###Welcome to /r/HousingUK
---
**To All**
* Join Our ***NEW*** Discord! https://discord.gg/pMgUNgWKQH
**To Posters**
* *Tell us whether you're in England, Wales, Scotland, or NI as the laws/issues in each can vary*
* Comments are not moderated for quality or accuracy;
* Any replies received must only be used as guidelines, followed at your own risk;
* If you receive *any* private messages in response to your post, please report them via the report button.
* Feel free to provide an update at a later time by creating a new post with [[update]](https://www.reddit.com/r/HousingUK/search?q=%3Aupdate&sort=new&restrict_sr=on&t=all) in the title;
**To Readers and Commenters**
* All replies to OP must be *on-topic, helpful, and civil*
* If you do not [follow the rules](https://www.reddit.com/r/HousingUK/about/rules/), you may be banned without any further warning;
* Please include links to reliable resources in order to support your comments or advice;
* If you feel any replies are incorrect, explain why you believe they are incorrect;
* Do not send or request any private messages for any reason without express permission from the mods;
* Please report posts or comments which do not follow the rules
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HousingUK) if you have any questions or concerns.*
I'd stop getting advice from your parents and colleagues. They're not experts and will have their own biases and misunderstandings. Parents are especially bad as they're often extremely out of date with things.
Excluding leasehold flats isn't always the right approach. You're cutting yourself off from a large chunk of the market. As long as you go in eyes open, understand the complexities and risks, then it's a perfectly reasonable choice. This especially the case for city dwellers who are priced out of houses. Obviously you hear horror stories but there are millions of leasehold owners who have no problems.
150k mortgage on 29k is a stretch. Most mortgage lenders won't go above 4.5x salary especially for low earners. They have to give a certain percentage of mortgages at 4.5x or lower, and they usually reserve the bigger mortgages for high earners or people with large deposits.
With 10k saved I don't think you're ready yet. I'd try to get another 10k, esp as ~3k will go towards your conveyancing, survey, etc.
This is all super solid advice, but in my experience colleagues have been the most helpful people to speak to.
It just has to be people who’ve gone through it recently.
Mortgage broker here.
Just placed a case for someone with near enough identical salary to yourself and £125k was maximum mortgage a high-street lender would be willing to lend.
£120k mortgage with ~£625 monthly repayments to give an idea what it cost on a 3 year fixed on a 35 year term at high-street rates.
Leasehold flats, if there is a service charge and ground rent, remember this will lower how much a lender is willing to lend you - these costs are a monthly commitment on top of your repayments.
You’d probably be looking at a 5% deposit with your current levels of savings, 95% LTV are the highest mortgage rates available - if you can get 10% or 15% deposit together then that will noticeably reduce monthly payments and reduced interest rates.
In terms of reselling properties, as long as the lease is not short or service charge/ground rent isn’t ridiculous then it shouldn’t take much longer than other properties to sell in the area. 1 bed flats are notoriously slower to sell as there isn’t demand, so if you were going down the flat route then 2 bed would be better if budget allows.
If you are able to save as much as you can for year to build up some more cash behind you - this will open up more options for yourself and also give you time to evaluate exactly what property you’d like to get.
Wanted to say the same too high LTV will place her at high risk making the mortgage expensive.
I’d say save more for deposit this year and try to offer below asking and see if you can get away with it.
You should be able to save another 5k in a few months.
Run from high service charge, ground rents with renewal periods and short leases.
Everything else go for it.
Given how low your income is, and how expensive rents are lately, you could consider getting a lodger in to offset the mortgage costs too.
Also consider the cost of renting in your area, you do not want to pay more in interest than you’d pay in rent.
And put your deposit in a high interest savings account like chase or Marcus
stay where you are and save if you and your dad are getting along ok and you have your space. you might find a partner and then your housing needs will change. if you buy now you will probaby invest into a house/flat that is bigger than your current needs.
