no savings left after house purchase

Londonraj

Hi guys,

We have a house currently for sale, got a buyer so thats all good. We have found another house we wish to buy, but the survey for our current house came in at 7 grand less.

This is fine and we can still afford to buy the new house but we will have zero savings left afterwards.

We feel really uncomfortable about this, I guess what I want to ask is what level of savings would you say you should have after just buying a house?

tia

CloudCuckooLand

Depends what needs doing, how safe your jobs feel, if you want a holiday this year...

And how good your income is, i.e. how quickly you can rebuild a savings pot. If it will take 3 months to get a wedge behind you, and you are not under notice at work, that should suffice. If it looks like you will be saving about £10 a month, maybe not...

Go haggle with the place you want to buy, to try and get a cushion ?

WHITEVANMAN

Londonraj wrote: »

Hi guys,

We have a house currently for sale, got a buyer so thats all good. We have found another house we wish to buy, but the survey for our current house came in at 7 grand less.

This is fine and we can still afford to buy the new house but we will have zero savings left afterwards.

We feel really uncomfortable about this, I guess what I want to ask is what level of savings would you say you should have after just buying a house?

tia

edit: totally misread first post!!!

Incyder

A rule I made for myself many moons ago, is to have a building society acc with 5k in that just sits there, not needed.
Due to the recession and the odd emergency, my 5k floated down to about 3k.
I start getting jittery when it gets this low. It's now topped up.

I have heard it said that 90% of people have less that 3 months wages saved.
I know a few who live on their pay cheque and have zero savings.

hazyjo

Have you had a valuation done yet on the house you're buying? I'm presuming you have actually offered on it... how far along are negotiations? I'd be tempted to swallow the loss if the valuation on the one you're buying's okay. If a surveyor undervalues it, the vendors will probably have to drop the price so you might claw a bit of money back.

Jx

80schild

Our house sale and purchase will be wiping out all our savings (I say all we actually have very little) plus 40k of inheritance money (given now rather than on parents death.

I consider it worth it as we are in a horrible area now where my kids can't play out, I get sexist abuse of lowlife druggies everytime I pass them in the street and have had car tyres slashed just for parking outside some gangsters house! The house we are buying is in a lovely area where I grew up as a child so I am considering it worth putting everything we have into.

I guess it depends how quick you can make up savings again. At the moment my husband and I have an expensive lifestyle so there will be lots of cuts we can make if need be, including selling the second car so I don;t consider it a risk however if you are already struggling and have lots of credit cards etc.. it could be risky-depends on the situation and how desperate you are to move!

Londonraj

CloudCuckooLand wrote: »

Depends what needs doing, how safe your jobs feel, if you want a holiday this year...

And how good your income is, i.e. how quickly you can rebuild a savings pot. If it will take 3 months to get a wedge behind you, and you are not under notice at work, that should suffice. If it looks like you will be saving about £10 a month, maybe not...

Go haggle with the place you want to buy, to try and get a cushion ?

Income is fairly good, we could resave a basic savings pot in 3 months. i.e about a 900-1000 a month. We would probably try and keep saving for 5/6 months before we felt "ok" though.

We've got the place down 13k and can't get it any lower than that unfortunately.

Londonraj

hazyjo wrote: »

Have you had a valuation done yet on the house you're buying? I'm presuming you have actually offered on it... how far along are negotiations? I'd be tempted to swallow the loss if the valuation on the one you're buying's okay. If a surveyor undervalues it, the vendors will probably have to drop the price so you might claw a bit of money back.

Jx

Yes legal work is progressing, and we got it down 13k initially. It needs some basic work done (external joinery needs maintenance) and the electrics need upgrading at some point, but it's livable for now. Won't be able to redecorate for a few months though until we get some money behind us again.

Londonraj

It just seems so much money, since we became savers it's quite painful spending so much in one go! We have around 50k saved + around 60k equity and still we'll have nothing afterwards. House was £340k initially but got them down to £327k.

I suppose it'll be worth it in the end.

Thanks for the replies everyone.

silvercar

Every time we have moved we have wiped out our savings to get the best house we could afford to. If you kept a savings pot aside, would you then regret not buying a better home?

Catatonia

I wouldn't buy a house without leaving at least 3 month's worth of take home pay in savings. What if you needed urgent repairs the day after you move in?

At the moment, I'm only considering houses that leave us with just over 6 months of take home pay in savings. I'm quite risk adverse, and would worry otherwise.