Where to start on the property ladder?

[Mumofoneandanotherontheway]

We really want to get on the property ladder but really don’t know where to start. We have 2 kids (4,1) OH works full time & gets £18.5k before tax, I’m not currently working. We’ve saved up approx £15k.

Can we get on the property ladder with this & our situation right now?
Please don’t judge, just looking for some advice x

Where do you live ? Can't advise unless knowing house prices

London, however we are willing to move on the border of London

To be honest, this seems very unlikely.

I live outside the M25, in a 'cheap' village for the area and my mortgage was based on a salary of £30k with no childcare costs. It's 40 minutes on the train to London. The season ticket for the train costs something like £4.5k.

When calculating the amount they will lend you, mortgage lenders take money off for having dependents when they do the affordability checks. They will also take off your OH's commuting costs etc.

At best, the amount a person can get for a mortgage is about 5X salary so someone with no dependents or commuting costs on a salary of £20k would be looking at a mortgage of £100k absolute max added to the £15k savings. Unfortunately £115k wouldn't buy you anything within commuting distance of London.

If being on the property ladder is important to you and if your OH's job is one that he could find a new position for in the North, I'd move away to a cheaper area.

Very unlikely, sorry.

You’ve done very well to save that much, you are obviously good with money. But basically you don’t earn enough. It’s hard to buy a house on one wage unless that person earns a lot.

Your husband needs to look for better paid work with more prospects and you need to get a job too. Could you do evening or weekend work do you don’t need to pay for childcare? Do you have qualifications and if not, can you study part time to get them ?

And as a PP said you need to move somewhere cheaper too.

Move up north or to the Welsh valleys, commute to the nearest city. The money you have will only buy a family home in either of those places.

How are you affording to live in London on such a low income now?

You need at least a 10% deposit and to pass affordability checks on monthly repayments plus all other expenses. It doesn't sound like this would be likely with house prices in the south, but doable up north.

Have you thought about shared ownership where you pay rent and mortgage but over time the percentage you own increases:

www.london.gov.uk/what-we-do/housing-and-land/homes-londoners/search/

Depending on your husband’s job, could you qualify for a key worker house in London? Some housing associations might be able to help with shared ownership but you will need to do some detective work to find out which ones have properties where you would like to live.

I don’t know enough to know if your deposit would be enough or how affordable it would be but I did have two friends who had lovely shared ownership flats and after a few years they sold them and moved onto a conventional mortgage

Try Sidcup and area around that.

There literally isn't one property for sale in Sidcup or within 3 miles of Sidcup in the OP's budget and that's including 1 beds in the search.

(just pointing this out to save OP getting their hopes up unrealistically).

Have you tried to move further away from London? I am originally from London and had to move away to get on the property ladder.
I live in Peterborough which has a straight train to Kings Cross.
A lot of people/families from London/Essex and Hertfordshire have moved up and there are lots of first time buying schemes here.
There is also a lot of investment into the town centre happening.

Forget about the 'property ladder', what you want/need is a house or flat that is suitable for your family size and within budget.

You can generally borrow up to about 4 x your income and at least a 10% deposit is recommended because if your mortgage is 90% of the property value or lower, the interest rate is lower. Don't forget that you will need an extra £1/2k at least for fees and moving costs.

As others have said, you currently don't have a hope in hell of affording to buy where you are. However, you might have a better chance of a small 2 bed property on the outskirts of a city in northern England or Wales. Do you want/need to stay in the area where you are?

Can your DH earn more - he's currently only slightly above NMW, so not benefiting from what should be availability of better paid work in an expensive area. Are you able to work, you should get help with childcare costs, or could you work when your DH is at home to look after DC?

The moneysavingexpert guide for first time buyers will be useful in terms of mortgages, help with savings, part ownership schemes, etc etc.

Sounds very unlikely (impossible) in London.
And if you move further out but still work in London you will have big travel costs.

No idea how you are managing rent etc and to have saved so much, but keep it up, keep saving, and then your options will be:
Move to an area if the country with cheap housing
Wait til both kids are in school / get max free nursery hours and then get a f/t job yourself
Be ambitious re promotion and pay rises, invest in courses, qualifications that will increase income.

You've done brilliantly to save so much for a deposit but I have to agree with the other posters. On the income level in London you are unlikely to be able to buy.

To buy, you would also need money to pay for;
Deposit
Solicitor fees
Mortgage arrangement fee
Moving costs
Post redirection fee
Survey
Other costs

If you look on www.rightmove.co.uk property for sale, each individual property, there is a calculator for the deposit & mortgage only ( not all the other fees)

Maybe look in Birmingham or Sheffield if you can move. There are small houses there for under £90K. Or, as previous posters have said, wait until the children are older, then return to work yourself so you have two incomes coming in. Unfortunately you would need a lot more for London or the SE. I think the cheaper homes in the SE are in the Medway areas (around £200K).

There are some new build houses in Rochester, for example, on shared ownership for £104K. You will have to find the rental portion on top of that and possibly a service charge too. Worth looking into though.

You could look at shared ownership in Belvedere/Erith area.

www.rightmove.co.uk/property-for-sale/property-67002750.html

@Lippy1234 that would be £400 ish on mortgage, probably similar again on rent AND it has an eye watering £301 a month service charge!

Yikes!

OP, if you look at shared ownership, don't forget that you pay rent on the share that the housing association owns. Eg if you own 1/3rd of a 300,000 flat, you will have to pay a mortgage on the 100,000 you owe plus about 3% on the 200,000 that they owe.

That would mean you have to pay £6,000 per year, £500 per month, for their loan. A lot of shared ownership adverts don't mention this.

You would also have to pay for a management charge (for maintenance) - again, that's something they 'forget' to mention in the advert.

You'd be looking at a mortgage between 80-85k, then your deposit. No chance near London but if you are willing to move then yes you can get on the property ladder - up north or South Wales are possible.

I don’t think you will in London OP. I’m looking to buy my first property and have £30k saved and am on about £65k but am still having to go out to zones 5/6 to afford a decent 2 bed flat. My maximum budget is about £300k for reference.
I’d also caution against shared ownership without proper research. It looks very affordable but when you add mortgage plus rent plus service charge every one that I’ve looked at has been ridiculously expensive

@Lippy1234 yikes indeed!