How to get onto the housing ladder

[Yaayuh!]

Me and the GF have a part rent-part buy flat. We currently have £10K invested in it and another £18K saved up whilst living here.
Needless to say, next year we are buying our first house with a 10% Mortgage.

Getting a small-medium percent mortgage on a new build flat seems to be a good way IMO.

 

[agnes]

Just be thankful you are living in Stoke. It appears your money can go quite a long way compared to us living in the South East.

You cannot buy anything in Reading for £120k unless you want a really small flat.

I am struggling at the moment to decide on renting or buying.

Property around here is simply silly. £140k for a shared ownership in a flat is the best I found and a mate did it. She is happy, but it's no different from renting. Only now she has a hold on the property ladder.

 

[Crafty]

^ 140k looks to be the total price, I see on rightmove pages of shared ownership flats starting under £50k in Reading.
There are flats to buy outright for under £70k.

 

[Spud21]

This is what I never understood about the UK. Why is everyone obsessed about buying a house, in most other countries in Europe you have absolutely no expedition of buying. Everyone rents, at least until they are married, middle aged and both have high paying jobs.

Why are people swing they are screwed if they are single and cannot afford a mortgage? you are not screwed, a house is a very expensive thing so why do you expect to be ale to buy one. Are you also screwed because you cannot buy a yacht, a Bugatti veyron, etc.

There is nothing wrong with renting, maying money to have a roof over your head is not a bad thing!

In fance at least there is a culture of not selling houses that are inherited, my girlfriends family are all froum Tolouse and they are well off but by no means minted but i think they have between her nan and grandad (divorced) about 4/5 properties, barring the 2 that are lived in the others are rented out, and they would not dream of selling them as they were my gf's great grandparents homes, and when her nan and grandad pass away their houses will not be sold either they will be kept and rented out, not as an investment but just because you don't sell your family home even when your parents or grand parents have died, iirc one of the flats has had the same tennent for 20-30 years. Because of this there is a very well established long rental market.

Over here it's much more unstable, tennency agreements tend to last 6-12 months, if you get lucky and get a decent landlord you may well end up there for years, but there as always the chance you will if unlucky have to move house every 12 months, and especially if you have a family you don't want to be doing that, so that creates a desire to buy as you will not have that uncertainty.

With buying you also have the advantage that you can make your home your own, if you want to put in a hugely expensive and garish kitchen you can, if you want to do a floating wall AV installation you can, while renting you wont as although you are de-facto the owner of the property while your tennency agreement is in place its still not really yours.

If you know your going to be in a rented house for 20 years then you will treat it as yours and you will likely make improvements to the house, what would be the point of getting all new appliances to find that 11 months later you have to leave.

 

[BombayMix]

Plus in some places like, NYC, you got rent control. Keeps rents down on long term rent. London rents are going up and up. Buying often cheaper (assuming you can get the deposit but the increase in rents make that hard.)

And traditional you could buy a house/flat. It only in recent years prices are going up to the level where you need 2 ppl, high deposit + high income to afford one. My first flat was easily affordable; today the mortgage would be more then double. Safe to say my wage hasn’t doubled in the same time.

 

[Xordium]

This is what I never understood about the UK. Why is everyone obsessed about buying a house, in most other countries in Europe you have absolutely no expedition of buying. Everyone rents, at least until they are married, middle aged and both have high paying jobs.

Yes they do that because they have very good laws that give renters rights and control the market fairly. Unlike in this country. Which maybe is why people don't rent here as much.

 

[Morbius]

I'm looking around at houses at the moment and it seems that your choices are very limited if you're single.

 

[Wizzkidy]

I'm currently in the process of buying a new build shared ownership property (50/50) with a housing association.

The house is £220k and i'm going in for half of that with a 95% mortgage, The deposit is £5500 which is the only possible way I would ever be able to buy.

I have no family members that can give/loan me 10k+ to go and get my own so this is the only feasible way I am ever going to get onto the housing ladder.

The mortgage + Rent is going to come out at around £860 a month which is a lot of money but hey better then being in a 1 bedroom flat! and imo i would pay 750+ to rent anyway

I'm planning on staying in this house for 10+ years and most probably expand my family slightly (already have 1 little one)

I read a lot of stories about how crap these schemes are but to be honest I don't have much other choice apart from saving over 10 grand and staying in a cramped 1 bedroom flat with a small child.

Over all I think if your looking for a family home and are willing to stay put for a good 10 years then in theory I should have something ready by then to have a decent deposit on a full property.

The house in question is pretty nice and is currently being built, en suite / kitchen diner with doors out to the garden, Its expensive and my mortgage will be crap but hey I would rather this then the situation i'm currently in.

Although renting would have been an option, landlords are proper **** as half of my mates always have problems with them.

 

[OpenToSuggestions]

I'm looking around at houses at the moment and it seems that your choices are very limited if you're single.

I have that issue!

If I someone to move in with (hopefully on a similar salary) we would have been looking at a better house in the first place, however I am single and as such will be buying alone.

Weston COyney is not bad area. Looked at a few houses there myself before buying my place in sneyd green (this house won because its got a huge garage! 33ft by 16ft As an idea for price it was £123k for a 3 bed semi in a quiet culdesac)

Got a couple of friends who live in weston coyney too

Today is a nice day. I might go for a drive over to that area for a look around as I need to get a feel for the area I plan to live in!
I found a nice looking 3 bed detached house with a brick single garage for £105000 in Meir.......I hate to think what the area is like!!!

