First Time Buyer - Purchase Years Prior To Moving Out?

dazza.mk

Also keep in mind you may well have to pay tax on your rental income, another option as mentioned above is to live in the property and then rent-a-room. By doing this you would qualify for the Govt's Rent-a-Room scheme and be able to get upto £4,250 in rental income a year tax free

http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/TaxOnRentalIncomeArticles/fs/en?CONTENT_ID=4017804&chk=mGasop

RHemmings

I think buying a house at the moment is a very risky strategy. Nobody can say exactly what can happen and when. But there are certain aspects of the current housing market that make it look like prices are seriously over-valued. And that means that prices could easily crash. So if you did go and buy a house, your money would paradoxically not be "as safe as houses".

What I would suggest that you do is to read as much as you can. Not just books on buying a house such as Alvin Hall's book. Which, truth to be told, I haven't read yet, though lots of people have recommended it to me and I have a copy in the room as yet unopened. But also books on finance, investing, and the like. The wikipedia is good too, especially for learning about basic concepts. For example, you'll often see cryptic references to "Tulips" on forums. Do you know why? Have a look at this:

http://en.wikipedia.org/wiki/Tulip_mania

this helps you understand pages such as:

http://en.wikipedia.org/wiki/House_price_crash

Basically, most of what you will read in the press, on the internet, and hear from relatives will not be accurate. It will be biased in some way, for various reasons. People will have their own vested interests, and their arguments will always be flawed. I would advise you to learn enough to be able to spot these interests and biases, understand why people might say things they say, and to distinguish the things in their arguments that you want to take note of. For example, I'm a bear, and believe that prices are going to correct. If you look at the links and examples in this post, you'll see a lot of negativity. And I couldn't be unbiased if I tried. So if you wanted me to make the decision for you, I'd scream "NOOOO!!!!". Another person might be a bull, expect house prices to go on up forever, and advise you to buy now as you'll never be able to buy later on if it's at all difficult now. Then I and the bear will have an argument until the thread is 20 pages long. There will be argument and counter-argument, and the bull and I will raise a lot of points that both can't be true at the same time. And that's an important bit, because that means that not all of it can be true. So if you want to learn from it, step 1 is to sort out the BS from the stuff that's true. This is never easy.

I don't know you, and hence can't judge your level of knowledge of the world, and your maturity. But I can certainly say that I was nowhere near being ready to make anything like a serious decision such as buying a house at 18. But on the other hand, I think it's important that people make their own decisions in life. You only get one chance at it, and you might as well live your own life, not the life that others tell you to do. Not that I'm saying that you should ignore what people say, but that you should hear as much as you can from all sides, gather it all together, investigate it thoroughly, and make your own decisions.

Don't forget to study history a lot. It has this strange tendancy to keep on repeating itself. Study everything you can. It's an important decision that you're considering making.

Can I ask if you are good at maths? A lot of the time I find it necessary to work through a lot of numbers before certain claims (or counter-claims) make sense, and the true situation can be ascertained only when you do the sums. For example, a previous poster talks about how much you can afford to borrow on 25, 30, and 40 year terms. I think you would be surprised to find out how much more, in total, you'll pay the bank borrowing 87K on a 40 year term, versus 77K on a 25 year term. If you can't work out the total you would be paying, then that should ring "not ready yet" alarm bells in your head.

But whatever you do, good luck.