What options does my friend have?

want2bmortgage3

A 35 single bloke living at parents, in and out of jobs, often agency work, doing admin, data entry, co ordinating courses, reception that sort of thing.

Has researched into renting his own flat but on his income (18-22k roughly when in a job) he is only allowed a renting budget up to £600-700. The studio/one bed flats he would like are more like £800.

His parents have offered 20k if he could somehow buy a property to put towards it as a deposit (he has no savings). I worked out at 4.5x income if he had a permanent 18k job which he was recently offered, he could borrow 81k giving a budget of 101k.

That is nowhere near enough as small studios in this town are £180-200k. So can I ask here if he has any options? Help to buy etc? He was told by an agent if he has a guarantor and paid 5 months rent in advance he could rent but he doesn't have that money in advance.

Thanks for any suggestions.

stator

If he can't afford and won't be able to afford the price of the smallest property in his area help to buy is unlikely to be useful.

Shared ownership possibly an option? With parents deposit and his income he could buy 25-50% of a property in his area and hope he gets a better job some time in the future if he wants to buy more of the house

hazyjo

Second job? Evening classes to train in something?


Jx

Alter_ego

Move to a cheaper area?

want2bmortgage3

A quick search shows 3 shared ownership small flats for about 112k that could be possible.

Has help to buy changed?I thought you could put down 5% and get 20% from the govt as a loan totalling a 25% deposit? Eg deposit 10k, govt loan 40k and mortgage 150k?

pmlindyloo

Whereabouts does he live?

If he has a friend who is looking for somewhere to rent then he may be better off considering a two bed place. Often this works out cheaper, rent wise, than renting a one bed/studio.

If his parents have considered lending him money for a deposit, couldn't they lend him money for the 5 months rent up front/deposit/fees etc?

He should take the permanent job on offer and then consider doing part time work (in a bar or similar) to up his income while he's looking to get a better paid job. At least having a permanent job means that his income is regular.

To be honest, this salary seems low compared to the rent levels so basically he does need to up his income if he wants an independent life.

Another option is a house share. May not be what he wants but again it can be the cheapest way to rent accommodation and if you are lucky have a good social life!

Thrugelmir

Perhaps he should start saving. Suggest a HTB ISA. Added to the money his parents have offered should get him started.

AdrianC

He has three options, really.

Increase his income.
Move into a shared flat or house.
Move somewhere cheaper.

In my nearest city, a nice two-bed flat in a good corner of the city centre is £100k, and rental is £550ish.

want2bmortgage3

Thank for the response. We live in Reading.
He is 100% certain he does not want to share.
Think the parents would only lend for a purchase , not a rental.
Yes 18k is pretty poor for the area - I earn 24k in a basic job.
Think he would consider a new area if rents were more reasonable than here!
So I have two options to suggest to him:
- look at shared ownership eg buying 50%
- look for jobs in cheaper area

DRP

How much rent do his parents charge? If the answer is 'nothing' then why hasn't he got savings? If they do charge rent, then obviously that is his starting point for finding rentals / mortgage affordability.


He certainly needs to increase his earnings (find a better job? re-train?), But does he also need to address his outgoings?

glasgowdan

Surely there's cheaper housing a few miles out? Commute by bus/bike.