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  • FIRST POST
    • oli356
    • By oli356 14th Jan 20, 9:24 PM
    • 51Posts
    • 10Thanks
    oli356
    1st time buyer, can't borrow enough money
    • #1
    • 14th Jan 20, 9:24 PM
    1st time buyer, can't borrow enough money 14th Jan 20 at 9:24 PM
    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?
Page 1
    • onwards&upwards
    • By onwards&upwards 14th Jan 20, 9:43 PM
    • 1,571 Posts
    • 3,139 Thanks
    onwards&upwards
    • #2
    • 14th Jan 20, 9:43 PM
    • #2
    • 14th Jan 20, 9:43 PM
    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?
    • pinkshoes
    • By pinkshoes 14th Jan 20, 9:46 PM
    • 16,833 Posts
    • 23,359 Thanks
    pinkshoes
    • #3
    • 14th Jan 20, 9:46 PM
    • #3
    • 14th Jan 20, 9:46 PM
    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')

    No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)
    • diggingdude
    • By diggingdude 14th Jan 20, 9:49 PM
    • 1,475 Posts
    • 1,974 Thanks
    diggingdude
    • #4
    • 14th Jan 20, 9:49 PM
    • #4
    • 14th Jan 20, 9:49 PM
    stretch the right move radius to 15/25 miles and look again
    House owner as of 27.3.2019
    • PasturesNew
    • By PasturesNew 14th Jan 20, 9:59 PM
    • 67,804 Posts
    • 396,721 Thanks
    PasturesNew
    • #5
    • 14th Jan 20, 9:59 PM
    • #5
    • 14th Jan 20, 9:59 PM
    "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
    • oli356
    • By oli356 14th Jan 20, 9:59 PM
    • 51 Posts
    • 10 Thanks
    oli356
    • #6
    • 14th Jan 20, 9:59 PM
    • #6
    • 14th Jan 20, 9:59 PM
    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?
    Originally posted by onwards&upwards
    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.


    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!
    Originally posted by pinkshoes
    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.
    • FtbDreaming
    • By FtbDreaming 14th Jan 20, 10:05 PM
    • 161 Posts
    • 294 Thanks
    FtbDreaming
    • #7
    • 14th Jan 20, 10:05 PM
    • #7
    • 14th Jan 20, 10:05 PM
    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.
    • Lover of Lycra
    • By Lover of Lycra 14th Jan 20, 10:12 PM
    • 833 Posts
    • 1,785 Thanks
    Lover of Lycra
    • #8
    • 14th Jan 20, 10:12 PM
    • #8
    • 14th Jan 20, 10:12 PM
    You do what most FTB do and cut your cloth accordingly.
    • oli356
    • By oli356 14th Jan 20, 10:17 PM
    • 51 Posts
    • 10 Thanks
    oli356
    • #9
    • 14th Jan 20, 10:17 PM
    • #9
    • 14th Jan 20, 10:17 PM
    stretch the right move radius to 15/25 miles and look again
    Originally posted by diggingdude
    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....
    Originally posted by PasturesNew
    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.
    Originally posted by FtbDreaming
    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_nosirrah
    • By haras_nosirrah 14th Jan 20, 10:18 PM
    • 2,116 Posts
    • 3,344 Thanks
    haras_nosirrah
    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.
    • gary83
    • By gary83 14th Jan 20, 10:21 PM
    • 128 Posts
    • 178 Thanks
    gary83
    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?
    • oli356
    • By oli356 14th Jan 20, 10:28 PM
    • 51 Posts
    • 10 Thanks
    oli356
    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?
    Originally posted by gary83
    Yep, of course they didn't, especially on my dads side they weren't well off. So hard work and many decades later and here they are. The 3 mile radius thing isn't important, of course I don't want to be 2 hours drive from my work either, but expanding further than 3 miles is 100% doable.


