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Buying a flat whilst at uni - possible? watch

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    (Original post by Lady Edith)
    Hi all, here's the situation:
    • I'm mature student, starting a 4 year degree (1 year abroad) at a London university next year
    • I have £20k in the bank
    • I will be entitled to the full government maintenance loan (after living costs, that is about £7000 for accommodation pa)
    • I have no income
    Instead of using my maintenance loan to rent a shoebox, could I buy a flat and use the maintenance loan to pay the mortgage (I assume it would be cheaper?). I don't really care where I live in London as long as it is reasonably quiet, no more than 40 mins from Euston and somewhere easy to rent (I'd need to rent it whilst I was on my year abroad).

    Am I being realistic? Is this even possible? Is £20k a sufficient deposit for a flat?
    Unfortunately a bank is very unlikely to give you a mortgage based only on a student loan with no guarentee of employment post-uni. £20K is a very good deposite though, so if you manage to at least keep that as savings you should have a good chance if you can get a good job after graduating We're talking £45K salaries just for a mortgage on a £200K flat though, maybe a little less if your deposit is big enough.
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    (Original post by Lady Edith)
    Hi all, here's the situation:
    • I'm mature student, starting a 4 year degree (1 year abroad) at a London university next year
    • I have £20k in the bank
    • I will be entitled to the full government maintenance loan (after living costs, that is about £7000 for accommodation pa)
    • I have no income
    Instead of using my maintenance loan to rent a shoebox, could I buy a flat and use the maintenance loan to pay the mortgage (I assume it would be cheaper?). I don't really care where I live in London as long as it is reasonably quiet, no more than 40 mins from Euston and somewhere easy to rent (I'd need to rent it whilst I was on my year abroad).

    Am I being realistic? Is this even possible? Is £20k a sufficient deposit for a flat?
    I don't think you should do this, unless you know that you'll be in employment almost immediately after you graduate/you can access other funds to pay the mortgage. Anyway, I doubt a bank would approve a mortgage, considering that you have no income.

    But not to despair, 20k is a good place to start after you graduate and enter employment.
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    (Original post by Lady Edith)
    Hi all, here's the situation:
    • I'm mature student, starting a 4 year degree (1 year abroad) at a London university next year
    • I have £20k in the bank
    • I will be entitled to the full government maintenance loan (after living costs, that is about £7000 for accommodation pa)
    • I have no income
    Instead of using my maintenance loan to rent a shoebox, could I buy a flat and use the maintenance loan to pay the mortgage (I assume it would be cheaper?). I don't really care where I live in London as long as it is reasonably quiet, no more than 40 mins from Euston and somewhere easy to rent (I'd need to rent it whilst I was on my year abroad).

    Am I being realistic? Is this even possible? Is £20k a sufficient deposit for a flat?
    If you have salary/income/job or passive income whilst being a student see a mortgage adviser.. perhaps you had a job b4 uni ( as you are mature student), surely this would have been ideal to look and see if you could get a mortgage as generally:

    It is Deposit + (4-5x income assuming a good credit score), would determine how much roughly you can borrow...
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    (Original post by Lady Edith)
    Hi all, here's the situation:
    • I'm mature student, starting a 4 year degree (1 year abroad) at a London university next year
    • I have £20k in the bank
    • I will be entitled to the full government maintenance loan (after living costs, that is about £7000 for accommodation pa)
    • I have no income
    Instead of using my maintenance loan to rent a shoebox, could I buy a flat and use the maintenance loan to pay the mortgage (I assume it would be cheaper?). I don't really care where I live in London as long as it is reasonably quiet, no more than 40 mins from Euston and somewhere easy to rent (I'd need to rent it whilst I was on my year abroad).

    Am I being realistic? Is this even possible? Is £20k a sufficient deposit for a flat?
    Extremely unlikely.

    Banks won't want to lend to someone without full time employment. £20k isn't a large enough amount to cover deposit & fees for a property in London.

    You say you don't want to rent.. however what happens if you buy a place and the boiler breaks? Or the roof starts leaking? Or you move in and discover the whole place needs to be re-wired?
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    (Original post by Lady Edith)
    Hi all, here's the situation:
    • I'm mature student, starting a 4 year degree (1 year abroad) at a London university next year
    • I have £20k in the bank
    • I will be entitled to the full government maintenance loan (after living costs, that is about £7000 for accommodation pa)
    • I have no income
    Instead of using my maintenance loan to rent a shoebox, could I buy a flat and use the maintenance loan to pay the mortgage (I assume it would be cheaper?). I don't really care where I live in London as long as it is reasonably quiet, no more than 40 mins from Euston and somewhere easy to rent (I'd need to rent it whilst I was on my year abroad).

