Is there any hope?

girl_withno_name

vincent.waldorf wrote: »

wow just read the above. you guys dont think that a a 250k property is possible on a 35.5k salary?

how come? he should be raking over 2k a month and a mortgage is usually about 1k?

By my (rough) calculations the take home pay would barely scrape £2k per month and the mortgage payments at 6% would be £1450, £1315 at 5%, £1188 at 4%... The OP could definitely be in trouble if interest rates rise and their mortgage payments at 6% would already be approximately 67% of their take home pay.

Given that the OP is, while very eager to save the deposit to buy their own place and move out, saving £1000 per month I'd hazard a guess that this is about all they could afford (and hence mortgage payments would need to be around this level at most).

There's also the small matter of mortgage lenders generally only lending up to about 4x salary, which would be £140k in this case.

vivster

If you're 25 and already earning £35k I'd say things are going pretty well for you. Particularly if you've got obliging parents living in a good location charging you cheap rent.

I don't see why you're so set against moving to a different area. If you are in London you could be in a much cheaper area by just moving a mile or two up the road. I don't see how you would be any worse off in terms of job opportunities.

Either set yourself a realistic budget and see what it will get you and be prepared to compromise, explore shared ownership (which also involves compromises), or stay put and see where you are in a few years time.

geoffky

Stay away from shared ownership deals....they are for mugs...

FireWyrm

geoffky wrote: »

Stay away from shared ownership deals....they are for mugs...

No, they're not. I grew up in one. Gross generalisations like that are unhelpful.

FireWyrm

vincent.waldorf wrote: »

wow just read the above. you guys dont think that a a 250k property is possible on a 35.5k salary?

how come? he should be raking over 2k a month and a mortgage is usually about 1k?

I think you need to do some basic arithmetic because I can guarantee the banks will have prior to agreeing to lend.

In short if you take a mortgage which is expensive at 6% and the repayments make you blanche at 12%, then you are being grossly financially imprudent. Just because interest rates are at an all time historical low, doesnt mean they will remain that way.

OP, people have always had to move away from their comfort zones in order to secure a future. My parents in law had to move out of watford in the 60s for precisely the same reason. They managed to survive and I assure you that there are jobs outside London.

Head up past Milton Keynes and you can have a house far bigger than you could possibly afford in London for £120-180 easily. Don't mortgage yourself for a quarter of a million pounds, it's financial suicide.

Vincent.waldorf

I have dne the "basic arithmetic" for someone and this is why i was confused. but i guess the biggest assumption is that i assumed they had a 25% deposit.

I plugged the numbers into my model and girl with no name is right about those numbers at a 10pc deposit!

cleas001

Thanks for the advise eveyone - I agree £1200 would be the max I could stretch to each month!

I think I'm going to have to stay put for the time being - for me personally moving away from friends and family is a comprimise I'm just not willing to make.

I'll keep saving and re assess in a couple of years.

Vincent.waldorf

cleas001 wrote: »

Thanks for the advise eveyone - I agree £1200 would be the max I could stretch to each month!

I think I'm going to have to stay put for the time being - for me personally moving away from friends and family is a comprimise I'm just not willing to make.

I'll keep saving and re assess in a couple of years.

I have put together a financial model that i would be willing to share with you if you want.
it allows you to do sensitivity analysis.

Happy-Days_3

I personally don't think you are saving enough at present. Without a student loan, that is £2,180 per month. With a sl, it is £2,030. You save £1k per month, spend £400 on other bills. Where does the other £600-£800 go?

I think you are spot on for saving a deposit while staying at home, but I think it should be treated like the hassle it probably is. E.g. Save £1,400-£1,500 per month, maybe get another job, just work your but off and save hard for a year or 2 so you can get out as quickly as possible.

Don't forget, it isn't just the deposit, there will be other fees as well - mortgage fee, solicitors, survey etc. So you don't just need the deposit cash. Buying a place ain't cheap.

girl_withno_name

vincent.waldorf wrote: »

I have dne the "basic arithmetic" for someone and this is why i was confused. but i guess the biggest assumption is that i assumed they had a 25% deposit.

A 25% deposit is £62,500 - the OP currently has £12k and is saving £1k a month, it'd take them another 51 months to get that deposit together :eek: ... and they were hoping to buy within a year!!