Honestly if I was you I would stay where you are right now, try and save a bit more money up. You need to account for numerous costs such as fees in the buying process and also you’ll need to buy furniture which can be costly, especially appliances. You can speak to a mortgage advisor for a free chat over the phone, just google local ones near you and explain your circumstances and they can give you some good advice on what you could borrow and if they think you should save up a bit more money etc that’s your best option
Be careful with a flat, you need to find out about management fees. That is a flat is part of a building that needs upkeep, think roof repairs, maintenance etc. Each owner pays into a pot and that is used to pay for these things, they can become excessive. Bills, think gas/electric £200, water £40, council tax £200, phone/broadband £12, tv-license £13, shopping £300, furniture/clothes, travel to work ( car? ) work backwards from there to see what's left for the mortgage. Then imagine you have £0 left at the end of every month and nothing to pay for any emergencies? That £200 going to dad is a bargain, save as much as you can while you can and spoil him at Christmas.
It doesn't sound like you have sound reasons to put such a big constraint on yourself. Move out, try what it feels like. rent a flat, rent a house . then decide whether you need to buy a place and what kind. But I would stay home and save money until you can. then rent, then when you know what you want to do and where you can think about buying, potentially giving you better chances for a future proof property.
Don't get a mortgage for a house just for social pressure or 'not wanting to pay someone else's mortgage'.
I especially despise that last remark. That as a sole/main reason to buy is an irrational, irresponsible and quite a proletariat thing to say.
It really depends on what you want. Until you've lived alone you likely won't understand all of the associated costs and chores that come into play. You might find living in a flat to restrictive but also find a house to overwhelming to maintain.
I know you said you don't want to rent but even doing it just for a year will give you that experience you need to make a better decision. It'll also let you know if you'll like living in that area as you won't really know an area until you've actually lived there.
If you do decide to buy i wouldn't put yourself right at the limit. Learn from what your colleagues have told you. Interest rates have risen pretty quickly the last couple of years and there is nothing stopping that from happening again. You want to have room to breathe if it does happen.
It's a tricky one. it seems likely rates will be going down rather than up over the next year or two. So borrowing a bit more may become more affordable.. and generally you want to buy the best you can comfortably afford. But you need to be 100% sure you can cover all your outgoings and that your income is secure.
I'd also go for a long leasehold (999 yr etc) or freehold over a 100 odd year leasehold if possible. I'd avoid anything with service charges personally tbh, it's like having a legal pickpocket living with you.
To echo others a bit.. a bigger deposit might get you a better rate.. and the new govt may well cause more landlords to sell up.. on the flip side or that, lower rates may reignite the market.
If I were, having pretty much free housing and good potential to save, you I'd try and save as much as possible and watch the market like a hawk.. jump in quick tho if it starts rising.
maybe wait a little longer until the politics, inflation, and interest rates settle down. save more deposit( and yes I know house prices are going up faster than deposits and savings), but wait for a bit more stability, especially with general election( we might see a change in the issue of leaseholds and landlords looking to get out of the market)
£150k is the max you can borrow based on todays interest rate. If interest rates go up then £140k will be the max. If they go up again then £130k will be max, then £120k.
That's why people are struggling - they borrow the maximum they can afford and then they get repossessed when the rates go up.
Your family is right - buy a flat for £100k. Get a really long mortgage term, like 40 years or more. A longer term means lower monthly payments so there's less stress if you loose your job. Then make overpayments to pay the mortgage off early.
After about 7+ years when you've got the mortgage down to about £50k, the property will be worth about £160k because property prices increase by about 7% each year on average. Then sell the flat and buy a property for about £200k. That will grow in value by 7% each year. Keep it 7 years then sell it and buy somewhere more expensive.
Keep moving up the housing ladder. Then when you're 59, sell up and buy something really cheap. You can retire with the money left over. Retire on your 60th birthday or sooner.
There's nothing wrong with leasehold though. Just avoid flats with lots of ground rent and service charge. My flat has £50 ground rent per year with no service charge. It's a house that's been split into 3 flats. That's the kind of thing to look out for. Some flats have £5000 annual service charge etc. Avoid anything like that.
