Wasting My Your Years Renting? Is Share a Mortgage the solution?
London Grammar might have meant something else when they spoke of wasting their young years, but it is interesting to think how true this could be when thinking about the years renting. The London Grammar analogy may have more meaning than we appreciate.
It is too often the case that Londoners start to rent because they can’t afford to buy a property; however they often fool themselves that they will save for a deposit to buy while renting. Year after year passes and unless you meet someone to share the cost of buying with, you end up caught living to pay your rent and life stands still.
If this has meaning to you, why not join Share a Mortgage? Call 0207 112 5388 for more details.
Wasting my young years and wasting £1,000’s in rent
The average rent being asked in London is around the £1,200 mark for a 1 bedroom flat and 2 bedrooms go up to £1,605 [Gumtree 2014, all figures has greatly increased since then]. For a single person renting a flat on their own, they could be paying:
Per Year
Rent £14,400
Council Tax £2,500
Utilities; Gas, electrics £800
Insurances & Tv licence £400
Total £18,100
With outgoings of £18,100 just on living in a rented flat, saving enough money to buy your own home is becoming harder. In fact a study by Nutmeg stated that the average age of a first time buyer in London was 52 in 2013.
Is Buying still out of reach?
With the average house price reaching £250,000 (Jan 2014), having enough deposit to buy a property is out of reach for most people. According to the Daily Mail, it costs 9 times your salary to buy a home and when mortgage lenders normally only granting a maximum multiplier of 4 - 5 times annual earnings, this means you won’t be able to buy on your own.
Share a Mortgage; share the cost of buying
Co-buying is soaring in popularity, with dozens of mortgage lenders offering various Friend Group mortgage deals, allowing you to use the income of up to three friends in order to boost borrowing capacity. Barclays Bank has even marketed this as an option for affordability.
A joint mortgage means you are both/all responsible for mortgage repayments - if any of you is unable to pay their share of the mortgage, the payments still have to be made by the remaining joint owners.
The Joint Owners will all be registered as owners, tenants in common, and the shares of the property stated in a legal document call a Deed of Trust. You should also make sure you have a cohabitation agreement to set out how to lease, what happens to your possessions and other legal points when living together.
Share the cost of living with Share a Mortgage
When you buy a property with a mortgage you will have to pay:
|
Who to pay |
Cost Per Year (Estimates) |
|
1. Mortgage Repayment |
£13,200 |
|
2. Council Tax |
£1,600 |
|
2. Electricity |
£400 |
|
3. Gas |
£400 |
|
4. Water Rates |
£200 |
|
5. Building/Contents Insurance |
£500 |
|
6. TV Licence |
£120 |
|
7. Telephone/Broadband |
£100 |
|
8. Sky |
£480 |
|
|
|
|
Estimated Total |
£17,000 |
These numbers are estimates, but as an indication, the cost of living in a flat is £17,000. If you bought with 2 other people, this cost is shared between you meaning you actually end up paying £5,667 and get the benefit of being on the property ladder.
Want to club together and stop wasting your young years? Share a Mortgage can help
Share a Mortgage is a community of people looking to partner up with lime-minded homebuyers to buy a property together. Whether you buy as friends, family or with a Mortgage Buddy you met through Share a Mortgage, you will get expert support with independent mortgage advisers, RICS Property Surveyors and Conveyancing Solicitors.
You will also be offered Shared Ownership Protection that centres on a Declaration of Trust,a Cohabitation Agreement, an Inventory listing for personal possessions, a dispute resolution procedure and Exit Help for when you want to leave or sell.
