Can I buy in London with my wage ?

zweety

Hi there,

I've just started to work and earn a pretty low salary, £15,600/pa tax included. I hope to find a new job around 18,000/20,000pa within the next 6months. If my salary remains the same, I should save around £10,000 until summer 2008. So hopefully, I should be able to save a bit more. Moreover, I've got an extra £7,000 available by the end of 2008.

The best I thing would be to save now and buy in 2008/2009. But I’m not sure it would be possible to buy on my own with my wage in London.
A studio in Harrow (where I live) is around £130,000.
I am confused with leasehold and freehold. I just know that leasehold is a contract for 99 years. But I wonder how it works if you want to sell the property?? (I’m French, not used to this kind of contract). Anyway, I do not think I could even afford a studio.

I’ve heard about shared ownership. But according to what I read, there is a rent to pay on top of the mortgage. However, a friend told me that all you pay is the mortgage for the percentage of the flat bought.

If anyone knows more about shared ownership/leashold or have any advice, please, let me know…

Thanks

Astaroth

Leasehold is where the original person bought a long term lease to the property. The can subsequently sell what remains of the lease to someone else when they want to move out. The lease can originally have been for any length of time and they can easily range from 50 years to over 1000 years. One major consideration with these is how much of the lease is remaining... as as you get closer to the end date the lease starts to devalue (who would pay £130,000 for a lease that will only last 3 years?)

The shared ownership varies between the schemes but typically you will buy a proporition of the property and a housing association or such will buy the remainder. You then pay mortgage on the part you earn and pay rent on the part that the HA owns... you can over time buy out the HA from the property but you have to pay current market value so if the property doubles in price between when you buy 1/2 and when you are financially able to buy the other 1/2 you would have to pay the complete original purchase price (though of cause if the property devalues then you get it cheap)

Of cause you could look at the other 2 options which many of us in london have to of doing a shared purchase with a friend/ colleague to avoid having the rent issue or moving further out for lower property prices but increased commuting time to work etc.

zag2me

Have you thought about buying a property with a friend or partner? Its is very dificult to buy one on your own these days.

If not, then shared ownership is a good idea. The rent is usually subsidised by the housing association. An example would be a 160k flat with 80k mortgage and £150 rent on top of that.

cattie

Flats are generally leasehold, & some do have longer leases than 99yrs, commonly ex local authority properties have leases of 125yrs & many new developments come with 999yr leases.

If you buy leasehold ensure that there is over 80yrs left on the lease. It's possible to extend the lease once you've owned the flat for 2yrs, but the costs of doing so are more once the lease has under 80yrs left to run.