First Time Buyer with little or no deposit

tony.simons

First of all thank you everyone for your responses. In response to MiniBear. As I said in my original post, the reason for not saving already is that we are both relatively young, finished uni and have spent the last year paying off overdrafts and credit cards. We are now in the position where this money can go into savings.

In response to Lostinrates. The long term plan has always included savings, but it also included the paying off of all debts aswell and that was done first. We would just like to try and take advantage of the market. However your right that maybe renting now cheaply, altough maybe 'throwing money away', may allow us to save for a better home. (We just miss a garden and a driveway at the moment! Fed up of luggin a weekly shop up flights of stairs. Although its a good workout for the arms!)

I think the key thing to be taken from all the posts is the comprimise in the short term for the long term gains. I think blunt_crayon understands the situation, that we dont want to miss the opportunity over the next year or two to take advantage of the poor market. However, it appears the best way to do this is to 'be prepared' and make ourselves more attractive to potential sellers who are maybe somewhat relluctant to sell. ie: Build up a deposit, no matter how big or small and not rush into schemes out there which are uping prices above the market.

Everyones help is very much appreciated and its nice to know that there are people in similar situations! Somehow knowing you not alone calms things down a little.

Any more suggestions are greatly appreciated!

T

katie2015_2

"The problem we have is that we have little or no deposit. I have seen schemes such as those from George Wimpy where you buy 85% of a new home, they have the other 15% and allows you to get it without a deposit."

hi tony in the exact same position as you, no savings and desperatley seeking a house, in relation to what you said above, i don't know about the area you live in but i live in derry in the north of ireland and we have reently found a house, which linked with ulster bank, the developer pays the 5% deposit and ulster bank provide the other 95%, in relation to your questions about the catch's involved. after reading the small print i realised that the catch is..... after 5 years of having your house, they revalue it... if your house has risen by 5% you repay the deposit to the builder! on the other hand if the value of your house decreases by 5 % they deduct 10% off your mortgage... it is advertised as being a win win situation.

i don't know about that, i don't think they would offer this if they didn't know the house price would rise! im no expert... hope this helps

regards katie



good luck!!!

beyond_skint

We are in a similar situation.
We have just 3k saved and we run our own business, which we will need 3 years books and only have 1 months, we are sving as much as we can.

So far we were told we would need 50% deposit:mad: Which is impossible. We are in cornwall and with all the big wiggs coming down here in the summer buying up holiday homes, the prices aren't coming down here. A typical 3 bed house your lookng at 179k
It's a very depressing situation isn't it and no help.

I would just sit and save like crazy. Property will come down alot yet, but in the long ter, it always goes up. So find a price that's good and don't go any higher, if you stretch yourselves it will put pressure on your relationship.

All the best, one day we will have our own home:T

blunt_crayon

tony.simons wrote: »

we dont want to miss the opportunity over the next year or two to take advantage of the poor market. However, it appears the best way to do this is to 'be prepared' and make ourselves more attractive to potential sellers who are maybe somewhat relluctant to sell. ie: Build up a deposit, no matter how big or small and not rush into schemes out there which are uping prices above the market.

i agree. whatever happens it will do you no harm at all to have some savings behind you. if you aim to save 10% you should have a nice chunk of money within a year or two and then even if you want/can get a 95% mortgage or you decide one of the FTB's schemes is right for you and you don't need a deposit, you will have a few grand to fall back on should your circumstances change/to do up the house/to spend on furniture. certainly no bad thing and such a weight off your mind to know that you have that safety net.

i also agree with what lostinrates said about keeping an eye on the house prices & economy board and this board. i think it's really important to understand what you're getting yourself into and to be able to form an opinion on what might happen in the future, because this will massively affect one of the biggest decisions of your life. there's some very useful information on here and you get to hear all sides of the argument rather than just the bulls**t that the government feeds us.

best of luck! bc x

suze1984

Hi

Me and my bf are in the same boat too. We looked into all the schemes and upon closer inspection decided they wernt right for us as they'd just put us in a worse financial position in 10 years, weve deciede to just have to bite the bullet and save. Were looking at houses in Castleford and can get a decent 3 bed with garage for around the £100k mark which is ideal!

Although its still going to take us about a year to have enough for a deposit and fees! (£3320 saved so far!)

Is anyone else finding it stupidly hard to save at the min??? I feel like where getting no where! x

moneysavingmonkey85

there's a lot of us all waiting and trying to save...I too would like a house to decorate or even hang something on the wall without someone's permission...but I think it can be easy to see renting as a problem, when at the end of the day its a place to live and after recently moving to a lovely new build (that we could never afford to buy) and finally found a trustworthy agent I couldnt be happier for the moment.

Also, having just lost my job I would hate to have the stress of a mortgage......trying to learn to be patient

ricll

If you are finding it difficult to be a FTB elsewhere thank yourselves for not being a FTB in London, where a shoebox will cost at least £150K. Unlike most of you, I'm single and so have to save even more, currently have around 15% at most, won't buy anything myself untill having at least 25%. I know a couple of friends who own part of the new-build flat and pay rent for the other part, would never ever do that. You have all the hassle of being a property owner with the added hassle of having to pay rent, I'd rather pay rent with no hassles and save for a deposit.

Dinah93

Firstly congrats on paying off the overdrafts, feels good to be debt free I bet.
With fees, moving costs and costs to furnish and install things into your new home, you will need some savings behind you else you will quickly find yourself back in debt again. Also at present it might take a while, but you don't have to pay for the repairs and maintenance to your rented property. If you do decide to do a property up rather than buying new, you'll need savings for these works, as a loan will increase your monthly outgoings and is an unnessisary risk in the current climate. You need to prove to yourself you can save for this, and make lifestyle changes to get something you want. A house is a huge commitment, which I think some people have forgotten, and is not without risk.

I have a colleague who did the part buy part rent thing, not only is she in negitive equity, but they have hugely jacked up the cost of the rental portion, and she can not afford to move, despite wanting to try for another baby.

In the current climate I don't think you are in any way loosing by paying someone elses mortgage. I don't want to throw random figures into the mix, but I think house prices are currently falling 1.6% a month or near enough. If you were looking to buy a house at £150,000 that is loosing value at £2400 a month! Suddently the £5-600 on rent seems quite reasonable to me! Obviously this varies regionally. I am also looking at the York area as my OH is hoping to get into the police there and I work in the top of North Yorkshire, and it certainly has not been exempt from price falls over the last year. If you use firefox try installing property bee to monitor the price changes in the area you are looking at.

A deposit is there not only to protect the bank, but to protect you. There are so many people in negitive equity now unable to move house who had 95-100% or higher mortgages. As you say no one knows which way the housing market is going to go, it might turn itself around and start growing again (bad for all concerned I think but hey) next month, but equally it might fall for the next 5 years, in which case you would be in serious negitive equity.

Personally I do not think the market will rise again quickly due to exactly the reasons on here. FTBs are not used to having to save up desposits, and as a result there are a lot fewer FTBs, meaning the first link in the chain is missing. In addition so many banks are now calling in overdrafts and credit cards, meaning people are having to prioritise these, and can't afford to save for a deposit or upgrade to a bigger house/better area.

penguine

House prices are linked to the wider economy. And if you've been following the news lately, you can see that our economy is in the toilet.

Prices aren't going back up anytime soon. What pushed them so high in the past decade was easy mortgages, banks giving out far more money than was sensible. Banks themselves have been pushed to the verge of collapse so the era of really silly lending is over for a long time.

While you're saving for your deposit, use the time to educate yourself about property market and the economy in general so that you can make an informed decision about what's going to be one of the largest purchases of your life.