Buying my first house and dont have a clue

Honest_EA

Sorry to be blunt, but you CAN rent for the rest of your life and it won't be the worst thing in the world. The thing is that British people have been brainwashed into thinking owning your own house is a sign that you are getting on well in life and that it is something to be proud of. 'Renting is dead money' I have heard thousands of times. Well the truth is that many people who thought that owning their home was their god given right and paid whatever the asking price was are now sitting with a mortgage they cannot afford as they have lost their job and inflation has led to everyday items costing more. The fact that you are looking at properties around £130,000, have bad credit, no deposit and are looking to borrow 10x your salary (which is well below the Uk average) shows me that there are still some very uninformed people out there. Unfortunately you have no chance of getting a mortgage right now with no deposit and earnings of £13,000.

Think about this for a moment: If you bought a house at £130,000 and it lost 10% of its value in one year due to the housing crash you would lose £13,000 plus the cost of paying a mortgage for one year (another £7000 as an estimate). You would be £20,000 out of pocket while renting for the same period could cost you £6000, so all in all you would be 14,000 better off by renting in a faling market.

I know I'm an estate agent and I should be talking up home ownership but I've seen too many nightmare stories to let some people even contemplate buying a house when its the wrong decision for them. For those that can afford it and have a good deposit, I'm all in favour of them buying. For others, renting is a good option. The vast majority of German people do NOT own their own home, they rent instead and you dont see them having a bad lifestyle. Infact, I would say they have a better quality of life then us Brits who struggle to keep up mortgage payments in the goal of owning our own little castle.

SilverSix

If you're short of room then if you can afford to save £8000 PA could you not save a little less and rent somewhere a bit bigger.

Saving like a nutter and popping what you can in to ISA's for two years should see you save around £12-14k if we assume you rent a bigger place. Then you're a bit nearer to a 15% deposit, though you'll still need a larger salary?

Can the OH get a part time job?

Don't forget about the costs of moving, solicitors fees etc.

peainapod

HonestEA - sorry that I'm uninformed, that's why I came here, that's why a lot of people come here ...
I don't think its bad to rent, but personally I want somewhere I can call home, my own home, and no I don't have a deposit right now so obviously not going to get a mortgage right now, was just putting the feelers out to try and understand how it all works for when I do have a deposit. Sorry but not everyone is an estate agent who understands how these things work !

evoke

Jeez. How can you save £8000 per year on a salary of £13,000 to £14,000? Do you not pay any NI or tax?