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£32k deposit, £35k salary...can't afford to buy. Am I missing an option?

(131 Posts)
Cronx Thu 15-Oct-15 23:39:36

In London, of course. No one needs to tell me to get over it, I tell myself the same every day, and at least I have a roof over my head and a job, etc. I am truly appreciative of this. So this is less a whinge, more asking if anyone has any bright ideas? If I had been in this position 5-10 years ago I would have been laughing, but the timing has been terrible for me, with house prices increasing exponentially and interest rates being virtually nothing, therefore leaving me with virtually no returns on my savings.

I'm single, 32 and have no children. It's not feasible for me to move to Grimsby or something at the moment, though I would definitely be open to it under different circumstances*

But my current living situation is a bit difficult. I live with my mum and pay rent to her, but way less than I would be paying if I were renting on my own. We share housework, bills, food etc but I just want my own space and to live like an adult. I've had enough of house shares, my current situation is better than that, and at least I get to keep saving this way. Renting would eat up my income and put my savings back so I would be in worse position in the long term.

But it feels like my saving is completely futile.

Without wanting to sound like an entitled whiner, I am so frustrated. I have been working and saving like mad, and I lead a really modest lifestyle (I'm quite boring and frugal anyway so this wasn't too hard, and I am happy to continue doing this). But it's getting me nowhere, especially with interest rates through the floor and no sign of them going up.

I know the answer is "too bad, suck it up, that's how cookie crumbles sometimes, no one deserves to own a house flat..." but surely it shouldn't be this difficult? I'm looking in the crappest, least glamorous part of outer London, not Hampstead or anything. The prices are going up faster than I can save, and I'm a bloody good saver.

I've spoken to a few lenders and they say they can lend me between £160k and £175k, which would buy me a property of up to around £200k, taking into account stamp duty and other fees. There is hardly anything on the market at this level - there are a number of "in need of TLC" derelict hovels on RightMove, between £150k and £200k. I'd be open to this in my desperation, but I'm doubtful they actually exist, because the estate agents never return my calls or emails about them. Even when I go in to their offices to enquire it's just "sorry, that's not on the market anymore". A lot of the properties at this level specify cash buyers or investors only, which rules me out.

There are a few properties a little above this, around the £210k upwards mark. In my cute naivety, I thought maybe I could look at these and make an offer 10-20% below asking price. Ha. Ha. Dream on. I've been to numerous viewings, all of these are hideous stampede-like open house affairs, where you get 2 minutes to look around. It's mostly young couples struggling to find a home (but probably on 2 incomes so they're more likely to succeed than I am), plus the odd single loser like me, and then an investment buyer turns up knowing they will be able to outbid everyone and offer at least asking price, and make a tidy profit. So I have no hope on these flats, which aren't even that nice.

I've been looking at the Help to Buy Equity Loans but it's all so mysterious, there seem to be hardly any properties around under this scheme, and describing them as "affordable" seems a bit generous to me. There's one down the road from me, but the 1 bed flats start at £350k! It's on a horrible roundabout in a crap part of a crap borough. And the affordability criteria seem to make it impossible for people of average or even slightly above average incomes to afford a very average home. Are they advertised elsewhere? Or are you supposed to just pick any new build and get a Help to Buy loan/mortgage for it? I made an appointment with my bank, which proudly declares they take part in the Help to Buy scheme, but the mortgage advisor did not have a single clue about it, I seemed to know more than she did. She had to look it up on the computer as she didn't believe that they offered such a scheme, even though I told her I was reading it on their website that very morning. The Help to Buy website is hopeless, it doesn't actually give any helpful, practical information.

I've thought about shared ownership, even though it seems like a massive rip off. But even then I sometimes don't even meet the income thresholds. I've contacted Housing Associations in my borough about new builds but I'm low on the priority list, understandably.

I honestly thought I'd be able to buy a house at 32, given that I've been nothing but sensible and taught myself about the market and followed all advice. I thought I had done all the right things but I am royally screwed. Lord knows what I will do if I ever want a family, there's no chance I can afford anywhere suitable for a child.

I have no hope, right? Should I give up and blow my deposit at the bingo or something?

