Should I just give up on the idea of buying a house?

[radiateforme]

17k soon to be in the bank. Income of 25k per year. Have recently been in a situation where I've afforded 800 a month rent, plus 1000 childcare fees and bills etc. Bit of help from UC. Now live with family member to save a bit more. Feel like I've spent the last 10 years working my arse off, being frugal, saving, driving a crap car, and STILL cannot afford a house. The cheapest 2 bed near me that's suitable is around 160k. And that's a doer upper. According to the bank I can borrow 100k. Deposit of 15k, still 45k short. It's hopeless isn't it? Feel like it's just going to get worse and I'm better off just living my life, saving a bit, going on a couple of hols and getting a council flat (if I'm lucky). Feeling defeated as you can probably tell.

@Hallyup6

The UC issue has always bothered me. Why should two people in the same situation get different amounts of money given to them because one is sensible and frugal and the other goes out and spends it on shite? It's not fair and doesn't encourage anyone to save.

What is also very unfair is that people still on the old tax credits system can basically save as much as they want towards their house deposit and not be penalized wheras those on UC will lose any Uc completely after 16k and it starts to reduce after 6k.

I wanted to say how well you have done for leaving your abusive ex and establishing a a new life with your child. Your material living circumstances may not be ideal but the emotional environment you have established is far better.

I'm sorry help to buy/shared ownership is not an option for you but it is worth looking again to see if you have missed something. It's definitely worth putting yourself on the list for a council flat. As you have a small child, I'm assuming you are under 40, so once you are below the savings limit, you could set up a lifetime ISA (LISA). With luck, your earnings will increase and it will be easier to find somewhere for you both.

If he is reluctant to sell, let him sit on your share of the equity for as long as possible. That way it isn’t your savings.

In the meantime you can accrue as much savings as possible from living with your relative. You mentioned £800 rent being paid before. Some of that will be a saving.

Look into help to buy and shared ownership. Not ideal but if it ownership you want and less outgoings it’s an option.

If you get your savings under £16000 for benefit/UC purposes you need to be careful as you could get caught out. Deliberate deprivation of assets/capital describes this course of action. You could be asked to explain what you spent the money on and so it prudent to keep receipts and also not to buy anything deemed unnecessary. I believe that essentials such as money towards a car or a bed are ok. There are very specific rules about this. Try checking it out with Turn2us. It could be that if the money is set aside for a property deposit you wouldn’t need to reduce it to under £16000 anyway. It’s best to check with an expert such as Turn2us or citizens advice

Reduce your 17k to 15. Put 2k in Premium bonds for your DC.

That will give you some breathing space In The interim with the UC.

@BluebellsGreenbells

Have you looked at shared equity? Or the LISA schemes which give you 25% extra each year?

LISAs aren't great if you're on UC. They count for income and there's huge penalties for withdrawing. Once you hit the £16k you'll get no UC. I looked into it as a way of helping my disabled daughter save for retirement or possibly a house deposit if she manages to work when she's older.

@Babyroobs Absolutely. It's disgraceful.

The UK property market is now predominantly priced/valued based on the fact that most buyers are couples with two incomes. I know a few people who have managed it one income but it has been a high income.

@A1b2c3d4e5f6g7

I know it’s a horrible time now, living in one room with a toddler. But what jumped out at me is career progression potential, and reduced childcare! I’d keep saving because if you can get through this period, you could well be able to afford something in a couple of years when you can save a lot more a month. I don’t know about the equity or how long that would take to get back, but hopefully you can get something from that at some point soon.

This stood out to me, too.

I don't under estimate how tough it is right now, and how despondent you sound, but the worst thing would be to give in now when you have a good chance of things getting easier in the future.

I agree, do something with that £1000 so that you have £16k in the bank. Not hide it - but spend it on things you know you will need anyway in the future. That way, you won't need to spend the money when you get there.

Better car (less chance of repair costs in the future), that kind of thing.

Keep that £16k safe and hold tight until you have lower childcare costs and a better salary. That you start in a good position to save for a house. You also never know what schemes might be there in the future to take advantage of. Try and keep yourself ready to do so if/when the time is right.

It will get easier, OP, just hang in there for a couple more years. It's difficult to buy on a single wage and with childcare fees to pay, but once your wages go up a bit and your child is at school things will improve.

But do make your savings work for you a bit, don't let the money sit stale in the bank. Even if it's just premium bonds with their stupidly low returns.

