£32k deposit, £35k salary...can't afford to buy. Am I missing an option?

[Cronx]

In London, of course. No one needs to tell me to get over it, I tell myself the same every day, and at least I have a roof over my head and a job, etc. I am truly appreciative of this. So this is less a whinge, more asking if anyone has any bright ideas? If I had been in this position 5-10 years ago I would have been laughing, but the timing has been terrible for me, with house prices increasing exponentially and interest rates being virtually nothing, therefore leaving me with virtually no returns on my savings.

I'm single, 32 and have no children. It's not feasible for me to move to Grimsby or something at the moment, though I would definitely be open to it under different circumstances*

But my current living situation is a bit difficult. I live with my mum and pay rent to her, but way less than I would be paying if I were renting on my own. We share housework, bills, food etc but I just want my own space and to live like an adult. I've had enough of house shares, my current situation is better than that, and at least I get to keep saving this way. Renting would eat up my income and put my savings back so I would be in worse position in the long term.

But it feels like my saving is completely futile.

Without wanting to sound like an entitled whiner, I am so frustrated. I have been working and saving like mad, and I lead a really modest lifestyle (I'm quite boring and frugal anyway so this wasn't too hard, and I am happy to continue doing this). But it's getting me nowhere, especially with interest rates through the floor and no sign of them going up.

I know the answer is "too bad, suck it up, that's how cookie crumbles sometimes, no one deserves to own a house flat..." but surely it shouldn't be this difficult? I'm looking in the crappest, least glamorous part of outer London, not Hampstead or anything. The prices are going up faster than I can save, and I'm a bloody good saver.

I've spoken to a few lenders and they say they can lend me between £160k and £175k, which would buy me a property of up to around £200k, taking into account stamp duty and other fees. There is hardly anything on the market at this level - there are a number of "in need of TLC" derelict hovels on RightMove, between £150k and £200k. I'd be open to this in my desperation, but I'm doubtful they actually exist, because the estate agents never return my calls or emails about them. Even when I go in to their offices to enquire it's just "sorry, that's not on the market anymore". A lot of the properties at this level specify cash buyers or investors only, which rules me out.

There are a few properties a little above this, around the £210k upwards mark. In my cute naivety, I thought maybe I could look at these and make an offer 10-20% below asking price. Ha. Ha. Dream on. I've been to numerous viewings, all of these are hideous stampede-like open house affairs, where you get 2 minutes to look around. It's mostly young couples struggling to find a home (but probably on 2 incomes so they're more likely to succeed than I am), plus the odd single loser like me, and then an investment buyer turns up knowing they will be able to outbid everyone and offer at least asking price, and make a tidy profit. So I have no hope on these flats, which aren't even that nice.

I've been looking at the Help to Buy Equity Loans but it's all so mysterious, there seem to be hardly any properties around under this scheme, and describing them as "affordable" seems a bit generous to me. There's one down the road from me, but the 1 bed flats start at £350k! It's on a horrible roundabout in a crap part of a crap borough. And the affordability criteria seem to make it impossible for people of average or even slightly above average incomes to afford a very average home. Are they advertised elsewhere? Or are you supposed to just pick any new build and get a Help to Buy loan/mortgage for it? I made an appointment with my bank, which proudly declares they take part in the Help to Buy scheme, but the mortgage advisor did not have a single clue about it, I seemed to know more than she did. She had to look it up on the computer as she didn't believe that they offered such a scheme, even though I told her I was reading it on their website that very morning. The Help to Buy website is hopeless, it doesn't actually give any helpful, practical information.

I've thought about shared ownership, even though it seems like a massive rip off. But even then I sometimes don't even meet the income thresholds. I've contacted Housing Associations in my borough about new builds but I'm low on the priority list, understandably.

I honestly thought I'd be able to buy a house at 32, given that I've been nothing but sensible and taught myself about the market and followed all advice. I thought I had done all the right things but I am royally screwed. Lord knows what I will do if I ever want a family, there's no chance I can afford anywhere suitable for a child.

