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Main site > Forums > Essential Money > House Buying, Renting & Selling > 1st time buyer, can't borrow enough money
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      oli356
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    • By oli356 14th Jan 20, 9:24 PM
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      What's this?

    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?

    Sorry!

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      Jacquelyne
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    • By Jacquelyne 15th Jan 20, 10:29 AM
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      What's this?

    Jacquelyne
    I bought my first flat 6 years ago. It was a very small (302 sq.ft) studio flat in a very expensive part of surrey but it needed a lot of work. It hadn't been updated in over 40 years and I got it for a good price. I had a minimal deposit of 10% and I stretched myself to the maximum amount of mortgage. I spent £10k fitting a new kitchen and bathroom, upgrading the electrics and on general redecoration and I was so proud of myself. It was my own home and I loved living there. Some family members had tried to put me off by telling me that it was a bad purchase and that I would never be able to sell it on because no one would want to buy such a tiny studio flat. However, there was nothing else that I could afford at the time and it was really the only way I was ever going to get on the property ladder in the area I live in.


    I sold it just under a year ago for £65k more than I bought it for and it allowed me and my partner to buy our forever home - a 3 bed house in the same area of Surrey. It was the best decision I ever made.

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      markin
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    • By markin 15th Jan 20, 12:04 PM
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      What's this?

    markin
    In 3 years you will have 200K to put down.



    “
    What would mum & dad think about constantly supporting a successful 30 year old?
    ”

    They are likely making a profit at £300 just for rent, hardly what i would call "supporting" Him, They may even need that money for all we know.

    Sorry!

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      oozle1989
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    • By oozle1989 15th Jan 20, 12:13 PM
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      What's this?

    oozle1989
    You need to be a bit more compromising on your location.

    within 3 miles of your parents house is too limiting. Why not within 10 or 15 miles?

    Not many people can afford their ideal location at a young age. People move away to cheaper areas then when they can afford it they move back to where they want to be.

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    • By pepita 15th Jan 20, 12:26 PM
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      What's this?

    pepita
    Hi Out of Curiosity, What decision did you make?
    I am currently living rented in Maidenhead, trying to buy first home in Reading as working there (me and my partner). For our budget, we can only get a flat in Reading, which I am quite not ready as loads of bad experiences with leasehold ground rent and service charges.
    I was looking at Didcot, as it is 12 min from train station to train station. With the same amount, we can afford a 3 bed house in Didcot. It is not however the most stilysh town, just saying...
    Still looking at options near reading within 325-350K budget.

    Have you found a location worthwhile to check within Reading and outskirts?

    Sorry!

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    • By Loanranger21 15th Jan 20, 12:28 PM
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      What's this?

    Loanranger21
    You need to move further out, that is what most FTB do. You are young so can stand the commute.

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    • By theartfullodger 15th Jan 20, 12:35 PM
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      What's this?

    theartfullodger
    Strangely enough, amazing really, when I 1st bought in mid 1970s I was unable to buy what I wanted. Some 20+ purchases later I still don't have the swimming pool and helicopter pad.

    But I survived: Just.

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    • By Skiddaw1 15th Jan 20, 2:15 PM
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      What's this?

    Skiddaw1
    “
    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.
    Originally posted by sgun ”

    I lived in East Reading (Newtown/Cemetery Junction) for many years. My old stamping ground. Nothing wrong with Newtown. As has been said, some good pubs, a wonderful Victorian cemetery (with heaps of interesting birds as well as a feral population of Muntjac deer), a lovely park (Palmer Park), some good pubs (Hope & Bear at the Junction is particularly nice as is the Anglers and Fisherman's Cottage on the Kennet & Avon towpath), shops (including a good Co-op and some fab Asian supermarkets), the best kebabs in Reading, easy access to open country/Thames, easy access to the town centre (nice walk along the towpath), easy access to the M4 and a friendly and vibrant local community. Plenty of very reasonably priced Victorian terraced houses to be had (with nice original features). Feeling all nostalgic so I am!
    https://www.rightmove.co.uk/property-for-sale/property-83970089.html
    Last edited by Skiddaw1; 15-01-2020 at 2:17 PM.

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    • By seradane 15th Jan 20, 2:28 PM
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      What's this?

    seradane
    From a quick search, there are currently 144 2+ bed houses in Reading for sale under £300k. Even if you drop it to £250k, there are still 24 of them. Not counting flats at all. And keep in mind most properties go for somewhat under asking price.

    Sounds like there are definitely options on your budget, just have to decide what's most important to you.