Not sure about the availability of social housing in your area but a relative of mine moved back in with parents, all living in one room when rent became an issue, as you have done. Their parents then spent a few months making a song and dance about over crowding, etc to the housing association and they got a property. The first one wasn't great but once you're in the system you can apply for swaps and now they have the right to buy. Unfortunately sometimes you have to play the system and shout the loudest.

@Singlebutmarried

Reduce your 17k to 15. Put 2k in Premium bonds for your DC.

That will give you some breathing space In The interim with the UC.

If you're going to save for your child make sure it's inaccessible until they're 18. Junior ISAs are good. I believe children's savings are still counted as your savings otherwise. My daughter is 17 and on UC but they've disregarded the £8k she has in a junior ISA until she can access it.

Keep an eye on shared ownership properties that are sold on by owners as opposed to new builds. This is the only way my daughter was able to buy a house. The 50% rent is under £300 and the owned party is just over £400 for a 3 bedroom house. I know that might be irrelevent in your part of the country in terms of prices but round here a 2 bedroom house starts at £160, 000. There are no new builds round here and it was just chance that she saw this house that was 9 years old. Good luck, it sounds like you have had a very tough time.

OP keep your savings.

Your wage will rise (you've said the progression in your job is good) and your childcare bills will reduce a lot when your child starts school. Even holiday clubs and wraparound really won't add up the way full time nursery does.

Focus on climbing the career ladder and increasing your wage, then you will find that banks will lend you quite a bit more, especially as your childcare cost drops. Because you can typically borrow 4x income, you afford more from increasing your income by 1k than you do scraping to save 1k from a low income.

How much would a 2 bed flat rather than a house be in your area OP?

Can you get a council house and go right to buy route?

@Aria999

I know it's a while off but when he's at school you will have the extra £1k a month that you were paying for childcare.

Can you give some of the £17k to someone you trust (parents?) so you don't lose the benefit, to be given back when you need the deposit?

I know you mean well, but you shouldn't really advise people to commit fraud. Hiding money, giving it to someone else or certain types of spending are fraudulent behaviours. You cannot intentionally deplete savings in order to claim or continue a benefits claim.

OP, shared ownership is a good way in. Also, housing associations sell off their houses remarkably cheap at times, give all your local ones a call to ask about this. This is how I am buying one now. Its being sold for £110,000 (fully furnished!). One that they sold a few years ago, same style, same road etc being privately sold is £240k.

Also, look at ex-council houses as these tend to be significantly cheaper.

I never thought I could do it either but managed. Good luck!

Would you consider a childminder instead of nursery?
I'm guessing you don't live in London if you can buy anywhere for 160k, I'm in London and my childminder full time is quite a bit less than you're paying for full time hours. Then there's tax free childcare to bring it down by 20%.
If you're saving 800 rent, and could bring the childcare down by ~200 that's a huge chunk of savings every month.

If you can get UC with £16 k in the bank, but not £17 k, I’d just spend the extra £1000, or keep it in cash.

Obviously don't try to defraud DWP. I would check the regs regarding premium bonds as well. However, you could use some of that 17k to invest in a decent car - the DWP don't need you to declare that. Once the savings are below £16k you can claim some UC. Once they're below £8k (IIRC) you can put in a full claim.

I'm pushing 50 haven't bought a house and don't think I ever will. It doesn't really bother me. Honestly, free yourself of the house buying obsession if you can. Save if you can, sure. Be sensible and careful. But many many other people your age and older are not in a position to buy. You've done amazingly freeing yourself from an abusive man. Celebrate that.

Win your shoes OP, I’d buy What I could afford. A one bed flat will be just fine to start with. Your child is much to young to care whatever sleeping arrangement you have.

Your issue is that you want to go straight in having your dream home. It doesn’t work like that. Buy what you can afford now and upgrade when your income goes up.

@Velvian

Help 2 buy is still available to first time buyers. It is by far the best scheme and makes a massive difference to what you can borrow as you are lower risk to the lender.

I've done it twice: for our first house and now our 2nd before it was limited to first time buyers.

I'm not a first time buyer

@vivainsomnia

Win your shoes OP, I’d buy What I could afford. A one bed flat will be just fine to start with. Your child is much to young to care whatever sleeping arrangement you have.

Your issue is that you want to go straight in having your dream home. It doesn’t work like that. Buy what you can afford now and upgrade when your income goes up.

I don't want to go straight in to my dream home. I'm looking at 2 bed flats, and would consider a 1 bed if there was one with a big enough lounge

Another problem with LISAs is that you can't use the "first time buyer" withdrawal option if you've ever previously owned a home.

I would pay your parents back for the £ they lent you many years ago for a car. There must be a way to save a deposit for a house without it affecting your tax credits. Just seems very unfair.