I'd quite like to buy a flat with my girlfriend, but it's (almost) literally impossib

[seany t]

Having watched house and flat prices soar now for about 15 years, I kinda always suspected they'd have to come down again at some point. And indeed they have of late. Yet STILL it's practically a dream for a first time buyer.

Having had a chat with a financial advisor, we've got a few options on the table but despite having saved up a fair old deposit and having a good combined income, we would get stung hard for even DARING to think we could get a mortgage. We also have no debt or loans (barring my student loan, over 1/2 paid off anyhow).

So whats the deal? Banks are charging interest on mortgages at about 5.74% (still grossly above the Bank of England's rate) IF you have a 15% deposit, but a 15% deposit in London is colossal and gets bigger obviously the nicer place you look at. We do just about have that amount if we were to buy a 1 bedroom place in a high rise in Zone 6 admittedly, but for anything else we only have a 10% deposit and the interest rate goes up by a good 1 or 2%, and therefore our monthly repayments spiral upwards by around £500 per month, despite the price of the property being comfortably within the '4x combined income' ratio.

Whats the answer? keep saving, and pray prices don't go up any further? Get on the ladder somewhere grim and endure a pretty dull existence to 'take that first step'? We also no longer qualify for many of the part buy / part rent schemes or civil service programmes due to our combined income being a shade over the threshold.

I know our predicament is better than most and we at least have savings / employment, but if people with stable ok paying jobs, no debt, good credit ratings and a fairly healthy wad of cash behind them can't get a place, then what's the answer?

Eh?

 

[Mad Cyril]

Why London?

 

[blues_r_best]

I share your pain, I've never had a loan or credit card, and despite saving a large amount of money (over £15k and parents saying they'll put a couple of thousand towards this too), I cannot get a large enough mortgage to buy a house in Southend as 4 times my salary is 72k.

Houses are going for about £130k, and there's nothing new coming onto the market.

 

[Pubey]

could it possibly be easier for one of your parents to take out a new mortgage in their name which you pay off and then buy back off them? i don't really know the upside of this but i've got a couple of friends who have done this and it seemed to work out for them

 

[seany t]

Why London?

I kinda like it? And I don't feel ready to move away yet with so many friends still in and around the area.

Commuting would cost us loads of cash balancing out the cheaper mortgage, and inevitably involve some form of a car expense too.

Long term, no doubt about it. I'm off. But right now there's far too many good gigs going on...

 

[Mad Cyril]

Also, why not clear your student loan with your savings?

 

[seany t]

Also, why not clear your student loan with your savings?

Well until recently the interest it was accumulating was less than what I had in the bank was earning. Right now, I'm not so sure.

But MSExpert still suggested until a month back that you should just ignore your Student Loan and just save what you could.

 

[Pubey]

Well until recently the interest it was accumulating was less than what I had in the bank was earning. Right now, I'm not so sure.

But MSExpert still suggested until a month back that you should just ignore your Student Loan and just save what you could.

yeah there is no real interest accrued on your loan, so it's best to ignore it. until recently any savings would earn more in interest than you would lose on your loan

 

[canveyshrimper]

I share your pain, I've never had a loan or credit card, and despite saving a large amount of money (over £15k and parents saying they'll put a couple of thousand towards this too), I cannot get a large enough mortgage to buy a house in Southend as 4 times my salary is 72k.

Houses are going for about £130k, and there's nothing new coming onto the market.

Do you have to buy a house as a first time buyer? I am sure there are plenty of decent flats about, once you are on the ladder then you will have the chance to upgrade in time.

 

[Davros]

I share your pain, I've never had a loan or credit card, and despite saving a large amount of money (over £15k and parents saying they'll put a couple of thousand towards this too), I cannot get a large enough mortgage to buy a house in Southend as 4 times my salary is 72k.

Houses are going for about £130k, and there's nothing new coming onto the market.

however, they also take into account your ability to make the repayments, which they are being more careful about in future.

They will take into account your other monthly out-goings, and the fact that you have a wee one to feed will count against you. Also, judging by you saying just your salary, i take it that the good lady isnt working at the moment, so it would be another mouth to feed, cloth etc.

A mortgage for 72k would cost you (interst only) about £330 a month or so, then by the time you take into account food for the month roughly £200, running a car, council tax, leccy, gas, and all the other bills, they would probably be asking whether you could really afford the mortgage, more so than before the crunch.

 

[MK Shrimper]

Are you sure even in a "w*nky" area you can't get somewhere. Sometimes the poorer end of the market attract more bohemian types - I bought a flat in Stoke Newington on the borders of Dalston and Hackney - yes there was some rough areas close by but I loved it and sometimes regret selling it and moving away.

And of course, North London only. South London is for gays ;)

 

[SARF]

Most people usually start of somewhere grim on the housing ladder.. When I started out most people looking locally started off on Canvey if they wanted a House with a garden.