Who doesn't own a property?

[GreatAuk]

TBH you've left a gap which is non-HMO reasonable rentals. It should be the case that at 18/21 it's possible to move out of your parents and into a house share (non-HMO, just 2 or 3 mates etc) and sustain yourself. Then eventually even rent a flat or gasp, house. Problem is that renting costs so much more than owning a house. Isn't that crazy? That people are pushed towards ownership because renting bleeds them dry?

At least in London, living alone carries such a hefty premium that it's just not viable. Compare my rent in a shared house - just over 600pcm, if I lived alone a 1 bed flat would be MINIMUM 800 but really 1000. 2 bed flats would be 1300-1400 easily.

Whereas at my budget I could be buying a 2 bed flat of my own and the mortgage would be £500. Absolutely bonkers.

I think it's ok that rent should be a part of normal cost of living. Go to work, earn money, income provides the means to support yourself. Buying property should be something above that you have to achieve - but actually it's more like an escape from the trap of renting. Weird.

I think we agree on the lack of affordable renting options - there should be an affordable renting option, but it's getting more and more difficult for people on lower wages in many areas all around the UK, leaving living with parents or living in a grebby HMO being the only viable options for people. Has been like that in places like Central London for ages obviously, but I think more and more places all around the country are getting like that.

To an extent I think its pretty unavoidable that renting in desirable neighbourhoods and particularly nice areas will always be out of reach unless you earn a very high wage. Simply the nature of supply and demand. However it's a real problem when whole regions start to fall into that bracket, and even in the less desirable areas of a city rents are out of reach for large numbers of people with decent jobs.

I think you might be being a little bit optimistic about the cost of buying and owning a house though, even discounting any capital cost considerations, risk, lack of flexibility etc. Houses are expensive to buy and maintain, and I think your maths might be wrong if you think you could get a £500/month mortgage on a 2 bed flat in an area where rents are £1200/month. The only people paying £500/month in that area will be those that bought 10+ years ago when prices were much lower.

Edit: for example, looking at rightmove just now:
Near me you could rent a 2 bed terraced house for around £825/month. To buy a similar house of the same age and style in the same neighbourhood is around £250,000.

Just using the Halifax mortgage calculator for 25 year mortgage with 10% deposit gives a monthly repayment of £981. Add on a minimum of maintenance money and simply comparing mortgage to rent is about 30% more expensive.

Am sure the calculations are a bit different in different parts of the country and it may be possible to get slightly better mortgage deals, but doubt it's massively different.

 

[LuckyBenski]

Yes IMO the entirety of London (I mean literally up to the M25) is now priced like this. And if you can be as fat out as the M25 for London commuting you may as well he another 40 miles out but near a station.

Edit: for example, looking at rightmove just now:
Near me you could rent a 2 bed terraced house for around £825/month. To buy a similar house of the same age and style in the same neighbourhood is around £250,000.

Just using the Halifax mortgage calculator for 25 year mortgage with 10% deposit gives a monthly repayment of £981. Add on a minimum of maintenance money and simply comparing mortgage to rent is about 30% more expensive.

So maybe I'm outside of the norm as I've saved very hard and my situation is this: 61% LTV but I've maxed my borrowing. Buying at ~260k but the borrowing is 160k. Mortgage payment is therefore going to be 510 per month.

I've only been able to save such a deposit because I found very cheap rent and dug my heels in, but I've also been living very frugally for 10 years. Nonetheless this is my real situation: going from a house share/lodger situation to owning, my costs will go down. My income is decent for national averages but not great for London, hence the big focus on deposit over monthly affordability.

 

[GreatAuk]

Yes IMO the entirety of London (I mean literally up to the M25) is now priced like this. And if you can be as fat out as the M25 for London commuting you may as well he another 40 miles out but near a station.


So maybe I'm outside of the norm as I've saved very hard and my situation is this: 61% LTV but I've maxed my borrowing. Buying at ~260k but the borrowing is 160k. Mortgage payment is therefore going to be 510 per month.

