three .. then four children to the mix .. all on ONE income. We couldn't afford the best area to live .. so we home-schooled our children until our income rose and we could afford private school. Only our fourth home made any profit gain in the housing market .. which we used to build our 'dream' home. Hubby is nearing 60 and our home has 19 more payments until it's completely paid for. It's been hard work .. and I'd have done things differently perhaps by buying a used home instead of building one .. it would have been less expensive and paid for by now.

  12. Have you considered moving abroad? Or to a much more rural part of the country? Houses in France are going very cheaply depending on where you look - the Limousin region has some great bargains, and depending on how much you can afford, you could buy something very nice in Brittany with enough room to grow your own food and raise a family for much much less than you could in the UK.

    It all really depends on what your priorities are - do you wish to be close to your parents/siblings/in laws? Could you bear to live in a more urban setting or is the countryside where your heart is? Will you be homeschooling or sending your children to school? Do you wish to be a SAHM (or Dad!) or will you want childcare? How important are certain amenities for you? What areas can you be really flexible on?

    From your description you sound as though what you really want is a smallholding where one of you is the stay-at-home parent and the other brings in a modest income. This is what we have, through good timing, our savings and sheer luck. Sure, it's a little out of the way, and it's colder here than in the 'burbs, but we love it.

    It can be done, broaden your search parameters and search for cheap properties (maybe keep an eye out for holiday homes that were repossessed by the banks and are up for auction). I wish you the best of luck!

  13. we live in the uk and the way we got onto the property ladder was renting from the local council and then had the option to buy after a couple of years with a huge discount i think you can still do thisnd

  14. sunflowersandtulipsJanuary 27, 2011 7:02 am

    We are 1yr into owning & living in our "new home'a 105yr old cottage,unlivable by most peoples standards and ours! We are renovating & establishing gardens with an orchard,kitchen garden and of course flowers for the soul.It is going to be our house for 30yrs so we are setting it up step by step for us to be as self sufficient as possible.Its our 2nd house-that was also unlivable when we bought it-it took 5yrs to reno,establish an orchard and kitchen garden, we shifted in with a 16day old baby,started our own business,in a rural area with poor job opportunities.When we sold we made a worthwhile profit.HERE'S WHAT I KNOW:1.I want to lie awake at night feeling excited & frustrated at the reno's and them not getting completed quickly enough.If we had a large morgage instead and everything complete I would lie awake so scared because we would be so over our heads in debt.My husband has his own carpenter business, I home-school our daughter.2.As soon as you leave your front gate & go out you spend money.We have worked it that we go to the shops/excursion where money needs to be spent every 4-6 weeks.My husband does the groceries every two weeks on his way home.You become very resourceful.3.Buying your home is a business deal,keep your emotions out of the deal.And of course take into consideration all Rhonda's great tips.Good Luck and Follow your dreams.

  15. My husband and I are in our 20s and bought our first house last year. We are both students, and I bought the house with my very modest student stipend. We live in an area where the houses usually range from $200k-$1mil (US). This is way beyond our price range.

    Like you suggested, we waited and found a house a few miles out of town that was foreclosed that we were able to get for much less than the average price. It was in mediocre condition. Since then, we've been working hard to fix it up and turn it into the home we want. We keep an eye out for floor models and clearance appliances. We take the time and effort to fix things ourselves rather than hire someone. And what a difference paint makes!! I painted the walls, molding, cabinets, and even the counter tops! It looks so much better now than when we moved in.

    So far it has been worth it to buy a home. We still have a long ways to go, but we love our home. And we have a yard for our dogs, gardening and composting. I also think this of this as an educational experience in home ownership that I am thankful to be getting now, rather than later.

    To your reader, I would say that if you can pay rent, then you should be able to pay a mortgage. If you love the area and plan on being there a long time, and are responsible and can live frugally, then I think buying a home might be a good idea. It's nice when your money goes toward equity in your own home rather than to equity in someone else's home!

  16. Here in the US there is a difference between a mortgage from a bank & a mortgage from a mortgage broker. A mortgage broker is able to look at different life factors than a bank - the fact that you live frugally would be a plus with that lender. Is there something similar in your area?

    When we bought our first home I knew what we could afford, when we went to the lender I was very honest telling her we can spend this much a month and that payment must include all taxes & insurance. She advised us the price range to look for AND to not tell realators what our price limit was as they would not consider doing business with us. Instead we were to say we were looking at fixer-uppers and would like to keep it under this amount - slightly more than our limit with the idea we could bargain down. This helped keep us from looking expensive property (though there was a lot of pressure to "Just Peek") and opened up less than desirable but cheaper houses.

    Many new home buyers get caught with larger than expected payments because their agent will tell them the payments will be such & such but that amount does not include the taxes & insurance. If you do talk to a lender first be certain that any extra fees are included so you will have an accurate amount.

    Our first home was over 100 yrs but very solid. We moved to be closer to my dh's father & this newer but flimsy home is not match for the sturdiness of my first home.

  17. 2 years ago we were asking outselves the same question. I think it comes down to focus- It was really important to us to have our own home, to be able to do what we wanted and have security. The trick is to try living with the mortgage payment before you buy. Find out from the bank or internet what your payments whould be then minus your rent put the rest into your deposit saving.

    The best advise we got was that the first two years are the hardest - and it's true. Now two years in we are on one (not very large) income and with careful living we are doing fine.

    Remember if you really want something there is a way to get there - don't give up! Good Luck.

