Is it possible to save to buy whilst renting?

neet87

daisiegg wrote: »

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.

I was absolutely gutted upon opening my first pay cheque last September- I did so in front of some of my department who still tease me over the look of disappointment when I saw the figures! Emergency tax for 3 months didn't help either!

Greyhorse

daisiegg wrote: »

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!

Ah its complicated but basically he is on the GTP programme for september 2012 as he missed this years intake. In the mean time the school offered him a part time teaching assistant position but he is still taking lessons/planning/shadowing in the school and so will be a qualified teacher in 2 years time, a year of being a teaching assistant then a year of GTP

No we have not applied for social housing and doubt we would get it as we have not been evicted or anything? Also we barely even qualify for help as the local housing allowance would only offer us £30 pw which wouldnt do that much although would help.

Greyhorse

Running_Horse wrote: »

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.

You are right that is the problem, its just the thought of 3 more years until we qualify and then X amount of years saving up, we will be nearly 30 before we move out of our parents homes! Eek!!

jimjames

You might want to check your figures again. While it is good to overestimate costs you might well find that the costs of renting are much lower than £1000 per month unless that is including food and other costs as well as the house/council tax/utility bills.

If so then that will add to your savings pot.

Running_Horse

If you can't hack it with the oldies, then move out. It's your life, and too short a life to be unhappy. But it may delay your home ownership dreams by a couple of years. Unless they stop asking for such big deposits, which could happen.

Greyhorse

jimjames wrote: »

You might want to check your figures again. While it is good to overestimate costs you might well find that the costs of renting are much lower than £1000 per month unless that is including food and other costs as well as the house/council tax/utility bills.

If so then that will add to your savings pot.

We estimated the 1000 to include things like food, petrol, council tax and tv lisence. We didnt really know where to start though so are willing to allow for leeway either way! Its difficult to judge when neither of us have paid for these things before.
I also will have to reduce some of my own direct debits however am locked into contracts with most of them I think. With hindsight I would never have gotten them at all!

KateLiana27

Of course it's possible - it's what most people do! Including ourselves.

You basically have to weigh up quality of life for the next three years, with being able to buy a better house sooner. There's no right or wrong answer - it depends largely on how uncomfortable your current situation is. And to be honest, that's really none of your parents' business.

I completely agree with the statement that interest paid on a mortgage is just as much down the drain as rent, and the figures may not actually be that different. I think buying a house is idealised a bit too much and living in misery to achieve it is not the best plan for everyone.

FATBALLZ

I've recently bought after renting for 5 years, of course it is possible to save while renting. It would of course be quicker to live with parents and save up, but I didn't personally have that option, and who the hell wants to live with their parents in their 20s!

People (specifically homeowners) in the 35-65 age range generally don't understand the realities of being a FTB in the modern world so you can disregard 99% of what they say.

gingerscot

Greyhorse wrote: »

Question in title really but,


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,

Thanks!

I take it you mean that it'll cost £400-£500pcm for both of you and not each? The extra £500 you've added, you'd still have to pay if you bought a place, it makes no difference!

You have to think of the maths/logic. With a £100K mortgage you'll be paying to begin with ~£420 interest/month and some money on top to pay of the house depending on the length of the mortgage. That £420 interest is lost...it's exactly the same as your £420 in rent! Unless you plan to buy a house significantly less that £100K or you have a significant deposit it actually makes financial sense to rent and save.

I lived with my ex for 3 years in Edinburgh on very similar salaries and rents.....and I had plenty of cash left to spend on nights out, sports etc which admittedly should have been on savings but that's the balance you have to decide on. You can't put a value on having a larger place to live in and its great life experience, go out there, rent a nice flat and save for that deposit!

Dave

Running_Horse

FATBALLZ wrote: »

People (specifically homeowners) in the 35-65 age range generally don't understand the realities of being a FTB in the modern world so you can disregard 99% of what they say.

Not everyone in that age group bought a first home for £500 with a 100% mortgage, only for the value to triple in three weeks.

Most of us know about saving up, going without, double digit interest rates, and even living with negative equity.

If someone chooses to ignore the experiences of everyone who has been in exactly the position they are facing, then that is their choice. But in my opinion it would be a little unwise.