Buying a house as a single person

Stacy_Ward

I am 33 years old and am living with my parents in London. After years of saving I have managed to save 20% deposite of a house worth £160,000.

I currently earn £24,000, I have a clean credit history and have no debts on any credit card as I do not have any. My monthly output is mainly on travel (about £200 a month due to petrol). I do not spend excessively (tough being a women!).

I am fully aware of the budgeting involved and predict that I would be paying £700-800 on the mortgage which would leave me with £800 a month on food and bills (well £600 if you take out travel).

I have looked into new builds, but their prices are too high. I am not in a position to ask my parents for help due to their circumstances. In your opinion is there a way of getting a mortgage or should i rethink the whole process?

Thanks for help

Stacey x

jc808

Stacy_Ward wrote: »

I am 33 years old and am living with my parents in London. After years of saving I have managed to save 20% deposite of a house worth £160,000.

I currently earn £24,000, I have a clean credit history and have no debts on any credit card as I do not have any. My monthly output is mainly on travel (about £200 a month due to petrol). I do not spend excessively (tough being a women!).

I am fully aware of the budgeting involved and predict that I would be paying £700-800 on the mortgage which would leave me with £800 a month on food and bills (well £600 if you take out travel).

I have looked into new builds, but their prices are too high. I am not in a position to ask my parents for help due to their circumstances. In your opinion is there a way of getting a mortgage or should i rethink the whole process?

Thanks for help

Stacey x

Good deposit

Maybe get a Credit card for (inevitable) emergencies. Dont rely on it though. Good for your credit rating too.

800 remainder on food and bills? What about saving for rainy day? Going out? Holidays etc? Rebudget!!

Where are you looking to buy??

HappyMJ

£24k is not enough to borrow £130k on a mortgage. Have you approached your bank to get an idea on what amounts they would be willing to lend? Once you have that figure then you can shop around for the best mortgage then look for a property within that price range.

Mojisola

It might be worth getting a credit card and using it for a while before applying for a mortgage.

A friend's daughter has recently had problems getting a mortgage because she had no credit record. She doesn't have a credit card; she saves for things she needs and buys them outright. She was rejected by lots of lenders and she was only wanting a mortgage for 25% of the value of the house.

Stacy_Ward

Thanks for the tips. Obviously when budgeting I have got £600 a month spare. As for Holidays and going out. I do not spend much on holidays as I have travelled previously and see holiday as a luxury not a nessesity. So am willing to go without. As for going out I do not need to spend a lot of money or to go out every week to have fun (dinner parties, house party etc).

I have budgeted as best I can. i.e. based on what my parents spend.

I have spoken to a few bank and mortgage advisors. When speaking to the bank they were only willing to lend me £110k at most which would mean a house on £140k. Which put me out of London and to some extent Kent. If this happens, the train cost of Kent into London would mean that I am no better off.

As for the credit card, I did have a credit card but got rid of it. Do Is till need to get one?

I feel with the house prices being as they are, now is the time to get on the property ladder otherwise I will forever be chasing the dream...

Thanks again for the replies.

moesasji

Stacy_Ward wrote: »

I feel with the house prices being as they are, now is the time to get on the property ladder otherwise I will forever be chasing the dream...

Thanks again for the replies.

You yourself have recognized that a house is unaffordable on an average salary + a decent deposit saved.

Add these two things together and do ask yourself if house-prices can keep as high as they are in particular with banks having massive difficulties attracting enough money (and hence very careful with whom they lent money to!).

In other words it might in fact NOT be the correct time to get on the property ladder because as with any "investment" prices can go down as well as up as many people have found out if you read through some of the horror stories in the mortgage section.

ps) £600 per month doesn't seem an awful lot to me if you have to pay all bills from it (Council tax, Gas&Water, BBC tax, car insurance,...). So doing a real budget might be worth it.

ukcarper

moesasji wrote: »

You yourself have recognized that a house is unaffordable on an average salary + a decent deposit saved.

Add these two things together and do ask yourself if house-prices can keep as high as they are in particular with banks having massive difficulties attracting enough money (and hence very careful with whom they lent money to!).

In other words it might in fact NOT be the correct time to get on the property ladder because as with any "investment" prices can go down as well as up as many people have found out if you read through some of the horror stories in the mortgage section.

ps) £600 per month doesn't seem an awful lot to me if you have to pay all bills from it (Council tax, Gas&Water, BBC tax, car insurance,...). So doing a real budget might be worth it.

Except the average salary in London is £37k

Henry_P_Chester

ukcarper wrote: »

Except the average salary in London is £37k

And the average house price is near to £300k.

abankerbutnotafatcat

Hi Stacy - just a suggestion but I think what I would do (and did do something very similar when I was a FTB in London) is buy a 2 bed flat in an ok i.e. not stunning but not scary area near good public transport. It would probably be an ex-council place - these are often well built, with low maintenance costs and good sized rooms in good locations. Just try and get one where the majority have been 'right to bought' which you can tell from the front doors or mouseprice.com. You then have a second bedroom to get a flatmate in to help during the difficult first year or two. They will count as a lodger so it will be tax free income and you'll have a lot more rights than a landlord-tenant arrangement. I did a rightmove search on 2 bed flats within a 5 mile radius of Bromley and a lot of places came up in SE London/Kent M25 area under £150k asking price. I presume this is where you are now so would rather stay in the area you know.

As for the credit card, it does help build up your credit rating whether you like the idea of credit cards or not. Why not get a points/cash back one and use it for your expenses and pay it back each month??

Lots of luck whatever you choose. The unknown factor is the housing market - maybe in a year's time prices will be cheaper and you'll feel you should have waited or maybe they'll be higher and...but if you think of it as a long term 'home' rather than an investment then over the next say 5 years you should be ok.

ukcarper

Henry_P_Chester wrote: »

And the average house price is near to £300k.

I think it's over but property has always been expensive in London I couldn't buy there in the 70s.

jc808

Look around in Kent. You wont afford a house (unless its a bargain/ Repo/ auction) in London 140K except maybe Thamesmead (ugh)

Does it have to be a house?