Buying a first home,

Soldato
Joined
22 Jun 2006
Posts
2,971
Location
Swindon
Yeah, completely agree with you. Those schemes are definitely preferrential to 50% ownership schemes. The trouble is, though, that in Swindon the newer properties go for in excess of his budget... areas like Priory Vale are out of his league, unfortunately, with only a £20K salary & £1K deposit. With that kinda money, he's gonna be looking at older properties, where you can't get such deals :(


edit: andy2k, if you're not worried about status symbols, how's about this nice trailer-park in Latton? http://www.rightmove.co.uk/viewdetails-11027735.rsp?pa_n=8&tr_t=buy :eek:
 
Man of Honour
Joined
11 Mar 2004
Posts
76,634
GarethDW said:
edit: andy2k, if you're not worried about status symbols, how's about this nice trailer-park in Latton? http://www.rightmove.co.uk/viewdetails-11027735.rsp?pa_n=8&tr_t=buy :eek:

http://property.thisisbristol.co.uk/homes/search_list_homes.asp?cat=1&max=120000

eitehr you live in a less desirable area for a year or two, start paying you mortgage and wait for a few pay increase before moving some where better.
Or you can save like you have never saved before, someone at work has managed to save £30k in 3 years and where on £16k basic. By living with his parents, doing every piece of overtime and not spending anything.
 
Last edited:
Man of Honour
Joined
11 Mar 2004
Posts
76,634
Triad2000 said:
They need to get that 30k into property fast as they will never make as much just leaving it in the bank.


he's looking at the moment. But it means he can get a 140k mortgage on are salary. Although he doesn't want to get more than 120k
 
Soldato
Joined
18 Oct 2002
Posts
12,645
Dolph said:
I'd be very, very surprised if anyone would lend you anything approaching £100k on that salary (5x multiplier), the figures don't add up. (Abbey do a 5x multiplier but you have to have a household income in excess of £50k to have it).

£20k will give you a takehome somewhere in the region of £1200-1300 a month after tax, and £100k on a mortgage (the £1000 savings will be gone in fees without any problems) will be around £550-600 a month, plus associated insurance policies and all the other expenses (bills, maintaince etc)

Without a second income in the household I'd say you're going to be out of luck buying at the moment. Any interest rate rise is going to be seriously close to crippling.

Dolph - If he's near london, people offer scary multiplyers, I was told that on my salary that ive just been offered that id easily get over 200k, trust me, I WISH it was 3x, in reality, thats nearer 6x my salary.. which in honesty is total insanity.... hence me taking the option of a 2bed house in swindon for 120k ish, and a 1 hour 30 door to door commute, much better imo...
 
Caporegime
Joined
7 Mar 2003
Posts
28,189
Location
Krispy Kreme drive thru
Triad2000 said:
Not sure what the best answer is. With renting you may as well withdrawl the money from the cash machine and burn it.

rubbish, if you get a nice place for less that you were planning on spending on a mortgage (+ other costs) for a short period then you shouldnt be too worried.
Renting for a long period (over 2 years imo) is when it starts to be silly, but then, a place to buy where you are renting may well be well out of your price range, except for crappy houses in crappy areas.
 
Soldato
Joined
22 Jun 2006
Posts
2,971
Location
Swindon
Plus, the £1K he's got saved-up isn't going to be enough to pay for the legal fees, surveyor's charges, etc... so those are gonna have to be included in the mortgage.

Places like Northern Rock are good for lending over 100% of the purchase price - I believe they offered us up to 125% when I was looking 3 years ago. That way, you can factor in the charges to your monthly repayments. The only downside is that you'll be tied to that provider for 3 or possibly 5 years, with a hefty redemption fee if you want to switch to a better deal before the time's up.
 
Soldato
Joined
18 Oct 2002
Posts
12,645
Morba said:
rubbish, if you get a nice place for less that you were planning on spending on a mortgage (+ other costs) for a short period then you shouldnt be too worried.
Renting for a long period (over 2 years imo) is when it starts to be silly, but then, a place to buy where you are renting may well be well out of your price range, except for crappy houses in crappy areas.

I guess it depends on the situ... in my short term situ for example

Im currently 'renting' in chelsea in london, 600 pcm, for a 1 bed apartment, which is also for sale, 395k....

now, I'd never spend 400k on a small place like this right next to a main road back in cheltenham, and christ, id never pay 600 quid a week for the privledge. however, in this short term situ (3 months) there was no way Its worth considering buying. (I put 'renting' as I am not actually picking up the tab)

However, say it had been a year, id of considered buying somewhere just because people seem to be making disgusting returns even over a year. one bloke in the office just sold his 2 bed house in ely, cambridgeshire for 20k more than he paid last year. absolute insanity.
 
Associate
Joined
29 Sep 2006
Posts
528
andy2k said:
Are house prices likely to drop at any point in the next 3 years or so?
The £64 billion question (or several £billion, at least). ;)

Anyone proclaiming to know the answer to that question with any certainty is an idiot or a liar.
 
Caporegime
Joined
7 Mar 2003
Posts
28,189
Location
Krispy Kreme drive thru
Conanius said:
I guess it depends on the situ... in my short term situ for example

Im currently 'renting' in chelsea in london, 600 pcm, for a 1 bed apartment, which is also for sale, 395k....

now, I'd never spend 400k on a small place like this right next to a main road back in cheltenham, and christ, id never pay 600 quid a week for the privledge. however, in this short term situ (3 months) there was no way Its worth considering buying. (I put 'renting' as I am not actually picking up the tab)

However, say it had been a year, id of considered buying somewhere just because people seem to be making disgusting returns even over a year. one bloke in the office just sold his 2 bed house in ely, cambridgeshire for 20k more than he paid last year. absolute insanity.

very true, it annoys me to hell to be paying £1k a month for this place, especially as it was valued last weekend only at £220k (which amazed me, i told the valuer if the owner wants to sell then see me first!), but its one of those things that has to be done for now.
If i could assure myself that I could manage a £250k mortgage, then i would just back on the property ladder. Its more a case of me not wanting to live in a crap area and also not wanting less than a 3 bed (2 beds give nowhere near enough floorspace for a growing family!).
 