I have no hope, right? Should I give up and blow my deposit at the bingo or something?

I suppose I'm just wondering if anyone has any stories of eternal perseverance finally paying off!

*everyone has their reasons for wanting to live in a particular area. Mine are mainly: I'm having long term counselling and probably won't survive without it, and my mental state will deteriorate if I have to go through the mill of trying to find a new one. I'm not going to be able to move on from some of the issues that caused my problems by staying in my family home (I'm living in the house I was abused in, for one). Plus, I have a stable, good job (the salary is ok if not stellar, but the pension and other benefits are very, very good. Plus I like my work and colleagues, and don't think I can cope with the upheaval of looking for a new job and establishing myself elsewhere at the moment, especially as I will have no partner, no family and no friends around).

Get Phil and Kirsty to help. They always seem to find something to suit everyone who is on LLL. They seem pretty good at dealing with the London market too and often have properties before they are officially on the market.

I am that a £35k salary gets you a mortgage of £175k. That's five times your annual pay!

Can I just check you can drive before I make an outside London suggestion?

It's bullshit. It really is. We are in a similar situation, it would be my oh buying so again single salary. As I've pointed out to people we'd need a deposit of the majority of the value of the property (which are going up faster than saving ability).
I keep looking at shared ownership but we are in a funny area so not eligible for a lot of the stuff as we are considered 'out of borough' even though it's half a mile away.

I just don't know what the answer is with the way things are

I'd leave and go North.

Unless you are earning well north of 100k there is no point staying in London after you hit 30s.

I know I don't live in London so can't help with the astronomical prices there. Here in south Hampshire, you can definitely find something under £175k in quite nice part of town. I know it must be so hard to be from London. I used to live around here for example.

What strike me though is when you mention the low savings rate. Have you been putting £32k in cash? As someone quite young, and not tied to releasing your cash at a fixed time, you should have put them at something higher return. Have a look at index trackers. That's where I put my savings when I was saving for my current house. The return is much much better, and I was lucky to have cashed them in at 68/69xx before the FTSE100 crashed down to 63/64xx currently. It might not help you now, but getting to know alternative ways to save will help you in your future.

There are 18 1 bed flats available for under £200k in and around the South Croydon area - within walking distance of East Croydon station which is under 30 minutes to central London terminus and in z5.

South Croydon is a lot nicer than west so you'll get a bit less for your money but it's worth it. Plus Croydon is currently undergoing lots of renovation work (including getting a Westfield in the next few years, apparently) which should help sustain or improve the market around there.

Strongly disagree with the person saying 'do not save in cash'

Sadly, equities are a medium to long investment - 8+ years.
That's too long a time-frame for saving for a house, which should normally be be less than 5 years.

I agree. I think the OP's best bet would be to talk to an IFA about the best way to save for a house purchase. But in her position I wouldn't do anything that involves risk or locking up the money for too long.

Have you looked at Abbey Wood - not a great area, and unlikely ever to be a great area (Belmarsh is there), but it is cheap, and will be at the end of the new Crossrail line so excellent transport in the future.

Otherwise, is there any way you could get a job up north / in Wales, and do your counselling via Skype?

London is crazy. We're thinking of leaving as we can't save as fast as prices are rising. Also we're wary of buying at the peak of the market - given the difference between London and elsewhere, the South East is only going to decrease long term as those that don't need to be in London cash in and relocate, esp people retiring and moving to the country. Also, whenever the Global market picks up many investors will sell up and move their cash to the next big investment opportunity.

Otherwise, have you looked at Redhill - more family friendly so potentially a better long term option but transport not as good.

I was going to suggest Croydon, though I thought from your user name that perhaps you already lived there . South Croydon really isn't that bad, DH and I have just moved to Purley, which is lovely (when you're away from all the traffic!). Coulsdon/Kenley might also have stuff in your price bracket.