  18. When I purchased my first home in the states, if you didn't put 20% down (minimum) you were subjected to mortgage insurance in addition to your property insurance. Mortgage insurance is to ensure that you don't default on your mortgage payments. Those monthly insurance fees are just cash out the window. These regulations may differ from state to state, country to country, but 20% down minimum was always the standard before things got crazy in the housing market. You worked and salted away your pennies until you could get 20% to put down on a modest starter home. Often times parents would help out there. Rhonda's advice about buying the worst house on the best street is absolutely correct. Where you buy is always more important than what you buy, which is exactly why realtors say, "Location, location, location." You want to buy in a desirable area so that your investment will continue to increase in value. A modest, starter home in a good, safe, coming area with 20% down is solid advice. Regardless of the current adjustment in cost of living figures, I still believe 25-30% of your earnings should be your housing cost. Anything above that means you start pulling out credit cards.

  19. My husband and I brought our own place in 2006 when I was 25 and he was 30. AT the time we brought a tiny wooden cottage out of town for $200k. We were lucky. We brought our house before the global financial crisis when we were able to get 100% finance and didn't need a deposit. At the time I was working full time and my husband was unemployed as he looked after our two daughters. It was still tough but our mortgage wasn't much higher than our rent. It is still tough now though with rates and water but we manage. We a have also just used our equity to build an extra room onto our house and we are only just npw 4 years later painting the outside as the paint was peeling off. My suggestion is to buy the worst house in a good area [if possible]. As you can always paint, replace floors etc as you go and that isn't too expensive. Sometimes you may have to choose somewhere a little out of town too. We are about 15 mins to our bigger town. Our town where we live has a population of 500 but the bigger town 15 mins away has 20,000 people. So although it's not very quick to go to the shops for supplies, the doctor etc we have to forfeit that to buy a cheaper house as in the bigger town houses are around $450,000 and higher. We are also lucky as our house has gained value and although our loan is only $215k now we could sell for about $300k so buying in a place that may not be exactly where you want but where you think there may be growth is always helpful too :)

  20. Living in San Diego where the housing market is out of this world expensive, my husband and I just rent. We would love to buy someday, but as I want to stay home with our children when we have them and we already live quite frugally, we are content to rent. But if we could ever save up the money for a down payment on a "fixer up" out in the country with a mortgage which was about equal to what we pay in rent, we would definately do that!

  21. I am in the US. Here is what we did. We first purchased an old farmhouse in 1996 that we gutted and remodeled. We sold that for enough profit to buy some acreage and we lived in a camping trailer while we built a log home from scratch in 2001. (you can see that house here: Now we are selling that log home and will be living in a "tiny house" that we put up on a bigger acreage and we will again be building our own home ourselves from scratch. And when I say from scratch I mean doing it all ourselves from hammering to plumbing to roofing, etc. This way we have no mortgage at all. Sure it is a sacrifice to live in a "tiny house" while we build the big house, but I would rather do that than be a slave to a bank. Living mortgage-free gives us the freedom to do whatever we want. We already have the tiny house up and ready. Just waiting to sell this house and we'll get rolling on the new one. You just have to have an open mind, not be afraid to work hard, and enjoy creating things. If I had a nickel for every person who told us that we were crazy when we built our first house, I would be a millionaire by now . . .

  22. we bought a 4 acre 4 bedroom farm for under 100,000 dollars the sacrfice was to move where we knew noone and start again..the rewards have been unmeasurable... so i guess what i'm saying is there will have to be some sacrifice..that little village that you love and know maybe???

  23. We don't learn about money at school so most of us don't know how to approach to this subject. I'm in the similar situation at the age of middle 30's. My first baby is on the way so I decided to do something about it. My current action is to educate myself about money so that I can make better choices for the future. I'm studying about investment from zero and blogging about it. I didn't even know how loans work when I started. My suggestion is to start with watching your expenses and incomes. High income doesn't mean that you are wealthy. Focusing on your goal and make action plan. And keep taking actions everyday, even a small step, because you are the only one who can make your dream come true.

  24. What's wrong with renting instead of buying? We own our home outright, having paid off the mortgage early, but there's still property taxes and insurance, and upkeep. These things will never go away. With a mortgage, if you don't pay it off early you may end up paying double the original purchase price by the time you do pay it off.

    As we have seen over the past few years, real estate is no longer an investment you can count on to increase in value. If you are in a good situation, happy with the area, etc., just keep renting! And invest any savings for the future.

  25. Hello Rhonda and everyone
    Love reading this about buying houses. My husband and I bought a house in the only area we could afford. Paid a bit off, painted and improved it a bit and worked our way up to a better one in a nicer area. Did the same again and worked upwards. We then bought a very cheap small place in the country as a weekender. We now live there. We both worked hard and in fact paid off two mortgages at the same time. One for his ex-wife!!! It can be done. It is hard work. It is great to know that the place belongs to you and nobody can take it away.
    Lots of luck and best wishes to all trying to get that foot in the housing market. But remember, it is possible. You just have to want it enough.

  26. This has nothing to do with house buying but a few days ago when I was here I read a request for money saving tips or advice. I didn't think I had any to add but I did remember something I wanted to share. Now I can't seem to find that post.
    Here goes:
    When we moved into our first trailer with our first baby, we had been living in a bedroom of someones home and so we never hosted any sort of get together party etc.
    When we moved it became just the thing several times a week for all the friends and relatives to invite themselves to dinner, bringing some of the ingredients with them.
    Our little 3 person family started going through groceries very very fast and we were living in a trailer, which around here means low income for the most part.
    One of our older friends who has a few children made a sauce for a salad and used my entire jar of mayonnaise, mustard and pickles! To her it wasn't a big deal, she goes through that on a daily basis. But she didn't consider that she was using someone else's fridge.

