First time buyer purchasing property alone

ehdx

Hello

Was just looking for some advice/help for anyone who may have been in a similar situation to me.

I am 23 and looking to buy my first property and will be buying alone.

I have 32k in savings and my salary is 28.5k. Average 2 bedroom apartments in my area are 280-300k.

Because I am in a London Borough I am eligible for the Help To Buy equity loan allowing me to borrow up to 40% from the government on a new build property.

I have looked at going further out but the travel into London for work is ridiculously expensive. I've been told the general rule to calculating how much you can borrow is 4.5x your salary which would still leave me quite short.

Is it common for borrowers to lend more than 4.5x or is it quite hard to secure between 5 and 6x salary?

I am in the process of speaking to a mortgage adviser but just wanted to hear from others who may have been in a similar situation or know someone that has...

Thank you,

LRmortgage

4.5 x salary is the maximum allowable under Help to Buy rules.

muhandis

I have had ex-colleagues in similar situations (graduate level jobs, buying on one income, albeit looking for 1 bed flats) who ended up plumping for shared ownership flats in zones 3/4 as it wasn't practical to buy outright.

Unfortunately, it can be quite difficult to afford a flat in/around London on an average single income. And when to comes to H2B eligible new build properties, the prices get artificially inflated because of the incentives available and often the flats come with very high service charges which eat into borrower affordability calculations.

The good thing is that you are already thinking of buying at such a young age (how I wish I'd done that!). Good luck though, hope something works out!

ehdx wrote: »

I am in the process of speaking to a mortgage adviser but just wanted to hear from others who may have been in a similar situation or know someone that has...

Thank you,

MortgageMamma

You need to save a bit more deposit

Your help to buy loan would be 112000 on a 280k property
Your deposit is 32k
That would mean you would need a mortgage of 136000

Divide that by your salary and it takes you to 4.77 x income which is over the limit for help to buy

You need a deposit of 40k plus costs for legals, broker fees and stamp duty if applicable.

If you get your own deposit to 40k then it will be 4.49 x income.


You need to be mindful of running costs - perhaps rent a room to a friend or a lodger to give you more disposable income and a reasonable standard of living.

Hope that helps.

ehdx

Thank you for your responses!

Just one question - why is there no mention of the 4.5x being the limit if you're using the help to buy scheme? I've done so much research into this scheme and I can't see a mention of this anywhere on the government website or on any first time buyer websites that I've looked on.

If this is the case I wonder if I would have a better chance of scrapping the Equity Loan and just trying to borrow more?

scholesfan88

It's on the help to buy London website about the salary cap.

muhandis

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ehdx wrote: »

Thank you for your responses!

Just one question - why is there no mention of the 4.5x being the limit if you're using the help to buy scheme? I've done so much research into this scheme and I can't see a mention of this anywhere on the government website or on any first time buyer websites that I've looked on.

If this is the case I wonder if I would have a better chance of scrapping the Equity Loan and just trying to borrow more?