Feel so worried about buying a house

[Orangestrawbs]

I can’t help it. I know all the positives but I am worried sick about what it means financially.

We did things in the more difficult order, meaning we are first time buyers with a 2.5 year old. We are purchasing a house through shared ownership as cannot save quickly enough for the deposit on a ‘ordinary’ purchase. We will have an 50% share on a spacious 3 bedroom newly built house. We could maybe buy a flat without needing shared ownership, but that would just cost more to inevitably have to move soon. I work part time and we live in the South, so it really feels like the best all rounder despite the rent to pay.

OH income will rise and childcare fees will decrease but for the first few years when we move, we will only have £1000-1200 left between us for the month after all bills and groceries. Isn’t that going to be incredibly tight, or will it be easier than I think? It doesn’t include savings. I feel like I sneeze and I spend £30 at the minute, especially on DS new wardrobe, a trip to the farm or soft play, so on and so on. We hope to grow our family in a few years too. I just don’t know how we are affording it. I can’t increase my hours as it would just cost more in childcare so makes no sense to as it won’t increase the household pot and I’ll just see DS less than I already do.

Some positives- we are purchasing a home we could stay in forever, it is detached, has a massive garden for him to run around in, it’s on a beautiful estate, in a great location.

I just needed a sounding board!

You will get a lot of backlash here for saying you are buying shared ownership, it is fraught with difficulties but then buying a leasehold flat could be even worse! Personally I think you've done the right thing but you talk about staying there forever, will you staircase to 100%? is that the plan? if so then you are in a good position.

One thing I am not clear about is the £1k a month - why is that not enough if it's after bills and food, or have I misunderstood? I think buying the shared ownership and having £1k a month are two separate issues.

Thank you. Yeah I’m worried about shared ownership, but honestly I don’t know that it’s wiser to have an equal monthly mortgage payment but own 100% of a much smaller space that we’d have to find the fees to move from!

I don’t know, £1000 for 3 people for clothes, disposable income, savings, birthdays/Christmas? It sounds tight to me but maybe it’s easier IRL?

£1200 a month after bills and groceries is more than a lot of people have, I think you'll be okay...

The thing is OP, that is sufficient money, many people have a lot less, and if it's all you have then it'll have to do. I mean what is the alternative? Even if you had a mortgage, how would that work? You need to pay some sort of housing costs for somewhere and you were assessed for affordability by the housing company before you got allocated the shared ownership so they clearly thought you had enough income left over. How much do you have left per month now?

Nothing wrong with shared ownership. I have had 60% for 26 years. We would not have had a house without it. The only down side for us is that we may not be able to buy the rest as the house has gone up over 4x what we paid for it but it does mean that the 60% we own has gone up 4x more too. So we could sell up on the open market and downsize when the kids leave home.

£1k plus after all the bills will be fine. If you are shrewd you'll save money in ways you didn't knew you could. For example Batch cooking, reducing meat consumption (lower food bills), buy most of DS clothes secondhand, shop around for mortgage and utility deals etc. I also tend to have money going out into savings on the day I get paid so it's not accounted for in day to day spending.

In regards to shared ownership you'll either sell it on at 50% or staircase. A lot of people bemoan it but it's a handy way to first get on the housing ladder. My mum is in a flat, staircased and now has it outright. She's nearly mortgage free and retiring in ten years. She's lived there 20 years now and hasn't had any issues with the HA in all that time.

Thats loads of money. Youll just have to prioritise what you spend on. Buy second hand clothes, do free days out, or at least take packed lunch;

I don’t know, £1000 for 3 people for clothes, disposable income, savings, birthdays/Christmas? It sounds tight to me but maybe it’s easier IRL?

You have to live within your means. It might mean not saving for a bit, buying clothes secondhand, spending less on birthdays/Christmas. We all have to do it.

Just rein in your spending. Log what you both spend on a daily basis, even the small things. You might get a shock as to how much you waste. Research purchases, plan in advance for the next size up for kids clothes. Make it a way of life. Things may be tight for a bit if you have another child but you’ll get through it. Wages rise.

The alternative is stay renting and have the impact of rent rises and insecurity if the landlord sells up.

Stop wasting money. Do you really need soft play or a farm? Does DS really need that cute t-shirt? Does that coffee/sandwich really hurt the purse? Do you really need to spend more than £50 on birthday/presents for DS, DH and 2x parents?

When I first moved into the family home the kitchen fluorescent lightbulb blew. We had to borrow off the inlaws to replace it as we couldn't afford to spend a measly £5 for about 3 months as money was that tight. You've got a £1,000, you'll be okay.

Oh love I remember this well and I had a lot less money left over than you. I spent a fortune getting stuff and I had awful dreams about losing the house. But you will be fine.

What I will say about shared ownership is try not to spend too much on it. Review in a few years to see if you can staircase and review your options.

Buying SO was the best thing we ever did although be warned there is the yearly rent increase and lots of hoops to jump through if you decide to sell. But you still have a home that is building equity and it feels as much as yours as when you own a non shared ownership house (as we now do).