Aargh! House prices are so low but we don't have a deposit!

Dharma_Bunny

For the first time in years house prices in less desirable areas of town are low enough that we could in theory get a mortgage, but of course no one offers 100% anymore.
We aren't doing so well now financially, but we'd be much better off paying a £300 pcm mortgage than £500 pcm rent, and I'm not anticipating the prices staying this low for too long.
Soooo... I think we should do what we can to get a deposit together however we can.

Any advice? Cautionary tales? How did you get a deposit together? Ebaying? Loans? Good old-fashioned hard work and saving? :T

originalmiscellany

I guess the key qn is:
a) Interest rates have never been lower.
b) As you said a massive deposit is needed.
c) House prices are going to go down for the next few years (I think).

My thoughts are it would be good to save as much as you can - set a target of say 1k a month for 2 years, and then you'll be in a much better position to buy.
We do lots of what you've said, we e-bay stuff, buy wholesale (Costco), live sensibly e.g. drive slowly to work, have both me and MOM signed up to money saving, else you can save as much as you want but if the other partner spends like it's water, you will never get anywhere!

Is there any work you could take on, even just evening work (Shame you just missed the census collection)?

A hard thing to do is to post an SOA http://www.makesenseofcards.com/soacalc.html which people can comment on about where you're not getting best value.

If possible, tell us what you can save per month currently as well. It's lots of small steps end up making a big difference we have found.

Hope it helps, and please don't think I was preaching in the first few lines, I was trying to put my thoughts into a framework and context.

00ec25

i'd rather pay £500pcm rent than buy in a property in a less "desirable area" which I'd then have to pay to maintain and then have trouble selling precisely because it is a rough area.

if you have no deposit now, and you have job worries (or at the very least "are not doing well financially") then the very last thing you should be thinking about is spending what savings you have or can create on a deposit for a property

originalmiscellany

Oh and set up a thread on here documenting how you're getting on. It'll be excellent at keeping you focussed.

Dharma_Bunny

Is that the concensus then, that prices are going to keep going down?

We are totally skint, not sure we should save if we're going to be fully nourished iyswim, but it feels like the time to go for it.

I'm looking at houses around £50-60,000, so considering a little saving, selling plus maybe a loan etc. as it's not a huge deposit we'd need.

harrup

Dharma_Bunny wrote: »

We are totally skint, not sure we should save if we're going to be fully nourished iyswim, but it feels like the time to go for it.

Dharma Bunny, lamentably I have nothing of use to you to offer in terms of advice of how to buy a house without any money whatsoever.

But...I just wanted to say that I'm rooting for you.

Your message made me smile. There is something so deeply incongruous and yet so joyously optimistic in your statement, that I totally hope it works out somehow.

BitterAndTwisted

Spend some time on the Old-Style part of the forum to see how you can cut your housekeeping expenses right down to the bone. Did you know that it's perfectly possible to feed a family of four a delicious and nutritious menu for £100 a month? No, nor did I until someone on Old-Style set up a site telling how you can do exactly that:

http://www.cheap-family-recipes.org.uk/

Imagine how much you could stash away in savings once you did that? Never mind, all of the other simple economies you could make.

iamana1ias

Lenders won't give you a second look if you use a loan for a deposit

23rdspiral

hi, i've no crystal ball re house prices, but if things are a little tight and you want a little advice/encouragement in saving more of the money you do have, then you could try looking at the Frugal Living Challenge... you could join if you wish, we're a friendly bunch, but even if not, the links in the first post could be useful. https://forums.moneysavingexpert.com/discussion/comment/42475436#Comment_42475436 good luck!

Jimmy_31

Dharma_Bunny wrote: »

Is that the concensus then, that prices are going to keep going down?

We are totally skint, not sure we should save if we're going to be fully nourished iyswim, but it feels like the time to go for it.

I'm looking at houses around £50-60,000, so considering a little saving, selling plus maybe a loan etc. as it's not a huge deposit we'd need.

In my opinion yes i do think house prices will keep coming down, in the last 6 months ive seen lots of houses in the area im looking to buy being reduced by 20 percent on average (and they still havent sold).

The only thing keeping house prices up at the moment is the base rate being kept at 0.5 percent, the government cant keep it there for much longer so there is only one way its going to go and thats up, this will have a quite large impact on a lot of home owners who are struggling at the moment and consequently there will be a lot of forced sales and houses arent selling at the moment anyway so that just adds more houses to the market, couple this with a lack of FTBs and prices will just keep coming down.

I have most of my deposit saved so in theory just need to get some money for fees and 6 months wages saved to fall back on and im good to go but i cant see me purchasing a home within the next 12 months whilst the market is falling. I may start making some offers around summer time but they are going to be way way below asking price so maybe if i find a seller who has had enough of chasing the market down then i might end up purchasing.

GDB2222

harrup wrote: »

Dharma Bunny, lamentably I have nothing of use to you to offer in terms of advice of how to buy a house without any money whatsoever.

But...I just wanted to say that I'm rooting for you.

Your message made me smile. There is something so deeply incongruous and yet so joyously optimistic in your statement, that I totally hope it works out somehow.

It's strange to think that a few years ago lenders would have been happy to lend to DB, skint as he is. As long as prices kept moving upwards, it seemed like sensible lending to them.