I've only been able to save such a deposit because I found very cheap rent and dug my heels in, but I've also been living very frugally for 10 years. Nonetheless this is my real situation: going from a house share/lodger situation to owning, my costs will go down. My income is decent for national averages but not great for London, hence the big focus on deposit over monthly affordability.

Fair enough, in your case your costs would go down, but I think you're in a very unusual situation.

I imagine it's very rare to have enough saved to get 61% LTV while also having such large loans that you can't get a mortgage. Am guessing you could have been an international student paying student fees via a loan maybe? Not sure what else would give you such a big loan other than a house!

In your case it's more down to your individual risk as a borrower than the wider market I think.

 

[LuckyBenski]

I'm not entirely sure what you mean - I have maxed out my borrowing at the standard limit of 4.5x my salary, it's just not that big a salary No loans or responsibilities other than normal student loan which doesn't really affect anything. Individual risk is what I hate - I'm capable of affording a lot more than banks will lend but the "average" borrower spoils it for me.

I'm definitely not the average buyer - but I've also achieved it all myself with no clever tricks or help, or even that much luck. Just got lucky finding cheap rent (with the drawback of being pretty unhappy living here...).

Still - on the budget I have, it was 2 bed leasehold in London or move 60 miles out for a 3 bed the same price.

 

[GreatAuk]

I'm not entirely sure what you mean - I have maxed out my borrowing at the standard limit of 4.5x my salary, it's just not that big a salary No loans or responsibilities other than normal student loan which doesn't really affect anything. Individual risk is what I hate - I'm capable of affording a lot more than banks will lend but the "average" borrower spoils it for me.

I'm definitely not the average buyer - but I've also achieved it all myself with no clever tricks or help, or even that much luck. Just got lucky finding cheap rent (with the drawback of being pretty unhappy living here...).

Still - on the budget I have, it was 2 bed leasehold in London or move 60 miles out for a 3 bed the same price.

Ah OK, sorry thought you meant you had a large loan already which meant the banks wouldn't offer you a mortgage of any size, didn't think about the salary to mortgage ratio being the limit. I'm not quite sure you're comparing apples to apples though, renting in an area with £260k 2 bed flats for £1300/month sounds like a much higher rental cost to house price ratio than I'm used to in my area? And is your 600/month house share in the same area as you could get a £260k 2 bed flat? I was paying 600/month for a grebby house share in a rather more expensive area a few years back for a short period.

I appreciate the bind you're in though, that sucks you're unable to get a mortgage to buy your own place even with a massive deposit and clear ability to save and manage money well.

 

[jonneymendoza]

FYI my parents were working as a nurse and security guard and they bought and upgraded houses 3x.

In London as well whilst us lot are struggling

 

[the_worrier]

I sold up a year ago and moved in to a rented place in the same town whilst we waited for our youngest to go off to uni. Sep 21 he went and we moved from the West Mids to Devon with my job. Work now want me back in the West Mids so I am looking to buy again. With a £225K cash deposit I find nothing much available and anything remotely contemporary-looking has so many competing over it. People (me included to a greater extent) don’t seem to want to have to do much work.

 

[bayo000]

Nearly 42, bought my first property at 34 after years of looking, I'm very fussy when it comes to properties. Put it on the market late 2019, first buyer pulled out at the start of the pandemic but eventually sold Sep 20 and we bought our current house, which should be our "forever house".

 

[ozaudio]

i dont own, i had plans to buy after saving up for several years. seems now even my deposit wont buy anything more than an ex council house thats had a nice kitchen and bathroom fitted. on that basis i think why dont i just buy myn from the housing company i rent from and build an extension. after seeing the house across the road from me and how these houses can be transformed into something decent looking after him doing an extension and all rendered. and the best thing is i could do most of this using the money ive saved up now and only need to borrow a small amount of cash

 

[LuckyBenski]

i dont own, i had plans to buy after saving up for several years. seems now even my deposit wont buy anything more than an ex council house thats had a nice kitchen and bathroom fitted. on that basis i think why dont i just buy myn from the housing company i rent from and build an extension. after seeing the house across the road from me and how these houses can be transformed into something decent looking after him doing an extension and all rendered. and the best thing is i could do most of this using the money ive saved up now and only need to borrow a small amount of cash

To be honest that could be pretty ideal - You already live there, know the house and the commute and the area. Ownership isn't my priority, it's just feeling able to settle somewhere for a few years without worrying about the next rental. You've got that sorted if you can buy your current home.

