Prudent Graduate seeks advice on Property

mrak

Hello all,

After a fair slog, I've finally made it out of university, clutching my 2.1 with pride. I've only been working for 6 months, but I'm on a reasonable salary, living at home with my parents (Minimal rent! No bills! hooray!) and I'm eager to get a foot on the property ladder a.s.a.p.

I'm fairly prudent with my money, and would like to garner your opinions on where I should go from here. I've thought about investigating the feasablity of a joint ownership with a friend and just sitting tight and stashing any savings into an ISA.. What I'd like to know of is any other realistic/feasible options open to someone keen to make the most of his cash.. I could potentially save close to £750 a month after rent/expenses.. but how could I best invest this?

My student loan stands at 8k, I have an interest-free overdraft with Barclays of £1k and £4k stashed in my ISA to date.. I've deliberately stuck this question in the property section, as I'm already fairly clued up re: ISAs.. Anyone got any tips for me?

Mrak

dougk_2

My tip is stay at home as long as possible, save and pay off your debts (although I know student loans are at low rates they are still a debt)!
As soons as you move out/buy a property thats when you find out how much it really costs!
IMHO I would suggest you save for a couple of years (pref 4 or 5) to get a decent deposit saved and funds to pay for costs involved in buying a house and maintaining it.

GDB2222

Before buying property, look at this url:

http://www.nationwide.co.uk/hpi/downloads/UK_house_prices_adjusted_for_inflation.xls

If that does not work, go to

http://www.nationwide.co.uk/hpi/historical.htm
Click on 'Uk series' and select 'UK House Prices adjusted for inflation'

When that spreadsheet opens, select the chart and ponder. If you buy now, you will be buying UK property at an average price of £157k compared to a long trend figure adjusted for inflation of £107k.

House prices are bound to fluctuate around the trend line. However, you would be buying at nearly 50% above the trend line.

There are all sorts of fancy theories about why it is perfectly OK for property to be so expensive. So, you have to take your choice. Either the world has changed utterly, so that sky-high prices are here to stay. Or prices will revert to the long term trend (or even go below it), in which case we are due the mother of all falls.

mrak

I'm always impressed by the quality of the responses from all over on this forum, and I'm genuinely thankful for your responses guys.. My Mum's dead prudent with her cash, and I abhor the idea of pouring my money away into rental property after doling out so much in rent whilst at uni..

dougk: I'm planning to stay put for as long as I can! As I work in the city, it's really not a problem commuting from my folks house in suburbia.. I seem to be really lucky to have a very good relationship with my folks, so I'd like to maximise on this boon where possible!

I'd welcome any more advice that you guys have! Does anyone know anything about buying holiday homes overseas? Say in non-EU countries in Europe? Maybe such a thing deserves a separate post..

Thanks to all,

mrak