To Buy or Not To Buy

Common_sense

1st post from a long-time lurker.

Let me set the scene, I'm 24 and live my fiancee who is also 24. We are soon to be married and that has been our main financial concern for the past year or so. I graduated 18 months ago and am in a stable job with a good salary but on graduation I had significant student debt. My first priority on graduation was to pay off credit cards which I did so successfully and have reduced my 'expensive' debt to nothing. I currently have an outstanding student loan of about 20K but I am happy to pay off at the minimum rate, a professional studies loan with about 4K oustanding (the rate on this is less than my student loan so again just paying off at the minimum rate) and a student overdraft which I've yet to think about paying off as it has been interest free. My fiancee is debt free (excluding student loan) but her job is a little more unstable and she is currently on a rolling 6 month contract (hopefully this will be made permanent at the next renewal).

Our combined income at present is about £63K. We have been renting a rather nice but expensive flat for the past 18 months and have recently been served notice to quit. We have found a cheaper but substantially smaller flat to rent for the next 6 months. After this period my job is subject to change and we don't yet know where we'll be or for how long, (it may only be a year). We both despise the insecurity of renting, particularly following our recent eviction and would both like a place to make our own home. We really like where we live at the moment although property is rather expensive although we will be willing to compromise somewhat on location when it comes to buying.

We are getting married in the next couple of months and as I said this has been our financial priority after paying off expensive debt. We haven't borrowed any more money to finance the wedding you'll be glad to know!

We have also managed to build up around 10K of savings, which we would rather keep in the short term in-case of unforseen emergencies rather than pay off the cheap debt I have outstanding.

After the wedding the first priority will be to clear my overdraft and then plough on with savings for a house deposit. We'll be saving at least £1k a month.

Finally, due to recent cirumstances we've reconsidered when we'd like to start a family and are looking to do this sooner rather than later.

So, where does this leave us in terms of the property market. We're both sensible and have a good amount of 'worldly' knowledge but are clearly both new to the idea of buying a house. My fiancee (who hates renting even more than I do) is inclined to wait a bit but i'm more towards buying sooner rather than later.

Sorry for the long post, but does anyone have any thoughts?

BitterAndTwisted

If you don't know where you'll be or for how long in your current employment in the short or medium-term it seems to me that it would not be sensible to buy now. In any case, most lenders are looking at 20% deposits as a minimum so your current savings of £10k might not be adequate depending on where you're thinking of putting down roots long-term to start a family. Buying soon only to have to sell up and buy elsewhere would eat up a lot in removal costs and fees in any case. I'd save like a demon and think about buying in about 18 months or so, maybe longer. There is an up-side to renting and that's the flexibility should your personal or employment circumstances change

Common_sense

BitterAndTwisted wrote: »

If you don't know where you'll be or for how long in your current employment in the short or medium-term it seems to me that it would not be sensible to buy now. In any case, most lenders are looking at 20% deposits as a minimum so your current savings of £10k might not be adequate depending on where you're thinking of putting down roots long-term to start a family. Buying soon only to have to sell up and buy elsewhere would eat up a lot in removal costs and fees in any case. I'd save like a demon and think about buying in about 18 months or so, maybe longer. There is an up-side to renting and that's the flexibility should your personal or employment circumstances change

You are probably right. It would be sensible to wait about 18 months which would give us a reasonable deposit and would hopefully be good timing in terms of my job (although there is a chance we'd be right where we are now).

Think we'll aim for August 2011, with or without baby.

I feel a little bit sick having just looked at house prices in the south compared with up north where i'm orignially from!

BitterAndTwisted

A little bit sick; I'm surprised you didn't have a coronary! It's very depressing isn't it? A lot of folks don't have a cat in hell's chance of ever owning a property unless they move to Skegness or Skelmersdale or somewhere

Fire_Fox

Is there any reason you can't relocate? I never understand why so many people appear to be welded to London, permanently stressed about house prices/ commuting and congestion/ crime ....

partlydave

BitterAndTwisted wrote: »

A little bit sick; I'm surprised you didn't have a coronary! It's very depressing isn't it? A lot of folks don't have a cat in hell's chance of ever owning a property unless they move to Skegness or Skelmersdale or somewhere

I havent been to Skelmersdale since the 1970's but looking at prices now its not as cheap as Burnley. However I wouldnt go to either of them

Common_sense

Fire_Fox wrote: »

Is there any reason you can't relocate? I never understand why so many people appear to be welded to London, permanently stressed about house prices/ commuting and congestion/ crime ....

We don't live in London but do live in the South, looking at local prices it may as well London! :eek:

Relocating very much depends on where my job is, neither of us want to go back up North but we'll definitely look at cheaper places around where we are