buying in london; is it actually possible?

housemouse_3

I am living in London in a friends house and paying him cheap rent which is great, but feel as I am in my late 20's i need to buy somewhere to live. All of the houses/flats in london that I would want to live in are all large fractions of £1MIllion. I have found a derilict, tiny, house that i like and would like to buy to renovate. It is a freehold garage with a first floor above rougly 8m x 5m, with planning permission to build into a 5 story house, for £195 000. I would like to offer £180 000 to start with, but how to get that amount of money? My salary is £23 000, I'm due a pay rise in the next month or but I doubt that i will get more than £27 000. My Dad is willing to put up a £10 000 deposit. I have been told first time buyers can get a mortgage to the value of 4 times annual salary, so even if i get a payrise I am still £72 000 short. It would seem that i have to earn £50 000 to £60 000 to get a mortgage for this house which is pretty much a shed I don't even know anyone who earns that sort of cash. I have been advised to buy ouside of london, get tennants in to pay rent for the mortgage and live in rented accommodation in london, so that i can sell that house to finally buy a house in london. By which time I will probably be too old to enjoy living here. This all sounds very boring and complicated, I have more than enough work to do in my job as it is! What to do?

Dr_Tom

I think it's very difficult, which is one of the reasons I moved from London and took a job in Birmingham. Even here house prices are bad but nowhere near that bad. I'm guessing you must be tied to London otherwise I'd advise looking at doing something similar.

Realistically there's no way you could afford the house you're interested in and with such a huge mortgage have money left to pay the bills, or, heaven forbid, renovate it, and as you've just said you work hard enough already when would you find the time to do it.

You could consider buying a studio, paying it off quicker to save interest and then upgrading or renting it out. That would be profitable, give you your own place and work well if you don't spend too much time at home. Otherwise have a think about how you commute and not just the areas that are popular now but also the ones that are a bit cheaper and up and coming. You'll have to downgrade your standards somewhere to get on the ladder.

stefano

The only way to get a big mortgage is "Self-Certification".
I could never have afforded my big house.
Most Financial advisers will be able to help you.

Joe_Bloggs

@housemouse
Where is your share of the deposit ? What is your existing debt situation ?
You are going to have to dial down your expectations and wait for that pay rise. Try and save some money of your own. Perhaps a two bed flat in South London within walking distance to the tube may be your first step on the property ladder.

J_B.
I've just got Gordon Brown's 'property owning, share holding society' quote. I think it means You may be driven/encouraged to buy half a share of a property.

meanmachine_2

Why do you have to buy a five storey house that doesn't yet exist?

Sounds crazy.

Buy a one bedder with an affordability mortgage (most do it these days), or look at an area out of London.

Honestly, on some tube lines it takes much longer than going in by overground.

A one bed will cost you around 150K, dad puts down £10K, leaving you with a large mortgage, and very little to live on, even with a pay rise.

It's up to you. Is it really worth it seeing as you enjoy cheap rent?

My advice is to wait, marry (or find a partner), then buy. Meantime enjoy your youth while you've got it. Property's a busted flush anyway.

meanmachine_2

Joe_Bloggs wrote:

Try and save some money of your own. Perhaps a two bed flat in South London within walking distance to the tube may be your first step on the property ladder.

Sorry, but a 2-bedder in S London nr to a station would cost you at least 250K.

Joe_Bloggs

@meanmachine
I'm looking at a photo an ad in the local free paper for a two bed purpose built flat/parking for £129,150 vacant possesion SW19. There does seem to be an electricity pylon in the shot. There are numerous similar/better properties up to 149K.These lower valued properties do not get full local press publicity or even shop window space as there place is taken up by higher value properties or rentals. You have to ask in person at the estate agent to see the lower priced stuff or request to be telephoned/emailed if something comes along in your price bracket.

I'm not saying that these are good value at this time but when the price drops the quickest to buy will be the BTL brigade who are sitting on their spare cash deposits after selling at the top of the market.

J_B.

herbiesjp

@ Stefano

Self certification here would be of no use - unless the OP has other income that can be taken into account he is still way short on income to justify the loan.

I can only stress that self cert mortgages serve a purpose for specific clients - in this situation it would appear on the face of it, on the basic information on the board, that the OP does not fit the scenario

A self cert should not be mis-used, doing so is fraud, and you would then have to pay the penalty if caught

michaels

Or overcome your snobbishness and try SE postcodes - I am buying a 3 bed garden mainette ex LA in New Cross (excellent travel to both central london and docklands) for 150k.

meanmachine_2

SE London can be good value for money if you buy in a pleasant road and can overlook the general crapiness of certain areas.

However I do think life is too short to live in a depressing dump of a town.

for instance, even if the houses were being given away, I wouldn't live in Catford.

Normally these areas are cheap for a reason. Although I agree that the lack of tube links does mean people are snobbish about SE london.

Also, it depends what you mean when you say "South London". I'd take it to mean Clapham, Balham. If you mean further south, then really you're looking at Surrey.

housemouse_3

Thankyou all for your replys, I am sure that it is blatently obvious that I really really am a first timer and very green. Some replies I find confusing in that I made no mention of north or south london, I am not in the slightest bit fussed about being near tube stations as i don't really use them, and I am not really after the plot for the planning permission(I am sure it may be useful).

At the moment I just want a studio flat with a bit of workshop space which I why this place caught my eye. Anyway thanks again for all the advise, I think I have to do alot more looking and alot more thinking. Cheers