Another take on 'affordability'.

LilacPixie

cleaver its the early redemption penalties. until 30.6.16 you can only over pay your mortgage by a maximum on 10% of balance outstanding if you overpay more or redeem mortgage you will have a financial penalty of 6% of the o/s balance. so on and so forth.

Sandrock

I'm in a similar position to the hypothetical couple in the OP's first post.

When we first moved in together in 2007, I was earning £15k as a trainee surveyor, and she was earning £15k as a retail supervisor. Initially, neither had pensions and our combined take home was about £2,050.

We rented a 2 bed flat, and shared with a good friend of mine. We lived reasonably economically but didn't go without. We spent £1,200 a month all told.

Even on these very low wages, we had £850 a month 'spare'. After 1 year, my partner had a small promotion to £18k which took this to over £1,000 spare.

Instead of !!!!ing it up the wall, I saved nearly all of this over a period of 2 years, and with interest, managed to save £25,000. I also downsized my car which released another £3,000.

We used this £25,000 as a deposit to buy our first property in the south east of England, which cost £155k and spent the additional and treated ourselves to a two week holiday in the Maldives.

During the second year, my partner achieved another promotion to £22k, and I changed jobs and earnt £23k. Now paying into pensions, this brings home approx £2,800 a month.

Our outgoings remain a steady £1,700 which includes absolutely everything, excluding holidays.

This gives us £1,100 a month 'spare', even after we have bought our own property.

Being prudent, I stick £550/month away into savings. I put £100/month aside to cover any maintence issues for our property, overpay the mortgage by £250/month and put £125 aside to pay for holidays.

The £75 remaining is split into a small 'slush' fund of about £50 a month (which we rarely spend - this is building into a nice rainy day fund in addition to all our other savings pots) and the remainder goes into a fund to accumulate money for my partners recently born niece education.

Although our wages are reasonably low, as we are at the start of our careers, I think most would agree that we manage very well. It can be done, and when I hear lots of couples complaining they cannot scrape together a deposit it does make me slightly annoyed. If we could do it earning £15k each, surely others can too!

tara747

Sandrock wrote: »

The £75 remaining is split into a small 'slush' fund of about £50 a month (which we rarely spend - this is building into a nice rainy day fund in addition to all our other savings pots) and the remainder goes into a fund to accumulate money for my partners recently born niece education.

Although our wages are reasonably low, as we are at the start of our careers, I think most would agree that we manage very well. It can be done, and when I hear lots of couples complaining they cannot scrape together a deposit it does make me slightly annoyed. If we could do it earning £15k each, surely others can too!

Er, goodness, why are you saving for your partner's niece's education? Are you planning to have children of your own?

Sandrock

tara747 wrote: »

Er, goodness, why are you saving for your partner's niece's education? Are you planning to have children of your own?

No. Neither of us wants kids at all.

My partners sister has no money, living on benefits (and maternity leave at the moment) and raising the baby herself. Putting a few quid aside every month is the least we can do, hopefully it'll be useful for her when she's a bit older.

sKiTz-0

Sandrock wrote: »

I'm in a similar position to the hypothetical couple in the OP's first post.

When we first moved in together in 2007, I was earning £15k as a trainee surveyor, and she was earning £15k as a retail supervisor. Initially, neither had pensions and our combined take home was about £2,050.

We rented a 2 bed flat, and shared with a good friend of mine. We lived reasonably economically but didn't go without. We spent £1,200 a month all told.

Even on these very low wages, we had £850 a month 'spare'. After 1 year, my partner had a small promotion to £18k which took this to over £1,000 spare.

Instead of !!!!ing it up the wall, I saved nearly all of this over a period of 2 years, and with interest, managed to save £25,000. I also downsized my car which released another £3,000.

We used this £25,000 as a deposit to buy our first property in the south east of England, which cost £155k and spent the additional and treated ourselves to a two week holiday in the Maldives.

During the second year, my partner achieved another promotion to £22k, and I changed jobs and earnt £23k. Now paying into pensions, this brings home approx £2,800 a month.

Our outgoings remain a steady £1,700 which includes absolutely everything, excluding holidays.

This gives us £1,100 a month 'spare', even after we have bought our own property.

Being prudent, I stick £550/month away into savings. I put £100/month aside to cover any maintence issues for our property, overpay the mortgage by £250/month and put £125 aside to pay for holidays.

The £75 remaining is split into a small 'slush' fund of about £50 a month (which we rarely spend - this is building into a nice rainy day fund in addition to all our other savings pots) and the remainder goes into a fund to accumulate money for my partners recently born niece education.

Although our wages are reasonably low, as we are at the start of our careers, I think most would agree that we manage very well. It can be done, and when I hear lots of couples complaining they cannot scrape together a deposit it does make me slightly annoyed. If we could do it earning £15k each, surely others can too!

What about single people on 15k-22k?

Sandrock

sKiTz-0 wrote: »

What about single people on 15k-22k?

That is why I clearly said

" and when I hear lots of couples complaining they cannot scrape together a deposit it does make me slightly annoyed. If we could do it earning £15k each, surely others can too!"

LilacPixie

sKiTz-0 wrote: »

What about single people on 15k-22k?

What about single people?? Single people can save up for deposits too.
I did it earning less than 14k.
The deposit I saved was only 10% of purchase but it was and still is doable in my area for a FTB single erson property 1-2 bed flat. I earned 13960 then. It was my first fulltime wage after leaving education and I thought it was fantastic. I saved £250 a month.

March 17th 2003 and the keys were mine.