 

[EGuitarStar]

I own but mainly because renting just became too expensive and our mortgage is less than we paid out in rent each month.

Me and my partner lived together in a tiny London (Streatham Hill) studio for 7 years and saved for a deposit after noticing that renting a nice property just wasn't feasible due to the rental price.

We purchased an end of terrace, 3 bed with garden at the end of 2019, we moved from Zone 3 in London to Zone 6 on the outskirts of London, this was due to what we could afford.

We now prefer our new location despite not having all the amenities that were at our doorstep in Streatham Hill. Getting into London Victoria is about 40 mins from our front door and taking a fast train.

Ideally, if rent prices were competitive and reasonable then I'd likely continue renting and save for our pension.

 

[GIBURROWS]

I don't own a property and never will, seems a massive burden and a waste to me.

 

[BongoHunter]

I don't own a property and never will, seems a massive burden and a waste to me.

You've got to live somewhere though - owning makes more sense financialy, and as discussed above - rent is often more expensive than a mortgage

 

[Bunko]

I've been on the fun path of saving towards a deposit. My rent has recently gone up 8% and I'd just like to finally be out and paying towards my own home.

I have no idea how much to save up before starting to look or speak to an advisor. Obviously the more the better but if I could get away with a 5% deposit (what I have saved up so far for the price of house I want as a first home) would it make more sense to go in now or stay put and grind out another year to have saved a 10-15% deposit?

I get so much conflicting opinion on the matter it makes me feel like I'll never own my own property.

 

[BongoHunter]

I've been on the fun path of saving towards a deposit. My rent has recently gone up 8% and I'd just like to finally be out and paying towards my own home.

I have no idea how much to save up before starting to look or speak to an advisor. Obviously the more the better but if I could get away with a 5% deposit (what I have saved up so far for the price of house I want as a first home) would it make more sense to go in now or stay put and grind out another year to have saved a 10-15% deposit?

I get so much conflicting opinion on the matter it makes me feel like I'll never own my own property.

Are you buying on your own or with someone else?

 

[Puzzled]

I don't own a property and never will, seems a massive burden and a waste to me.

What do you plan to do when you retire? A pension pot large enough to cover ever increasing rents is quite some ask. I guess you don't get some of the unexpected maintenance costs of home ownership but you might get a couple of unexpected moving costs due to the insecurity of renting.

 

[Bunko]

Are you buying on your own or with someone else?

I will be buying on my own.

 

[radderfire]

I have no idea how much to save up before starting to look or speak to an advisor. Obviously the more the better but if I could get away with a 5% deposit (what I have saved up so far for the price of house I want as a first home) would it make more sense to go in now or stay put and grind out another year to have saved a 10-15% deposit?

In general I would say try and buy as soon as you can afford (and continue to afford) somewhere where you would be happy living. Owning a property puts you in a better situation financially, so it's best to get started as soon as possible. Over time, house prices generally continue to go up. Check your potential mortgage contract beforehand for details of how much you can overpay. Also, check the contract for costs if you wanted to move house. Not all mortgage contracts are the same.

 

[BongoHunter]

I will be buying on my own.

That will be tough without someone to garentee it like parents or someone. Banks are more reluctant to lend to people trying to do it solo without a bigger deposit or a lower multiple on earnings to lending in my experience at least

 

[Bunko]

Cheers guys, exactly what I mean about contrasting opinions though. I guess in reality no-one can give an answer besides the lender but it's a bit demoralising and makes you think what's the point when you read the above. I do not like where I live now and in reality don't want to move again until I move out for good into my own home but that may have to change if I'm stuck saving for another 12-18 months.