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1st time buyer, can't borrow enough money

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1st time buyer, can't borrow enough money

edited 30 November -1 at 12:00AM in House Buying, Renting & Selling
94 replies 8K views
oli356oli356 Forumite
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edited 30 November -1 at 12:00AM in House Buying, Renting & Selling
Sorry this might be long, TLDR at the bottom...


I'm 25 years old, living at home with my parents and single. I have around £60k saved in savings accounts, £10k in help to buy ISA and some money in company shares (ESPP) if I wanted to sell them I would have around £80k in cash in total; more than enough for the minimum deposit on any house I would want.

I actually realised the Help to buy ISA was useless (at least the bonus), as the max house price was £250k which gets you not a whole lot around Berkshire so I've also started a Lifetime ISA.

The important part though is that I mentioned I'm single. My salary is low £50's, I believe as an estimate you can borrow 4-4.5x the salary so £200-225k, lets say 30k deposit, so I could buy a house worth £230-250k.

A 2 bed house in the area is over £300k easily, my sister bought a new build and I think it was 350, but a quick search on rightmove within 3 miles of my parents house has all but a few at over 300k. Expanding the search radius out a bit wouldn't help much or make it worse..

Of course I could move into a flat which is cheaper (I would still probably need more money!), but I want my 1st house to be a long term thing and I wouldn't want to live in a flat. So moving out of my parents and burning any money on a mortgage or rent on a flat seems a bad idea to me.

I don't mind living at home with my parents, though the older I get the sillier I will feel. I like the house I live in so naturally wouldn't want to move out just for the sake of it into somewhere I wasn't happy.


What choices do people like me have though? I'm struggling to see how how any single person (unless goining in with friends), could get a mortgage without the 'bank of mum and dad' helping out big time (i think I could get 20k from them).


TL;DR: how does 1 person without an insane amount of savings afford a house they would want to move into?
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Replies

  • onwards&upwardsonwards&upwards Forumite
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    It looks like your options are a flat, or buying a house somewhere a bit cheaper.

    Flats are fine, just make sure you read the lease thoroughly and find out about the service charges.

    Why are you only planning to use less than half your savings for a deposit?
  • pinkshoespinkshoes Forumite
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    You do what most first time buyers do - compromise on area or size with their first property.

    £60k budget and £200k mortgage is a decent amount. Which bit of Berkshire are we talking about???

    I wanted a 2 bed house in Summertown Oxford when I was 25, but that was never going to happen. Instead I got a 2 bed flat in a cheaper area. It was still lovely though!
    Should've = Should HAVE (not 'of')
    Would've = Would HAVE (not 'of')

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  • diggingdudediggingdude Forumite
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    stretch the right move radius to 15/25 miles and look again
    An answer isn't spam just because you don't like it......
  • PasturesNewPasturesNew Forumite
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    "You can use your Help to Buy: ISA with other Government schemes, like the Help to Buy: Equity Loan scheme" https://www.helptobuy.gov.uk/help-to-buy-isa/faq/

    That means you're not limited to £250k.

    I only looked as I see heaps of houses advertised for £325k or more, nowhere near London, all with the Help to Buy stamp all over the Rightmove adverts.

    So maybe .... you can do it, but you're not aware of all the different schemes/mixes of schemes....

    I don't know how it all works as I'm not a FTB.... but I do notice them as I can't afford the houses being offered to FTBs :)
  • oli356oli356 Forumite
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    It looks like your options are a flat, or buying a house somewhere a bit cheaper.

    Flats are fine, just make sure you read the lease thoroughly and find out about the service charges.

    Why are you only planning to use less than half your savings for a deposit?
    I just made up a number really, I'm unaware of all the other fees of moving in to a house and being my 1st would need money to buy things (albeit not tens of thousands on furniture..). In reality if I was able to get somewhere I wanted to buy, the majority of my savings would be going in... that's what they are there for.

    pinkshoes wrote: »
    You do what most first time buyers do - compromise on area or size with their first property.

    £60k budget and £200k mortgage is a decent amount. Which bit of Berkshire are we talking about???

    I wanted a 2 bed house in Summertown Oxford when I was 25, but that was never going to happen. Instead I got a 2 bed flat in a cheaper area. It was still lovely though!
    I figured this would be the answer :)

    I guess I just have to get in my head that everyone starts somewhere. Though as soon as I stop paying £300 in rent to my dad and start paying a £1k mortgage (making up a number) and bills etc, upgrading just seems like a very very long time thing. So considering I don't 'want' to move out, the mentallity about doing it isn't great if that makes sense.

    I work in Reading, live several miles away. My work is the only reason keeping me in the area, though it is quite flexible so in reality I could live a bit further away and maybe work from home a couple of days a week. No real/hard consideration has been done into moving and looking at costs involved and house prices properly. I know what new 1/2 bed flats/houses cost around here, but not much else.
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  • FtbDreamingFtbDreaming Forumite
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    If youre only paying £300 keep and youre on £50k salary why not stay at home another 3 or 4 year, live very frugally aiming to save £30k plus a year and in that time you'll have enough to move straight into the area you want then with a smaller mortgage topup.
    Mortgage started August 2020 £69,700
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  • Lover_of_LycraLover_of_Lycra Forumite
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    You do what most FTB do and cut your cloth accordingly.
  • oli356oli356 Forumite
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    stretch the right move radius to 15/25 miles and look again
    I do need to do this, I would probably be quite surprised.
    "You can use your Help to Buy: ISA with other Government schemes, like the Help to Buy: Equity Loan scheme" https://www.helptobuy.gov.uk/help-to-buy-isa/faq/

    That means you're not limited to £250k.

    So maybe .... you can do it, but you're not aware of all the different schemes/mixes of schemes....
    I hadn't heard of the 'equity loan scheme'.. HTB yes and LISA yes but not this.. Will take a look, thanks.
    If youre only paying £300 keep and youre on £50k salary why not stay at home another 3 or 4 year, live very frugally aiming to save £30k plus a year and in that time you'll have enough to move straight into the area you want then with a smaller mortgage topup.
    I've started a spreadsheet so I can track how much money I have in various accounts throughout the year as I'm a bit clueless how much better off I am today than I was 12 months ago. My expenditures are low, rent and my £20 phone bill is all I pay monthly. Car is paid for and is the biggest expense as its a bit thirsty etc. Plus i'm tight ... :) In reality though its hard to see me moving out in the next few years so this is probably what would happen.
  • haras_nosirrahharas_nosirrah Forumite
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    Have just got a first time buyer a 250k mortgage on a 50k salary - that plus 50k of your deposit would get you to 300k
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • gary83gary83 Forumite
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    Your parents probably didn't buy a large house in Berkshire on a single income when they were 25. the house you were brought up in & live now was probably the results of their lifetimes work. you're only 25, still young, everybody has to work up to something, that's where the initial compromise of a different location, smaller starter home or flat, rather than just expecting to straight away buy a large house within a 3 mile radius of your parents in Berkshire.

    I don't think I'd agree with suggesting you stay at home for another 3/4 years Paying £300 board on a 50k salary, everyone needs to spread their wings and grow up at some point. Would anyone really want to be approaching 30, professionally obviously successful but still living with mum & dad? What would mum & dad think about constantly supporting a successful 30 year old?
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