    We finally got ahead of it by me making a main dish with what I had extra of, instead of using my entire jar of mayonnaise. Then we offered for the friends to make a side or dessert. This way all the 'forgotten' ingredients for every dish wasn't coming out of our almost bare cupboard.

    I didn't think anyone else went through this but I have heard a few stories recently and would have been glad for some advice. Especially some about how to say no when someone shows up at the door with children in tow. Sure we love these guys, but we didn't get our house to ourselves very often, even so small.

  27. That was our plan - buy the cheapest house, renovate, sell, buy better. Unfortunately, the crisis hit and after putting $35K in renovating the house, it is now worth $30K LESS than what we bought it for. That was quite a shock (appraisal done for refinancing).
    So at this point we are at $60+ thousands is loss. I am just hoping that when the market gets up, the value of the house will go up again. We bought 2 years before the market crashed and I wish we would have rented and bought a foreclosed house now. We would have saved about $130 000.

  28. Having bought my own home on one income. I was surprised at the interest that I was paying back every month. Look at the interst rate, if it is a lot more than paying rent keep saving for a while yet.

    Why move if you are happy, keep saving, the more you have in bank the long term the better.

    Renting has some benefits if something breaks you dont have to fix it the owner does and rates, who pays them when you are renting and insurances.

    Look at the amount you want to borrow and what are the repayments put that money away for 6 months and see how it would affect your day to day life also think about if the rates go up and you drop to one income when children come along.

    Dont forget to look at the different types of mortages, redraw is good, dont just rely on what the bank says do your homework we have morgtage brokers here that compare several different loans and they dont charge you for the service.

    Hope all the advise you are getting is helping you.

  29. Perhaps you need to take a different approach and instead of looking for a house look for a block of land to buy. I am only suggesting this because you say you are in a rural area and I think it would be easier to buy a block in a rural area than in an urban one. At least where I live in Australia you can only get house and land packages in urban areas.

    Anyway a block of land with no house is usually much cheaper and your deposit may cover a large chunk of the cost. You could then get a cheap caravan and live rough on your land while you build the house of your dreams. There are very frugal ways of building using green materials (mud brick, straw bale or whatever is appropriate to your location) and recycled materials. You may be able to find a co-op that will help you build your home in return for your assistance in building other people's homes.

    Good luck and I hope you are able to get the home that you want.

  30. I agree that, since you know you can't have everything, better prioritize carefully. For us, having a parent at home with the children was top priority, so that meant we have to give up one income, and be happy in a little house. It's far easier to stay frugal and content with less all the time, than it is to get used to living on two incomes and spending luxuriously and then having to rein it in! We learned that the hard way. It was tough at first, but it's much easier now. Renting and owning homes both have their pros and cons, and financial drains. Don't be hasty-- be okay with waiting if it necessary. Focus on the joys of family and the jobs you love, and the rest falls into place.

  31. We bought our home nearly 30 years ago, just before prices went mad in our country town. It was 80 years old and unloved.
    We have lived in it the whole time and have renovated it all ourselves, room by room.
    We are currently working on the last room as my partner is on "holidays".
    We have so enjoyed restoring each room just the way we want it.
    Yes, it took a long time but you need to have the time , money and inclination all at the same time.
    We love our house and have enjoyed every moment of the work.

  32. I live in Latvia, Europe, and the recession has hit so hard that more than one fifth of the people are unemployed. I hear of people losing their homes every day. They just can't pay the mortgage which the banks were all too ready to grant some five years ago. That's when I bought the house. Being a translator I can work from home and earn as much as I physically can - I get paid for the amount done. After the birth of my second son we moved to the country, doing just what the others are advising to do - buying the cheapest house in the cheapest village. The house has never ever been renovated or redecorated and we do not have anything left after the mortgage payment to do it. I've been working like mad for these five years, never sleeping more than 6 hours a day (in five years with two small children the sleep deficit really piles up.) I haven't spent nearly half as much time with my kids as they deserve. My husband works as a plumber but that's a very seasonal job and not too profitable either, so I'm basically the only breadwinner in the family but as we live frugally and as we still are much, much, much better off than all the jobless people in the country all around us, I am not complaining.
    What I'm getting at is that it's absolutely great to own a house, but there are so many days when I wish I didn't have to look at 35 year old, peeling wallpaper, at the horrible bathroom, mouldy and very damp, at the wood prices because we've insulated the house only partly, having to do with the little amount of money we have. I'm a wreck, I have devoted 5 years of work solely for this house and will spend two more without sleep, any vacation (ever) and new clothes, books, theatres etc. I'm sure that after those two years have passed and we will be able to BEGIN renovating the house I will be pleased. But I won't get back those years, and much as I long for the third child it just isn't an option now.

  33. No one has mentioned inheritance. It hasn't happened to us yet, but others we know had family members who passed away and either left them property or money -- and that helped them with the down payment on a house...or in the case of some I know, actually enabled them to buy a house outright! Now, it might seem inappropriate to be talking about this since we cannot necessarily know the future, but there are a number of families I know in Cape Town who bought a home in the first 10 years of starting out on their own this way. Another tip: if you do decide to go the mortgage route, every bit more that you can pay each month on it will of course reduce the interest and thus the overall amount eg when my parents gave us a good amount in US dollars to 'invest in a education policy' for their grandchildren, we sunk it into our house bond (mortgage) and dropped it by half. That was far better than taking out a new 'education policy'. This was some years before our children were due to start at university.

