Is it possible to save to buy whilst renting?

Greyhorse

Question in title really but,

My OH and I are currently trying to find a way around our living arrangements. We both share a tiny room kindly rented to us by my mother in law, saying that in all honesty we pay very little in terms of rent.
However the room is very small and we have 2 large dogs. It is also far away from my job which means a long commute (1hour minimum) and we also really need our own space. Ie, not next door to his parents

We were first wanting to buy. However cannot qualify for a mortgage as I am an apprentice Vet nurse and do not qualify for another 10 months, and he is a training teacher, and does not qualify for another 2 years.

So, in order for us to be qualifiying for a mortage it seems it will be a minimum of 3 years as it is when both of us will have a 'proper' wage. However, it seems a long way off and I cannot see myself living here for that length of time!!

My OH thinks we should save until January and then rent a small terrace.
We budgeted for a house around £400-£500pcm which is more than reasonable in the area for a 2 bed terrace (some go for £350 in less desirable areas!!) This would mean we would be pulling out in the region of £1000 for rent/bills which is feasable, obviously when my boyfriend qualifies then we will have alot more than this as he will be earning £1500 minumim per month and I myself earn £1000.
So, technically, we would be bringing in around £2500 and will only have to spend £1000 of this leaving 1.5k left over.

We were happy to save until January before the move for 1st months rent/fees/some furniture/bond and would hopefully have a spare 1k for unexpected costs.

Now the problem we have encountered is the amount of negativity from my parents and his parents that once we will rent we will never afford to buy.
Is this true that once renting you are pretty much stuck?
Is it feasable to save for a deposit whilst renting?
Is renting 'throwing our money away?' when we could be saving it for our own home?

Should we just grin and bear it for 3 more years

Thanks!

Running_Horse

Good luck finding a rental with 2 large dogs.

We all have choices in life.

Are you willing to go without now, to get what you want in three years?

Greyhorse

Well I do have 2 large dogs however am a vet nurse and both of my dogs come to work with my 9-5 during the week and are never left unattended. We have spoken to a number of agencies who assure me that it should be concidered and from speaking to a couple of landlords they say they would rent to myself?

I am willing to go without, but then again it is hard when we are getting older and want to fly the nest so to speak but are waiting when all of our friends have already moved on and seem to be getting somewhere

moesasji

Greyhorse wrote: »

Question in title really but,
Is this true that once renting you are pretty much stuck?
Is it feasable to save for a deposit whilst renting?
Is renting 'throwing our money away?' when we could be saving it for our own home?

Thanks!

1) Paying the interest on your mortgage is no different from paying rent to a landlord; in both cases you won't see that money back. (remember that over the lifetime of a mortgage you typically pay the total amount you borrowed in interest!)

2) Saving while renting is definitely possible.

To me it seems that the parents extrapolate their experience with house-prices and assume the same will happen in your case, without thinking things through (how many FTBs can afford the current prices?).

Remember that all investment-advertisements come with the disclaimer "past performance is no guarantee for future performance" which definitely applies to houses as well.

So do you own research and make the choices that appear sensible to you. Moreover in my opinion it is better to live happily in a rented house then be stuck in a place where you are not happy while saving for a deposit.

neet87

Hi, I'm sorry I don't have any advice about the renting but after reading I thought you should know, unless you live in London or have a reason (E.G LOTS of experience), your partner will not start on £1500. He will go in at point 1 of the pay scale which currently comes out as £1300 exactly at the moment (it was £1280 before the increase in tax allowance). I know this as I have nearly finished my NQT year. Thought this might be of interest so you do not over extend your budget before he starts.

kiki*_2

I managed to save a deposit while paying 550 a mont rent so it is possible! Just takes longer but it went in my favour when applying for a mortgage!

Greyhorse

neet87 wrote: »

Hi, I'm sorry I don't have any advice about the renting but after reading I thought you should know, unless you live in London or have a reason (E.G LOTS of experience), your partner will not start on £1500. He will go in at point 1 of the pay scale which currently comes out as £1300 exactly at the moment (it was £1280 before the increase in tax allowance). I know this as I have nearly finished my NQT year. Thought this might be of interest so you do not over extend your budget before he starts.

He neet he already has a GTP position in a school and they have told him this is what he will come out with, but I will certainly get him to check incase he is wrong (although he will never admit it )
Either way it means we will still have a reasonable amount of 'free' income left over after bills.

daisiegg

neet87 wrote: »

Hi, I'm sorry I don't have any advice about the renting but after reading I thought you should know, unless you live in London or have a reason (E.G LOTS of experience), your partner will not start on £1500. He will go in at point 1 of the pay scale which currently comes out as £1300 exactly at the moment (it was £1280 before the increase in tax allowance). I know this as I have nearly finished my NQT year. Thought this might be of interest so you do not over extend your budget before he starts.

I was about to say the exact same thing, you got in ahead of me!

As someone else also just finishing my NQT year, I was taking home just over £1300 a month this year - it was slightly more than £1300 because I live near London so had London fringe allowance - but I think it's less than that with the pension contributions and will be even less if the pension contributions increase, as they are planning.

daisiegg

Just out of interest, OP, if he's doing a GTP why will it take him two years to qualify?

As for your dilemma, I think it's one that is increasingly common these days. I have a few friends who are living as couples with parents well into their twenties because they think it would be impossible to save for a house while renting. Personally I would not have been able to hack it, but I'm in the very fortunate position that my partner earns a lot more than me so we were able to save for a house while renting. I think if I'd been with, say, another teacher, there is no way we could have rented in the area we live in and still managed to save for a house.

Based on what you say your rent would be, though, I think it is definitely possible. Good luck with whatever you decide!

shop-to-drop

Have you applied for social housing?

Running_Horse

Greyhorse wrote: »

I am willing to go without, but then again it is hard when we are getting older and want to fly the nest so to speak but are waiting when all of our friends have already moved on and seem to be getting somewhere

Like I said, we all have choices in life.

If renting is more important to you than saving for a mortgage, then best of luck to you. I know plenty of people who lived with in-laws, or on a boat, or just about anything to save up a deposit.

TBH I suspect your real problem is neither of you is qualified yet and bringing in a decent wage. Sometimes it's hard to see the long term picture.