I suppose I'm just wondering if anyone has any stories of eternal perseverance finally paying off!

*everyone has their reasons for wanting to live in a particular area. Mine are mainly: I'm having long term counselling and probably won't survive without it, and my mental state will deteriorate if I have to go through the mill of trying to find a new one. I'm not going to be able to move on from some of the issues that caused my problems by staying in my family home (I'm living in the house I was abused in, for one). Plus, I have a stable, good job (the salary is ok if not stellar, but the pension and other benefits are very, very good. Plus I like my work and colleagues, and don't think I can cope with the upheaval of looking for a new job and establishing myself elsewhere at the moment, especially as I will have no partner, no family and no friends around).

lilwelshyrs Thu 15-Oct-15 23:47:27

The equity scheme is good - you can apply via the help to buy website. DH and I are hoping to do that next year.
The governement give you 20% loan on a new property and 15% on an older property. You have to find agents who allow this... Give the help to buy people a call. Bare in mind that when you come to sell your property, then you need to pay back 20%/15% of the sold price. If the property value goes down then you still need to pay back what you borrowed from the government.

Speak to an independent mortgage advisor. They can help you out smile I have a fab lady but she's in eastbourne... So maybe not much use to you lol!

It is a minefield though. I'm dreading going through it all next year!

Cronx Thu 15-Oct-15 23:48:53

Just to add, I've been looking not just in London but anywhere that is commutable to my work and my counselling, so Surrey, Kent, even Essex, but obviously these tend to be as expensive and I'd have to factor in travel costs. I'm open to further out of London, I just can't relocate to a cheaper region than the South East at the moment.

Cronx Thu 15-Oct-15 23:51:13

Thanks - I will try that. The banks and brokers I have spoken to have been a bit hopeless, they start off saying "ooh it's harder on your own...". Yes dear, I know this...

But I haven't tried a proper independent adviser yet, they're probably much more clued up I guess - I'll get going on that!

lilwelshyrs Thu 15-Oct-15 23:53:19

Dont go to banks - they'll check your credit score which brings it down each time... A mortgage advisor will have access to all kinds of options and will be independent too!

Cronx Thu 15-Oct-15 23:56:11

Yea I've been really firm with my banks that I only want the initial advice until I make an application, so they haven't done any credit checks. I just tell them my credit score is excellent and show them my Experian record.

lilwelshyrs Thu 15-Oct-15 23:59:41

You can check your credit score for free without affecting it using too smile

Cronx Fri 16-Oct-15 00:02:09

Ooh I didn't know that, thanks! I cancelled Experian after the free trial but am obsessed with my credit score being unblemished, ha. This will provide me with endless entertainment.

lilwelshyrs Fri 16-Oct-15 00:07:18

Glad to help! They have helpful hints and tips on how to improve your credit score too! So knock yourself out haha! smile

stripytees Fri 16-Oct-15 00:14:17

Rightmove has 1 and 2 bed flats under £200k in South and East London - have you looked at areas like Barking, Plaistow, Sidcup etc.? Also further out in Kent with rail links to London Bridge and Cannon St. Or north of London in St Albans area with rail links to Kings Cross.

Cronx Fri 16-Oct-15 00:22:30

Thanks stripeytees. Yes Barking has been on my list but it suffers from similar problems to where I live now, the cheap places don't actually seem to exist or get snapped up immediately by investors. I don't mind Kent at all and am open to that (actually saw a lovely looking house in Dartford yesterday), I'm not too familiar with Sidcup and Plaistow so will look at them as well.

I think St Albans is too posh for me! I'd prefer South/East for commute reasons; I will look at Herts but I don't think it would be sufficiently cheaper to justify the increased travel costs/times. I will keep an open mind on it though and keep looking. I am casting the net quite wide, I'm just a bit miffed that all my links are in the most expensive city so I have to go about 50 miles before it's actually affordable!

I am relieved that at least I can live where I am at the moment and keep saving, it's stable if not ideal. It must be so much worse going through this while paying eye-watering rents and dealing with crap landlords and unstable tenancies.

