To give up council housing and save to buy a flat/house?

[hadtodoitagain]

Hello,

Had to NC for this.

I currently live at home with my mum and my son (10). I had my first DC very young and was in a domestic violence relationship and didn't plan to move out then because I was scared what my ex would do- considering I still had feelings for him.

I have been on the bidding list for 7 years. We are in London. I have saved around 7-8 grand. I saved more but spent the majority of it on paying for court fees for DS school.

I'm starting to give up on the council. My DS is getting older and I want a home for him and I. I considered private renting but was worried about the security. Now I am considering just saving up as much as I can to buy a flat in London. I would love to buy a house but it's ridiculously expensive. Is this a mad idea?

What are your earnings like? Have you worked out how much mortgage you could get and how much you'd need to save? It's tough buying as a single person anywhere but especially in London.

Hello,

I work part time...around 18 grand- so not a lot... especially in London. Well if I want to buy a house/flat which is 150,000, I need to put a deposit of 7 grand approx. I have a long way to go as flats/houses in London do not cost that much.

I think the first thing you need to do is go and see a mortgage broker to see if you can get a DIP and go from there.

Of course your not if you can afford to buy, your going to be better off.

I know of no flat in London for 150k

There's nothing wrong with saving for a house and if you're living cheaply with your mum, you're in a good place to save, but unfortunately you're a long way off for several reasons.

1. The maximum multiple of your income you can borrow is around 4, so on what you earn now, that's around £70k or so.

1. You'll need money for fees, and 5% deposits are currently unavailable or very expensive, you'd be much better to aim for a 10-20% deposit.

1. If you get universal credit, that will end if you save more than 16k and will be reduced once you save more than 6k.

Now your DS is nearly at secondary school age, can you work full time? That will help you achieve your house buying goal much faster. Also look at the Moneysavingexpert guide for first time buyers for details of help available.

www.moneysavingexpert.com/first-time-mortgage/

I'd see a broker. A mortgage of £143k on an £18k salary doesn't see likely. Would you consider moving away from London?

For reference, I live in a one bed flat in London (not a particularly posh area) and while searching to find out how old the property is, I found instead an evaluation of its worth - £285k.

Would you consider leaving London?
You shouldn't have to leave your support network and it's understandable if you can't. If you need to stay, it's best to hang on a bit longer. Private renting is horrendous. There's no security, it's expensive, and often poorly maintained. You and your child risk having to move home repeatedly. It's a terrible way to live, never able to settle because the landlord might want to sell or put the rent up too high for you to afford. If you can stay with your mum for now, don't lose all your money on private rent. Stay on the council list but also keep saving. If you do decide to move out to private rent, try to stay in the same borough. Otherwise you risk being thrown off your current council's list but may not have been in your new area long enough to go on theirs. I hope things work out for you. It's very very difficult for Londoners. So many people assume living in London is a choice, but of course lots of people are actually from there - and that's where their family, support network, and childcare is.

Agree with others it's not just about getting a 5% deposit you can usually only borrow about 4/5 times your wage so you actually need to be thinking more about a 50/80k deposit for a 150k flat!

If you get a council property after 5 years can't you apply for right to buy if it still exists?

I think you'd struggle to buy in London on that wage.

I earn similar to you and I'm also a single parent, I bought a house for £100k but I live in a much cheaper area and had a large deposit of £40k.

You’d need to look at shared ownership or buy to rent schemes.

You’ll only be able to borrow 60-70k at the moment, so you are a long way off from being able to buy anywhere.

Do you have a particular area in mind? If you could move out of London you’re much more likely to find something affordable.

Well..... it looks like I am far off from buying my own home/flat. I would consider moving out of London, really I would. I do love the area though. But my mum is not well and I still would like to keep an eye on her and see her as often.

What can I do in the meantime? Just continue to save? Should I wait for the council? It's just more for my DS sake, I would love for him to have space.

You’d need to look at shared ownership or buy to rent schemes

I have heard about this but do not know a huge amount about it.

I would continue to save up and increase your deposit and then get FT work when you can. Normally you can borrow a maximum of 4.5 times your income.

When you have a larger deposit and income there may be a shared ownership scheme that can help you

If you google a phrase like “shared ownership name of your borough” you should find lots of info.

I bought my first place using shared ownership - it’s great because you buy a proportion of the flat, pay a (low) rent on the remainder, and then as and when you can afford it you buy the remainder of it.

I haven’t used buy to rent but that sounds good too.

I would just move to surrounding areas and commute, go onto other bidding lists

If your dm is not well then stay put. If anything happens to her you may get the tenancy of her council house as it's your ds's home. Sorry to be so brutal but it's probably the best way for you to get your own home eventually.

I really feel for you. Housing is so ridiculously expensive in London that it’s inaccessible for anyone earning what would be considered a fairly normal starter or PT wage anywhere else. London NEEDS people in lower paid jobs because they’re the ones that keep society running. It makes me mad.

I wouldn’t completely give up on private renting though - but it’s true that you’ll be able to save more while living at home. I rent a one bed for £900 per month and deal directly with the landlord so there are no extra fees and he leaves me alone - no random inspections or unreasonable demands. Depending on area you may be able to find something cheaper - Woolwich and the surrounding areas like Thamesmead and Plumstead are more affordable. But that’s a big chunk of your wage, and I doubt you’d find any one bed under £850/900 per month anywhere in London. Could you look at increasing your hours or progressing in your job to earn more?

Coffeecak3 is correct. Your alternative is shared ownership- which goes v fast so I’d start making enquiries