Mum of the moment we're not in London but in south West. We had 7400 deposit and a total income of was 31500 and we had a mortgage of 140,600. That's with the first time buyer mortgage where you only need 5% deposit.

Sorry op no advice with London it is crazy how prices differ up and down the country. I hope you get somewhere for you x

I am just shocked that banks are still lending at that multiple of income, even with a good deposit.

MumOfTheMoment maybe Hollyoaksfan doesn't have childcare cost? I believe they look at total financial position now. A single person with no dependents can pay a lot more into their mortgage compared to someone supporting a SAHP and two children.

Head you are right. No children yet. I'm 20 years old and 31.5k is mine an day partners joint income.

They were very very thorough the banks actually and even asked what tarbsfers were down to £11 being transferred to my dad for a takeaway.. And £450 being transferred to my sister and transferred back to me for her wedding dress deposit I lent her. So they very much do not just give mortgages away. We did fight for it actually and we have no outgoings other than bills as we don't have any hobbies(I've just took up adult colouring books) and we don't go out like usual teens and early 20 somethings. Were lucky if we go out for a drink once every 2 months!! (were very boring)

Transfers *

Take a look at Woking - fast train line up to Waterloo. I have just had a quick look on RM and found various 1 bed flats in the £170k - £200k segment. Woking is not the glamorous town but it has good transport connections - green space in the town, decent shopping, cinema, theatre etc.. Though be warned it's difficult to get a seat on the trains on the morning but it is only 25 mins of standing!

A quick look at Rightmove came up with these. I don't know the areas at all, but I hope it means that there are at least a few reasonable properties out there in your price range.

www.rightmove.co.uk/property-for-sale/property-35124699.html
www.rightmove.co.uk/property-for-sale/property-49364341.html
www.rightmove.co.uk/property-for-sale/property-36656643.html

Thanks all for your views. It's helpful to get a different perspective rather than getting stuck in the depressing vortex of Rightmove and doom-mongering house price stories in the press! My mum is a financial trainwreck so has no advice (partly why I am so risk-averse and frugal); my friends have no idea what I am on about as their advice ends up as "but are you sure your family can't help you get on the ladder?". Everything I know is from Moneysavingexpert and Mumsnet, and there are too many warnings of losing out for me to take the risky options like playing stocks and shares.

I think those of you saying speak to an IFA are right - I will find one and speak to them, at least then I might have a firmer idea of whether my once realistic plan will never be realistic again and I need to make a big decision, or whether it might be worth hanging on for a little longer.

Thanks for the suggestions of areas - I'll look at these.

Applesauce, yes I have the same concerns as you, that the point I buy will be the exact peak. I'll complete, then house prices will start to fall like a stone and I'll be in negative equity, and interest rates will rise to 15% as soon as my fixed rate ends, and I'll be screwed again . I just feel like sod's law has applied itself beautifully to my situation.

Indeed, I am in Croydon, the rubbish bit. South Croydon is like Mayfair compared to the bit I live in, I'm totally up for moving there and do include it in my search, but it's a little more expensive than the scummy bit where I live so probably even less doable. I'm happy to stay in Croydon, it's naff but I know it really well. It's just that it used to be in my reach, and in the reach of working class people, so I aimed for it but now buying in Croydon is becoming a pipe dream. I've been concentrating my search around my bit of town as it is the cheapest, but there is so much competition and the investors usually win, it's really frustrating. I am open to South Croydon, Purley, Coulsdon (and would probably prefer them!) so will continue to include these places while I decide, maybe they have less of a stampede.

