First time buyer with no deposit!!

clg123

HiMy older sister (whi is not a key worker) had no deposit either and has bought a half buy/half rent (I wish we'd done that - we got a 100% in 2007 - crumbs). She has found the scheme to be great, she lives on her on on not too great (less than £15k) wages and is fairly comfortable. For some reason it is not counted as a 100% mortgage so you should be fine and able to get a good rate. If I could I would definately go for that option than a 100% mortgage. She is with Bellway homes I think, took about 3months from first viewing to moving in.

londongirl

Wickedkitten wrote: »

You live in London though. London is completely backwards compared to the rest of the country when it comes to rent prices. When we lived in Scarborough, we were paying £375 for a 2 bedroom flat with on South Cliff with a seaview, and now we live in one of the nicer bits of Cheltenham and we are paying £725 with all bills included on a 1 bedroom flat.

Hope this comes out okay as i'm not sure how it works trying to quote other people and answer them!


You have a studio flat. Not even a one bedroom flat, a studio. If prices keep coming down and you have to sell, people are going to be jumping right over your head in order to get to the two bedroom flats.

Personally if i was buying again and I was in the same situation i.e newly single and living with my parents aged over 30 and not earning a huge wage for London anyway then I would buy a studio or 1 bedroom without hesitation. Why when ther is only one of me would I want to buy a two bedroom place and pay a load more council tax and more heating bills etc. Ok I admit ideally I would have gone for a 1 bed with a balcony or small garden but these studio's that i have just bought one of have been here for 25 years and one in the next block sold on the open market at the same time as mine for exactly the same price (but was in a lot worse condition with the original 1980's kitchen whereas mine had been modernised). The price that I paid for my studio was the same as they were going for in about 2003. The prices of two bed flats around here are currently around £250k asking price and possibly sellling for maybe £200k at absolute lowest I would have thought so a big leap between studio and two bedroom place. I am hoping there are always going to be people that want to get on the ladder before they can afford a two bed flat even with prices coming down. I know its hard for people to understand when they live in places outside London where you can buy a 3 bed house for the price i paid for my studio but people have always lived around here and are going to continue to do so and the prices are therefore always going to be higher than certain places outside London.

Not to mention it has a 40% equity loan attached as a second charge which means it's worth 60% of what you paid for it in total already and moving up the ladder is going to be a nightmare.

I'm not sure what you mean by its worth 60% of what i paid for it in total already? I own 60% of it - therefore if the market falls further i only have 60% of that risk. After 3 years (and since i dont intend on moving or buying anymore of it for at least three years) I can buy a further share at the current value - not the loan they gave me. They loaned me 50k. If the property has fallen in value and i want to buy the rest of it in 3 years then i will only pay 40% of the value - so less than 50k.
As i have got a good mortgage rate at the moment i intend overpaying and according to overpaying calculations I would have paid off £10k of the mortgage after 3 years. Therefore if i need to sell and I lose £10k of equity - so what - its still cheaper than renting which i wouldn't have come out with £10k of equity. The only reason i would move from here would be if i met someone new and wanted to move in with them so getting on the ladder and getting a larger property would be easier anyway as there would be two incomes. If i don't meet anyone then happy to stay here for at least 5 years maybe a lot longer.



You can buy without a deposit the only bank you can do this with is The Co-Operative bank and they are guaranteed to make more money than you are by the time you either redeem your mortgage or sell your property.




No offense meant whatsoever, but personally I wouldn't recommend this scheme to someone that I hate, let alone someone that I was actually friends with. I certainly hope you explained the cons to them as well.

Have you actually read the small print and understand this scheme fully? And do these friends that you wouldn't tell about the scheme actually therefore have the means to buy a property in future without any help from one of these schemes? If so great, i can assume they either don't live in London, or are earning a very good wage or are buying with a partner. None of which apply to me and none of which apply to the two friends I have recommended the scheme to. Also by recommending the scheme to friends I am by no means telling them it is right for them just telling them about it - it is up to them to read the small print and look at their own circumstances and work out whether it is a good idea for them or not - i'm not pretending to be their financial advisors!


I can understand how stressful it is living with parents, honestly I do, but I can't possibly see how you can remain in a better position if you aren't planning on staying there for a long time.

