Advice needed for moving out

djwolf

I'm 32 and still at home with parents right now but may be considering moving out in about 12-18 months time. I always wanted to move out after meeting a woman to settle down with but I guess that may never happen! I currently have about £4.5k saved, want to get that up to around £10k ideally although that's probably being optimistic.

Just want advice on a couple of things:

Firstly, I'm very undecided over whether to rent or buy and take out a mortgage. Both have their pro's and con's. Renting is good for flexibility and to see how I get on living alone. Also, the landlord has to fix any problems. However, it's wasted money in a way and seems to be slightly more expensive than a mortgage despite not even owning the property. At the same time I'm not sure if I want a big mortgage hanging over me. I can afford to pay up to £450ish a month for rent/mortgage.

Secondly, I'd like an idea on the average monthly running costs for a single person in a 1 bedroom house or flat - including heating, water, council tax, home insurance, phone/internet and TV licence. I know I'll also have to pay for food and petrol etc.

Thanks.

Annisele

Whereabouts do you live?

If you're in London, unfortunately you've no chance at all of buying anywhere with a £10k deposit (with the possible exception of some shared ownership places, but even then I think it would be a stretch).

In most of the rest of the country you'd seriously struggle trying to buy somewhere if you only had £4.5k. You usually need to put down at least 5% of the purchase price, and then pay on top of that for legal fees/survey/etc etc - and you'll want some furniture at some point.

If you had £10k, buying would be a little more reasonable in some areas, but not in all.

djwolf

I'm around the Midlands area where house prices seem to be about average. Council tax is fairly high though.

Yes I know I need to get up to £10k at the very least to be able to put down a deposit and buy furniture. Maybe I need to give myself a bit longer to save up.

Annisele

Some of your other threads suggest you might have borrowed money to buy a car. If you have, that'll have a negative impact on the amount you're able to borrow.

I'm around the same age as you but in London. I've pretty much given up on the idea of ever being able to buy, so my "buy or rent" decision has been made for me. Depending on your income, you might be in the same position.

London_Town

Hi djwolf, why don't you consider renting for at least 6 months, as a prelude to possibly buying? If you've never lived alone before, renting will give you the opportunity to assess the running costs for your home and if it it's not working out, you know that buying isn't realistic for the time being.

By chance rather than design, I rented for 6 months before I bought and I found it very useful in learning to budget household bills and think about what sort of property I'd actually like to buy.

I'm in the West Midlands and £450 a month as a rental, will bring you within striking distance of quite a few nice one bed flats. Could be worth some research on Right Move?

Whatever you decide to do, try and continue saving as that will only be a good thing for your long term future.

[Deleted User]

djwolf, at 32 you're a spring chicken! I'm nearly 40 and still lodging with friends, although just in the process of first-time buying (touch wood). I didn't intend to leave it this long, but whereas getting a mortgage seems daunting, renting with friends is so comfortable, and I imagine living at home is similar!

Experimental renting idea as a first step sounds very sensible, as long as it puts you in a position where you can still add money to your savings each money to grow your potential deposit. The alternative, if you don't want to move out for 12-18 months, would be to come up with a serious financial plan that will enable you to reach at least £10k in that time, if possible.

If you rent, make sure you do sensible stuff like immediately register on the electoral roll etc. Not doing that for one of the places I've lived in recent years came back to bite me when I first tried to apply for a mortgage due to not showing up on credit reports.

TV licence is currently £145 I believe. Council tax will depend on property but the various price bands should be published on the website of your local authority and you might qualify for a single occupant's discount too. A one-bed flat would probably be in a low band. Utility bills might need more research - do you have friends living in one-bed flats who could give you an estimate of what they pay? Phone/internet? Check out Virgin, Sky websites etc - varies massively according to which package you desire.

Good luck!

kingstreet

I did some figures for someone today.

95% mortgage on £73,625 over 25 years and the rate was 5.49% fixed for three years. The monthly cost was £457.

TBH this was for a shared ownership purchase, but at 95% the rates aren't great whichever way you go...

glos1983

From personal experience I would suggest renting and saving for a bigger deposit before buying. I got sucked into the mentality of 'must buy as renting is dead money' about six/seven years ago and ended in a very bad investment.

I bought a new build on a 95% deposit, and as such the mortgage products available to me were very limited - 5 year fixed where the interest payments were higher than the rent I was paying on my previous place (kindda destroys the 'dead money' argument!!).

I've just sold my first place a worked out I would have been at least £20k better off if I had stayed renting and waited to be a FTB now with a bigger deposit, especially when you factor in stamp duty, solicitor fees, estate agent fees etc. Admittedly I was unfortunate to buy in 2006 before the crash, but there is no guarantee prices won't go down again.

So I would say it's better to have the flexibility of renting first until you are in a financial situation where you can get a good mortgage product and aren't tempted by the 'deals' new build sellers offer - ignore the 'we pay deposit', 'we pay stamp duty' - alluring for a FTB but a one way ticket to massive negative equity.

hazyjo

Put your salary, loans, etc into some mortgage calculators (YBS have a good one) and see what they'll actually (roughly) lend you. No point in saying you have £X amount to spend on a mortgage or rent, it's not what you believe you can afford.

Can only be a good thing if you gain some independence and live alone before meeting that special someone! You'll have somewhere to take them back to for a start (and no girl wants to wonder if she's gonna be a mum-replacement!) Please don't shoot me down for that lol - just sayin', like

Good luck, let us know how you get on.

Jx

Yorkie1

Don't forget to factor in the buying costs such as mortgage application fee, survey, search fees and solicitors costs. That could easily account for £2-3K.

djwolf

Thanks for the comments, all very helpful.

It does appear that renting will be the best and only realistic option for me, especially if I'm still single when I move out. Although there's no major rush I hope to do it within the next 18 months. For now I'll keep saving as much as I can each month!