Can't see myself buying my first house any time soon

MikeL93

I have been saving hard for years for my first house, I now have £32K for a deposit which will leave me with £6K left over for any renovations I want to do or even to just keep money to one side. However when I have been saving so much for years it's really disheartening to not be able to afford my first house due to ever increasing prices. I applied for a mortgage in principle a few months ago and based on my wages (I'm on £37K) a year the best they could offer me was £139K, meaning that I can afford a house around the £170K mark. But there is just nothing even remotely in that price bracket anywhere near me and even further afield there is nothing and anything that comes available close to my budget is snapped up in hours. I did consider using a help to buy scheme but everyone I have sought advice from has advised against this. I have spoken to my parents and they have told me they feel sorry for the situation I am in and they have no issue with me staying at home a bit longer.

I know I will have to be patient and keep saving but with the spiralling costs I just can't see me buying anything in the next few years. It's a sign of how high house prices have risen when 4 years ago my sister and brother in law bought a 4 bed detached for £180K and now that wont even get a terraced house. Is anyone else in a similar situation to me?

Snookie12cat

Did you look for an AIP at a few places? Some lenders have higher income ratios, like NatWest does 5x as standard, so you could more?
It's hard but can you borrow from family to get you a bit more? 

MaryNB

Snookie12cat said:

Did you look for an AIP at a few places? Some lenders have higher income ratios, like NatWest does 5x as standard, so you could more?
It's hard but can you borrow from family to get you a bit more? 

Be careful with this though. Many lenders won't accept a loaned deposit.

propertyhunter

I suppose your parents would have offered you a gift if they could?

You can try a higher income multiple - speak to a broker if you haven't already. They can advise you best and answer questions specific to your affordability. Some banks allow you to borrow even 6-fold if you have a fantastic credit history - but it's risky to put yourself in this position with exposure to such high levels of debt. I'd be happier to take on a higher income multiple mortgage if I was younger and likely to be promoted which will increase my income. 

Generally you debt is eroded by inflation if wage rises at least match inflation, which is why it also gets easier to pay your mortgage over time if interest rates are fixed (e.g. over a 5-year period). This is why stretching yourself when you are younger isn't as risky as you'd think. You have greater scope for career progression and for inflation to erode your debt. 

Otherwise, the advice would be to make some compromises with respect to your property search, whether it be size, area or condition.

MikeL93

Snookie12cat said:

Did you look for an AIP at a few places? Some lenders have higher income ratios, like NatWest does 5x as standard, so you could more?
It's hard but can you borrow from family to get you a bit more? 

Thanks for the advice about Natwest, I have just been on and they could offer me up to £160K

Lyd00

Definitely speak to a broker. My income is less than yours and with only a 10% deposit I can borrow around 157k with multiple lenders 

SavingPennies_2

MikeL93 said:

I have been saving hard for years for my first house, I now have £32K for a deposit which will leave me with £6K left over for any renovations I want to do or even to just keep money to one side. However when I have been saving so much for years it's really disheartening to not be able to afford my first house due to ever increasing prices. I applied for a mortgage in principle a few months ago and based on my wages (I'm on £37K) a year the best they could offer me was £139K, meaning that I can afford a house around the £170K mark. But there is just nothing even remotely in that price bracket anywhere near me and even further afield there is nothing and anything that comes available close to my budget is snapped up in hours. I did consider using a help to buy scheme but everyone I have sought advice from has advised against this. I have spoken to my parents and they have told me they feel sorry for the situation I am in and they have no issue with me staying at home a bit longer.

I know I will have to be patient and keep saving but with the spiralling costs I just can't see me buying anything in the next few years. It's a sign of how high house prices have risen when 4 years ago my sister and brother in law bought a 4 bed detached for £180K and now that wont even get a terraced house. Is anyone else in a similar situation to me?

This sounds low, I'd shop around, a quick look suggests you could borrow around 165k (assuming you have no other debts/ commitments other than the usual spending). If you are living with parents then that will make saving a lot easier. You don't say how old you are assuming you are young, single and a ftb is there anything wrong with a flat or small house/ terrace for a first home? 

TBagpuss

You might find it helpful to look on the debt boards, which also give great advice about saving / avoiding debt - it may be that you could boost your deposit by looking at your current budget and spending and aiming to focus on saving. Fo your parents charge you rent? Would they be able to reduce what they charge to help you save more? 

 You mention saving for your first house - have you considered a flat as a first step? They are not all high rises or places with cladding issues.

like others, I think the figure you give seems quite low given your income, o it's definitely worth talking to a broker and shopping around - also get copies of your credit records and check whether there is anything that need attention.

Do you currently have any debt?

Leggitte

MikeL93 said:

I have been saving hard for years for my first house, I now have £32K for a deposit which will leave me with £6K left over for any renovations I want to do or even to just keep money to one side. However when I have been saving so much for years it's really disheartening to not be able to afford my first house due to ever increasing prices. I applied for a mortgage in principle a few months ago and based on my wages (I'm on £37K) a year the best they could offer me was £139K, meaning that I can afford a house around the £170K mark. But there is just nothing even remotely in that price bracket anywhere near me and even further afield there is nothing and anything that comes available close to my budget is snapped up in hours. 

Have you considered Shared Ownership. That scheme was designed for your situation.

theoretica

You might also look at how fast you expect to be able to rebuild your savings once you are paying the mortgage and if it is worth going below £6k kept aside.

ReadingTim

Speak to an independent whole of market broker to update the max you can borrow, you might be pleasantly surprised.  Also, consider whether you need to keep as much as £6k back for renovations etc.  

Other than that, it's a case of looking further afield and/or properties you'd previously disregarded - flats for example, rather than houses.  I appreciate it sucks that your sister bought a 4 bed detached and you say you can't afford a 2/3 bed terrace, but that's life - you can't go back in time, so just have to make the best of the situation you're currently in.  I had to move 40 miles away from West London where I was born and brought up and all of my friends were because I couldn't afford to buy there, and that was back in 2006, so not a lot has changed in the last 15 years, and probably won't change in the next...