How much money does the first time buyer needs?

Mishomeister

Hi, all

I am currently saving money for a mortgage deposit in London and in about 1 year time thinking of buying my first own place. I am likely to buy a one bedroom flat, but there is a chance it will be a2 bedromm flat if I find a good, cheap bargain.
My question is, how much will everything cost me roughly all together. I am talking about the things like house move, buying furniture(currently have none), paying solicitors etc.

So if I save £10,000 deposit, how much on the top will i need to cover all the other costs? I am also unlikely to apply for a mortgage with a high fees, so those don't need to be included in the ammount.

beecher2

Good luck finding a £100,000 bargain in London - you'd be hard pushed to get a 2 bed flat for that in the area of Glasgow I live. Have you researched how much properties in the area are going for?

Only you know how much furniture will cost you, and how much the move itself will cost. You could freecycle all your furniture and get a friend to help move, or you could shop at expensive furniture shops and get a pack and move service from a removal company.

Sylvia1982

'Furniture' It really depends on you as a person, it could be £3k - 20k. I have been informed by friends for fees and including mortgage fees you'll need about £4k.
I live in North London, studio flats are going for £125k plus. what area are you looking at, if you don't mind me asking?

Mishomeister

Sylvia1982 wrote: »

'Furniture' It really depends on you as a person, it could be £3k - 20k. I have been informed by friends for fees and including mortgage fees you'll need about £4k.
I live in North London, studio flats are going for £125k plus. what area are you looking at, if you don't mind me asking?

I don't really mind the area that much, as long as I get a good price.

And you can definetely find a studio flats cheaper than £125,000 you have stated

Wakey2008

Bare in mind as well that some banks and building societies will not lend on studios. They would require the property to have at least one separate bedroom.

Bit of a myth Beecher that all flats in London are expensive. You can get an ex local authority flat in SE for less that £70,000 but you'll be living next to smack heads and feel like you're about to get mugged everytime you walk out of your door. West London apart, the capital really is the roughest sh*thole in England.

Yorkie1

Allow £1500 or so for solicitors fees. Survey £500ish. For starters.

LilacPixie

furniture depends on taste and what you want/need. you could pick up a cheapo sofa for under £100 in the likes of B&Q or Argos, bed for about the same but it would be pretty basic. We were just under 2k for a 3 and 4 seater sofas a few months ago. Also consider does bargain = needs work and would you want to be fully decorating before moving in? Decorating seems to just such the money out of your bank

Mishomeister

LilacPixie wrote: »

furniture depends on taste and what you want/need. you could pick up a cheapo sofa for under £100 in the likes of B&Q or Argos, bed for about the same but it would be pretty basic. We were just under 2k for a 3 and 4 seater sofas a few months ago. Also consider does bargain = needs work and would you want to be fully decorating before moving in? Decorating seems to just such the money out of your bank

I would do without a big decorating if the place looks not that bad could do without for a first couple of years. The main thing is to get on the ladder to start with. As the sooner you buy the place, the quicker you start benefit from it growing in price, possibly not in a short term, but in a longer for sure.

So to clarify my question, If I was to buy a 1 beddrom flat and buy the cheapest available, but new furniture, gone for a tracker mortgage(generally those are alower fee ones) and obviously had to pay a solicitor, what would my budget need to be like? Just want to know at which point I need to stop saving and start looking for a property, that suits me.

seilduksgata

The main thing is to get on the ladder to start with. As the sooner you buy the place, the quicker you start benefit from it growing in price, possibly not in a short term, but in a longer for sure.

Property prices will probably not rise in the future in the same way as they have done in the past, although the market in London is probably stable enough to stop them going down dramatically. This means that although using your life's income to buy a place is still generally more sensible than renting, it is definitely also important to consider the value the place will be likely to have if/when you decide to sell it. Studios and cheap 1 beds in rough area may be very difficult to get a decent price for, especially when the market 'realises' that the property boom is over. Upgrading frequently loses you money in all but a booming market because of the costs associated with buying and selling.

You might want to consider looking at your current salary and how likely it is to rise in the next few years, then take the deposit to the bank when your income will allow you to afford a mortgage that buys a place in an at least okay area. Hopefully you can then get hold of a place that meets your housing needs for a reasonable time and won't be a nightmare to sell when you do move on.

You can check the figures with a mortgage calculator on banks' websites.

When you're coming nearer to buying, look at properties in an area you know very well - see how much they are going for on estate agent websites - you will have a feel for what has good transport links and is in nicer streets from knowing the terrain and start going to viewings well before you are about to buy to get a good feel of what things are worth. Then try to spot the anomalies, to get good value. Sacrifice the advantages you can personally live without (but not to a ridiculous degree that will make the property very hard to sell). I would suggest less well connected areas in zone 2-3 or better connected ones in zones further out, with your current budget (or perhaps you have an amazing salary and can afford a 1 bed in a more popular area, what do I know?)..

HTH!

Mishomeister

seilduksgata wrote: »

Property prices will probably not rise in the future in the same way as they have done in the past, although the market in London is probably stable enough to stop them going down dramatically. This means that although using your life's income to buy a place is still generally more sensible than renting, it is definitely also important to consider the value the place will be likely to have if/when you decide to sell it. Studios and cheap 1 beds in rough area may be very difficult to get a decent price for, especially when the market 'realises' that the property boom is over. Upgrading frequently loses you money in all but a booming market because of the costs associated with buying and selling.

You might want to consider looking at your current salary and how likely it is to rise in the next few years, then take the deposit to the bank when your income will allow you to afford a mortgage that buys a place in an at least okay area. Hopefully you can then get hold of a place that meets your housing needs for a reasonable time and won't be a nightmare to sell when you do move on.

You can check the figures with a mortgage calculator on banks' websites.

When you're coming nearer to buying, look at properties in an area you know very well - see how much they are going for on estate agent websites - you will have a feel for what has good transport links and is in nicer streets from knowing the terrain and start going to viewings well before you are about to buy to get a good feel of what things are worth. Then try to spot the anomalies, to get good value. Sacrifice the advantages you can personally live without (but not to a ridiculous degree that will make the property very hard to sell). I would suggest less well connected areas in zone 2-3 or better connected ones in zones further out, with your current budget (or perhaps you have an amazing salary and can afford a 1 bed in a more popular area, what do I know?)..

HTH!

Well, the longer I wait, the more money I waste on an expensive London rent rent. When I will have my own place I will start to repay a loan and increase my equity at the place(do realise not by that much, as you pay mostly interest at the begining. However at the moment all my rent money goes wasted. As I am not one of those lucky people who can licve with their parents for free(or very little keep) and save for deposit.