I can be in a better position because while living at my parents I was going out practically every night to get some space including paying for nights in hotel with b/f at the time as despite being over 30 my parents didn't want anyone staying over! Sanity and enjoying life are important too - not just sitting at home saving every spare penny for a deposit only to find that you still don't have enough after 5 years. If I had stayed any longer at my parents I would have been paying rent - comparable to the mortgage I am paying now. If I had rented and tried to save a deposit I would have the worry that the landlord might decide to sell the property as has happened to a couple of people I know as the landlord was not able to keep up with the payments on the mortgage. I would much rather be in my own place where I know I can stay for as long as I like and not have to worry about moving every single year - i've moved 4 times i the last 4 years and spent a few hundered each time with removals, buying new furniture to fit, getting rid of other furniture that didn't fit etc, rental administration fees etc.



In my opinion as far as the loan in concerned, you're "lucky" in the fact that you bought in a falling market. If you bought in the middle of last year, then your property has probably already lost more value off it. The reason I'm saying you are "lucky" is because when you pay off the 5% chunks of the loan, they go by the price that it is valued at at the time so right now that's great because you will end up paying a lot less than you would.


Don't intend on paying of chunks in 5% - intend on not buying anymore of it and just saving hard and using the equity i will have on the part i do own if the house prices go up, if the house prices go down i intend on using my savings to buy the whole 40% in one chunk otherwise i have to pay legal fees etc each time i want to buy an extra 5% - not worth it.

Obviously no one knows when the prices are actually going to bottom out, but definitely as it drops further just keep paying it off in chunks, or save as much as you can and then when they actually do start to correct, pay it all off because it will be a LOT less than it was when you first bought.

My other plan is if it does fall a lot more in value then take the opporutnity to buy the rest of it and then rent it out if i need to move elsewhere. I would actually hope to keep it on as a rental property anyway if i possibly could - having moved in with my fiance and then had to move back with my parents then as pessimistic as it may seem if i ever moved in order to be with a new partner i would appreciate having the fall back of still owning a property on my own if i ever needed it. This of course may not be possible but it is another option. Basically i have gone through every option possible and every scenario of prices falling and rising and the percentage i own etc, the amount i can overpay on mortgage etc and all this compared to how i would be financailly renting and i can honestly say i'm still glad I did this. Plus last thing to say is although it is a studio flat it has a sepearte bedroom area - which can easily be made into more of a proper bedroom with a stud wall which is what some others have done, and has a seprate kitchen which is bigger than the kitchen in my friends two bedroom house! So just depends what people want I guess!

I hope I've not come off as being harsh because I truly didn't intend to be.

Not at all - good to hear your views. I was just trying to add my view to the OP as everyone else was just saying no no no. All i'm saying is everyone's situation is different and as long as you have researched things properly and made you're own decisions then i don't think there should be a definate answer of no , to every single first time buyer at the moment. However i guess i differ a little from the OP as i technically did have a deposit just chose not to use it as a deposit and risk it losing value in the flat - instead kept it as savings so if prices fall i then buy the rest of the property at the cheaper rate. Who knows in 5 years time perhaps i'll be crying my eyes out on the debt free wannabee board! Or i'll be living with a new partner and a baby all crammed into a studio flat which i can't sell! But who knows what will happen in the future. For me at this time doing this was the right thing to do. If the OP thinks buying is a good option then perhaps it is for them.

londongirl

Crap sorry - i knew i'd mess up with that quoting thing! Half of my replies to that previous post have come out as part of the quote and only the bottom bit has come out afterwards. Sorry - after all that typing i bet no-one can tell whose written what - how annoying!!

SavingSteve

Anyone else notice the OP has not returned? Not even sure any of this helpful advice is being read by anyone, which is a shame

leveller2911

I'm still saving for a deposit, have just under £30k saved up, its not easy renting and trying to save,mid terrace 3 bedroom (small) house locally are still around the £200k mark.

I don't think I can save relative to the house price increase when it does come back,which in my opinion will be around 2011.Buying for me is not the "be all and end all", I will buy if I can afford to re-pay.If not then it will be a life of renting for us, which does has benefits........

Just 1 thing to add, this "key worker" crap is really starting to wear thin.Everyone who works is a "key worker" if the dustman does'nt do his job then we'll be right in it.

Teachers,nurses,fireman and police are NO more "KEY" than anyone else,in my view it is clear "discrimination", how do they think the rest of us feel when we are bottom of the pile(just for the record,im a qualified ,self employed carpenter & joiner).