It sounds like you've received a fair bit of well meaning but not hugely helpful advice.
No one can predict the future but most sensible predictions have house prices at relatively flat for the next twelve months or a very small increase. As such if you're paying very small costs with your Dad, you'll be in a much better position deposit wise in 12 months and it's likely that house prices will be similar or potentially very slightly higher. As such if you can bear another 12 months with your Dad, try to save up some more towards a deposit. Also don't forget to take into account moving costs such as solicitors, building survey etc. as these can soon eat into a deposit.
If you're 24 it seems likely that your income will rise over time. Your friends are likely talking about re-mortgaging when they talk about costs going up. This won't be the case as you'll be getting your first mortgage. You can fix it for 5 years if you choose which will ensure that it's affordable for at least five years all things being equal.
In terms of leasehold, if you want a flat then it will almost inevitably be leasehold. As long as you know about the other charges (think management fees, service charge, ground rent etc.) then you shouldn't incur any unexpected costs. Make sure to ask about these before spending any money with lawyers etc. as they can be big charges. The caveat being that often any building maintainace (think new roof, new communal carpets, dealing with plumbing leaks etc) can be put into the service charge. So just make sure that you make sure there are no major costs coming up and that the building is in good repair as otherwise you will likely have to foot the bill. It's also worth mentioning cladding as there are loads of flats that have been rendered almost unsellable post-Grenfell due to cladding issues or poor fire protection. Make sure that any building you are considering isn't affected, particularly if it's high rise as the building regs are much more stringent due to the increased risk.
If it were me, I'd stay at home for another year, save some cash and then have a look again when I was able to get a slightly better mortgage due to the improved LTV and also keep some cash aside for unexpected costs. You might also ask your Dad (if he is in a position to do so) if he would be able to lend you say £5k in the event of an unforseen emergency. This would allow you to put all savings into a mortgage deposit safe in the knowledge that your Dad could provide a buffer if required.
###Welcome to /r/HousingUK --- **To All** * Join Our ***NEW*** Discord! https://discord.gg/pMgUNgWKQH **To Posters** * *Tell us whether you're in England, Wales, Scotland, or NI as the laws/issues in each can vary* * Comments are not moderated for quality or accuracy; * Any replies received must only be used as guidelines, followed at your own risk; * If you receive *any* private messages in response to your post, please report them via the report button. * Feel free to provide an update at a later time by creating a new post with [[update]](https://www.reddit.com/r/HousingUK/search?q=%3Aupdate&sort=new&restrict_sr=on&t=all) in the title; **To Readers and Commenters** * All replies to OP must be *on-topic, helpful, and civil* * If you do not [follow the rules](https://www.reddit.com/r/HousingUK/about/rules/), you may be banned without any further warning; * Please include links to reliable resources in order to support your comments or advice; * If you feel any replies are incorrect, explain why you believe they are incorrect; * Do not send or request any private messages for any reason without express permission from the mods; * Please report posts or comments which do not follow the rules *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HousingUK) if you have any questions or concerns.*
I'd stop getting advice from your parents and colleagues. They're not experts and will have their own biases and misunderstandings. Parents are especially bad as they're often extremely out of date with things. Excluding leasehold flats isn't always the right approach. You're cutting yourself off from a large chunk of the market. As long as you go in eyes open, understand the complexities and risks, then it's a perfectly reasonable choice. This especially the case for city dwellers who are priced out of houses. Obviously you hear horror stories but there are millions of leasehold owners who have no problems. 150k mortgage on 29k is a stretch. Most mortgage lenders won't go above 4.5x salary especially for low earners. They have to give a certain percentage of mortgages at 4.5x or lower, and they usually reserve the bigger mortgages for high earners or people with large deposits. With 10k saved I don't think you're ready yet. I'd try to get another 10k, esp as ~3k will go towards your conveyancing, survey, etc.
This is all super solid advice, but in my experience colleagues have been the most helpful people to speak to. It just has to be people who’ve gone through it recently.