  34. There is some very excellent advice here.

    We bought our house 17 years ago and it is now worth 2.5 times the price we paid for it. We have gradually renovated it (it is a 1970s house and needs TLC) and, due to the equity in our home, we have been able to invest in two other properties for rental purposes.

    WRT where you want to live and also mortgages, you need to do your research (what can you realistically afford, who is offering the best mortgage rates, what are you prepared to compromise on [location/size of mortgage/type of property], etc. etc.). Re mortgages (deals, comparisons, etc.), I've found an interesting UK website, which is worth a look.

    I wish you all the best. Take your time during this process. Don't rush - you will regret a decision made in haste.

  35. Hey Rhonda and co :) Well, we live in Sydney and bought our house in the outer south west about 7 years ago. It was always a priority for me to be home with the kiddies, so we bought in an older area that we could afford and do all the renovations ourselves. One thing i would recommend young couple Ebay. We never pay full price for pretty much anything and have decked out our home with lovely things for hardly any just have to be patient. Also...learn to live on once income and be content, i realise that the home we live in now housed a family back in the 70s although now most would say 'too small!' but if it was good enough for families back then, it's good enough for us! :)

  36. I live in a small village in the UK and we bought the ugliest, most run down house that no one else wants to live in. It was barely habitable and some of the locals think it is an eyesore and should be knocked down! But over the past 5 years we have slowly turned it into our home. We live on one income (my husband's) with one child and our mortgage plus household bills make up more than half his take home pay. We live on an overdraft and live in fear of something breaking or going wrong in the house as there is no spare money. Sometimes we think of selling up and renting as it does seem a much cheaper option, especially looking at the next few years where interest rates may rise horribly. We are barely coping financially now, and our current interest rate is low. Scary stuff. If I were you I'd carry on renting for a while until we know what interest rates are going to do. We love having our own home but face the scary prospect that if we can't afford the mortage we could lose everything. Meanwhile we continue to try to live as frugally as possible. I think the reality in the UK is that many people 'own' their own house but in fact are living off credit cards and overdrafts and are a couple of missed mortgage payments away from repossession. I wouldn't be in a rush to own, keep saving and when the time is right and you feel you can afford it - even if that is ten years from now - do it then. Good luck x

  37. We find ourselves in a similar position here in the UK. We would like to move outside of the city to a more rural location but can't find enough money to do it. My husband's asthma is so much better outside of the city. We have been saving every penny for more than 10 years since the children started leaving home. We shop at charity shops, grow as much food as we can and don't go out on social occasions where we would have to spend money. I can stretch a £ until it cries for mercy because I've had so much practice :)

    The economic climate means that we would not get very much on selling the house that we have but at the same time, would have problems getting a mortgage at our nearing retirement age. Everything we go without is not enough to help buy a property outside of the city but within a couple of hours of where we live. Our children and grandchildren live in this area and we want to stay within a "there and back in one day" visit range. If we move farther away where property is cheaper, we would not see our grandchildren grow up - maybe just a couple of visits in a year. We are a close family and I'd hate that.

    I know how difficult we find this situation so my heart goes out to the young folk who emailed Rhonda Jean. I think that the advice of looking for the cheapest property in the best area is sound. However, follow your heart too. Has the landlord indicated that they will want the property back? Can you talk to them about this? Is there any way that you could earn a few extra £ selling something that you produce on the smallholding? Or on ebay? I do hope that things work out for you.

  38. Don't forget tax breaks you may be eligible for, especially a first home buyer. I'm in the US and in the past few years with the stock market drop and recession and even before all that it was cheaper to buy than rent. We can also deduct interest from our taxable income. Do the math. Find what total monthly payment you can afford, then take 75% of that and see what amount you can borrow at the going rate. That way you can pay the loan off early by adding the extra 25% toward the principal. If the UK is like the US property values are low in most places and the interest rates are at the lowest rates since the 70's.

    Once you know how much you can comfortably borrow you can start looking for that fixer upper on the low end of prices in the neighborhood.

    Good Luck!

  39. Rhonda - thanks for your beautiful blog - your lifestyle is inspirational, environmentally respectful and purely joyful.
    Getting a house - I love your suggestions and reader's clever thoughts and ideas. I can add that discipline, persistence, creativity and resourcefulness will get a person to that 'home of one's own' place sooner. Being focussed on home ownership from teen years & saving money (from part time jobs) proved valuable & got me into the savings habit early. No car till early 30's - public transport, walking & cycling were the go. A second job helped deposit building and extra loan repayments. All money expenditure must be scrutinised - get the best deal on utilities, telephone, car & health insurance etc - absolutely everything, if driving to work consider car pooling or other options (above), if growing one's own food - swap excess with neighbours, or sell at local, community market stall, can one cook or craft & turn hobby into a supplementary income stream? Can one live rent free somewhere with older person or person with disability in exchange for home help & small maintenance tasks? (may need legal agreement in place re rights and obligations & for both parties' protection.) Remember to make the savings process fun & reward savings milestones. Also, swapping frugal living tips with like minded folk helps with even more new ideas..
    Go well - I know you can do it!!!

  40. If I was Rebecca, I'd keep renting for now.

    The UK property market is still quite insane at the moment -- average property price over the last quarter was £250k, AUD400k - and from what I've seen, except for the wildernesses of Scotland and Wales, smallholdings tend to start at that figure. (And that's not just big detached houses pulling up the figure - terraces and flats are still averaging around £200k across the country.)