    Sorry!

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    • By gary83 15th Jan 20, 4:48 PM
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      What's this?

    gary83
    “
    In 3 years you will have 200K to put down.






    They are likely making a profit at £300 just for rent, hardly what i would call "supporting" Him, They may even need that money for all we know.
    Originally posted by markin ”
    At £300 a month for board, bearing in mind he’s not paying council tax, gas, electricity, water, insurance there doesn’t seem like much profit there, add in occasional groceries and I’d suggest it’s below market rent for a lodger in the Reading area, I think that’d class as subsidising or supporting him. Again I wasn’t being judgemental, it might be a great solution for everyone, for now, I’d have just thought that after the potential next three or four years that some people are suggesting them both sides would want some of their own space.

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    • By sgun 15th Jan 20, 4:54 PM
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      What's this?

    sgun
    “
    I lived in East Reading (Newtown/Cemetery Junction) for many years. My old stamping ground. Nothing wrong with Newtown. As has been said, some good pubs, a wonderful Victorian cemetery (with heaps of interesting birds as well as a feral population of Muntjac deer), a lovely park (Palmer Park), some good pubs (Hope & Bear at the Junction is particularly nice as is the Anglers and Fisherman's Cottage on the Kennet & Avon towpath), shops (including a good Co-op and some fab Asian supermarkets), the best kebabs in Reading, easy access to open country/Thames, easy access to the town centre (nice walk along the towpath), easy access to the M4 and a friendly and vibrant local community. Plenty of very reasonably priced Victorian terraced houses to be had (with nice original features). Feeling all nostalgic so I am!
    https://www.rightmove.co.uk/property-for-sale/property-83970089.html
    Originally posted by Skiddaw1 ”
    Ooh now I fancy a trip back! The Lyndhurst too and how could you forget Mr Cod at the junction?

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    • By Skiddaw1 15th Jan 20, 6:14 PM
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      What's this?

    Skiddaw1
    The Lyndhurst was a local of ours for some years when we had a flat just around the corner! Mr Cod was still going strong when we left town as was Ye Babam Ye (best kebabs in Reading). Pity Bella Flora closed (used to buy my Christmas wreaths from them) and it was an even bigger shame when Arthur Hill pool went defunct but many of the old Cemetery Junction institutions remain....


    Do you remember when there was a cinema at the Junction (the Gramby)?

    Sorry!

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    • By Bonniepurple 15th Jan 20, 7:22 PM
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      What's this?

    Bonniepurple
    “
    Strangely enough, amazing really, when I 1st bought in mid 1970s I was unable to buy what I wanted. Some 20+ purchases later I still don't have the swimming pool and helicopter pad.

    But I survived: Just.
    Originally posted by theartfullodger ”
    How do you survive without a space to land the helicopter?! Joking aside, OP, buying a house is all about compromise. You’re single, so you are not chasing school places. Don’t write anything off because of what you think an area’s like. Go and see it.

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    • By fidgetgreen 15th Jan 20, 8:53 PM
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      What's this?

    fidgetgreen
    I'm 32, have just bought a do-er upper 2 bed flat in Hertfordshire for £275k. I had a 10% deposit and got a £245,000 mortgage on a £54k salary. It's a huge mortgage but I have a stable job and its time for me to leave home. I didn't think I'd be able to buy last year but I used an online mortgage broker and found i could get enough to buy. You've got a really good size deposit so you can put more down and reduce the size of the mortgage needed. Also, I know you want a house but most people don't go straight into their ideal home, i know i don't want to live in a flat the rest of my life but its a good place to start.

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    • By MissMollyJ 15th Jan 20, 9:46 PM
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      What's this?

    MissMollyJ
    I moved out of Hertfordshire and 100 miles north to buy a house 20 years ago. I would like to have a bigger house with some land so may indeed move another 100 miles in some direction or other to get it.
    C’est la vie.
    £2 Savers Club 2020 no. 9

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    • By MissMollyJ 15th Jan 20, 9:48 PM
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      What's this?

    MissMollyJ
    Also if my house was big enough for my kids to stay and live for as long as they wanted I’d be very happy. My kids are fab! Would love to have a huge house I could convert into flats for them or something.
    £2 Savers Club 2020 no. 9

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    • By DCFC79 15th Jan 20, 9:51 PM
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      What's this?

    DCFC79
    Apologies if been asked but how far would you be willing to travel ?


    You have to decide whats important to you, being close to work but compromise on what you buy or move further out and buy a house.

    Sorry!

