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AIBU?

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Original poster

To break my promise to my landlord?

163 replies

privilegeporridge · 27/12/2020 20:45

NC.

I'm in my early twenties and I live with my husband in a flat we rent from one of his colleagues. We originally had to move somewhere quite quickly back in summer as we had issues with our previous rental, but we spoke to his colleague and he said he'd love for us to move in on a "longterm" basis. A specific amount of time had not been specified and so far, we've been here about 6months.

However, we are due to come into an amount of money in early 2021 that would mean that with a little luck we are not too far off from putting a deposit down on a house. This would also be great as it would mean it we could TTC significantly sooner, as I would feel more secure owning property before having kids and not being dependent on a landlord. (just a personal preference and I feel very fortunate to have the opportunity for that choice).

If we came into the money in February time ish, would it be unreasonable to start looking for a house then? I don't want my landlord to feel that he's been deceived (especially considering he works with my husband) but I simultaneously don't want to rent, as we have cats and the longer we stay here the more deposit gets chipped away along with the wallpaper.

He also asked for notice a few months in advance before we decide to move out, so I don't know how far into the house buying process I should wait before letting him know (if buying a house very soon is the right thing to do).

Thank you!

OP posts:
SpiderinaWingMirror · 27/12/2020 21:46

Nicely
You are way over thinking.
This has worked well both ways. It got you out of a hole.
He had tenants without any effort for references, deposit scheme etc.
Look for a house. Tell him when you are in a complete chain

LeSangeEstDansLarbre · 27/12/2020 21:46

Have you even started to look at a mortgage yet? Your figures look hopelessly unrealistic to me - most lenders won’t offer you a mortgage of more than about 4 times salary, and if you’re looking to buy for £200k on a single £28k salary, you’re waaaaay short - you’d need a deposit three of four times what you’re expecting to have to meet affordability criteria. I’d look into this before worrying about when to give notice.

But before all that you need to get the legalities of this extremely dodgy tenancy sorted out. Make that your priority.

Original poster
privilegeporridge · 27/12/2020 21:49

Ahh, so I'm completely fucked in various contexts. Yay, Merry Christmas me! Grin

Is my deposit unreasonable then ? I thought 10% deposits were OK, especially in quite a cheap bit of Scotland, but what do I know to be fair!

OP posts:
Hapixmas · 27/12/2020 21:51

Op do you both earn? Or is it the one salary you mentioned at 28K?
For context. I earn £31k ish.

Buying alone. I needed a 15% deposit.
The property i can buy is £150K..

I could have put down a bigger deposit.

Typically mortgage lenders will lend you 3 - 4.5 times your salary but I'll be honest, with covid they are tending to lend more like 4 times. On 28k salary with 23k deposit I'd say you could afford roughly £135k house.
Don't forget the few thousand you will need for fees too! And money for any DIY and furniture once you move in.

I had over £30k in savings. And keep saving even now!

LeSangeEstDansLarbre · 27/12/2020 21:52

10% deposit should be okay, but it’s the total amount of the loan that’s the problem. The single salary of 28k isn’t enough to allow you to borrow the other 90%. You’d probably be offered a mortgage of about £100k at 90% LTV.

Nohomemadecandles · 27/12/2020 21:53

They will only lend you a multiple of your salary. The better your credit rating, the better and the better the interest rate. The higher your deposit, obviously the lower the mortgage you need and the more reliable they deem you.
It's not likely you'll be lent more than 4 times your salary, even with a perfect credit rating and a 23k deposit.
It IS nuts that mortgage payments are lower than rent and your rental history isnt taken into account as proof of affordability. But that's the reality.
Look at £120k houses max and buy the worst house on the best street rather than the other way! That way, you can add value over the years.

Hapixmas · 27/12/2020 21:54

@privilegeporridge

Ahh, so I'm completely fucked in various contexts. Yay, Merry Christmas me! Grin

Is my deposit unreasonable then ? I thought 10% deposits were OK, especially in quite a cheap bit of Scotland, but what do I know to be fair!

It isn't so much about the area you are in, it is more to do with how likely you are to pay them etc... with the current climate with covid, people aren't wanting to lend as much. Most are wanting a 15% deposit in my experience.

And I'd say lending more like 3.5-4 times your salary.

Do only one of you work? Could the other get a job to pick up your income? They want 3 months of payslips.

Original poster
privilegeporridge · 27/12/2020 21:55

Op do you both earn? Or is it the one salary you mentioned at 28K?

One salary at the moment, I'm currently at university. Is buying alone better or worse than buying with someone else? Does that affect your mortgage or general credibility at all? Thank you for the info, @Hapixmas that's a useful comparison.

135k house isn't bad at all, I think I could find somewhere suitable on that budget. I'll need to save harder to get to 30k ish though, for the extra costs.

OP posts:
Nohomemadecandles · 27/12/2020 21:56

You're also conflating the cheap and the deposit bits. The cost is the cost. Whether it gets you a 7 bed where you are compared to a bedsit in London! 200k is 200k

Original poster
privilegeporridge · 27/12/2020 21:58

You're also conflating the cheap and the deposit bits. The cost is the cost. Whether it gets you a 7 bed where you are compared to a bedsit in London! 200k is 200k

You're right, sorry, I have absolutely no experience of this at all. I'm just jumping to all the wrong conclusions.

OP posts:
Nacreous · 27/12/2020 21:58

So if you inherit £20k and have £3k in savings for removal and solicitors fees, then ignoring stamp duty for now as you're first time buyers, you'd have a max budget of say £28k * 4.5 = 126, plus 20k deposit so £146k - not 200k. If you're very lucky you might get £160 as a max budget if you got 5x your income as a mortgage but you'd probably need a specialist broker for that.