    Also, while I very much see the appeal of wanting to settle down before babies start arriving, their needs might change considerably once those babies do arrive -- both wants/needs and the financial situation.

    Since they seem happy where they are, I'd do what I could to make that more secure - talk to the landlord about getting a longer term lease. They might have to agree to do certain repairs themselves or that the landlord can still raise the rent periodically - but it might make them feel more secure in their home until they're ready to buy their own.

  41. My DH and I are very young, and we bought a house about a year and a half after we married.
    One thing we did was get into contact with a good real estate agent we knew. We told him we wanted a cheap house with a good enough sized property. We didn't care too much about what the house was like as long as we could afford it. We gave him a price range. We didn't have to pay him to do this, he just kept an eye out, and when he saw our current house come up, he let us know right away. He had the inspiration of being our agent (so he got a bit of money out of it), and we got one of the best deals on the market.
    Before we bought a house, we lived in a bachelor apartment, meaning: everything was in one teeny, tiny room. That's it. It was the cheapest possible apartment we could find. It was pretty run down, but it kept us warm and dry. We didn't buy anything that wasn't a need, and worked crazy hours, but it was worth it. That whole time living there, we constantly looked at properties and saved every penny we could.
    Granted, we live in Canada, and land here is cheap, but it was still a struggle because the bank was a hassle since we didn't have "credit" aka- credit cards galore. We had only one, and for some reason, they didn't like that too much.
    So I don't know what else to say but that if you contact a good agent, they will help you find a cheap property because they'll want the commission. You'll be the first to hear about it.
    The Girl in the Pink Dress

  42. Hi. I'm in the UK, age 55, and this is what we did, and what I would do now if I were you.
    When I was around 24 we bought our first house, a sorry-looking little bungalow all on its own, outside a village. We put in central heating, decorated it nicely, painted it outside, even grew roses around the front door. Four years later we traded up to a near-wreck which needed 3 months of building work (we lived with the in-laws very happily for that time!). When we moved back, we only decorated one room at a time, as we could afford to. This meant bare concrete floors in the rooms that were not essential, no carpets on the stairs for about 2 years, nothing fancy at all. Nor any spare cash for anything else. When I had money for a carpet, the room would get decorated. It took 8 years to finish that house, but, as with the first, we had been working on the garden, first taking it back to bare bones, then making it truly lovely. Everything takes time! The TV make-over programmes are completely false in that the only way most people can work up to the level of finish shown is to go into a lot of debt!
    If I had to start again now, I would buy an ex-local authority/council house, ideally one on the edge of a village. I know of several that are end-of-row houses with lovely gardens, and they are often quite easy to extend if/when you had some extra money. It would also mean that you would continue to grow veg/keep hens etc. These houses are usually very well built and reasonably priced. The size of mortgage required would be more likely to let you sleep at night!
    It might take you a while to find such a house, but they are around. Decide what is important to you, such as needing a second car when you have children, or being able to walk into town. Calculate your post-baby budget. Buy anything you might need now, while you are still working (e.g. I love Le Creuset, so I would ask for a pot for my birthday present!).
    As other people have said, we didn't buy our "forever" home first time. Few people do. We lived through some periods of very high inflation when mortgage rates rocketed. I was 48 by the time I was mortgage-free.
    It will be your decision, but very good luck!!

  43. I also 29 yrs old and just bought my unit in western sydney for 166 thousand in november 2008! It has two bed rooms and 40 years old! My first impression of it was awful and want to run away! It was for rent and not on any renovation for long time; except for the kitchen which look good enough! I was lucky that i got a friend who is a builder and he bought stuff at cheaper prices! It save me a lots on the renovation! We ripe off carpet and replace with titles; paint the whole house ! With the bathroom; i dont have moneys to do anything with it so i try to clean ; bought white paint and paint over title line to cover up all the dirt line and cenment then paint over the bath floor! When i move it ; my house was empty! My friends come over they and the kid happily lay on the title floor on living room and we had a house warming party with all of us on the floor cheering with soup and coke! I sleep on the matress! Gradually; i bought other stuff! Now i have all sofa and bed suit but it take a almost 2 years and lots of sacrifies! I have to say; this blog inspires me so much and teach me a lots of thing! I sometime want to give up and spend but ur blog save me! I have some friends who like to spend and say that i m too tight with moneys! But i think i am proud of the fact that i use my money in the right way and the sacrifies bring me my dream place where i can sit and relax with my dog after work! just pray that i have a good health so i can work ; i work for a supermarket and earn 600 week! And i m hearing impaired person! I now trying to save 40000 so i can get my mom who still in my origin country to come to australia as she getting older and have me as her only child! So from my experience ; i believe a little luck; sacrifies and saving hard wil got you have your dream home!! I wish you luck with that housing dream