I don't think I will be buying the 4 bed end council terrace for £53000........

 

[HangTime]

Lets say 200k property.

at least a 15% deposit = 25k

Stamp duty = 2k

Solicitors fees = 1-2k

Moving in = about 1k (assuming you have everything furniture, kitchen and bedroom)

Upfront bills = 1k(water, council tax installment, gas, electric, phone connection)

200k house = at least 30-33k upfront. That is with a 15% deposit which will leave you with a high mortgage rate.

£500 a month will give you the deposit in 5 years.

£200k seems a lot for a single FTB in Stoke (assuming that is where he wants to buy) although of course his situation may have changed in 5 years time.

Up front bills I can't see being £1k - even if one assumes there is no phone line connected and no deals being offered I think it is still only about £125 to get a line connected

 

[Guest2]

Probably already been said but have fun living at home for another 4 or 5 years

Personally I would rather rent in a location I like and not worry about saving too much each month. I cam currently 28 and been renting (1 year in student hall) since I was 18.

I dont have much in savings but then I have been going on at least 4 holidays a year. I would rather rent a nice place and do stuff than save, not go on holiday and buy a house I dont like in a location that doesn't suit me

 

[OpenToSuggestions]

Probably already been said but have fun living at home for another 4 or 5 years

Personally I would rather rent in a location I like and not worry about saving too much each month. I cam currently 28 and been renting (1 year in student hall) since I was 18.

I dont have much in savings but then I have been going on at least 4 holidays a year. I would rather rent a nice place and do stuff than save, not go on holiday and buy a house I dont like in a location that doesn't suit me

No wonder you cannot buy if you are going on four holidays every year!

Why would I be living at home for 4-5 years? I am now saving £500 per month and will have £10000 in early 2014.

 

[OpenToSuggestions]

I went for a drive today to get a feel for a few areas. I am not ready to buy right now but want to be in a good position when the time comes.

I was looking at areas between Uttoxeter and Stoke On Trent.

I have drawn the following conclusions from today:

Houses
New builds are extremely small and you often get one single parking space that is an allocated space not a driveway.

Locations
Blythe bridge - No comment as have not checked there yet.
Weston Coyney - Seems OK but a little too close to Meir.
Meir - What an absolute **** hole. The locals were middle aged women in trackies and young smoking mums with pushchairs. Loads of run down shops and poorly kept council houses. Chavtastic.
Meir Park - Looks like a really nice place, but out of my price bracket.
Meir Heath - No comment as have not checked there yet.
Meir Hay - Seems OK and the house prices are good, but is further away from my work and parents.
Tean - In between work and parents which would be a nice location. Prices seem OK and the area seems nice.
Cheadle - Seems like a nice little town. Found a lovely 3 bed semi that has been renovated for £115000 with a decent driveway.
Uttoxeter - Lived here since 2002 and I think the area is good, but the high street is terrible. For my budget I would be right at the bottom end of the market.

Ideally I would buy in Uttoxeter, but the issue with this is that I would be buying right at the bottom end of the market. Cheadle seems a nice middle ground as it has Stoke On Trent in the address (i.e. it is cheaper than Uttoxeter so I would have more house choice) yet is surrounded by fields and seems decent.

 

[Macro]

Why is everyone obsessed about buying a house

I guess on a very simplified level because a mortgage is often the same or even cheaper per month compared to renting and after 20 years you own it. To not have to pay £800+ per month out when you retire because you own the property and are not renting is " a good thing".

 

[OpenToSuggestions]

Can somebody explain a mortgage question to me:
(I will make up numbers)

Why when it says 3.8% with a £0 booking fee is the 'overall cost for comparison' 4.7% when the mortgage is a 2 year deal. Is it really a 5 year deal where the % goes up in years 3-5?

I am usually pretty sharp when it comes to numbers but I am a little confused right now . I get the feeling that the 'initial rate' is all fancy but later on it goes up, just like my ISA has a good (well that is debatable) rate for 1 year then goes to a really rubbish % and hopes I don't notice.

I have found sites (example link below) that explain it, but I am thinking that the 'overall cost for comparison' one is the interest rate to properly look at.
http://www.cheltglos.co.uk/guides/product-tables-explained4.html

 

[OpenToSuggestions]

5 Year Fixed
Fixed until 28/02/2018
85% LTV
3.89% fixed until 28/02/2018
Our Standard Variable Rate currently 4.74%
4.5% APR
£0 fee

So exactly how does it go drom 3.89% to 4.5%? Is this assuming I stay with them longer than the 5 year period?

 

[OpenToSuggestions]

Anyone? .

 

[big_white_dog84]

The reason ownership is seen as the norm here is that the whole renting setup is short term. Up here we rented for 5 years and were constantly on 2 months notice to leave. That was fine in our early twenties but as you get older and more settled you want / need more certainty. A 5/10 year rental period with fixed / predictable rents would encourage more people to stay renting.

 

[Rotty]

how do folks that rent all their lives go on when they retire? paying rent then would cripple most folks

 

[HangTime]

Theoretically they'll have a big savings pot to fall back on as they may have paid out less in rent than a mortgage and associated fees would have cost them. Alternatively by the time they retire they may have inherited some money/property. Furthermore bear in mind that most retired people don't have dependents i.e. they can rent a simple property as they need to house at most two people compared to younger years when they may have a family living at home.

Interestingly for all the talk about 'getting on the ladder' my brother-in-law has chosen to hop off the ladder; he owned a property from 25-31 but has just sold up and moved into rented.