Soldato
Joined
23 Feb 2004
Posts
6,941
Location
Edinburgh
The best thing for you to do, would be to book an appointment with a mortgage/financial adviser at your bank and ask them. They should have answers to most of your questions. I'd also recommend looking at property prices, and deciding what would be the minimum price, based on what is available, you'd be happy with.
 
Soldato
Joined
2 Jan 2005
Posts
8,429
Location
leeds
if you can't afford it, and you can't, then rent. Those people who say renting is dead money are wrong - you can rent a much better place than you could ever afford and you don't have to pay for maintenence. If you lose your job the gov pays your rent for you aswell.
imo anybody who buys at the moment is insane.
 
Soldato
Joined
17 Aug 2004
Posts
3,511
Location
Houston, TX
I've just bought my first place on a part repayment part intrest only scheme, which keeps the monthley payments down considerably, then when my 2 year fixed rate is up they'll do a re-jig and convert it to a 40yr repayment, hopefully by then i'll be earning more.

But then again i did get a lot of parental help including guarantor and a deposit, without that i would've been absolutely screwed, especially in London.

My advice is to build up more than 1k, i spent twice that much on solicitors and bank fee's. Including stamp duty i think i spent about 4k.
 
Soldato
Joined
22 Jun 2006
Posts
2,971
Location
Swindon
aardvark said:
if you can't afford it, and you can't, then rent. Those people who say renting is dead money are wrong - you can rent a much better place than you could ever afford and you don't have to pay for maintenence. If you lose your job the gov pays your rent for you aswell.
imo anybody who buys at the moment is insane.
See, that's what everybody told us 3 years ago... that we must be insane because the crash is just about to happen, and that the current prices can't be sustained, and we'd be better off renting and then buying when everyone gets stung. Glad we didn't listen to them.

We got on the property market late compared to friends, partly because we were living abroad when the prices were really rocketing. However, in the past 3 years, we've been constantly paying off the mortgage, and the house has risen in value by about £15K too. Admittedly, it's small fry compared to the increases seen 4 or 5 years ago, but it's still better for us as a homeowner than it would be if we were just tenants renting someone's house.

Even if there is a crash in the housing market, as long as you view your investment in the long term, you're not going to be affected by it. Negative equity is a problem if you have to sell your house, but if you can ride out the storm, then it's not really a problem. House prices - in the long-term - rise in value, irrespective of any short-term decrease.

This doesn't really apply for buy-to-let purchases... not sure I'd recommend buying somewhere at the moment to simply let it out, unless it was a dump at a knockdown price that you're prepared/able to renovate.
 

Jez

Jez

Caporegime
Joined
18 Oct 2002
Posts
33,073
Dolph said:
I'd be very, very surprised if anyone would lend you anything approaching £100k on that salary (5x multiplier), the figures don't add up. (Abbey do a 5x multiplier but you have to have a household income in excess of £50k to have it).

£20k will give you a takehome somewhere in the region of £1200-1300 a month after tax, and £100k on a mortgage (the £1000 savings will be gone in fees without any problems) will be around £550-600 a month, plus associated insurance policies and all the other expenses (bills, maintaince etc)

Without a second income in the household I'd say you're going to be out of luck buying at the moment. Any interest rate rise is going to be seriously close to crippling.

Not strictly true, he just needs to shop around. I only have a declared income of around what he is on and i have been offered £104,000 with direct line and natwest, i do have a larger than normal deposit though which they seemed to like. Repayments are less than £700per month on a standard term. Where he will fall down is the deposit though as you have said, generally i am getting tyhe indication that including legal fees im going to be down a grand or so at least before i have started, so he effectively has none. Its really not the income that is the problem (first national will lend 7x), its the deposit.
 
Soldato
Joined
15 Sep 2003
Posts
9,454
aardvark said:
Those people who say renting is dead money are wrong - you can rent a much better place than you could ever afford

I pay 220 pounds per month less for my flat than what I would have if I rented it. So I've gained money on the flat value (10k currently) and i'm saving 220 pounds per month. It was a no brainer for me to buy.
 

Bes

Bes

Soldato
Joined
18 Oct 2002
Posts
7,318
Location
Melbourne
There is some stupid and potentially dangerous advice in this thread- this gem being my favourite

They need to get that 30k into property fast as they will never make as much just leaving it in the bank.

Why?

With interest rates rising, some good deals around on savings accounts at the moment, and the current state of the housing market, 30K won't get you far and in my mind a range of high interest savings, and ISAs is a very viable alternative at the moment.

Renting is not the equivelent of burning money either... What is the equivelent of burning money is taking out a 100% (or more) mortgage on a shoebox in some chav-hole. You have to pay buildings insurance, stomach several thousand pounds in searches, surveys, solicitor fees, stamp duty (potentially), etc and then hope the market isn't topping out round about now, leaving you in some horrible negative equity situation- especially as what I imagine the OP would buy (a flat in a development) will be the type of property that is hit the hardest when deflation occurs in the housing market. Why is this? It's because this is exactly the type of property a lot of BTL LL's purchase on mortgages, and as interest rates continue to rise, these LL's will sell their BTLs due to low rental yeilds and cause a glut of these types of property on the market.
 
Back
Top Bottom