WWYD - buying London

[brandyandcoke]

DP and I are currently renting. We'd like to buy and would like to stay near to where we are. Problem is it's uber expensive but we will move to a cheaper part. Previously we've calculated we could borrow up to £400k on our combined salary but the payments on that would be more than we'd like to pay, and we simply don't have the money for a deposit. Added to that, DP has just gone freelance so getting a mortgage based on his salary now is unlikely to happen until a lender can see two or three years of accounts. I have been told that Halifax may be able to help but I need to investigate further. But right now, based on my salary, we have a mortgage in principle offer of about £200k.

The flipside of our earnings halving is that we'll now also be more eligible for shared ownership, previously out of bounds because we earnt over the threshold. To do shared ownership you have to buy in the borough you already live or work in. There are some local two bed flats about though

Added to the mix, I am likely to come into some money at the end of next year which will mean having circa £30,000 in total. However we'll still likely not be able to get more than a studio for £230k (cash plus mortgage I can borrow)

So, WWYD? Go for shared ownership? Wait it out to next year to see what market does and reassess with larger amount of money? Or wait three years so dp's earnings can be taken into account?

I am conscious we're in our 30s now and would like to TTC, but having a baby and childcare will be expensive and I'm worried that could also affect mortgage chances. I also don't want to buy a one bed and I imagine we'll be buying to stay there for a while.

Any thoughts on our circumstances greatly appreciated.

[brandyandcoke]

Sorry to not live up to the London stereotype but we have no interest in cocktail bars!

We are considering areas with DC in mind. Plenty of families in London too you know...

[Cedar03]

Consider whether you are serious about having a baby in the next couple of years or so and look at what that means for the kind of area you want to live in and the difference it will make to your incomes.

Look at what, if anything, your employer offers over and above statutory maternity pay. Look at what the maternity pay is and how long it lasts. Think about how you would afford to pay your bills in the mean time.

Think about nurseries, schools, etc. Childcare costs within London can be very high, see what they'd be in the areas you want to live in.

I know this probably sounds a bit hard when you may not have even made up your minds whether you want to have children at all but effectively losing one salary to maternity leave will have a big impact on your ability to pay the bills. So you need to keep this all in mind when looking at how much you can afford to borrow. This is what we did when we bought our house, it meant that although money was tighter we weren't in a panic about how we were going to afford things with a baby.

[noddyholder]

Wait. And don't even consider S/O. Once you have the 30k and your partners job can be taken into account then see a broker and get a definite deal and maybe move out a bit rather than pay nearly a quarter of a million for a studio! You may end up stuck with it if the market changes or stagnates. Today teh govt have announced 20% off newbuilds for up to 100000 ftb under 40 and this could push down prices at the bottom end

[MrsPJones]

I disagree about not even considering shared ownership. I used to think that way until 2 different couples I know did really well out of it. If you can afford outright that is definitely the best way to go, but mortgage + rent + service charges generally come out significantly less than private rental and there is security of tenure. I think shared ownership is a brilliant alternative to private rental, especially if you have kids and can't afford or don't have the deposit to buy.

[brandyandcoke]

Again, thanks all.

Ideally yes we would do it outright. But an opportunity to buy SO in an area we couldn't otherwise afford may come up

I am conscious of timings. I am 33 and I fear for our chances of having DC if we keep putting off TTC. And from what everyone says it's best to buy before DC.

I don't know... It's all food for thought, thank you