To think I don’t have a hope in hell of buying a property

[Terrified1]

I’m 27, still renting, on a 22k salary. I got myself into quite a bit of credit card debt in my early 20s which I thankfully have now paid off without help from anyone. A lot of my friends seem to now be buying lovely houses, small but cosy with pretty little gardens. I just feel so low about how far away I am from being there. I’m single, in a flatshare, and will not have any money given to me like most of my friends have had from parents. I think others saved deposit money due to living at home with parents and therefore paying little/no rent but I don’t have this option. A 2 bed house where I live is about 190k. Is it nuts for me to hope I could do this on my own? I Currently saving £600 a month. I swing between feeling optimistic and just utterly defeatist

I thought the same as you. I am 30 and have just bought a property. It is shared ownership which means I own 50%, so I pay 50% rent and 50% mortgage, but I am still on the property ladder. You can do it

Also look at "Help to Buy". I don't know the details, but I think it was aimed at making it possible for first-time buyers

“Was” being the operative word. It stopped last year. But my guess is that in the aftermath of COVID there will be other schemes aimed at getting people onto the property ladder and making the housing market move. Look out for them!

You’re saving a good amount OP- well done.
Don’t assume you won’t meet someone and pool resources. In the mean time keep looking at ways to climb the career ladder- whether that’s additional training/ education. In the space of 7 years I jumped 40k p/a —-it’s completely possible

Thank you all your replies have been very encouraging. I am going to look for other jobs, even earning £200 more a month would be a big help for me. I’m also trying to write a novel about getting out of debt (and I’ve had some stuff published in good literary magazines so it’s not a total pipe dream lol), that’s the thing that keeps me going

I worked in pharmacy, just as an ACT so not terrific money. After my divorce I got a mortgage advisor and he managed to find me a mor with Halifax bs which was ample to buy myself a cosy little Victorian terrace cottage.

My advice, get a mortgage advisor, you’ll be surprised what you can afford.

I started out with shared ownership together on the ladder. worked great for me

It looks to me like you are moving in the right direction. Is your salary likely to increase over the next few years? Once you have a deposit you could look at cheaper areas or fixed uppers maybe? Or consider having a lodger for a few years to help pay down the mortgage.

Property prices are going to drop around 10% over the next few months.
It is desperately sad for people who might be forced to sell, but it will be a buyer's market. Banks will be wanting to lend, so it might actually be easier to get a mortgage.
Any chance of moving areas? Or are you tied to a job?
DS couldn't afford to buy anywhere near us, but he has bought a property in a much cheaper area, just to get a foot on the ladder. He has a lodger who pays rent.

Of course you can buy! £600 a month is £14,400 in two years which is enough for a deposit in your area. And then your £600 a month can go towards mortgage in addition to what you spend on rent now

But that's ignoring the income multiple requirements that all lenders impose on applicants. The absolute maximum loan to income multiple is around 5x, which limits the OP to a £110k mortgage, meaning she'd need a deposit of £80k+ (need to keep some back for fees), not £14k.

Unless you can point to mortgages available on a 9x income multiple with a 6% deposit?

While the stock market is depressed you could consider putting some of your savings into a stocks and shares ISA. It is not without risk, but if you invest now, when the stock market recovers - as it will - you’ll see the value of your savings rise accordingly. Cash ISAs will never make you money, so you need to be a bit more adventurous.

I have a stocks and shares ISA with a high street bank and the value is depressed at the moment, but I’ve been putting extra funds in and I’m waiting for the stock market to recover to see the benefits. Just a thought.

Which area do you live in op? 190k for a 2 bed house seems a hell of a lot for an area where you’re only earning 22k. I’m in Liverpool and can get a nice 2 bed for 80k. Like pp have said, £600 a month is a good amount to save, but you’re going to need a huge deposit for nearly a 200k mortgage

where are your savings? please look to opening a Lifetime ISA, you'll get o good bonus which will help.

look to get a flat first- stops the "dead" rent money, will be a starting place, then upgrade to a house in a few years.

During this current lockdown and further social distancing can you save more? 600 is brilliant but I think realistically you will have to aim for maybe a flat first, maybe something you can do uo and sell with a profit?

Or maybe do some bar work at weekends and evenings? Could you move back home and save?

Shared ownership is good and what I do but I was only allowed to borrow 130 and had a 50k deposit but I am a far bit older than you so my borrowing time is shorter but could only get a flat, its lovely though. Good luck

If your ambition is to write that book then you should do it. But it comes with a sacrifice. There are lots of books, blogs and podcasts that deal with debt management and reducing your spending. Unless you have a USP and media profile it’s unlikely you will make any money. The numbers of people who make a good living out of writing are very small.

At 27 and not having any dependents you have lots of options that would improve your income. Whilst these have no guarantees there is a lot more probability than becoming a successful and well paid writer.

A salary of £22k is adequate but it won’t buy you a home costing £190k. And it wouldn’t be a factor that would inspire me to buy into your philosophy on financial management and planning.

A friend did cleaning on the weekends and was able to buy a two-bed flat in London within two years. She came from an immigrant family who had nothing to lend her.

I wasn't earning much more than you when I bought my first flat in 2010 at 25, I got a second job worked a night shift once or twice a week doing that, stopped me spending and all the money I earned doing that I saved on top of what I was already saving. You will get there. I did shared ownership because I lived in an expensive area, not London but very commutable. I kept the flat five years and made 35k , sold it with one open house , multiple offers, no issues, it was walking distance to a mainline into a London terminal (less than 30 minutes). if you're going to go down that route make sure it is a desirable location for future first time buyers or young couples.

Why do you need a two bedroom house? Genuine question - do you have a child?

I would aim at a one bed flat or studio to get started. As PP have stated, it's not going to be possible for you to find a reputable lender/manageable interest rate willing to lend you such a high multiple of your wages.

Good luck

I'm all for buying a house if it's right for you, especially in a place where renting is so insecure as it is in the UK, but it's an indicator of having the right amount of money to do so, and of nothing else - not of having Done Things Right, nor of moral superiority (and the sooner British culture wakes up to that, the better, IMO). There's a lot about the 'property ladder' model that's pretty individually and socially toxic.

Just saying that to give you another perspective.

A friend did cleaning on the weekends and was able to buy a two-bed flat in London within two years. She came from an immigrant family who had nothing to lend her.

This is really inspiring. But presumably it meant she had a bigger deposit rather than increasing her borrowing potential? Not that it is a bad thing to have a bigger deposit, as you'll be able to get a better rate and have less risk of negative equity.

I'd aim for a 1 bed flat now, then look at buying a house in the future with a partner.

Thats what i did.

Don't overstretch yourself now when you don't need to and focus on increasing your earnings, every extra £1k is aboit £4.5k extra a bank may lend you for a mortgage

How is it possible to pay rent, live, and save 600 quid on a 22k salary? That's witchcraft! Any chance of a rough breakdown of your monthly outgoings?

@LemonTT I’m not writing a book about financial philosophy or management but thanks for your input. I’m writing a book about poverty and how easy it is to get into debt and how hard to pull yourself out of it. It’s a novel, not a guide.

@morriszapp - yep I pay £500 in rent/bills, save £600, then I’ve got £300 left each month, so I give myself £75 a month for everything. I never buy clothes unless from Depop, bottle all books from the library, take lunch into work every day.

Also the reason I’d like a 2 bed is so I can get a lodger/flat mate and lower the costs.

How much have you saved for a deposit already?

Are you putting some away for a pension, rainy day etc?

Sorry £75 a week not month!

@mamanyoga yes I pay money out of my salary into local government pension scheme which is a pretty good one - £50 a month