Q I’m almost 26 and have lived at home my whole life, just outside the M25. I am a tailor, I didn’t go to university – so have no student debt – and I have worked since I was 13 in various jobs.
Both my sisters have moved out to study or live with partners, so I am feeling more and more like I need to leave and live my life on my own terms, and all the other things that being in your own space allows. Tailors don’t earn a lot of money, I’m on £26,000 now, which I hope to negotiate this year up to £28,000 to £30,000. I don’t live lavishly and living at home has allowed me to save a deposit of about £60,000.
I want to buy a flat in London to be closer to work, friends and everything else. Renting isn’t something I feel is an option. My salary is fairly low but stable. If I move and the landlord decides to hike the rent I would not have any option but to move back home.
I’ve looked into joint borrower sole proprietor mortgages but am limited by the mortgage term being age-dependent as my mum is almost 63, shortening the loan term and making it unaffordable. No lender would go much beyond £80,000 on my salary alone. My parents don’t want to use their house as security to my mortgage as they near retirement, and could help me with perhaps a couple of thousand pounds towards the deposit, but not more.
I suspect there isn’t a magic bullet, and I’m trapped as many people in my situation are. I’ve spoken to a broker and he says basically it’s a no unless I make more money.
It all feels a little futile. I’ve done all the right things – worked, not got into debt, saved as much as I could. But now I can’t afford to move out into the local area as it’s much too expensive and I can’t afford to move to the city either.
NC
A You suspect correctly: there is no magic bullet. But there are options. You are right that your mother’s age is a stumbling block when it comes to getting a joint borrower sole proprietor mortgage with quite a lot of lenders but before you rule out this type of loan altogether, I think you should try out this tool on onlinemortgageadvisor.co.uk. The fact that you can put down a deposit of £60,000 will certainly work in your favour as “putting down a big deposit usually gets you access to more deals”, according to the site’s Pete Mugleston.
He says that on any residential mortgage, most lenders allow you to borrow four and a half times your income. So that would mean that with your £60,000 deposit and a mortgage of £135,000 – based on earnings of £30,000 – you could afford to buy a flat costing £195,000. However, if that is not enough and you are not able to go down the joint borrower sole proprietor mortgage route, you may want to investigate part-rent, part-buy shared ownership schemes such as the one run by the housing provider Peabody.