I’m not missing something here am I? Universal credit, renting and saving for a deposit.

[tiredconfusedhungry]

Keeping it a bit vague. I’m separated, STBXH and I were looking at figures last night and we’re not going to come out with much to put towards a deposit. We’re looking at around £15k each, I’d need a deposit of around £60k - £70k and that’s to buy a 2 bed house.

We’re in the South East and house prices here are high, rent is high. We’re already in the ‘cheaper’ part, moving further away from where we are puts us in prime commuting land and would be more expensive.

Anyway, it’s likely I will end up renting and saving for a bigger deposit. I did a calculation on entitled to (based on no savings) and I could get some help with rent, which is great. It means I could save some money each month and then hopefully buy after about 4 years.

But now I’ve looked into it further, if you have more than £16k in savings you aren’t entitled to any help. Which I do understand, but it then means that after all essential bills and costs are covered, I’d have about £200 left a month. Which doesn’t go far with 2 kids and certainly wouldn’t leave me anything to save.

So essentially I’m never going to be able to save a deposit am I?

But where has the suggestion come from that the OP wants to buy a £600K house? She mentioned a £240K one?
It doesn't seem unreasonable to want a secure home for your kids.

You are in a unfortunate situation, unless you can massively up your income and live without the benefits or meet a new partner who can contribute half towards a new home I guess you are stuck keeping your savings under the threshold. I can kind of see what people mean about benefits shouldn't be used to help you save, but I can also see what people mean that it costs the tax payer more in keeping you renting long term. A good friend of mine has just found herself in the exact same situation, not much equity in the house to divide up, nowhere near a house deposit and she isn't a big earner (gave up her career to raise children, though she is married). She is stuck renting with universal credits help, to be fair she's very grateful that there are benefits out there to help support her when her life has been turned upside down. I think you have to play the long game, earn more and/or meet someone new.

I’m not looking at 600/700k houses.

5 times my salary is £135,000. So that plus whatever I get out of this house (at the moment potentially £15k) is £150,000. It doesn’t get you much here.

Exactly this.

I earn more than minimum wage but cannot even remotely saved a deposit for a house and this I’m left topping up on Universal Credit and then cannot save because anything above £6k will be swallowed.

Its a trap.

Could you continue living together for a little while longer with the objective to both save as much as you can?

So when tenants are paying £2K a month that barely covers landlords expenses?
Not that we expect them to do it for nothing, it's a business like any other.
But far mor social housing should be available so tenants could have security at half the price, which would slash the benefits bill too.

I think the confusion has come from me saying I needed to save up a £60k deposit. I think people assumed I was planning on this being a 10% deposit. The £60k deposit was to put with the £135k mortgage to make my budget nearer £200k which gives you more options than £150k does.

Believe you me, I'm not disagreeing about more social housing is needed. But the reality is it's not available. Not all LL's charge £2k a month. My houses are let for about £1100 in West Midlands and £695-£800 in Hull.

We are, for probably the next year or more. The problem is our mortgage here is high, plus we have a second mortgage we took out to do a renovation and pay off debt (don’t even go there). Hence why there wouldn’t be much equity if we sold now. But it also doesn’t leave us much leftover save. But it is what it is. It could certainly be worse.

Do you still have eleven of them or was it twelve?

www.rightmove.co.uk/properties/162180917

Why can't they save? It is a responsible thing to do.

What is wrong, is that the 16k limit was set in 2013 and hasn't gone up since. It should go up each year in line with benefit increases and inflation.

OP has said it themselves, they don't earn enough to save a big enough deposit to buy a house. I was responding to that

On 27k I don't see how you could possibly save 60k in four years? It is pretty insulting that a person with lots of experience has a top earning band of 27k too, but there has been definite stagnation of wages, so that even ones requiring significant experience hover just above minimum wage.

Your change in circumstances means you need to decide whether the job or the property is more desirable to you. Definitely look into whether you could do a degree apprenticeship as someone else mentioned. It also sounds like your skills would work well in a customer service role and could potentially rise to team leader quickly. That would definitely pay more in most big companies.

I wonder if shared ownership might be an option? You can staircase as your income improves.

Yup.

There’s a help to save account at the minute- u save £50 a month, it pays you £25 a month. Payable in the 2 years of its opening and then is 4 years.
So you save £2.400 over the 4 years, you get £600 steer 2 years, then the £600 at 4 year

if you’re on universal credit

Government Help to Buy Equity Loan:

https://www.gov.uk/help-to-buy-equity-loan

I would look at the above and shared ownership- you may need much less deposit than you think you will. If you accept that you may not be able to buy on the open marker straight away.

I bought shared ownership in the South East in 2015. Property was worth 222k and now it's worth 295 - 305k due to equity growth. I increased my share from 45% to 70% (i.e. increased my mortgage) when my salary went up, so have benefitted more from the equity growth.

My salary was 26k when I bought.

So tenants pay the interest for them, then inflation does the rest of the work, so they have a whacking amount of equity in 25 years' time for very little input from themselves.

And plenty of LLs do pay off the capital (or a huge chunk of it) from the rental income. You very commonly hear them wailing when interest rates or other costs go up, meaning that they actually have to contribute a small proportion themselves towards the massive asset that they are building towards eventually - which they find completely unthinkable.

Unless you get some sort of financial support/inheritance, owning a house is a thing in the past unless you earn very well or stay childless. I don't think we will have much left for our children (we won't be getting anything from our parents neither), I encourage our children to put money into their pension / LISA as soon as they start working.

Yup, everyone I know who is in public sector or third sector jobs without wealthy parents did shared ownership.

I’m in Kent quite close to you, it’s dearer here than there, so I know what it’s like. One of my friends is in a very similar situation, living in house with ex at the moment still whilst getting divorced as neither can afford to move out. For a moment or two I thought you were my friend but then you mentioned Thanet and your job so no you aren’t my friend irl.

my answer to her when she asked for suggestions and you is to find somewhere smaller and cheaper. I know it’s hard. In your case if you can borrow 5x and get your salary up somehow (I’d take night work stacking shelves I’ve done similar in the past) so say get up to 30k that gets you £150k plus your equity of £15k so £165k. And I’d look at large one bed flats, your own home is far better than renting.

id also not go shared ownership we tried that idea ourselves was completely unaffordable and instead bought a doer upper .

On a simple intellectual level, it does sound straightforward that "the taxpayer shouldn't be helping you to buy a house", but it's far more complicated than that.

If UC were designed to help those at rock bottom to survive their very worst period, it would make sense; but as PPs have said, the whole UK economy is based around allowing employers to pay millions of working people far too little to live on, meaning that the government is expected to top up their income to an amount that they can actually live on indefinitely.

Effectively, the system is based on the idea of giving a person a fish every day, rather than on the much wiser sustainable and dignified principle of teaching a person to fish... and it's all sponsored and tightly controlled by Massive Fish Shops 'R' Us.

Have you looked at part buy part rent? We did that on our first flat and it meant I could get the mortgage on my £35k salary alone. They prioritise key workers, which you would be classed as, and some blocks are key worker only. If you live with a decent social landlord, like family mosaic, some of the rent includes water and other utility bills. Might be a bit more manageable than buying outright, cheaper than renting and mortgage so you may be able to save a bit more, you can buy the property in further chunks if you want, then if you sell you still make a profit on the part you own. We did this and it worked for me!