  44. Housing in Trinidad and Tobago, when I got married in 1998, was very expensive even in the rural areas. It is even more so now and everyone is asking $1million and up for the simplest of houses.
    My husband was renting a small flat when we got married. I was still living at home (so that I could pay off my car) but had sporadically rented throughout the years. Both of us had been working for a while and had already bought our own cars and put aside some savings. He was 32 and I was 29. I moved in with him and we had our first child. When she was one we decided to start a plan of action since the flat could not accommodate a growing family. We renovated one floor of his parents' house whilst we invested in a piece of land (coincidently next door to theirs). This helped us to save and also would give his parents a renting income when we moved out.
    We spent months designing and redesigning our house ourselves after careful consideration as to how we would live in it and how weather would affect it. Because of this, added costs like air-conditioning are not necessary.
    We got an architect to draw up the plans and to verify that the structure would be sound, so that it could be passed by the Housing Authority.
    We hired a contractor, an electrician and a plumber to lay the bare bones (they get a discount off of construction material). When the basics were down we would come home from work every single day and build cupboards, install sinks, tile counters, you name it, we learnt to do it ourselves. It was hard work but because we put a lot into it ourselves we appreciate it and love it even more. It is our dream house where we intend to grow old together. As we built we started the garden, an ongoing project. We found more and more ways to make the most of what we had as we went along. It took us a year to complete the house. Weather delayed us several times but we worked like hell so that we could move in by Christmas Day. We were in by 2a.m. Christmas 2002.
    Doing it the way that we did means we are one step closer to completing payments to our mortgage.

    Trinidad & Tobago

  45. p.s. Another method that people have always used here is to acquire a piece of land and as you earn you build. So that there is no 'loan shark' on your back. Eventually you have a basic structure you can inhabit and you just add on as you need. Nowadays you have to be sure to keep within the building codes.
    Usually family and friends of the family provide the manual labor. Someone always knows someone who knows a thing or two.
    We took out a mortgage because we had a time frame we were working within.

    Trinidad & Tobago

  46. My husband and I purchased a home 20 years ago off of the reposessed list. It is a very small house but it was affordable at the time. We worked hard and added extra principle to our mortgage payment each month. We got our house paid for with the last 20 years. Now all we have to do is pay the taxes and insurance on a yearly basis. Now what I do is take the monthly mortgage and put it into a savings account to help with the tax and insurance and to also allow us to have a little put back for repairs.

    With the economy here in the U.S. we are very happy to be here with our extra small house and being able to live on only 1 income.

  47. HI RJ...
    As always the comments are a good read alongwith the blogpost....they unknowingly are forming a part of the post....

    We moved into a home.. a townhouse as it is called in US in year 2006 when I was 3 mnth old in my job and had a 3 yr old kid....we were planning for a second child and with daycare expenses.. our main focus was on only one income to be used for expenses and income was for daycare and kids stuff... so if I lost my job, at least the home and that budget will not suffer....
    Also the house we got was a fixer upper as the top notch houses came with a price tag which was way beyond our limits....what we did was, we fixed the most imp things in the hosue like carpeting and kitchen for hygiene purposes and whatever was not our choice we decorated the rooms, the way we liked it.. with pictures.. I cut from old calenders and put in frames which we got in a $$ store....if u find, you find treasures there....after 4 yrs , we recently re-financed the mortgage.. and customized it to our current income...banks do work with you if you are honest about the payments..

    making a house a HOME is in our hands...we are planning on renovating the bathrooms when we have saved some money.. till now, no one sees the master bathroom .. to know what and how old it is.....the wall paper bothers me.. so I have put the fake flowers in there...the ones which were the few purchases I did as the newly married girl setting up the home.....helps me see through the wall paper....and value what I have which many dont get...I know I am singing self praises.. but we all find a way we are never given a problem which we are not capable of finding solutions...
    Hope things turn out fine with R.. and she gets a home she wishes for....
    Love Ash.

  48. I think the problem in the UK is a lack of land. If you want to be fairly self sufficient, even the most basic property is expensive if you need land. Development laws in Britain also severely restrict your ability to buy land and then build when you can afford to, as many people who want a smallholding know only too well. Even the option of buying a house with less land and then having an allotment is rather a pipe dream because waiting lists for an allotment in man areas are years long.

    However, if you are sufficiently handy so that you can repair and maintain your own property then buying will always be better than renting. In the end rent is dead money and rental costs always go up year on year, whereas if you stay put long enough a mortgage takes a smaller and smaller part of your income as the years pass. As we near the end of our mortgage our repayments cost around £200 a month if we rented then it would probably cost around £800 for this house, it does get easier as the years pass.

    I think the only real solution would be to temporarily reduce the amount of land you have in order to get on the housing ladder. Live as green a life as possible and save hard to buy a property with more land further on in your life.

    However, having seen the problems my daughter is currently having to find a house to renovate, I realise this is not the ideal option it seems. There are few houses for sale that are unrenovated. Those that are available are in areas that are really quite unpleasant to live, have no garden at all and parking problems are a nightmare even for one small car. She is rapidly concluding that to live in a reasonably safe neighbourhood will mean a larger mortgage and less profit to make on a property. Anyone trying to buy their first home home in the UK has my utmost sympathy.

  49. The saying "location, location, location" is the most important one I have ever heard. We bought the tiniest house on the block in a very good neighbourhood, and that got our foot in the door. I would suggest too that you take your time until you find the perfect place and then make a low offer. Negotiate a price that will allow you to pay off extra on the principal every month. Knowing that our house will be paid off before we retire is a very good feeling.

  50. We've just bought our first smallholding (10 acres). We moved away from our home town because prices there were ludicrous - a similar property the same commute from town as this house would probably be more than twice as expensive where we used to live. We bought a run-down place with good bones - the paddocks are full of weeds but the soil is very rich; the house was really really ugly but had hardwood floors and gorgeous architectural elements, and with paint and ripping out carpets it's already looking so much better.

    We made sure that we can pay more than our minimum payment off our mortgage each week on DH's wage, and we also decided to ask a friend (a single mama with 2 kids) to move in with us. Her rent goes straight off the principle. It's squishy and loud (we have 2 kids too) but it's great for me to have someone around rather than being at home all day with the kids while DH works. A boarder might be worth thinking about, especially if you buy a slightly larger house than the two of you need initially.

