Advice wanted - buying in London

[Nolongerteaching]

MN seem knowledgeable so I’d like to pick your brains if I may🙂

i’m thinking of buying (low end of market, a London studio/flat, zone 3/4, circa £120-150

This is all I can afford and I will have a 5% deposit. I’d like to take advantage of Sunak’s government mortgage scheme that runs out this December. It guarantees 20% towards your deposit so you get favourable LTV rates.

To me, all this talk of interest rates rising/houses going down in value has to be balanced by what I can achieve. I currently rent at £810 a month ex bills.

I think it is better to try and buy before this scheme runs out to try and lock in a really good 5/10 year rate then wait for them to go down more and lose the chance to use the scheme.

Am I making sense or just panicking? What are your thoughts? Thank you and all advice appreciated

Hi OP I hate to rain on your parade but I remortgaged last year weeks after turning 50, and overnight my mortgage term went from 19 to 14 years! The advice I had from the broker was that to get a longer term I would need proof of income after retirement age. This put my repayment up by nearly £300 per month.... sorry. I agree with other posters that you've got a huge challenge with your budget in your chosen area if you can't consider a scheme such as shared ownership. It's crap isn't it?

To be honest OP , there are actually some big advantages if you are older on shared ownership- one being that if you hit hard times income wise, you can claim rent support on the 'rental element' on shared ownership and the allowances are considerably more than the provinces. If you only buy 25% you will get the security of tenure but a low mortgage element..as a previous poster has said you may struggle to get a 25 year mortgage . You can't claim bugger all with a straight mortgage. (At least not for almost a year) The service charge elements are present in lots of flats- not just shared ownership - we never had an issue with them when we had a shared ownership and as housing association involved the costs were tightly controlled- whereas when we had shared freehold in a flat that wasn't shared ownership they were like the Wild West!! The other thing to bear in mind is next year the 10% ownership fraction is coming in. So a minute mortgage , mainly rent- but security of tenure again. I honestly think you will struggle to buy anywhere that's ok in areas you are thinking about as a lot go to auction and are bought by builders etc

@RedRocketGirl ,

A decent broker should have found you a re-mortgage up to 70 years ( a 20 year mortgage at 50) It's not that uncommon these days. Unless you told them you plan to retire at 64?? A lot of deals would want someone whos retirement is planned at 70.

Of course once one reaches 55 all the equity release deals kick in, which for SOME might be a better option than taking out a new 15 year mortgage

Thank you @strawberryband @Crikeyalmighty @RedRocketGirl

I have to rethink the shared ownership by the look of it. I’m going to go away and do my research and come back here and would appreciate any thoughts on what I find.

Some serious thinking to do🧐

A few suggestions here- ideally you want to get the lowest 100% value for the highest 'share' - that way it keeps the rent aspect down

www.peabodysales.co.uk/developments/sydenham-groves/#Shared

www.peabodysales.co.uk/developments/valley-house/#Shared

www.peabodysales.co.uk/developments/liberty-house/

@Crikeyalmighty

thank you- much appreciated. Unfortunately, I don’t earn enough for the ones you linked to but there are cheaper ones in there.

I would also go for a resale which is supposed to be a better deal? You are not paying the ‘brand new’ premium.

More reading to add to my list. I’m also thinking about my chances of getting a better paid job. Might be a better way to go

The resales are always the best deal of all and if you go outside London and into Kent/surrey/berks etc then some really nice options at around 70k for 25% . Thing about resales too is the'quirks' have usually been ironed out.

I know I worked this out for my son previously and at around the 100k level you are going to need to earn around £42k to £45k ish- but at around the £70k level it's more like £36k - as a guide!

This one's a nice resale

www.peabodysales.co.uk/developments/tannoy-square-third-floor/

I know that area - nice off Beulah Hill.

But I don’t earn enough for that one😖🤪😥

Crazy isn’t it? Although it is a two bed, a one bed would be more realistic

If you can mortgage this though (not shared ownership) it doesn't look bad- but suspect it will go for maybe £150k??

www.onthemarket.com/details/12265074/

Very strange - won’t show for me when I click on link

www.onthemarket.com/details/12265074/

Odd as no problems on mine!! 3 bed ex council in Bromley- looks quite tidy

On share to buy.com a couple of nice ones in Tonbridge at that 65k kind of level for 25% . If you were prepared to move out a bit- even 1 in Brighton at about that price. Worth playing around on there at various places - if you earn under 35k I think you will be stuffed in London for partbuy too. Given rent,'mortgage and service charge I think income will need to be at least £2300 to bring home- if it's close I think it's worth giving them a call.

I think if you look more towards South Norwood /Croydon you might find something that'll work for you. Sounds like you already know this area a bit

Beulah hill www.zoopla.co.uk/new-homes/details/62250112/

There's this shared ownership 2 bed on Portland Road www.zoopla.co.uk/new-homes/details/62342465/

1bed in South Norwood
www.zoopla.co.uk/for-sale/details/62335841/

@GearBots I think the problem was the nice one I sent was £85k and OP said she doesn't think she would get the mortgage as they factor in rent costs too- but I do think I would call and check that out- criteria can vary between developers and HA

£144 pcm service charge