A young'n trying to elbow in on the housing market

andyman2303

Hi Everybody,

I know I don't have too much hope of getting a flat anytime soon, but want to know any advice people have for me.

I am 20, in full time employment (dropped out of uni in feb), and living with parents. Due to living out in the sticks; 15 minute drive into town; I really want to move if not into, then closer to my local town.

I'm open as to how to go about doing this, but really don't want to go down the renting path as I'm worried that I'll never leave!

I earn 13k, but that should be increasing from next month, I'm hoping to at least 15k, and then another review in April (I work for a non-profit making organisation, so the Credit Crunch hasn't hit us all that much).

If I do get up to 15k, can I realistically expect to be looking to buy in about 18 months time? I'd have about 8k saving by then (hopefully more), so obviously would only have a small deposit.

I'd be happy to get a 1 bedroom flat, as well as a 2 bedroom flat and have a lodger to boost my income.


Any advice/comments welcome

Mrs_Bumble

You are going to need at the very least a 10% deposit, a 15-20% deposit will get you a better interest rate. You will also need to have funds to pay legal costs, valuation costs, arrangement fees, stamp duty potentially, then of course you will need funds to furnish the property.

On average you would be looking at somewhere between 3 and 4 times annual income in borrowing. If you have any other credit committments these would be deducted from affordability.

The reality of a mortgage would maybe clip your wings as well? Would you realistically have anything left after paying a mortgage, essential household bills to go and party in town?

Can you and a friend not rent something together closer to town?

andyman2303

Like I said, I'm open to renting if it means I can move somewhere closer to town. Plus points are much cheaper car costs, but like I said, would prefer to avoid renting.

I do realise that I'm going to be hard pressed to get a deal with my circumstances, but the more advice I can gather, the better!

Essential spending like going into town with friends for the majority of the time is quite low - 2 years at uni has allowed me to be pretty thrifty!

opinions4u

andyman2303 wrote: »

I'm open as to how to go about doing this, but really don't want to go down the renting path as I'm worried that I'll never leave!

Don't get paranoid. You'll find a way when the time is right.

I earn 13k, but that should be increasing from next month, I'm hoping to at least 15k, and then another review in April (I work for a non-profit making organisation, so the Credit Crunch hasn't hit us all that much).

Good luck with the rise! The Credit Crunch will affect our lives for a lot longer than the near future. One impact of lower Government spending could be less money getting out to non-profit organisations. Additionally, unemployment usually lags other economic issues. In other words the job picture will deteriorate further.

As somebody who saw massive changes in the once "job for life" banking industry during my time in the business I would suggest that it is dangerous to make assumptions on job security. Much better to have a savings pot built up to protect you against the initial impact of a potential redundancy however safe you believe your job is.

If I do get up to 15k, can I realistically expect to be looking to buy in about 18 months time? I'd have about 8k saving by then (hopefully more), so obviously would only have a small deposit.

Very rough sum would be 3.5 to 4 times income for borrowing. So that could get you up towards the £65k property mark. Check out someone like www.rightmove.co.uk to see what prices are like in your area.

I'd be happy to get a 1 bedroom flat, as well as a 2 bedroom flat and have a lodger to boost my income.

A lender won't take in to account income from a lodger (and would also need to issue their consent for you to have a lodger).

Additionally if you go for a 1 bedroom flat you will be buying the kind of property that is not always easily saleable at a later date.

If it is was me I would rent with a mate for now, save as much as I can (I know, tough with the cost of rents) and then review the buying option as and when I was in a stable relationship with somebody that I wanted to spend the rest of my life with.

That second income will help you to buy and afford a better property.

Run your bank account well. Use a cashback credit card that you always repay in full every month. Make sure you pay all your commitments on time. Then when the time does come to borrow you will be able to access the best deals.

Mrs_Bumble

If there are a few of you that rent together then you maybe able to get the costs down to being quite cheap? Still able to save!

Best advice is to make sure your credit history stays clean, make sure you are on the elecctoral register and save, save, save

andyman2303

Thanks guys!

As my friends will all be returning from uni in June, I should be able to start renting with some of them hopefully, and have had 1 offer to start renting in Brighton next academic year.

I've been rebuilding my credit history after some irresponsible students years and spending more than I could afford; I've seen the error in my ways, and have been nice and responsible for a few years now.

If I can borrow about 4 times my wage, then I'd need to be on about 18k to be able to afford a 1 bedroom flat in my area! Maybe it's time to look further afield!

I think living with a friend/partner might be the only way (until my lottery numbers come in!).

Again, thanks a lot!

LeeSouthEast

Brighton rents suck. Go out a bit... Saltdean, Telscombe, Newhaven, Fishersgate... anywhere but Brighton itself.

maninthestreet

Start saving - I didn't buy my first property until I was almost 26, you're still only 20.