Affording to buy even with a decent deposit?

[HoneyBadgers]

I hope this is in the right section, sorry!

DP and I have been renting close to London for a year or so (been together almost 8 years), but have always wanted to buy. Although it's not the ideal situation, we've decided to move in with my parents to save for a deposit for a year. We currently pay £1600 a month in rent and bills, so in theory we'll be able to save almost £20k in a year (parents are helping us out majorly by not charging us rent as they are in a good financial position).

We're not on a fantastic income, around £45k a year joint. It's fine, and we're comfortable, but obviously could do with more.

My worry is that even with a 20k deposit we are not going to be able to buy anywhere and secure a high enough mortgage. We will need a 2 bed as hoping to start a family within the next few years, however 2 beds around here are all upwards of £220k, and that's for very basic flats.

I'm very new to the buying scenario and think I'm a bit overwhelmed with it all, does anyone have similar experience or even able to offer advice to help me make sense of it all?!

What about moving further out.
Would part buy part rent help.
Are the Government still doing the first time buyer scheme wonder.

• I wonder.

Unfortunately moving further out isn't really an option. Both our jobs and families are here and I think we'd really struggle with new jobs, new home and no family around.

I've looked into part buy part rent and don't seem to understand how we're meant to continue 'staircasing' whilst paying the rent and mortgage. The help to buy scheme is apparently finishing December '16 so would be no good to us as we'll be looking to buy about a year after this.

Thanks for you response though :)

Could you move further out?
I think it is definitely worth moving in with parents and saving up for as long as you can all tolerate!! That's how me and my siblings all managed to get deposits.

Is there scope to aim for career progression at the same time? because you get a multiple of salary, even a moderate step up in earnings would make it more achievable. Are there extra courses etc you could do? Or options of overtime?

It's crap how out of reach prices are these days. Really crap. But I have been impressed with the inventiveness and tenacity shown by people on modest salaries to get on the ladder.

Help to buy is definitely worth investigating, or whether you qualify for any shared ownership schemes

Three years with parents maybe!!
Have they said the max mortgage they will offer you.

Re "stair casing" i guess this might happen once you get a promotion/ payrise or if you get money through an inheritance/bonus etc

Ultimately for you though it could be a brutal choice between being near family and renting or moving away so you can buy. Not an easy choice or one I think people ought to be faced with, but it's one many many people have to make

I don't understand why if your parents aren't charging you rent and your joint income is 45k you will only manage to save a 20k deposit?

Wait and see what happens with Brexit. A lot of people predicting major drops in the housing market, including London.

People in the industry aren't really expecting massive drops cinnamon , more like a dip and then a bit of a stagnation/wobbly patch

bigmama I am assuming it's £45K gross? And presumably there's still stuff like travel cards etc etc

Yes 45k gross, plus some debt we want to completely clear before saving hence 20k in the year which will leave us entirely debt free. Although we will be housed rent free we'll still be buying our own food/supplies, plus travel expenses etc. Thank you everyone for your advice so far! It is a miserable situation at the moment with buying!

Ex Londoner here and confused why you can't move future out. Many Londoners commute from the suberbs or Home Counties etc for work

My advice is keep aiming for it, both in paying off debt/building savings and climbing career ladder, it seemed impossible to me once but somehow I finally did it! (Admittedly in SE not actual London)

We live very close to London now (in the rented property), not actually in London. Our parents are both in Surrey, about a 40 minute drive from where we currently are. Surrey is where we'd like to stay and buy as we've both been brought up here.

Thanks pebbles, all seems so far away at the moment! I'm so sad about leaving our little flat but it's the only way to save money really.

Sorry to sound harsh, but I think you are going to struggle on a relatively low joint income for London, especially if you plan to start a family soon - would you be able to manage whilst on maternity leave for example?

Am aware I sound even more boring, but I suggest you fire up a spreadsheet and put in some numbers for, say, the next 5-10 years and see what that looks like.

What amount of mortgage can you get?

I think you will struggle to be honest where are you looking to buy? In my part of London (zone 4) even one beds are more than £220k.

even if you never manage to buy, it still will have been worthwhile to have a decent cushion of savings and some good financial habits.

I would suggest that you research how much it costs in total to buy. You would probably need to pay most of the below;

Mortgage arrangement fee
Property survey
Stamp duty
Solicitors fees
Land registry fee
Life insurance
Some unexpected costs/fees
If you buy a flat, may need to pay ground rent, management fee, service charges
Furniture
Bills
PLUS your deposit

I agree that you are probably looking at minimum 3 years savings
However, this may become increasingly difficult if London property prices continue to rise by 20%+ per year

It is probably achievable if you live rent free and have opportunity to work overtime or a second job

Property prices are cheaper further away from London

I would investigate how much banks are willing to lend you for a mortgage

I would investigate your finances if you give up work to have a family

I grew up in Surrey but have bought somewhere else more affordable, despite my and DP's joint salary being nearly double yours. Sorry to be blunt OP, but you will almost certainly need to broaden your horizons and lower your expectations if you want to buy in the next couple of years. It is easy to zip round to Surrey from a neighbouring county.

I think you are going to struggle to buy a whole property on that salary. I'm going to be struggling on that amount in bristol to be honest with you. Shared ownership with/out stair casing might be your only way forward:

I think you are being unrealistic in what you can afford.

Fuck it op

Live your life and rent

Or yeah you could live with your parents for three years then move to an area you don't like with a killer commute, with kids in childcare 10 hours a day minimum with no friends or family nearby to help you out or offer support or socialise with.

Look at your life - how much better will it be if the money you spend on housing goes on interest to a bank rather than a landlord? Will your life be better? Will you be happier? More fulfilled? Will your life actually change at all (presuming you could live where you do now)?

Yes there's a long term issue of renting in old age but get good pensions, and consider never stopping working. Consider how your careers could be adaptable. How you can downside to a one bed flat again once your children leave home.

Renting isn't so bad, really