Feeling embarrassed applying for somewhere to live

[thesearch21]

I am in my early thirties and single. For the past few years I have been saving for a deposit whilst living at home and managed to scrape together about 15k.

Unfortunately my profession is not very highly paid. I didn't used to think it was that bad naively until I came to look into places to buy. I am a manager in my profession, but i'm repeatedly told by lenders my income in low. I don't particularly want to change careers, I do like what I do, and I think that is important for someone single like myself that my focus in on a job I like. But there isn't any other ways to really increase my income. And again, naively, thought my deposit would make up for this fact.

I applied for shared ownership, rejected on affordability. Asked for lower share, again rejected. Got a Mortgage in principle for 80k... which will buy me, nadda.

I feel like I might aswell just rent but then what was the point of saving and living carefully for all this time to save my deposit in the first place? Its getting me really down, I feel like i've failed and way outstayed my welcome with family now.

Ive actually come off the phone to mortgage advisors in tears as i didnt think it would be this bad and im embarrassed.

Can anybody relate or give me any hope?

"a choice you're making" - not really, the real 'choice' here is successive govts to have overseen property prices rise completely out of line with wages. so people on average salaries can no longer afford average houses.

so don't feel embarrassed OP. lots of people never buy and certainly never buy on their own, especially in last 20 years, so your position is completely normal. shared ownership, buying with a partner/friend, increase savings or increase earnings, seem to be your options.

Are you prepared to move? In my area of the North West there are still houses to buy for around £80,000. A three bed terrace 5 minutes walk from the sea is currently for sale for £82,500 (ish) .

Yes, a lodger will help with bills but if you can't get a mortgage in the first place that doesn't help! I feel for you op, my daughters are in exactly the same situation and won't be homeowners until we die. They are paying rent on flats that are way less than mortgage payments would be so could easily afford the repayments. We could give them a 75k deposit each but they still couldn't afford to buy a one bedroom flat. Not sure what the answer is. Could parents like us use our homes as guarantees?

not really, the real 'choice' here is successive govts to have overseen property prices rise completely out of line with wages. so people on average salaries can no longer afford average houses.

But OP isn’t on an average salary. UK median annual salary for full time work is about £31k (a truer average than the £39k mean average, which is distorted by high earners).

Sure £31k might only get you a mortgage for c.£140k, which doesn’t go far in most parts of the UK, but that’s not the limiting factor here.

Aldi recruit store managers on a starting salary of £47,080. Hard to know if OP’s experience as a manager in retail is comparable, but it illustrates the potential difference in earning potential.

How important is it that you live in an owned home?

As a single parent on a very good salary I can't afford to buy in my area.

Instead I have an investment property which is far from here which will eventually give me enough capital growth to buy something to live in.

I know it's unpopular but rather than putting your savings in the bank, can you see a FA and look at investment in shares or something else to grow that deposit?

It’s not embarrassing at all, please don’t feel that way. But speaking frankly that is a really low salary, far below the UK average for a FT job, so on a single income it is going to be next to impossible to buy somewhere. Retail management has a great transferable skill set so I strongly suspect you have the potential to be earning much more elsewhere. For example, I know an assistant section manager at a supermarket who is on 25k. Is your current job really more important to you than the financial security of owning your own home? I know there’s possibly more going on that you haven’t shared but from an outsider’s perspective it seems kind of insane to be that loyal to a shop job. I wish you the best of luck though and whatever you decide, I hope you get there.

If you live at home what outgoings do you have?

Save £10k, spend £8k and in another 5 years that's £50k.

Have you spoken to an independent financial advisor? Have you spoken to your employer? You may find a pay rise forthcoming if you ask for it and can justify it.

I'd try a broker or two. Is your job close to national minimum wage as PP suggested? If not maybe a broker could get you a bigger mortgage approval. You might be able to buy a property as buy to let. The expected rental income will be added to your current income to determine affordability. When you've paid the mortgage down you could refinance as a owner occupied mortgage. It's one way to build equity at least, though it would mean living at home longer.

@CoronaPeroni

Yes, a lodger will help with bills but if you can't get a mortgage in the first place that doesn't help! I feel for you op, my daughters are in exactly the same situation and won't be homeowners until we die. They are paying rent on flats that are way less than mortgage payments would be so could easily afford the repayments. We could give them a 75k deposit each but they still couldn't afford to buy a one bedroom flat. Not sure what the answer is. Could parents like us use our homes as guarantees?

You could go guarantors on a loan, not sure if that would increase the amount they can borrow. Could they buy a 2 bed flat together? Then they'd have a combined 150K deposit. You could also remortgage your home to free up more equity, but that depends on your income as you'd have to service the loan. Not usually a great idea unless you both earn well or have good enough pensions.

@LakeShoreD

It’s not embarrassing at all, please don’t feel that way. But speaking frankly that is a really low salary, far below the UK average for a FT job, so on a single income it is going to be next to impossible to buy somewhere. Retail management has a great transferable skill set so I strongly suspect you have the potential to be earning much more elsewhere. For example, I know an assistant section manager at a supermarket who is on 25k. Is your current job really more important to you than the financial security of owning your own home? I know there’s possibly more going on that you haven’t shared but from an outsider’s perspective it seems kind of insane to be that loyal to a shop job. I wish you the best of luck though and whatever you decide, I hope you get there.

I also agree with the poster above especially this point: is your current job really more important to you than the financial security of owning your own home? How would you react if you passed up a really good job opportunity due to the fact you 'like your current job' and then for some reason lost the current one? I'd advise never to be emotionally involved with a job, but to look out for yourself, your needs. Employers really don't particularly care about your lack of owning a home so you have to.

You work full time, could you possibly get a part time job at evenings/weekends as well? Maybe a bar job, cleaning, anything. If you do that, pass thr probation period and then when you've got 3 oay slips, it can count as income for your mortgage. You can then get a higher mortgage. Once you've bought a property and moved in, you can quit the part time job

Have you posted about this before OP? If not there’s another MN in exactly the same position who may be able to help!
Sadly it is now very difficult for people on low incomes to buy a house. From a lender’s perspective, they just can’t take the risk.
There is nothing wrong with renting.

@SD25

"a choice you're making" - not really, the real 'choice' here is successive govts to have overseen property prices rise completely out of line with wages. so people on average salaries can no longer afford average houses.

so don't feel embarrassed OP. lots of people never buy and certainly never buy on their own, especially in last 20 years, so your position is completely normal. shared ownership, buying with a partner/friend, increase savings or increase earnings, seem to be your options.

She’s not on am average salary she’s way, way below average and is earning not much more than minimum wage. There are other jobs available. So yes it’s a choice she’s making.

You could go guarantors on a loan, not sure if that would increase the amount they can borrow. Could they buy a 2 bed flat together? Then they'd have a combined 150K deposit. You could also remortgage your home to free up more equity, but that depends on your income as you'd have to service the loan. Not usually a great idea unless you both earn well or have good enough pensions.
Thanks @LunaAndHerMoonDragons
We are retired and in the process of downsizing which is where the deposits will come from. Good idea about sharing, that might be possible.

If you are a first time buyer you maybe able to get support from the first time buyers scheme for new builds.

www.ownyourhome.gov.uk/scheme/help-to-buy-2021-2023/

@CoronaPeroni If they bought together they'd also have two incomes so would qualify for a larger loan then one would as well as having a larger deposit. It's a good way to get into the property ladder, as long as they get along, wouldn't be an option for some siblings.