So you might need to stick around for longer anyway to save enough of a deposit?

You might be able to top your savings up by taking your landlord to court re the deposit: you are guaranteed your deposit and 1-3x it on top back that way I think (check Martin's money savings for details).

Nacreous · 27/12/2020 21:59

Sorry cross post there with a load of others!

Hapixmas · 27/12/2020 21:59

@privilegeporridge

Op do you both earn? Or is it the one salary you mentioned at 28K?

One salary at the moment, I'm currently at university. Is buying alone better or worse than buying with someone else? Does that affect your mortgage or general credibility at all? Thank you for the info, @Hapixmas that's a useful comparison.

135k house isn't bad at all, I think I could find somewhere suitable on that budget. I'll need to save harder to get to 30k ish though, for the extra costs.

I'm not sure to be honest. I'm single so no choice 😀

I'd recommend speaking to a mortgage advisor if you can. Mine was fantastic and made me realise that I was closer to buying that I thought! For example, I'd planned to start speaking with her in the new year with the aim of buying in the summer / end of next year. Whereas (because she is a friend) we happened to chat about it on a whim in September and now I'm hoping to move in soon!

Almostslimjim · 27/12/2020 22:01

You need to look for a mortgage before looking for houses, get an idea of what you can borrow.

Original poster
privilegeporridge · 27/12/2020 22:01

You might be able to top your savings up by taking your landlord to court re the deposit: you are guaranteed your deposit and 1-3x it on top back that way I think (check Martin's money savings for details).

Am I obligated to have asked him to protect the deposit? Do I need to text him and ask him about it? That would be a good way to get some extra savings but might be a little frosty in the breakroom!

OP posts:
Nohomemadecandles · 27/12/2020 22:01

Don't worry, its a minefield!!!!
My mortgage is the most they would lend me even though its 300 quid less than I had paid in rent, every month, on time, for 6 years! It makes no sense.
Ask away before you get your heart set on something. Honestly. Keep asking!

Original poster
privilegeporridge · 27/12/2020 22:03

Thank you, @Nohomemadecandles this is quite stressful so I really genuinely appreciate your kindness! Seems I have a lot of big problems on the horizon that I had (admittedly naively) not accounted for! Confused

OP posts:
Echobelly · 27/12/2020 22:04

Bear in mind househunting and completion is a loooong process - you'd be there at a bare minimum another 3 months after you start looking. Don't give notice until after you exchange (at which point sale is sure and you'll move within a week or two) - a lot of people come a cropper by believing their estate agents' assurance it'll all be done and dusted in a month and then giving their notice. Yes, you'll have to pay double for a month, but then you've kept your place without the panic of trying to extend, especially in this delicate situation.

Really your LL has not put himself in a good position by not having a lease, which is not good for you in turn.

78percentLindt · 27/12/2020 22:05

I had a quick look at the mortgage calculator on the Halifax website. On a single salary of £28K you could borrow 117K, so if you want to spend 200K on a house you need to have about 80K deposit.
Obviously if you have a second inome you could borrow more, but on the figures you quote, there is more saving to do.
I think your OH needs to have a serious talk with your landlord, regarding the utilities bills and what is included in the rent, without a tenancy agreement you are vulnerable. Who is paying the Council tax and water? If nothing else, follow up the chat with an email confirming the details of what is included.

ChateauMargaux · 27/12/2020 22:07

Buying with someone else rather than alone is a good idea and gets you more money and more security for the lender... if you are both earning!! Though in fact also acts in your favour even if only one person is earning as there is a potential that either could get a job in the event the current earner was made.redundant.

Lookslikerainted · 27/12/2020 22:09

It’s not prison you can leave when you want (given the agreed notice period).

CheesecakeAddict · 27/12/2020 22:09

I bought a house early August (or maybe end of July?) and only just moved in last week. Covid held everything up. The searches alone took 4 months to come back. That was a chain free sale too.
I would wait till you have the money then just explain you've been given some money and you never thought you'd be in this position, but you can afford a deposit.

LeSangeEstDansLarbre · 27/12/2020 22:14

@Echobelly

Bear in mind househunting and completion is a loooong process - you'd be there at a bare minimum another 3 months after you start looking. Don't give notice until after you exchange (at which point sale is sure and you'll move within a week or two) - a lot of people come a cropper by believing their estate agents' assurance it'll all be done and dusted in a month and then giving their notice. Yes, you'll have to pay double for a month, but then you've kept your place without the panic of trying to extend, especially in this delicate situation.

Really your LL has not put himself in a good position by not having a lease, which is not good for you in turn.

You don’t actually pay double for a month - rent is paid in advance, and mortgages in arrears, so you’ll still only pay once a month even if you have an overlap - which we did when we moved into the first house we bought, so that we had time to redecorate, change the kitchen and put new carpets down before we moved in. It’s the only time you have that luxury of not doing it all in a day, and I highly recommend it!
ShellieEllie · 27/12/2020 22:17

I think you can say goodbye to any deposit. I'd contact Shelter and seek advice if I were you.

Original poster
privilegeporridge · 27/12/2020 22:18

So I'm looking on Gumtree for houses around my area now, does anyone know the difference between "offers above" and "offers in excess of"? Is "offers in excess of" just a nice way of saying "we want a shit ton more money but still want this house to show up in your search criteria?"

Should have married for money, I knew it Grin

OP posts: