General advice on starting out.

fozmcfc

My situation I'm 40, never ever lived by myself, only ever lived with my mum and/or brother. Main reason why, never ever been able to afford anything else due to being a bad gambling addict until 2 years ago.

Finally the gambling is behind me and I'm looking to move to my own place in 6 - 12 months time.

By the end of the year I will have about £20k saved, I earn £30k a year (about £25k after tax) and my credit record is spotless (no late payments, never ever defaulted or had any sort of CCJ etc) and I do get accepted for credit cards with lenders such as MBNA/Halifax/Tesco etc.

I'm really stuck as to what is best, do I start out by just renting somewhere, or do I look at one of these places where you own a quarter/half share, or am I young enough still to consider a mortgage.

I really don't have a clue as, as I have said I have never ever even looked into getting my own place (rent or buy).

Any advice greatfully received, cheers

BitterAndTwisted

1) Please don't consider shared ownership/shared equity. These schemes seem to me to have been developed purely for the benefit of the freeholders.

2) Consider renting for a while, maybe six months or so to see how you enjoy living in your own.

3) If you earn enough and your employment is secure, home-ownership is not out of the question but this does depend on a number of factors. With only 20 years let of possible gainful employment your mortgage payment are going to be relatively high.

4) If you do go down the home-ownership route I would think about buying a freehold rather than a leasehold flat. You might not want sky-high service-charges to pay in your retirement.

CloudCuckooLand

In part this will depend on where/what you might buy. In London, you will struggle to buy anything with that deposit/income - at least anywhere decent.

So renting could be essential, rather than just a good idea to get used to living on your own.

If mcfc means you are local to the blues, then there is some good cheap property around the NW.

Looking at your signature, if you can go from £4400 to £20k by the end of the year, that's great. Look at locations you like and the houses around those locations, see what price they are...at a rough guess, you can probably aim around £140k. Getting the £20k to 15% of the price of houses you like would improve the mortgage deals. Don't forget fees etc...if you get to £25k it all helps.

But renting is still a decent option as you need to road-test living alone.

Personally I'd avoid Shared Ownership, too many rules, complications, limitations.

AnnaV

We have been renting for ten years and finally looking to buy this year. Have learned so much about properties from renting - exactly what our requirements are, how much difference living 50 metres away makes (we live in London!), things that seem like they matter but hardly get used (extra spare bedroom), things that are very important but easy to forget (transport links at rush hour can be very different to when the EA shows you round).

Personally if I were you, I would rent for 12 months, get a really good feel for the market (both renting and buying), keep an eye on Rightmove, Findaproperty, Zoopla etc. Get to know your area really well.

Generally speaking there is no such thing as a bargain property - houses are usually priced the way they are for a reason.

Have a look at the house buying tips thread, some excellent ones on there.

JuniorSherlock

You have an excellent credit rating, so keep it that way.
HOWEVER, you need to show that you can keep up with regular payments, which renting will prove. So get out of your mums house and rent for about a year, by which time the housing market may have either fallen again or remained stable.
Another good reason for waiting a year is that banks may start to relax on lending and you'll find it easier to get a mortgage.

Save like mad. £20k isn't bad for a deposit but it would be better if it were more.

There is no rush. We just applied for a mortgage and my husband is 45. We got a 20 yr mortgage. The longer you wait the more savings you can build up. But renting will put you in a better position with the bank and will get you used to living on your own.

Research the market, find out what kind of house you are looking for. Keep an eye on house prices, check out local areas and when you feel ready, you can apply for a morgage and hopefully be on your way to getting your first house.

Well done for beating your demons, that's a hard thing to do. You deserve a huge pat on the back and I wish you the best of luck for the future.

fozmcfc

Thanks for your help so far.

Just to clear a few questions up.

Job is as secure as a job can be, work in the travel industry and have done for 22 years. Current job and home location is London.

My signature doesn't tell the full story, I actually have £15k in a savings account already, my sig is just what I have managed since September.

As well as quitting gambling, I have tightened my belt so much, worked quite a bit of overtime and with that I manage to save roughly £1000 a month. If I carry on as such, I probably will have £23k or so, said £20k as a goal I know providing nothing changes I will meet.

I did think about renting to get used to living alone, maybe I'm wrong, but the thought of paying say £600 - £800 a month for 20 years and having nothing to show for it, is quite disheatening to my thinking.

If I retire in say 20 years, I will have a decent work pension, although I couldn't say how much, never really looked into it.

mlz1413

Living in shared accomodation is very different to living with family. If you do 'share' maybe just rent a room so it's you and the home owner, ie owner sets the rules and you just get used to living away from home but for a set rent + food and personal money.

Sharing with 4 different people in a house often leads to disputes about who cleans the bath and who used the last of your coffee which at 40 you might well not want to do.

Renting a small place on your own for about a year will help you get used to paying bills, cost of bills & life in general plus you can wash up and clean the bath when you want to.

You should be able to get a mortgage as most lenders assume 25 year mortgages which only takes you to 65 and as the government has just removed the legal requirement to retire at that point lending to 65-68 yo should be possible.

You could go and have a chat with a whole of the market mortgage lender and see when age becames a problem.

AnnaV

fozmcfc wrote: »

I did think about renting to get used to living alone, maybe I'm wrong, but the thought of paying say £600 - £800 a month for 20 years and having nothing to show for it, is quite disheatening to my thinking.

I'm not saying do it for 20 years, just 12 months, and what you learn could help you save ££££££ in the future.

Also be aware that when you have a mortgage you will also be throwing money away on interest - it doesn't all go towards repayment.

Oh, and well done for sorting out your gambling problems :T

pupsicola

Well done on beating your gambling addiction that is a huge achievement.

Personally I wouldn't rent if you know the area well where you intend to buy. Why pay off someone elses mortgage when that cash could go toward your deposit and mean taking out a smaller mortgage.

You have a good credit record, are in a secure job with a strong employment history,will have a good savings record and a substantial deposit by the time you apply for a mortgage. Cant see it being a major problem.

All I would say is be aware of what your costs will be to run the property; utilities, council tax, insurance, other bills and expenses. Knowing you are able to meet those costs and your mortgage payments will give you confidence and any potential lender.

When you start looking for a property consider the possibility of having a lodger. They could help towards the mortgage payments and it would also mean you wouldn't be living alone. Worked for me years ago when I started out.

One thing I was going to advise is if you have any loans/ debts etc I would clear those first before putting savings by. Normally the interest rates are higher than your savings can make. Will also look good to a lender if you are close to debt free.

Good luck with it all

JuniorSherlock

But if she has no history of paying towards something, whether that be a mortgage, rent or student loan, then she may find it difficult to get a mortgage.

Her best bet is to go to an independant mortgage advisor. State your case and they will tell you realistically how much you can borrow and what the banks will be looking for. You see, to them you are an unknown quantity. You have a clean credit history which is good, but they have no idea how good you are at paying things off because you've never borrowed.

Renting can be a pain because as you say, you are paying money towards someone else's mortgage. But with a mortgage don't forget you'd have to pay buildings insurance, fork out for any repairs and keep up with interest hikes. Whereas you could pay your rent for 5 years and never see an increase, plus no repairs to worry about, they take care of all of that for you.

It will give you a taster and will increase your chances of a mortgage. It is possible to get a studio flat in London for around £500pcm like this one http://www.rightmove.co.uk/property-to-rent/property-17704131.html. I also think that, looking at the market and the economic situation at the moment, you may be best biding your time for a year or two anyway. You've still plenty of time to go looking at houses and if you are looking to buy in London you will need rather more than £15k as your deposit.

So my advice - see a mortgage advisor to get a realistic idea of how much and if they will lend to you. Rent for a year or two and keep a close eye on the market. Save as much as you can, putting your savings into a high interest account (one of those where you have to make minimum monthly payments for around 4% interest) and have a review after one year.

fozmcfc

Thanks for the further advice/thoughts and also the nice comments about my gambling. I should add I'm a he as well lol. If it makes a difference I have been with the same bank since I was 17 as well.

Following the advice here, I'm warming to the idea of looking for somewhere in the region of £600 - £800 a month to rent a one bedroom flat but to live by myself as I really don't want to share a place, be a lodger or even share a bathroom/kitchen etc.. I'm not fussed even if it is quite small.

I take home normally £2000 a month (minimum £1850 and sometime as much as £2300), so I see that as an achieveable amount of rent.

As I've said I'm not going to rush into anything and will spend months and months, looking around, seeking advice etc...

Thanks again.