Can my daughter afford to buy a house?

[hollyberrytree]

My daughter brings home just under £3000 per month. Steady job. No risk of unemployment really.
Shes in a house share at the moment but unhappy
I think she should buy, she has a good deposit (15k or more)

2 bed terrace is over £220k. Nothing cheaper

These are her figures
“Mortgage is £1150 ish
Council tax £180
Home insurance £20
Gas water electric £100 absolute minimum
WiFi £25
Phone £24

= £1499

Not to mention… petrol, food, clothes, car insurance, MOT/services”

She thinks it’s too much of a percentage of her take home. She’s got a mortgage offer but has lost her nerve.
I think she can get a lodger to help ( she’s ok with this)

My knowledge of mortgages and household costs are out of date. But I don’t think there’s much point in waiting as it would be ages to get a bigger deposit and house prices may rise by then and more years of rent down the drain.

What are other people’s thoughts? Am I out of touch? It looks affordable to me.

Buildings and contents insurance will
be more than that.
Annual boiler service
etc.

Do a real budget, but it sounds affordable to me.

My DS bought a house with his gf but they split up very soon afterwards so he had to have the mortgage put in his name only. He’s on £30K and his mortgage is £1K a month which is roughly 50% of his take home.

We advised him to look for a lodger because £250 left for all bills, food, car and pet is very tight but he was adamant he didn’t want to live with a stranger so he’d rather try living alone and only look for a lodger if he couldn’t cope financially.

Two years on, he’s really surprised us. He is very careful, but he runs a car (old one that was bought outright) and he has a hobby that he spends about £1000 a year on.

It can be done, if your dd is prepared to make sacrifices.

TalkTalk is £25 with Freeview. I have critical life cover for £21.20 with Legal and General. £11 mobile with Tesco and an Android phone
She can get a lodger and that will pay for loads. Stop putting her off, it can be done ✅ ✅ ✅

I think the utilities are very low but with a lodger it would be doable. Would she have money for maintenance and any work that needs to be done

My point is that paying half of your take home on bills, as a mortgage-payer and on one slightly above income, and having low equity, isn’t a great position. What about overpaying and saving for your rainy day fund? Income protection payments?

I think in the early days you have to take of a leap of faith and believe you’ll make it work, otherwise you would never get on the property ladder.
She has more left over at the end of the month then we did, we managed to buy when a lot of people couldn’t pay mortgages in the last big recession and brought a repossession. It had been trashed but it was fairly liveable once we had ripped out the carpets etc

Now we are still in the same house, have extended it and our mortgage is almost half what it would cost to rent a similar house in the same area, so I’m glad we did it as some of our friends are still stuck renting and unable to save enough for deposits.

It can be done. But it's up to her if it's worth it compared to what she has now.

And getting a lodger would defeat the point of her living alone.

I’d say it’s a bit tight in the current climate as interest rates are likely to rise as will bills as inflation has risen again. I think she should keep saving as house prices are dropping and will continue to fall if interest rates rise. £30k deposit is better and those £220k houses might drop to £190-200k.

Think your daughter should re frame (same happened to me at similar age...) as...' Spending this £x on survey is annoying but it means I've dodged a very expensive mistake.... That would have cost oodles in future'.

Shared ownership is a great way to build up her confidence. Buy a 2 bed house 50% ownership and rent the other 50. Then buy %increase when she has experienced the commitment. My first purchase was a 25% ownership in west London.

There's also the auction sites. A do up house for a long term gain?

I'm health & safety by trade for 17 years and I've never earned more than about £2200 a month. Wages and cost of living are on a different planet to each other!

I think the two things she needs to think about is a) if a person who is a pain in the arse / noisy moves into tie house share she'll want to be getting out quick - I'm guessing people can come and go in these places. And b) like others have said she has to think about the fact she may meet a partner she likes down the line which may be awkward living in a house share and having her own house before that happens stops them moving in together under pressure within a short time of meeting each other.

It's affordable with good budgeting, and there's always the lodger possibility if she wants more disposable income.

Of course she can - part of buying a house is accepting you have less disposable income for a while. It gets cheaper over time

The only thing is her deposit is quite small so she won’t be getting the best interest rates and won’t be as shielded from price fluctuations. At 27 though it’s wise to get on with it - how will her situation be materially different in 3 years time for example? She’s getting quite old to live in a house share, I’m sure she’d like to live more like a grown up and less like a student.

Absolutely she can afford it and should do. She could remain where she is for longer to get a bit more saved but really, thats about 7% or so is it? (not great at maths)

Its about whether the multiples work, if the house is 220 and she needs to borrow 205, she needs to be earnikng around 50k, is that what she earns?

I wouldnt touch shared ownership with a bargepole, you pay the mortgage, rent and service charge and then you're very restircted to who you can sell to once you sell on

That's not quite true. But its an option as I offered. There is much issues with buying generally as op has shown. Nothing is fail proof. I found it so good. And easy to sell. Was cheaper selling too.

I think it's doable and I would crack on if I was in your DD's shoes. She would need to keep an open mind about a second job if she's short of money, or a lodger. She should keep in mind that a lodger doesn't need to be a permanent fixture. She can offer something time limited to a friend or colleague who needs a stopgap, or just a term /academic year to a visiting student, for instance. I think the bills have been underestimated. It's normal to be skint when you're in your first home.

Completely agree - it’s a complete scam for most people and only really benefits people who have no hope of buying a house conventionally and need secure housing.

From the responses on this thread I can see why people are dithering and renting when they could buy. And why parents whine 'my son/daughter simply cant afford to buy ANYTHING'

So many comments about her being skint (yes normal), having to cut back (yes normal), haaving to do the house up (yes normal), not having the best interest rate due to the LTV (yes standard for FTB), not having a lot left over for new furniture etc (normal)

She's 27 and living like shes 18, of course she isnt happy, doesnt mean she wouldnt be happy with lodger, she is in complete control in that way.

Some people are never in a position to overpay. I don’t know anyone with income protection or a large rainy day fund (maybe an overdraft or credit card for emergencies) and I don’t think that’s unusual
I have a mortgage on 28.5k, there is no chance and never has been of me overpaying!

£15k is not a 10% deposit plus there will be the legal fees etc.

It doesnt have to be a 10% deposit as long as she can get 5% she can do it

I became a homeowner 6 years ago. Every single bill has gone up, service charges quadrupled. Unless she’s in the kind of job / profession where she’s projected to keep progressing, I wouldn’t risk a paycheck to paycheck salary.

Are you in a leasehold?

I wouldnt recommend a leasehold

A terraced house which is what she is looking at seem ok

And to answer other points, Ive never had income protection or criticial illness cover