Londoner attempt to get on the ladder!

mui

Yes but if we can't afford in our area and can't move outside of London then I'm failing to see the options!!! Frustrating. I've been in touch with a few brokers but we can't swing the numbers to afford what we need... there is a chance we haven't spoken to the right one of course. I didn't feel our numbers were unrealistic but alas...

Pixie5740

What research has lead you to the conclusion that a £200k property will incur £5k of SDLT?

mui

landc DOT co DOT uk /calculators/stamp-duty-calculator/[/url]

mui

though that was on 150K property

Pixie5740

mui wrote: »

though that was on 150K property

The SDLT on a £150k property is £500, it's only £5,000 if it's an additional residential property. You say you've never owned before and that your husband has owned previously. Does your husband still retain a beneficial interest worth more than £40k in another property?

mui

Oh? It's my understanding that the 5K is for buy to lets also. He sold his previous property some time ago, so no.

Pixie5740

mui wrote: »

Oh? It's my understanding that the 5K is for buy to lets also. He sold his previous property some time ago, so no.

The extra 3% SDLT is not a specific tax for BTL properties it's a tax for the purchase of additional residential properties. That calculator you linked to even says, "Is this an additional property, such as a rental property or second home?" If this will be your only property how can it be an additional property?

sal_III

mui wrote: »

Yes but if we can't afford in our area and can't move outside of London then I'm failing to see the options!!! Frustrating. I've been in touch with a few brokers but we can't swing the numbers to afford what we need... there is a chance we haven't spoken to the right one of course. I didn't feel our numbers were unrealistic but alas...

I was in a similar uninformed position until an year ago. I knew that I can only get about 300-350k mortgage (although our disposable income can cover much more) while the suitable properties in the areas we want to live cost 500k+, despite having great income we are not the best of savers and would have taken us 5-10 years to save the £150k difference for the deposit by which time the prcies would have been much higher. so we prefered to keep living our lives instead of go above and beyond and sacrifice to build up a deposit.

Queue February 2018, when we got a leaflet in the mailbox for the new builds nearby with some example numbers:

Price: 599995
Deposit: 30000
Mortgage: 330000
HTB Equity loan: 240000

Several hours later, speed reading about the intricacies of the HTB equity loan I was convinced that this was the perfect deal for us. The next day we were in the marketing suite looking at available plots. Long story short we walked into our new dream(ish) home last September.

So now instead of paying £1650 rent for our last place, we are paying £1450 for mortgage + service charge (out of which about 900 repays the mortgage) for a much better property.

Even in a worst(ish) case scenario where we can't save enough to staircase the equity loan or overpay the mortgage to build up enough equity to remortgage and fully redeem it by year 6-7 when the interests rates on the EL start to bite and we decide to sell, instead of spending 100-140k on rent for 5-7 years with no return we would walk out with 50-70k from the deal.

sal_III

AFF8879 wrote: »

Do you mean £900 per month is the capital only component of the mortgage? Or is your service charge really £550 per month? :eek: as I assume you have not yet started repaying your equity loan.

The mortgage is 1250, ~900 is repaying the mortgage, the rest is interest, the service charge + ground rent is £200ish a month and i know it's on the high end, but there is no other option.

Equity loan repayment requires me to save up ~60k in one go, it will take a while

mui

Thanks sal_111 > that's really helpful! How far out did you need to go to get a new home? I had a glance some time ago and found they were mostly flats which isn't an option for us unfortunately - but perhaps if we went out a few zones we'd find something.