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    • By oli356 15th Jan 20, 10:26 PM
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      What's this?

    oli356
    “
    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.
    Originally posted by artyclarty ”
    I should look at Basingstoke, I hear it is a bit cheaper than Reading...

    “
    You need to be a bit more compromising on your location.

    within 3 miles of your parents house is too limiting. Why not within 10 or 15 miles?
    Originally posted by oozle1989 ”
    “
    Apologies if been asked but how far would you be willing to travel ?

    You have to decide whats important to you, being close to work but compromise on what you buy or move further out and buy a house.
    Originally posted by DCFC79 ”
    I am, 3 is very limiting when you have a car.. I suppose I never figured that going out 10 miles etc would make too much difference and hence never looked.
    I was looking out 20/30 miles earlier out earlier, more towards Oxfordshire, houses there seemed cheaper. Even if it was an hour commute each way, it took me 20 minutes this morning to do 1.5 miles on my 7 mile commute, I was thinking that an hour commute wouldn't be so bad if I was at least moving. Would need a different (more fuel friendly / not so fast car, but thats no big deal).

    “
    At £300 a month for board, bearing in mind he’s not paying council tax, gas, electricity, water, insurance there doesn’t seem like much profit there, add in occasional groceries and I’d suggest it’s below market rent for a lodger in the Reading area, I think that’d class as subsidising or supporting him.
    Originally posted by gary83 ”
    Well yeah, you can pay several hundred a month just for a room in a house easily.. I think my mum quite enjoys me being home, gives her someone to talk to as she is now retired (looks after sisters dog all day!) and my dad is more miserable in his 'old age' now
    Last edited by oli356; 15-01-2020 at 11:25 PM.

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      SelmestonFTB
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    • By SelmestonFTB 16th Jan 20, 8:56 AM
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      What's this?

    SelmestonFTB
    HSBC lent me 4.7 x my salary last year.
    Not sure if that's worth looking at?
    It would have been nicer if I could have afforded a house, but most people start off with a flat and move their way up slowly if they're buying alone. There was no way I could have afforded a house but I'm in a flat overpaying my mortgage with the view that hopefully in about 5 years I'll be able to move up the ladder.
    I'm your age, I was feeling a little trapped living at home and my parents were super laidback, so I understand that point!
    Maybe write a pro & con list? That's how I ended up moving rather than staying put and saving more of a deposit.
    Mortgage starting June 19: £140,500.00
    Mortgage currently: £137,300.00
    Overpayments TD: £1,638.10

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      getmore4less
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    • By getmore4less 16th Jan 20, 10:08 AM
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      What's this?

    getmore4less
    I think you are underestimating how much you can afford.
    at 25 you have 40y till 65.

    £50k income net £3k+ if you get more pay rises you will be better putting in pension once 40% kicks in.

    £250k mortgage £62.5k deposit aim for 80% LTV get a rate of around 2%

    40y £760pm
    35y £830pm
    30y £925pm
    25y £1060pm

    With £3kpm , £1k mortgage, £1k living, £1k for discretionary spending/overpay mortgage free before 50.

    HTB probably won't help you as much as the no deposit brigade as you can go to 80% and get decent rates anyway.

    H2B help you stretch to 65% LTV on a £380k place
    £247k Mortgage, £76k HTB, £57k deposit


    no idea on location but spacious house was on a £325k not clear who owns the garage.
    https://www.rightmove.co.uk/property-for-sale/property-65815584.html

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    • By oli356 16th Jan 20, 10:11 AM
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      What's this?

    oli356
    “
    HSBC lent me 4.7 x my salary last year.
    Not sure if that's worth looking at?
    It would have been nicer if I could have afforded a house, but most people start off with a flat and move their way up slowly if they're buying alone. There was no way I could have afforded a house but I'm in a flat overpaying my mortgage with the view that hopefully in about 5 years I'll be able to move up the ladder.
    I'm your age, I was feeling a little trapped living at home and my parents were super laidback, so I understand that point!
    Maybe write a pro & con list? That's how I ended up moving rather than staying put and saving more of a deposit.
    Originally posted by SelmestonFTB ”
    Yeah, I think I probably need to speak to someone and try identify how much I could borrow, seems like the estimators on line can't be trusted and there's too many variables at play. At least then I will know where I stand.

    If I was able to afford a flat but was like 2 years away from buying a house , then I think I would stay put really and save up the rest, it just makes more sense in my opinion; might write a pro/con list though. We are getting a nice new shiny kitchen at home next month and as someone who spends alot of time in there .... I'm looking forward to that

    Sorry!

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