  51. I think this young couple are in a difficult position as they are changing from one stage of life to another (for example, if the first child turns out to be triplets, as it did to someone I know, your needs suddenly change a great deal!). But I think it's important to know yourselves. My hubby and I are not handy, so for us a fixer-upper would turn into a money pit. We therefore bought a house in good condition.
    While saving, get together a list of essential and desirable criteria for your future home. I knew I wanted a good-size garden and so mine was a block of at least 500 sq.m. (We got one of over 800 sq.m.) Perhaps a smallholding is more than you need. Would you settle for a suburban back yard with chickens, vegetables and fruit trees? What about the need to care for your parents in the future, or to be near good schools or to get to your workplaces on public transport? Everything's a trade-off, but one thing not to trade off is quality of life: there is no point in getting a mortgage if you both have to work long hours to pay it off.

  52. It is interesting reading these comments but a bit frustrating for those of us in the UK reading some of them :-) There are no tax breaks for first time buyers here and the high cost of housing in many parts of the country mean people would need to borrow at least 5 times average salary and have a 20% deposit to buy a small ordinary house.

    Many of us here would describe backyards I have seen described as 'an average suburban backyard of around 1/4 of an acre' on some US and Australian sites as a smallholding :) Our back garden is about 45 ft by 30 and would be average. My parents garden is 100 by 40 I would guess and would be considered a large suburban garden. There are bigger ones here in London but they are usually attached to large houses with a massive price tag. As far as I can see from online house selling sites this is not that different in other areas, even many country ones.

    We are lucky enough to have a couple of allotments as my husband has always been interested in growing things so had these before the current demand for allotments caused by the trend for grow your own. Apparently the waiting list in some areas is 50 years!

    The situation is some parts of the country is better but usually there is a shortage of jobs in those areas so moving to them is not an option for many people. The UK is a bit small for the number of people who live in it which is probably why there are several popular TV programmes about starting a new life 'down-under' :)

    We were lucky in that the situation was slightly better when we bought our first house but that was nearly 30 years ago and times change. Most of my friends still have their adult children living with then due to the high cost of housing to buy and rents are high too. Probably worse because we are in London though.

    We are hoping to move to a place in a more rural area with a large garden or even a smallholding when my husband retires in a few years time but even then we will still have to be looking for a house to do up (as we have for our present one and the first one) so that we can afford to get one with the outside space. Luckily we enjoy practical things and have a lot of the necessary skills. I do sometimes fantasise about having a house that is finished though.

    Susan (London, UK)

  53. Hi Rebecca, I'm 32 years old and my husband and I bought our first home less than a year ago. We really struggled to get a deposit with the high price of rent we were paying, but over a few years managed to save $15,000.

    Even then we were only able to get a mortgage by getting my husbands parents to go gaurentour for us on the mortgage. We also moved interstate for university (from QLD where house prices are ridiculous, to Tasmania where house prices are quite reasonable) so we were able to buy a solid, but tiny, little home in a small town 30 minutes from Launceston city.

    We didn't buy something run down that we would need to do a lot of work on because electricity prices here are prohibitive and we wanted to make sure we'd save $ on our bills in the long run (which so far has proven to be a very prudent decision).

    Also, with our mortgage, we made sure to get a loan that included a 10 year interest-only period, so that if for some reason we lost our source of income we could opt to just pay the interest part of our mortage until we were back on our feet.

    We'd also like to consider children in the future but realised we couldn't have both our first home and a family at the same time, the cost would simply be too much. Instead we're committing to wait another 4 years until my husband finishes uni and then see were we're at.

    I'll be 36 by then, and maybe that's too late to be having children, but I always wanted my own home and garden more than anything and if I miss out on having children because of that I can live with that. Your priorities may be different so of course keep that in mind with your decision making. Also it may be worth talking to a fertility specialist about your chances of having healthy children if you wait a few years, then you'd be able to make a more informed decision about whether to try and get a house now or start a family.

    Also another idea we looked at initially was buying a cheap piece of land and putting up a cheap kit home, just to get our foot in the door of the property market, or even a caravan with a lean-to. Hardly a house, and some areas won't let you do this because of the council regulations, but you'd at least be paying off your own land and in time could either sell it and move somewhere else, or upgrade your house.

    I hope that helps! I feel your pain. It's really really tough for people in our age group at the moment. Wishing you both all the very best!!

    (Tasmania, Australia)

  54. Hi Rebecca

    Lots of good advice here, but this is my tuppence-worth. I was renting The Perfect Rural Farmhouse for years, had some savings and then inherited some money which enabled me to look at buying a house - however, house prices near Edinburgh were so high in the late 1990's that I even considered moving to France or Spain, after making offers on lots of properties which were 20+% lower than the successful price. If I wanted to stay here, I had to radically adjust my expectations, so instead of a detached stone cottage in a rural location away from other people, I now live in an ex-council house in a tiny village. But it suits me just fine - it's convenient for my work, very quiet, the neighbours are great and because it is within 10 miles of the city, it is increasing in value all the time. Keep looking and don't go over your budget - but don't discount any property, go and see them all. Good luck!

  55. If you have principles, which go against capitalism, then you have to be prepared to bridge an enormous gap.

    If your principles are not about making lots of money, then you won't be able to enter the property market with the prices that are currently going on extremely modest homes in the UK.

    The only way we got into the housing market in Australia, as under 30 year olds (early millenium) was before property prices took off. We bought a home for $60k and four years later, sold it for 170k. It was a very modest home.

