How do people do it?!

spugzbunny

We are also in the same boat. We are 60K joint, saving around £600 - £700 a month aiming to have a deposit together in 2 yrs. I am hoping that the mortgage scene will change slightly by then and that a 15% deposit will begin to be the norm. If not then we have to wait another year - which we can do! The way I see it is just keep saving and one day things will be at the right balance. In the end, first time buyer couples are in a better situation than many others.

wheresmydoshat

a 15% deposit will begin to be the norm.

almost a dead cert, i'd imagine it will happen a lot sooner as not many ftb's will have more than a 10% deposit.

gkinrade

In response to your partner being a Key Worker - my gf & I are both teachers and we looked into both the mychoicehomebuy and the ownhome schemes - they both sound really good (although have limited funding and long waiting lists) apart from the fact that you can only buy a place with one bedroom more than you need (e.g. a couple could buy a 2 bed, a couple plus one child / one on the way could buy a 3 bed etc) and this meant that we could not get something of the size that we would want - it's an option though

mike5678

I am a 24 year old FTB. I've just bought a 2 bedroom flat in London for £180k on my own. I put down a £30k deposit. I started saving for my deposit when I was 16, my part time wages. I saved all of my student loan while I was at university as I worked through uni. I have saved about 50% of my wages ever since to build up my deposit, usually putting £1k away per month.

I've not been that frugal as I've also had a great few years despite saving this, travelled USA for a month, 2 weeks in maldives, bought a nice Mercedes, those three things cost me a total of about £20k thinking about it. My salary isn't amazing, ranging from £33k to £40k depending on overtime.

I don't know how people manage their money so poorly and have less to show for it than me. My friends for example, have no savings, despite all having decent jobs, havn't had holidays as nice as me nor cars as nice as me.

I guess it helps a lot that I only pay £200 per month living with my parents up until now, but so do my friends.

My tip is never to turn down overtime, I'm always the first person my work comes to for overtime as they know I will always do it, meaning I earn as much as possible every month, most weeks I work 60 hours a week, which isn't really that much. I make sandwiches every day, don't spend money on anything you don't need or don't really want. Spend it on nice things that you save for, rather than a Starbucks coffee and muffin everyday.

I still have my pleasures like a good night out probably once a month, I love a gas guzzling car so I allow for that in my budget. I buy very little clothing as I mix and match items for different outfits so still manage to look decent.

Waste as little as possible, instead of buying new food, eat those things in the back of your cupboard collecting dust. Look for buy 1 get 1 free offers in supermarkets for your toiletries and things, I wait until I see the products that I use come on offer, and when they do I stock up on them that will last me until the next offer. I have a pay as you go phone and wait til after 7 if its not urgent to call someone for free off peak calls. I never pay for car parking, if I have to go into town I will park on the outskirts of town in a residential street for free and walk that last mile in to town.

Whatever you really have to buy, make sure you get it for the best price possible, so do your research before splashing the cash.

It all adds up.

This may explain why I don't have a girlfriend as I guess I am a bit tight!

Idiophreak

retepetsir wrote: »

I have looked at the key worker schemes, along with new house homebuy, part-buy/part-rent, etc, but they seem to be a bad deal/ripoff. Interest is charged on repayments, you never own the whole house and have to ask permission to change anything, the price of new builds is overpriced anyway and then when you come to sell you're back in the same position as you then don't have enough equity/capital to buy your new house.

Unless I missed something?

Look more carefully at the new build schemes available to you.

GF and I in very similar position to you, on similar wages.

We just bought on a shared equity scheme with a local builder (oxford area), but most modern schemes are similar, from what I saw.

There's no interest charge on the loan.
You own the whole house.
You don't need to ask permission to change anything.

You're right, however, that new builds are priced high - and when you're using one of their schemes, you feel you have little power to negotiate. I've come up with my own rationalisations for paying a slight premium for newbuild, but I won't post here - it'll just cause squabbling

On the upside, the equity loan (in out case 23%) is treated as a "true deposit" at some banks, so you can end up on a decent fixed rate - our mortgage repayments now are more than £200 less than rent would have been on a similar property.

Obviously, we still need to save up that 23% in the next 10 years, but we've reasoned we stand a much better chance of doing that with £200 extra in our pockets each month. And, of course, by the end of those 10 years, we'll also be 10 years into our mortgage.

Not saying this is what you should do, etc - realise there are plenty of people who dislike these schemes for a variety of reasons, but it's just something to think about.

Idiophreak

mike5678 wrote: »

This may explain why I don't have a girlfriend as I guess I am a bit tight!

Think this explains why you have any money

princeofpounds

£600 a month saving is not bad going.

The answer to your question is that prices are unsustainably high - or they certainly have been, it's not so clear cut now 'artificially' low interest rates have been introduced.

Trust me, you aren't alone. I am probably earning in the top 3% of incomes in this country according to this:

http://www.ifs.org.uk/wheredoyoufitin/

yet I cannot afford anything more than a normal 1 bed flat in my London Zone 2 area (or a 2bed ex council), even assuming I have the 20% deposit already. Admittedly I exclude bonuses from the calculations, but I would personally never get a mortgage on a bonus and I may not always be earning well.

I'm even more mystified by rents. I can afford a studio or a 1-bed ok by taking up to around half my take-home income. But there are hundreds of 3,4,5 bed houses around at multiples of my rental costs, and I have no idea how these are sustained by the single-income families with kids that seem to live in all of them. I mean, who can afford £800pw just on rent?! There are plenty of rich people in London but not that many compared to the amount of housing stock on at these levels.

Never managed to get an answer to that.

Tassotti

At the original poster, you are young, and whilst I admire your attitude to money, and getting on the property ladder, take some time out and just enjoy yourself...

There is no point in being the richest man in the graveyard!!!

We are in a major depression (they call it recession, but I know better). In a few years, you will be able to buy a house for the price of a postage stamp....However, mortgages will be 65% interest rate!!!

Hang in there, enjoy some of your wealth at the moment, because once you buy a house, that will be over.

Idiophreak

Tassotti wrote: »

Hang in there, enjoy some of your wealth at the moment, because once you buy a house, that will be over.

Quite agree with this, actually...

If you're paying £200/month at home and it's not driving you bonkers, just stay there.

Spend some of the money you would be paying in mortgage on really stupid stuff you'll never be able to afford again. Travel. Go to nice restaurants. Just live life to the max for a bit while you've still got the disposable cash!

pfpf

i dont want this to sound rude, but i have just scanned over this thread and notice 2 or 3 posts where people say they are earning 47k - 60k PA joint but are only saving £600.00pm. this is without a mortgage but obviously rent.

why such a low amount? what are peoples outgoings? the OP states outgoings of £1200.00pm inc. rent and savings of £600.00 = £1800.00. income of £47k, wheres the rest?