    For now I don't think they mind it.... I would be more concerned though as the years ago by (and already am a little bit) ... especially whilst approaching 30, it would be rather embarassing to tell people, so I do fully agree with you.
    • oli356
    • By oli356 14th Jan 20, 10:31 PM
    • 51 Posts
    • 10 Thanks
    oli356
    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
    Originally posted by haras_nosirrah
    This is very interesting to hear, whilst in reality my base salary is a few grand under the 50, bonuses (twice a year, but not guaranteed) would put it over 50. But even still, using the multipliers I always hear people go on about (4 - 4.5%), in your case at least weren't accurate.
    • JayRitchie
    • By JayRitchie 14th Jan 20, 10:39 PM
    • 361 Posts
    • 356 Thanks
    JayRitchie
    You earn good money for a 25 year old. How do you see your salary in 3 years time? I'd generally go for a flat in your position (somewhat dependent on type of work) but it might be worth hanging on for a pay increase.
    • TadleyBaggie
    • By TadleyBaggie 14th Jan 20, 10:44 PM
    • 3,454 Posts
    • 2,712 Thanks
    TadleyBaggie
    Which part of Berkshire, I live just over the border in Hampshire towards Basingstoke and it's certainly possible to get 2 bed flats for under 200K.
    • oli356
    • By oli356 14th Jan 20, 10:55 PM
    • 51 Posts
    • 10 Thanks
    oli356
    You earn good money for a 25 year old. How do you see your salary in 3 years time? I'd generally go for a flat in your position (somewhat dependent on type of work) but it might be worth hanging on for a pay increase.
    Originally posted by JayRitchie
    Hard to say, had 2 increases last year, from 33.x to 43.x and then another to where i am now at 47.x, though moving forwards I am unsure what and when the next would be... these caught me by surprise.


    Which part of Berkshire, I live just over the border in Hampshire towards Basingstoke and it's certainly possible to get 2 bed flats for under 200K.
    Originally posted by TadleyBaggie
    Office is in Reading (not central), so that naturally is the area I've been looking at (need to expand out).
    • steampowered
    • By steampowered 14th Jan 20, 10:59 PM
    • 3,796 Posts
    • 3,923 Thanks
    steampowered
    You can often borrow up to 5x salary.

    Borrowing 250k plus 60k of your cash would get you a 310k property, with 20k left in the bank to cover costs and emergencies.

    Have a play around with https://www.moneysavingexpert.com/mortgages/best-buys/.
    • yksi
    • By yksi 14th Jan 20, 11:14 PM
    • 194 Posts
    • 333 Thanks
    yksi
    Assess your options. We all want the world but can't have it, so we look at what we could have and we think about whether we could make it work.

    - Move 30 minutes away and get your starter 2bed home, would this work, would you get a lodger in to help you save money, could you cope with the travel time
    - Move 10 minutes away and get a flat, could this mean a smaller mortgage that you pay off faster, could you deal with moving house again in five years' time? I'd take a long hard look at this one, you're not being very realistic to expect to move into your forever home at 25, what happens if you meet a partner, in five years' time a 2bed house might be too small anyway!
    - Move across the country and buy something outright, would you want to relocate, is your line of work only present in Berkshire, do you feel brave
    3 a Day January 61/93
    2020 in 2020 61/2020
    • artyclarty
    • By artyclarty 15th Jan 20, 9:39 AM
    • 165 Posts
    • 151 Thanks
    artyclarty
    My sister works just outside Reading. She has gone from lodging with our grandfather in Fleet, to lodging in Calcot but finally ended up in Basingstoke.



    She has just exchanged on a flat in the city, a 1 bed flat 5 minutes from the station for 150k, so well in budget. It was a compromise as she wanted a 2 bed, but that's more the 200k+ range



    If you don't have a car, the commute is about 20 minutes direct by train (albeit a very busy train!).



    I do think your choice will be flat, flat or flat unless you are going to move a lot further out. Good luck though!
    • sgun
    • By sgun 15th Jan 20, 10:07 AM
    • 500 Posts
    • 580 Thanks
    sgun
    Office is in Reading (not central), so that naturally is the area I've been looking at (need to expand out).
    Originally posted by oli356
    Earley, Newtown? My sister lives in Reading and that's where everyone started out if they were on a low budget (crazy to say that, 280k got me a rural large 3 bed detached with land up here in Northumberland). Now I never minded Newtown (it has a couple of decent pubs) but I do get that it isn't everyone's cup of tea. However, if you want a house rather than a flat you might just get one there. Of course, it isn't an area you would boast about living in but then most FTB have to start in the ropier areas.
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