Lastly after my rant, I still wish the OP good luck :rotfl:

poppysarah

Agreed keyworker schemes seem a bit wonky.

clk299

It is ridiculous to say that there are no 'key' workers. The trouble with public services such as NHS, police, fire etc is that in areas where cost of living is high, you can't actually earn enough in those jobs to buy a property or even sometimes to rent. Starting salaries can be quite good but then you're on that salary pretty much forever unless you get a promotion, which you may not want to do (a midwife is a midwife, unless you want to be management/team leader/specialist). So if you cannot afford to live close enough to that hospital to work there, there is poor recruitment and retention and thus services are understaffed and poor etc. Key workers are counted as those without whom essential services would not function but do not include those whose salaries are good enough that you could buy- eg doctors aren't included.

That is not to devalue anyone's job, because everyone's employment is important but you can imagine the devastating effect that lack of staff can have on services like fire or NHS. But if you look at a lot of the sites like inplace, they say 'key worker living' etc but you look at the criteria and 'council housing list' or 'unable to afford own home' often counts just as much as 'key worker'. Also- £200k would buy you a 1/2 bed flat where I live. I do not want 'handouts' or 'preferential treatment', I want prices to be realistic so I can do my job (as I have to live within an hour's drive of the unit)

To the OP- if you are living with your parents you do not need to live there for 5 years to save a decent deposit.

leveller2911

clk299 wrote: »

It is ridiculous to say that there are no 'key' workers. The trouble with public services such as NHS, police, fire etc is that in areas where cost of living is high, you can't actually earn enough in those jobs to buy a property or even sometimes to rent. Starting salaries can be quite good but then you're on that salary pretty much forever unless you get a promotion, which you may not want to do (a midwife is a midwife, unless you want to be management/team leader/specialist). So if you cannot afford to live close enough to that hospital to work there, there is poor recruitment and retention and thus services are understaffed and poor etc. Key workers are counted as those without whom essential services would not function but do not include those whose salaries are good enough that you could buy- eg doctors aren't included.

That is not to devalue anyone's job, because everyone's employment is important but you can imagine the devastating effect that lack of staff can have on services like fire or NHS. But if you look at a lot of the sites like inplace, they say 'key worker living' etc but you look at the criteria and 'council housing list' or 'unable to afford own home' often counts just as much as 'key worker'. Also- £200k would buy you a 1/2 bed flat where I live. I do not want 'handouts' or 'preferential treatment', I want prices to be realistic so I can do my job (as I have to live within an hour's drive of the unit)

To the OP- if you are living with your parents you do not need to live there for 5 years to save a decent deposit.

There are thousands upon thousands of people on low wages, lower than nurses,firemen,teachers etc,who don't get a pension paid for mostly by council tax revenue as for "council housing" criteria is the same for everyone , if you don't have children your generally have no chance.

No one forces you to become a "key worker" you can have another career.We all want prices to be realistic .

Instead of creating "sub groups" of society the government should have "FORCED" developers to construct low cost housing with covenants on to restrict the profiteering of the housing market.If deveopers don't build them then the government should.

olly300

leveller2911 wrote: »

There are thousands upon thousands of people on low wages, lower than nurses,firemen,teachers etc,who don't get a pension paid for mostly by council tax revenue as for "council housing" criteria is the same for everyone , if you don't have children your generally have no chance.

No one forces you to become a "key worker" you can have another career.We all want prices to be realistic .

There is already a situation in London where lots of primary schools particularly those in the most deprived areas are staffed by supply teachers who are mainly from abroad.

So stating that no-one should be come a "key worker" is ridiculous. As we get into the situation that the only way we can get staff is getting people from aboard.

However I do agree with you that the governments definition is wrong. For example a gardener employed by the council is a key worker there as a gardener employed via a private company to do work for the council isn't when they both do the same job.

leveller2911 wrote: »

Instead of creating "sub groups" of society the government should have "FORCED" developers to construct low cost housing with covenants on to restrict the profiteering of the housing market.If deveopers don't build them then the government should.

Yes the government under whatever guise they want should allow councils to build more council houses without penalising them. And they should also build them themselves with strict tenancy policies and no right to buy.

beingjdc

leveller2911 wrote: »

There are thousands upon thousands of people on low wages, lower than nurses,firemen,teachers etc,who don't get a pension paid for mostly by council tax revenue as for "council housing" criteria is the same for everyone , if you don't have children your generally have no chance.

No one forces you to become a "key worker" you can have another career.We all want prices to be realistic .

But if, say, London, didn't have any call centres, it wouldn't matter, would it? People could go and work in call centres in Sheffield or Wolverhampton, and buy houses there.

If nobody in London wanted to be a nurse, however, and you couldn't get treated when you were ill, who would get the blame - property developers, or the government?