First Time buying

JB77_2

Hi all, hope everyone is well.

I have just started working full time, following being at university etc. I have decided that now is the time to look into buying a home. However I have no idea where to start. Could someone compile an idiots guide to help me out??!!

In truth I know nothing, so some of the questions i would like answers to are

1-What sort of deposit do i need (If any)?
2-What should be the initial step, find a house, sort out what mortgages etc???

Having spent so much time renting at uni, I have very little saved. and my current salary is £18K

Thank you for your help in advance

lynzpower

most lenders will give you 3.5 times your salary in mortgage. thats the starting point. and save for a deposit, save, save, save. xx

Doozergirl

You should try to save for at least a 5% deposit, but the more the better really as you will get a better rate of interest on your mortgage with a bigger deposit. It is possible to get a 100% mortgage but it carries more risk with it because you have no buffer against negative equity (where your house is worth less than you owe on it).

There's a thread dedicated to the order in which you should do things here: http://forums.moneysavingexpert.com/showthread.html?t=175653

HTH

meanmachine_2

JB77 wrote:

Having spent so much time renting at uni, I have very little saved. and my current salary is £18K

Thank you for your help in advance

You won't get much on an 18K salary.

I was on that ten years ago - and could barely afford anything, even when prices were in a slump post-crash.

Now you'd be lucky to afford a mobile home.

Best thing is to draw up a 5-10 year savings plan and stick to it. Set up a direct debit and put £250 a month into a high interest account. Then, when you've moved up the career ladder and have accumulated a deposit you can seriously think about buying.

I'd say you're at least 5 years away from that point.

Enjoy being mortgage free for now.

sarah_elton

Errr meanmachine is more than likely right I'm afraid, but can you at least tell us where in the country you are first?

I'm not sure anywhere is affordable at that price anymore, but that will affect how long it will take.

Have you looked at property prices yet? What are you looking at for a small place where you are?

SharedSpaces

They are quite right, the first thing to do is to get some money behind you to use as a deposit, 5% is acceptable, 10% is preferable. But your savings must also go towards all the costs of buying a property (solicitors, surveyors, mortgage arrangement fees, stamp duty), and running a property (bills, repairs, utility connections, food, council tax, etc).

The average age of a first time buyer in the UK today is 33 or 34 depending on who's stats you look at, so if you're aiming to be average you've quite a wait ahead of you. The average deposit is over £20k for the average property which in England & Wales will cost you over £200k.

£18k will not get you far in most areas of the country, and it may be sensible to wait whilst you save a larger deposit and your salary increases, but if you do not wish to wait there is an alternative. <Advertising removed by Pal>

By joining forces with 1, 2 or 3 others in a flat/house-share like arrangement, as I'm sure you've been used to at University, you can seriously increase your buying power, and of course all your costs will be shared, and you could get onto the property ladder years earlier than you could do on your own.

<Advertising removed by Pal>

nelly_2

SharedSpaces wrote:

They are quite right, the first thing to do is to get some money behind you to use as a deposit, 5% is acceptable, 10% is preferable. But your savings must also go towards all the costs of buying a property (solicitors, surveyors, mortgage arrangement fees, stamp duty), and running a property (bills, repairs, utility connections, food, council tax, etc).

The average age of a first time buyer in the UK today is 33 or 34 depending on who's stats you look at, so if you're aiming to be average you've quite a wait ahead of you. The average deposit is over £20k for the average property which in England & Wales will cost you over £200k.

£18k will not get you far in most areas of the country, and it may be sensible to wait whilst you save a larger deposit and your salary increases, but if you do not wish to wait there is an alternative. <Advertising removed by Pal>

By joining forces with 1, 2 or 3 others in a flat/house-share like arrangement, as I'm sure you've been used to at University, you can seriously increase your buying power, and of course all your costs will be shared, and you could get onto the property ladder years earlier than you could do on your own.

<Advertising removed by Pal>

Would you buy a house with 2/3 strangers??????????????

Thats about the most stupid plan I have ever seen and that includes the army's old walk slowly towards them it'll scare them off,plan

meanmachine_2

SharedSpaces wrote:

They are quite right...but if you do not wish to wait there is an alternative. I have recently launched a website...

*click*

Channel changed.

I suggest that, if you wish to advertise on this site you pay. Except...there are no ads on this site. You're walking a fine line, laddio.

yoshihirouk

meanmachine wrote:

You won't get much on an 18K salary.

I was on that ten years ago - and could barely afford anything, even when prices were in a slump post-crash.

Now you'd be lucky to afford a mobile home.

Best thing is to draw up a 5-10 year savings plan and stick to it. Set up a direct debit and put £250 a month into a high interest account. Then, when you've moved up the career ladder and have accumulated a deposit you can seriously think about buying.

I'd say you're at least 5 years away from that point.

Enjoy being mortgage free for now.

It's very sad but true. Back when my parents bought their original house (in the 70's) things were far more realistic and those who needed somewhere to live could afford it (unlike now where renting a room/living with strangers/far more impractical solutions occur).
Some people dismiss a crash - others think its right around the corner. The question to ask is this:

If those who need somewhere to live can't afford to live anywhere, then what will happen to the housing market?
Does the government massively increase it's spending on housing developments/housing benefit to support the housing market thus weakining the overall economic position of the country? Or does it let it return to normality where those who need somewhere to live can afford it without being on £30k per year as a minimum?
What percentage of the country is on £30k per year or more?