How to get onto the housing ladder

physichull · 11 Nov 2012 at 08:44

My thoughts, as I am currently in the middle of buying right now.

For a deposit, if its taking you a while to save for your deposit then I would recommend that you save for a 15% deposit. That way the interest rate, if fixed for a few years, is much lower than having a 10% deposit. If it takes you a long time to save for a deposit, then don't bother going for a 20%deposit as the savings on interest rates diminish after 15%.

As for fees, solicitors, including stamp duty for me is around 2.5k. No product fee, 1k cashback, 30 year mortgage. Wont cost me much to move in but I will need to buy a sofa and a bed.

As for student loans, I'm not sure that they do count against your credit rating, if anything it may help you as it shows you can consistently repay a loan. I might be wrong on this though.

In response to those talking about renting vs buying, in many instances, getting a mortgage can be cheaper than paying rent, with the added bonus that you wont be held at gunpoint by a landlord, the property would be yours to do as you wish and you can decorate or update to your own taste. The advantages of buying far outweigh the advantages of renting.

I will add that I was quite surprised to the average first time buyer age of 37. I'd be interested to know what the average age was in the period of boom as opposed to now (bust!).

GhostlyPea · 11 Nov 2012 at 09:00

Buying my first place at the moment. I'm 26 and had to go for a 10% deposit. Not ideal but circumstances dictated that I ha no choice. A friend is doing the same but he has been able to get a 20% deposit and his mortgage payments will b around £100 cheaper a month, if not more. I'm annoyed by this as if I could have then I would have waited for my 20% but not everything is in your control

- GP

alexakasloth · 11 Nov 2012 at 09:26

OpenToSuggestions said:
I may get a credit card with some cashback then .
I have a LLoyds TSB one that I never use, and a Halifax one that has no fees for abroad usage.

Experian have free credit checks (first 30 days free, I cancelled it after a day and still get to access it for the rest of the trial period). It's pretty handy to have a look at and you can download the information to a PDF.

Rotty · 11 Nov 2012 at 12:59

Third Opinion said:
Lets say 200k property.

.

He lives in Stoke, £200k buys you Stoke

seriously though he probably wouldn't be looking at spending that amount, round here £200k buys you a 4/5 bed detached double garage etc

Deleted member 77746 · 11 Nov 2012 at 13:03

Just keep working, paying bills and then they will just accept you as long as you can offord the monthly repayment and have a deposit.

Puzzled · 11 Nov 2012 at 13:24

To the OP

Do you know where you want to live?

I wouldn't even consider buying a property until i'm ready to settle down in a secure relationship, as I don't know where I'm going to end up.

Unless you buy somewhere with a strong rental market then a property could be a real restraint on what jobs you can take / adventures you can go on.

Still a good idea to save though, can't argue with that.

Gribs · 11 Nov 2012 at 13:40

PapaLazaru said:
Which is what most people do in Europe anyway. We are slightly obsessed with buying in the UK. Go to Germany for instance and the vast majority rent all their lives.

They have the benefit of secured tenancies though. Over here it's generally the case that you could be kicked out in a month.

No1newts · 11 Nov 2012 at 13:49

billysielu said:
You pretty much want a 20% deposit to get a decent mortgage rate.

This.

If you aren't fussed about living at home just save the £500 and buy in a couple of years, try putting away extra whenever you get the chance but you'll get there. I saved about £700 a month for 3 year before buying, you'll get there in the end

Deleted member 77746 · 11 Nov 2012 at 14:00

MonkeyMan said:
I wouldn't even consider buying a property until i'm ready to settle down in a secure relationship, as I don't know where I'm going to end up.

Why do people have to be in a relationship to get a mortgage. I'm single and I have one. I put 15% down.

Em3bbs · 11 Nov 2012 at 14:24

PapaLazaru said:
Which is what most people do in Europe anyway. We are slightly obsessed with buying in the UK. Go to Germany for instance and the vast majority rent all their lives.

Having gone through the procedure of buying an apartment in Germany I can see why. The red tape is unbelievable and it literally took about 6 months for me to buy without there being a chain involved.

alx · 11 Nov 2012 at 14:25

PapaLazaru said:
Which is what most people do in Europe anyway. We are slightly obsessed with buying in the UK. Go to Germany for instance and the vast majority rent all their lives.

Isn't the advantage in Germany/Europe is that the rental laws are much more suited to long term renting? Aren't rental agreements up to 5-10 years long and much more notice is needed to be given when landlords want to remove tenants?

I guess people in the UK, especially ones with families, don't like the idea that they could be booted out of their home with just a month or maybe 2 months notice if they rent.

Deep · 11 Nov 2012 at 14:33

Rotty said:
He lives in Stoke, £200k buys you Stoke

seriously though he probably wouldn't be looking at spending that amount, round here £200k buys you a 4/5 bed detached double garage etc

200k buys you a piece of crap down in most of Greater London

Em3bbs · 11 Nov 2012 at 14:35

alx said:
Isn't the advantage in Germany/Europe is that the rental laws are much more suited to long term renting? Aren't rental agreements up to 5-10 years long and much more notice is needed to be given when landlords want to remove tenants?

I guess people in the UK, especially ones with families, don't like the idea that they could be booted out of their home with just a month or maybe 2 months notice if they rent.

It's very hard to get people out yes, you will see a lot of properties for sale which include tenants!

King Damager · 11 Nov 2012 at 14:37

Rotty said:
He lives in Stoke, £200k buys you Stoke

seriously though he probably wouldn't be looking at spending that amount, round here £200k buys you a 4/5 bed detached double garage etc

I'm moving to Nottingham!

Nice flat where it'd be nice to live for me, good commuting into London etc...

http://www.rightmove.co.uk/property-for-sale/property-24326196.html

1 Bedroom flat, £195,000

(Admittedly 2 beds in the same block go for a similar price)

£30,000 deposit (ish) and then a £40,000 salary (ish) to get a mortgage!

kd

Deleted member 77746 · 11 Nov 2012 at 14:40

^^ £195,000 for that, no thanks. Doesn't look that nice for the price.

King Damager · 11 Nov 2012 at 15:04

Exactly

Welcome to commuting to London

kd

Crafty · 11 Nov 2012 at 15:04

Yeah, thats not cheap at all. I bet the management fee is a fortune as well.

Edit: Having had a quick look around you can get a 3 bed house in Chelmsford for £200k and some new build stuff as well.
Seems the one above has "hip" tax applied.

the shadow · 11 Nov 2012 at 15:06

The ground rent is £270 per annum. A recent service/maintenance charge which was paid for the months of September 2012 to April 2013 was £740. This charge is payable half yearly

King Damager · 11 Nov 2012 at 15:18

Crafty said:
Yeah, thats not cheap at all. I bet the management fee is a fortune as well.

Edit: Having had a quick look around you can get a 3 bed house in Chelmsford for £200k and some new build stuff as well.
Seems the one above has "hip" tax applied.

It has some stones throw from the train station tax applied xD

kd

OpenToSuggestions · 11 Nov 2012 at 15:22

I do laugh at the use of the US word for flat.
It is not an apartment, it is a £200,000 one bed flat.

It is a nice flat, but it is a flat nevertheless.