£80,000 deposit - what to do?

marvellouspotato

We have an £80,000 deposit from my in-laws, however, my salary will only get me a (single) mortgage in the region of £100,000. Since we live in London there is no way we can afford to buy for our needs (i.e. two bedrooms = £270,000 minimum) here. We do have a couple of options to increase our mortgage allowance: I'm expecting a salary increase around June and my wife could go into full-time work. Since we're keen to put the money into property soon, I was wondering if anyone had ideas on how best to play it?

pinkshoes

What are your salaries? £100k borrowing indicates you only earn £25k between you...

If your salaries are that low, then you should consider moving to a much cheaper part of the country where you can have a nice house with only a tiny mortgage!

pinkteapot

Can you move out of London and commute in for work?

The simple reality is that deposit plus what you can borrow = your budget. If that's not enough for what you want, where you want, then you need to change your property type or your location.

mr_scientist

Hi marvellouspotato!

I've got a similar problem to yourself.

One thing I'd suggest looking at is shared ownership. By the sounds of it, the amount that you earn between you is low enough to qualify. Look into buying a share of a place, and then once you get your wage rise, your wife goes into full-time employment etc, you can then look to increase your share.

As for pinkshoes; have you ever thought that the jobs/career they may have in London may not be possible elsewhere in the country, that they may have an established network of family and/or friends in the London area that they may not want to move away from?

Good luck!

Mojisola

mr_scientist wrote: »

As for pinkshoes; have you ever thought that the jobs/career they may have in London may not be possible elsewhere in the country, that they may have an established network of family and/or friends in the London area that they may not want to move away from?

It's possible that moving won't be an option but it's certainly something people should consider.

atolaas

My brother lives and works in London...he managed to find a large 1 bed flat and convert it into a 2 bed. Might this be a possibility?

pinkteapot

Only go into shared ownership with your eyes wide open. Selling a shared ownership property is harder than a 'normal' property and it's becoming evident that not many who buy manage to staircase to full ownership:

http://www.theguardian.com/housing-network/2014/feb/19/shared-ownership-first-time-buyers-property-ladder

It can work, but research carefully.

marvellouspotato

Thanks all, some really helpful suggestions and good to know the spectrum of thinking out there is similar to my own. Shared ownership might be a channel worth exploring more......

mattyprice4004

We're facing a similar issue, so we're moving away from my home town into somewhere a little cheaper.

Baby_Angel

Which part of London are you talking about? We live in West London and there are 2 bed room flats for £180k near our area. So it depends on your area and the types of houses/flats you are looking for.

You should do your research on shared ownership. When we first looked into this, we realised we could immediately afford the property (our share and rent) and when we look at the details (the rules on how to buy the rest of the share) we found out we will never be able to afford to fully own the property. If you decided to sell, then you are limited to whom you can sell too.

We ended buying a smaller property but a freehold one.