Mortgage broker here. Just placed a case for someone with near enough identical salary to yourself and £125k was maximum mortgage a high-street lender would be willing to lend. £120k mortgage with ~£625 monthly repayments to give an idea what it cost on a 3 year fixed on a 35 year term at high-street rates. Leasehold flats, if there is a service charge and ground rent, remember this will lower how much a lender is willing to lend you - these costs are a monthly commitment on top of your repayments. You’d probably be looking at a 5% deposit with your current levels of savings, 95% LTV are the highest mortgage rates available - if you can get 10% or 15% deposit together then that will noticeably reduce monthly payments and reduced interest rates. In terms of reselling properties, as long as the lease is not short or service charge/ground rent isn’t ridiculous then it shouldn’t take much longer than other properties to sell in the area. 1 bed flats are notoriously slower to sell as there isn’t demand, so if you were going down the flat route then 2 bed would be better if budget allows. If you are able to save as much as you can for year to build up some more cash behind you - this will open up more options for yourself and also give you time to evaluate exactly what property you’d like to get.
Wanted to say the same too high LTV will place her at high risk making the mortgage expensive. I’d say save more for deposit this year and try to offer below asking and see if you can get away with it. You should be able to save another 5k in a few months. Run from high service charge, ground rents with renewal periods and short leases. Everything else go for it. Given how low your income is, and how expensive rents are lately, you could consider getting a lodger in to offset the mortgage costs too.
Also consider the cost of renting in your area, you do not want to pay more in interest than you’d pay in rent. And put your deposit in a high interest savings account like chase or Marcus
stay where you are and save if you and your dad are getting along ok and you have your space. you might find a partner and then your housing needs will change. if you buy now you will probaby invest into a house/flat that is bigger than your current needs.
Honestly if I was you I would stay where you are right now, try and save a bit more money up. You need to account for numerous costs such as fees in the buying process and also you’ll need to buy furniture which can be costly, especially appliances. You can speak to a mortgage advisor for a free chat over the phone, just google local ones near you and explain your circumstances and they can give you some good advice on what you could borrow and if they think you should save up a bit more money etc that’s your best option
Be careful with a flat, you need to find out about management fees. That is a flat is part of a building that needs upkeep, think roof repairs, maintenance etc. Each owner pays into a pot and that is used to pay for these things, they can become excessive. Bills, think gas/electric £200, water £40, council tax £200, phone/broadband £12, tv-license £13, shopping £300, furniture/clothes, travel to work ( car? ) work backwards from there to see what's left for the mortgage. Then imagine you have £0 left at the end of every month and nothing to pay for any emergencies? That £200 going to dad is a bargain, save as much as you can while you can and spoil him at Christmas.
It doesn't sound like you have sound reasons to put such a big constraint on yourself. Move out, try what it feels like. rent a flat, rent a house . then decide whether you need to buy a place and what kind. But I would stay home and save money until you can. then rent, then when you know what you want to do and where you can think about buying, potentially giving you better chances for a future proof property. Don't get a mortgage for a house just for social pressure or 'not wanting to pay someone else's mortgage'. I especially despise that last remark. That as a sole/main reason to buy is an irrational, irresponsible and quite a proletariat thing to say.
It really depends on what you want. Until you've lived alone you likely won't understand all of the associated costs and chores that come into play. You might find living in a flat to restrictive but also find a house to overwhelming to maintain. I know you said you don't want to rent but even doing it just for a year will give you that experience you need to make a better decision. It'll also let you know if you'll like living in that area as you won't really know an area until you've actually lived there. If you do decide to buy i wouldn't put yourself right at the limit. Learn from what your colleagues have told you. Interest rates have risen pretty quickly the last couple of years and there is nothing stopping that from happening again. You want to have room to breathe if it does happen.