    The money we got from that, to build our home on 5 acres, came from capitalism. We didn't make it happen through our principles, we were just in the right place at the right time and we profitted.

    Something strange happened after that however. I realised my home wasn't just a place to raise family, it was also a means of making money. For the first time, we took re-sale value into account when we decided to build our second home.

    That's what a lot of people have done in these comments too. It wasn't just about getting a foot in the door anymore, it was also about making enough money to get the house of their dreams.

    So a lot of fixer-uppers that would've been available 5 or 10 years ago, have been done up with a higher re-sale value now. I won't just blame the baby boomers here. I think everyone is guilty of turning their homes into a means of making money.

    Which makes it impossible for people with careers in the community, to buy houses in their community. They just cannot raise the funds to pay for the prices being asked.

    I believe Rebecca and her partner need to decide if they want to take the path into capital pursuits, if they don't want to live the kind of lifestyle that raises funds for capital.

    Once they decide what they want to do, then they either change jobs to buy more capital, or they look for alternative ways to find accommodation and security.

    What about mission work, where you work for an organisation who puts up the costs of living (frugal living) while you engage in a community project overseas? Or what about working as a husband and wife, running a property for someone else? You live on site and manage the farm, while the owners go away to do their business.

    What about looking into the incentives offered local council workers too? Is there a bank which offers government workers lower than normal interest rates on home loans?

    I think it would be wrong for Rebecca and her husband to look at buying their first home, under the pretence it's accessible to those without the means. There are other ways to find accommodation, which fits with your life principles.

    Rebecca you may find more in your pursuits with community ownership, than you will ever find in home ownership.

    Security doesn't always come through capital. In Australia (quite a wealthy country) there's been a lot of floods which has suddenly uprooted many peoples lives. Their homes which held all their secuirty, has either been destroyed or they don't feel safe in their homes any more. If you live near a creek or a river, re-sale value has just knocked $50k or more off the price of your home.

    So yes, security doesn't just come from owning your own home. I think what Rhonda tries to live is that owning your life is more important.

    Your biggest asset may come from the community you already live in. Maybe you need to ask around and let people know that you're looking for more home security. Someone may be living by themselves on a farm, and want the sound of a family around them again - and to help with the animals.

    A lot of advice given is good if you want to raise capital. But what are your other alternatives, if you want to live a different way?

    Maybe you're not asking yourselves the right question. Is it a home or security you're looking for? They don't always go hand in hand. Especially in these uncertain times.

  56. Hi Rebecca,
    I think there is lots of good advice on here already.

    For background, I'm 28, also work in the environmental field, and live in the UK.

    It sounds as though you are currently happy with your life and situation - the smallholding you rent allows you to raise a lot of your food. Can you, as others have said, talk to your landlord so you feel more secure about your tenancy there?

    I do understand wanting to own as house - as you say, if nothing else so you don't have to be paying rent in your retirement. But I think you are a long way from that yet!

    I wouldn't take it upon myself to forecast what the property market in the UK will do - but I do think now is a good time to be hanging on. By that I mean, keep living as you do, keep saving as much as you can. If you want to keep looking for somewhere to buy, the 1st thing of course is to see how much you could borrow - but how much you could actually afford, not how much a bank would want to lend you!! Don't buy if it is going to be a massive stretch month to month, and you have to lie awake at night hoping interest rates stay stable.

    If you do want to buy I suspect it will be as others have said, a case of either moving to somewhere cheaper, or finding the cheapest property in an area you are happy with and doing it up. But I know even that can be out of your reach (it is out of mine). Plus, what if you are not good at the home DIY? You can end up making a property difficult to sell when you want to move on, or move up!

    If it was me, I would hang tight and keep saving for now. Who knows, in ten years time, what the house prices will be like, and what your life will be like?

    PS: Allotments! if you have to buy somewhere with less land, check if there are allotments nearby of course! and what their waiting list is like.

    (finally, I am actually an environmental worker currently unemployed after redundancy. I don't know if you are at any risk of this, but if you are, hold back on the house buying again, as it is stressful enough to lose your job without worrying about losing your house as well).

    I fear this comes across as very negative, which wasn't my intention. I wanted more to empathise as someone in the same country and similar job.

  57. We came into an inheritance of $180,000 at the end of 2009. We researched very hard on the internet for houses in our price range. We didn't have a car, so we looked for an inexpensive, yet brand new car that would fit the whole family into.

    We were prepared to move somewhere remote, in order to be able to buy the house outright. We moved 4 hours away, to the middle of nowhere (I'm not going to give the exact location for privacy reasons, but I will say it's near Cootamundra)

    We bought a 3 bedroom house with an old butcher's shop attached (it also had an office at the back of the shop) for $110,000. We have three kids, and the plan was for us, the parents, to use the office as a bedroom. Because it's an old house and needs work, the office isn't yet fit to be slept in. But we know we'll get it all how we want it one day.

    There's so much to do, that we're a little overwhelmed, but we are glad we did it. We are still trying to get repairs done, that has set us back with getting chickens, but we did put in a heap of fruit trees last year, which we feel is a good start, considering everything else we had to do as well.

    People always ask us about work out here. One thing: my partner had already had to stop working after getting paint poisoning at work, so it was an ideal time for us to move. Having arrived here, we see there are plenty of opportunities to work, and I do some work from home as well as being a stay at home mum.

    We don't want to live in this town forever, but as you've said, we want to work our way up, buying a better house when we can.

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