Frustrated FTB

jozbo

Would appreciate thoughts and ideas...

I am mid 20s, in perm ft employment and partner is in full time contracted work, which for mortgage purposes counts as 'zero hours' ie unmortgageable.

The total amount I can borrow is £110k. I have £75k in savings (inherited) ready to put into a deposit.

We rent a small, crappy flat in a great area in NE London. I work in E London and at the moment take 1 hour to get into work using public transport. I'm soon to take my 2nd driving test and hope this'll make the commute shorter but...

We are very unhappy in the cramped place we live. We can't really afford to rent anything else that's bigger without going so far out that it would make commuting a real issue.

Buying has been our first choice as we have the deposit and the mortgage in place, but after the latest sale fell through close to exchange due to the vendor, we've had numerous appointments to view properties with EAs not turning up, messing us around etc. I think that the property market in this neck of the woods (Leytonstone/Walthamstow/Forest Gate) is pretty stale and there may be much demand for few properties.

We can rent something else but are desperate to move on with our lives and start a family somewhere permanent. My questions are;

- are shared ownership properties really such a bad move financially? what about the resale ones, so not buying from new?

- where can I invest £75k sensibly if not in a property?

- are auctions a wise move and can auction properties be bought with mortgages?

sorry for the long post, feeling exasperated. We've been trying to buy for over 2 years and I just want a fresh start...:mad:

Fire_Fox

Do you have to stay in London, have you thought about relocating somewhere cheaper? You could purchase an entire apartment outright in many parts of the north, frankly nicer than that part of London. Auction properties are a great idea providing you do your homework, get a survey done and have a solicitor look over the legal pack before you bid. You have a month between exchange and completion to organise your mortgage, it can be done if you are fully confident in the condition of the property, your ability to raise a mortgage and have a decent deposit.

sniggings

I didn't think it was possible to buy anywhere in North London for...what is it you have, £175k?

You say you want to start a family but is a 2 bed possible for that?

As above have you thought about moving as for £175k you could get a great house in another part of the country.

jozbo

Thanks for your thoughts.
Yes, we've considered leaving London but job-wise that isn't an option for me. Even if I did do in a year or two, my income would drop to around 20k so mortgage offer more like £90000.

Plus we would also be isolated from friends and family so I've ruled it out.

2 bed is adequate for our needs for the next 3-5 years. I feel that investing the deposit in the right place will help us move somewhere a bit bigger after that. My income is also guaranteed to raise every year by 2k.

Any one got advice about area? I'm viewing something in South Woodford on Monday. Opinions on location?

Auctions seem like a good bet now, they make me nervous but something has just come up that looks promising. Will take a look.

nollag2006

If I was starting out, and working in East London, then Crystal Palace would be on my radar. It's green, close to London, and the train links are constantly improving. The Overground orbital rail track will link it up Clapham Junction in December.

Best of all, there is plenty in your price range:
http://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E70306&insId=2&minPrice=150000&maxPrice=190000

If you are looking for capital appreciation, there was a good article in the Telegraph last week about investing around some of the less loved neighbourhoods on Cross rail. As happened at the opening of the Jubilee Line, any of these areas see a big price only once the line is operational:
http://www.crossrail.co.uk/route/maps/

Fire_Fox

Up to you but the north is hardly isolated from London, plenty of places on a direct rail line in within two hours. And that £20K drop in wages would still leave you able to purchase a larger house than in London.

jozbo

nollag2006 wrote: »

If you are looking for capital appreciation, there was a good article in the Telegraph last week about investing around some of the less loved neighbourhoods on Cross rail. As happened at the opening of the Jubilee Line, any of these areas see a big price only once the line is operational:
http://www.crossrail.co.uk/route/maps/

The Stratford-Shenfield line exists already but Manor Park might be a good area for price and location...there's plenty in our budget actually..

abankerbutnotafatcat

re your OH's employment status, I got a mortgage from Halifax based on a 6 month contract.

jozbo

abankerbutnotafatcat wrote: »

re your OH's employment status, I got a mortgage from Halifax based on a 6 month contract.

He is in fact permanently employed but his contract states 'zero hours' so he has no guarantee of available shifts week to week... I think it's pretty sneaky.

DoubleOhScrimp

jozbo wrote: »

- where can I invest £75k sensibly if not in a property?

Seeing as you will want to tap those funds to buy a house in the near time I wouldnt invest. Investments typically have initial costs that make short term buying and then selling non-sensical.

ISAs wont help much as savings are limited to ~£5k year. Best to see an IFA ... but look at their advice very critically particularly if them fund themselves from commissions. Personally I'd rather pay them a consultation fee.

Fire_Fox

jozbo wrote: »

He is in fact permanently employed but his contract states 'zero hours' so he has no guarantee of available shifts week to week... I think it's pretty sneaky.

If he has been consistently given the hours over the course of a year or more the law might see him now as a permanent employee, might be worth running an advanced search on the Employment board. Is your partner a member of a union?

For example
http://www.steeleslaw.co.uk/news-item.aspx?id=826dd060-19fc-4a89-a3fc-c5ac8a1ec7fe