    Am I being realistic? Is this even possible? Is £20k a sufficient deposit for a flat?
    When I was at uni in London, my friends and I talked about clubbing together to buy a cheap flat or house. It was possible, even on tiny part time wages and I wish we had made more effort to make it happen now. I would only do it in a major city where the property market is guaranteed for an easy sale in a few years when you're finished.
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    (Original post by Captain Jack)
    When I was at uni in London, my friends and I talked about clubbing together to buy a cheap flat or house. It was possible, even on tiny part time wages and I wish we had made more effort to make it happen now. I would only do it in a major city where the property market is guaranteed for an easy sale in a few years when you're finished.
    There's the key word

    New lending criteria in the past 2 years have pretty much eliminated any chance of this happening now. The MSE mortgage forum is full of people struggling to fulfil lender's criteria even with 2x full-time jobs.
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    (Original post by Reue)
    There's the key word

    New lending criteria in the past 2 years have pretty much eliminated any chance of this happening now. The MSE mortgage forum is full of people struggling to fulfil lender's criteria even with 2x full-time jobs.
    I reckon a group of three - four people could still collectively do this in parts of London on a part time job and a small deposit each.
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    (Original post by Captain Jack)
    I reckon a group of three - four people could still collectively do this in parts of London on a part time job and a small deposit each.
    I agree here, especially if each person contributes to the deposit, if they all live together, all the incomes combined should count as the household income
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    Maybe 10 years ago but banks have to be really strict with their new lending criteria. They ask you to give your future potential "life story" which is where you would probably fail.
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    Living in a hostel is the cheapest although most times you have to share with strangers
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    (Original post by Lady Edith)
    Drat, that is a shame. Maybe somewhere outside of London then? I thought £20k was a pretty good deposit.



    Nop, never had a job (long story), but I'm only 25.



    All good points, but I've had a look at what I could rent on my budget and the places scare me so much. Most are miles and miles from the university, and so small I could touch all the walls at the same time. It just seems such a waste of money.



    My worst nightmare.
    Do your parents/ siblings have jobs, why not buy with them if u have a deposit and they have the salary it could be a neat mortgage arrangement with you paying the mortgage and save on rent, if you think rent is too expensive...
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    (Original post by Lady Edith)
    Drat, that is a shame. Maybe somewhere outside of London then? I thought £20k was a pretty good deposit.
    As others have said, the bank is likely to be your biggest obstacle... and the London / Southern housing market. At £7k a year, that is just shy of £600 a month for a mortgage of about £120k to buy a house / flat of £140k. I believe you might just about be able to afford a garage in London for that.

    You could buy a canal barge but you would then be at the mercy of the canal maffia and the rules governing moving your boat on every 2 weeks etc.

    Good luck!
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    (Original post by Lady Edith)
    Drat, that is a shame. Maybe somewhere outside of London then? I thought £20k was a pretty good deposit.



    Nop, never had a job (long story), but I'm only 25.



    All good points, but I've had a look at what I could rent on my budget and the places scare me so much. Most are miles and miles from the university, and so small I could touch all the walls at the same time. It just seems such a waste of money.



    My worst nightmare.
    It's not the deposit which is as problematic as your lack of income and the state of the housing market (terrible for first-time buyers).
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    (Original post by Saoirse:3)
    It's not the deposit which is as problematic as your lack of income and the state of the housing market (terrible for first-time buyers).
    Why not try to get a job in order to improve your income OP? As you can get a mortgage with a salary and you have a good deposit! Otherwise it is renting...
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    You could try living in plumstead in London the rents cheap there and the house prices are really good there
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    (Original post by ebam_uk)
    Why not try to get a job in order to improve your income OP? As you can get a mortgage with a salary and you have a good deposit! Otherwise it is renting...
    What kind of salary do you actualy think you need to buy in London?
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    (Original post by Saoirse:3)
    What kind of salary do you actually think you need to buy in London?
    You need a starter property and generally they could easily range between 100k - 200k. Let's take 150k for a property price ( bare in mind thats if there any studio/1 or 2 bed flats mortgage-able condition to buy left for this price) as prices have gotten so expensive so 20k deposit means 130k left to get a mortgage on...

    Typically lenders, lend on the basis of 4 - 5x income multiples...

    Assuming 5 x (130,000/5) = £26,000 per annum. Assuming you are getting some income (7k from student loans / grants or benefits)... then 26k -7k = 19k

    £20,000 per year should be absolute least to obtain to be a position to buy.... But obviously there are ways around this for example if you bought with another person etc etc ie if two people had income of 25k with good credit scores & further deposit, it increases the chances of being able to secure a higher priced property..
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    (Original post by ebam_uk)
    You need a starter property and generally they could easily range between 100k - 200k. Let's take 150k for a property price ( bare in mind thats if there any studio/1 or 2 bed flats mortgage-able condition to buy left for this price) as prices have gotten so expensive so 20k deposit means 130k left to get a mortgage on...

    Typically lenders, lend on the basis of 4 - 5x income multiples...

    Assuming 5 x (130,000/5) = £26,000 per annum. Assuming you are getting some income (7k from student loans / grants or benefits)... then 26k -7k = 19k

    £20,000 per year should be absolute least to obtain to be a position to buy.... But obviously there are ways around this for example if you bought with another person etc etc ie if two people had income of 25k with good credit scores & further deposit, it increases the chances of being able to secure a higher priced property..
    Indeed, and that's with a VERY generously low price on the house. I don't know many part-time student jobs paying £20K...
 
 
 

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