AnotherEmma Fri 16-Oct-15 00:26:43

I don't know how anyone buys property in London without someone else to buy with (could be a good friend, not necessarily a partner) and/or a windfall in the form of inheritance or help from parents. Sorry, I know that's not helpful!

Cronx Fri 16-Oct-15 00:31:01

Hehe Emma, the truth is always helpful! My friends all seem to have wealthy families who have given them their deposits so they don't need to buy with me, and are baffled as to why I can't just get my parents to help me. Alas my mum has not got two pennies to rub together!

It's annoying, people a few years older than me managed to buy flats with tiny deposits, even considering the fact the prices were much lower then. I guess the bubble won't burst any time soon.

AnotherEmma Fri 16-Oct-15 00:34:27

Could you invest in a buy to let flat somewhere (not London obviously)? You would get a bit of income from it and would be building equity so that you could hopefully sell it and buy somewhere else to live in eventually.

StrawberryTeaLeaf Fri 16-Oct-15 00:35:17

Which mainline station(s) are closest to your work?

AnotherEmma Fri 16-Oct-15 00:35:42

It doesn't immediately solve your problem of wanting to own your own home, but it would solve the frustration of having £35k savings that aren't doing anything for you.

Cronx Fri 16-Oct-15 00:39:47

I have considered that. But I worry that nowhere is as nuts as London, and there are rumblings that prices everywhere but the SE will tumble dramatically, so there may be a danger that I buy somewhere that starts losing value so when I come to sell it to actually buy somewhere for myself, I'll be in trouble. I don't think I am clued up enough about the economy to take the risk - everyone I know who seems to do it already has a safety net of sorts. My deposit is all I have, there is no back up plan. Plus, I really want somewhere to live, not an investment - I'll only be jealous of my tenants!

Cronx Fri 16-Oct-15 00:43:54

I work bang in the middle of London so am quite flexible in that sense. I live south at the moment and my treatment is South so I would prefer S London, Surrey, Kent..., but if need be I could just take 2 hours to travel home from that of an evening. I don't see north of London being much cheaper (though I wouldn't rule it out), but ideally I'd prefer South, East or West.

StrawberryTeaLeaf Fri 16-Oct-15 00:48:39

Medway towns is the obvious option then (particularly Gillingham and Chatham).

There are also bargains to be had in the middleish section of Essex (around Kelvedon, 50 mins into LiverpoolSt) but that is probably less convenient.

Prices in Surrey and Sussex and much of Kent are not friendly to single bargain hunters really.

Cronx Fri 16-Oct-15 00:53:03

Thanks StrawberryTeaLeaf, I'll investigate these definitely. It's useful to have place names as just putting a radius onto Zoopla means you end up with a load of chalets and houseboats to plough through.

I'm finding out about places I have never heard of, if nothing else, so thank you for your help!

StrawberryTeaLeaf Fri 16-Oct-15 00:57:14

Historic Dockyard?

Older 2 bed

StrawberryTeaLeaf Fri 16-Oct-15 01:03:19

And Essex

A second bedroom looks very possible if you take the out of London approach. Do get out of the 'family home' if you can for the sake of your recovery. Good luck smile

Cronx Fri 16-Oct-15 01:07:16

2 bedrooms?! shock I was almost resigning myself to having to get a studio.

While further than I had planned, these areas could definitely be options, and the properties look nice. I'll look at travel etc tomorrow and investigate it further. Thanks again for the suggestion.

I'm a little sad that the part of London I have lived in forever was always terrible and cheap, and I was fine with that and planned to stay here, and worked towards doing so. When I finally thought I could manage it, it's still terrible but needlessly expensive; it's still really rubbish, it's not even been gentrified. A pity. But maybe I need somewhere new!

travailtotravel Fri 16-Oct-15 09:31:22

Can younspeak to a pretty financial advisor. There are still things £35k could be doing for you ....

You don't say when your treatment might end - is there an end point (excuse my ignorance it sounds necessary and painful all at the same time,,). If there is,would this change or broaden options for you?

cestlavielife Fri 16-Oct-15 09:56:39

sharetobuy if you want to stay in your area... at it.

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