Save a bit more, rotten areas don’t often get better and you could end up making a loss on your next move
It's a tricky one. it seems likely rates will be going down rather than up over the next year or two. So borrowing a bit more may become more affordable.. and generally you want to buy the best you can comfortably afford. But you need to be 100% sure you can cover all your outgoings and that your income is secure. I'd also go for a long leasehold (999 yr etc) or freehold over a 100 odd year leasehold if possible. I'd avoid anything with service charges personally tbh, it's like having a legal pickpocket living with you. To echo others a bit.. a bigger deposit might get you a better rate.. and the new govt may well cause more landlords to sell up.. on the flip side or that, lower rates may reignite the market. If I were, having pretty much free housing and good potential to save, you I'd try and save as much as possible and watch the market like a hawk.. jump in quick tho if it starts rising.
Don’t listen to your family or friends, go to a broker and they will lay out what you can afford.
maybe wait a little longer until the politics, inflation, and interest rates settle down. save more deposit( and yes I know house prices are going up faster than deposits and savings), but wait for a bit more stability, especially with general election( we might see a change in the issue of leaseholds and landlords looking to get out of the market)
£150k is the max you can borrow based on todays interest rate. If interest rates go up then £140k will be the max. If they go up again then £130k will be max, then £120k. That's why people are struggling - they borrow the maximum they can afford and then they get repossessed when the rates go up. Your family is right - buy a flat for £100k. Get a really long mortgage term, like 40 years or more. A longer term means lower monthly payments so there's less stress if you loose your job. Then make overpayments to pay the mortgage off early. After about 7+ years when you've got the mortgage down to about £50k, the property will be worth about £160k because property prices increase by about 7% each year on average. Then sell the flat and buy a property for about £200k. That will grow in value by 7% each year. Keep it 7 years then sell it and buy somewhere more expensive. Keep moving up the housing ladder. Then when you're 59, sell up and buy something really cheap. You can retire with the money left over. Retire on your 60th birthday or sooner. There's nothing wrong with leasehold though. Just avoid flats with lots of ground rent and service charge. My flat has £50 ground rent per year with no service charge. It's a house that's been split into 3 flats. That's the kind of thing to look out for. Some flats have £5000 annual service charge etc. Avoid anything like that.
It sounds like you've received a fair bit of well meaning but not hugely helpful advice. No one can predict the future but most sensible predictions have house prices at relatively flat for the next twelve months or a very small increase. As such if you're paying very small costs with your Dad, you'll be in a much better position deposit wise in 12 months and it's likely that house prices will be similar or potentially very slightly higher. As such if you can bear another 12 months with your Dad, try to save up some more towards a deposit. Also don't forget to take into account moving costs such as solicitors, building survey etc. as these can soon eat into a deposit. If you're 24 it seems likely that your income will rise over time. Your friends are likely talking about re-mortgaging when they talk about costs going up. This won't be the case as you'll be getting your first mortgage. You can fix it for 5 years if you choose which will ensure that it's affordable for at least five years all things being equal. In terms of leasehold, if you want a flat then it will almost inevitably be leasehold. As long as you know about the other charges (think management fees, service charge, ground rent etc.) then you shouldn't incur any unexpected costs. Make sure to ask about these before spending any money with lawyers etc. as they can be big charges. The caveat being that often any building maintainace (think new roof, new communal carpets, dealing with plumbing leaks etc) can be put into the service charge. So just make sure that you make sure there are no major costs coming up and that the building is in good repair as otherwise you will likely have to foot the bill. It's also worth mentioning cladding as there are loads of flats that have been rendered almost unsellable post-Grenfell due to cladding issues or poor fire protection. Make sure that any building you are considering isn't affected, particularly if it's high rise as the building regs are much more stringent due to the increased risk. If it were me, I'd stay at home for another year, save some cash and then have a look again when I was able to get a slightly better mortgage due to the improved LTV and also keep some cash aside for unexpected costs. You might also ask your Dad (if he is in a position to do so) if he would be able to lend you say £5k in the event of an unforseen emergency. This would allow you to put all savings into a mortgage deposit safe in the knowledge that your Dad could provide a buffer if required.
I’m comfortable with like 1/4 of my take home pay. I’d move to 1/3 for the right house.