There are quite a few flats advertised within a mile of me which are even around the £170k mark, which would be ideal - they need some work, fine, they are in the less salubrious areas, fine, I'm really willing to compromise on these things... But they must have problems because they tend to have been on the market for months, the estate agents either ignore my enquiries or tell me the properties are no longer on the market, or they are for cash buyers only. I guess they just leave them up on the websites to get people's details for their mailing lists, and then hassle them with calls and emails with details of properties £100,000 over their budgets. Nothing more annoying than a 21 year old wide boy estate agent calling me twice a week to ask if I have managed to gather an extra £50k.

I do drive, but I don't have a car so I'd need to factor in the cost of buying and running one if I were to move somewhere that I'd need to drive. There is no way I can drive to work.

I can't move to Lancashire or Wales or whatever at the moment. If I were feeling more mentally robust, or if I had a reason to do it (a dream job, a partner to do it with...) it would be an option and I would be more gung-ho about taking the risk. But isolating myself from all my support networks, my treatment (Skype is not an option), my stable job where I am well liked and well-established, and removing myself from everything I know - none of that would be a good idea right now - I would be better off staying where I am, rather than pulling the rug from underneath myself for the sake of getting on the property ladder. It's times like this I wish I was from Scarborough or something, then everything I know would be somewhere affordable! But you win some, you lose some. I wouldn't have had the same good experiences in those places, so it's swings and roundabouts I guess.

Mumofthemoment, I'm convinced it's just a marketing thing, lenders say "yea, we could in theory lend you £175k". But that will buy naff all so it's pointless. Just like the Help to Buy schemes and so on - the prices of the places that are eligible need two really high incomes, and if you're a couple with two high incomes you should bloody well be able to save more than 5% for a deposit and shouldn't need affordable housing. It's nuts.

Investing was just too risky for me, and I didn't want to tie it up as I wasn't planning on waiting this long. Hereandtherex has given the reasons why I didn't do it. When I first started saving, a 10% deposit on a flat in my area was about £10,000, and 90% mortgages for single people who have demonstrated that they can save money and keep on top of their credit were a thing. So I knuckled down and got to it, but every time I reached a milestone it seemed I needed an additional £10,000 The money I have earned is all I have and there was no back up plan, so I wanted to get to a point where I had something solid in cash, at least.

Everyone I know who has investments does it as a bit on the side for amusement, and when I ask what would happen if they lose the money they're a bit blase about it, as they have parents other funds to bail them out when they want to buy a property or whatever. I did investigate it but, for the risks I was willing and able to take, the returns were still pretty rubbish. I'd rather not have the chance of earning £10 than run the risk of losing £100. I taught myself everything I know about investing, and admittedly I am still a bit clueless, but the thing that jumped out at me every time was that there was a sizeable risk things could fail. I could not afford to do that - I know my money has lost value as cash now, but at least I have it. Having said all this, now I reached the 30k mark I have looked around at investments and will dip my toe in, but the returns are still not all that great. If it were a long term thing and I had some other piles of money to tide me over, or was already on the ladder, it would be an option.

A good solution would be to move away from London.
Only rich people can afford to live there.

Lostintoys, I'm familiar with these , I feel like I know all the properties on rightmove witihin a 5 mile radius off by heart. Maybe it's just a right place, right time thing - one day I will find something, make an offer and it will all fall into place. But maybe that's too optimistic!

Like I said, I can't just up sticks and move to the other side of the country in my current circumstances. I'd rather not do that now, and instead keep earning a London salary and being able to save at least £1000 a month, then at least when I hopefully get better I will be in a better financial position if I do move somewhere else in the country, or find a partner to move in with or whatever. If I thought moving to the other side of the country where I know no one and nothing would make me feel better I would do it, but it's the only thing that would make things worse than staying in a house with bad memories and being a perpetual teenager living with her mum. I've lived elsehwere before (even other countries) and I know I'm not in the right frame of mind to do that at the moment, so that's the only thing stopping me. Living with ma is not ideal but it could be worse.

If you don't mind West, you might do better - just more travel for your counselling.

www.rightmove.co.uk/property-for-sale/property-55445675.html