Graduate wanting to move out of parents house. Best options?

malteaser04

Hey, hoping someone could tell me what my best housing option is as I don't know too much about buying/renting etc!

I graduated from uni in 2012 and am 23 currently living back at home with my parents & am finding the lack of independence very tough and defs want to move out in a year. I live/work in London.

I get £21k from my new job. Thanks to life savings from my parents I have £11k saved which I can easily bring up to at least £16k in a few months.

I am also saving to go travelling for a few months next year, aiming to return in April 2014. I will have to quit my job to go travelling & get a new one when back and this is when I'd like to move out.

What sort of options do I have based on my salary for a house in a decent area in London? I could rent a house as this offers flexibility but not sure how I could continue saving for my own property by doing so/ if its a waste of money.

I looked into government schemes like the share to buy one and the new 20% equity loan which seemed like possibilities but the FAQs said you can't rent these out to people. Since my eventual long-term goal is to be self-employed and have the option to travel and rent my house out, I was a bit put off the unflexibility of it this no-renting-out rule!

What options would you recommend based on my financial situation and goals?

To summarize, the dream (perhaps idealistic!) is to move out April/May 2014. Will have £11-16k savings by then. Currently on £21k, when applying to 2nd when back from travelling this would hopefully rise to £25k. Eventual long-term goal is to become an entrepreneur, be flexible enough to be able to rent out my property a few months a year if travelling...

Thoughts?

19lottie82

malteaser04 wrote: »

What sort of options do I have based on my salary for a house in a decent area in London?

You won’t be able to afford to buy in London on a salary of £21k. Or £25 k either, i'd imagine. Renting on your own would be quite tight financially too.
A house share would be your best bet, and you’d get to meet new people to develop your social life in the area too.


If you're set on buying, do you have to stay in London. If you will have to look for a new job somewhere where you can get more property for your dollar?


I'd concentrate on going travelling first, then getting a new job and work out where you can proceed from there based on your salary.
It's all fair and well saying "I'll come back and get a job on 25k" but it might not happen. Also, who says you'll come back from travelling? A lot of people don't!

19lottie82

malteaser04 wrote: »

Eventual long-term goal is to become an entrepreneur, be flexible enough to be able to rent out my property a few months a year if travelling...

Thoughts?

Also, the general minimum lease length when renting out a property is six months. You could make it smaller, but there might not be many takers, and also, they might refuse to leave at the end of the term, then you’d have to go to court to apply for an order to get them out. This can be very time consuming and costly. (There are plenty of threads on this board posted by people having such problems!)

Oh and you will need “consent to let” from your lender. Conditions can vary from lender to lender, a common one is that they may only grant this once, valid for a period of 12 months, for example, then you may be required to move on to a “Buy to let” mortgage, which requires 25% equity.

You’d be better looking to buy a two bed place and taking on a perm lodger to help pay the bills

silvercar

Go travelling, come home, find a job.

Then see what options are open to you. No point looking to move out until then as you won't know exactly where the job is.

Keep networking while your away and see what housing options are available when you get back. A house share seems the most affordable option.

malteaser04

19lottie82 wrote: »

A house share would be your best bet, and you’d get to meet new people to develop your social life in the area too.


If you're set on buying, do you have to stay in London.

I'd concentrate on going travelling first, then getting a new job and work out where you can proceed from there based on your salary.

silvercar wrote: »

Go travelling, come home, find a job.

Keep networking while your away and see what housing options are available when you get back. A house share seems the most affordable option.

Thanks for your replies silvercar/lottie!

I will be looking to stay in London for now as friends/family live here.

House sharing does sound like a nice option & tempting as i have graduate friends looking to houseshare. My only concern is, can I still save to get on the property ladder whilst house sharing? Is that feasible? Or will it be likely all my salary would go on rent/expenses?

My family are quite traditional... inbedding the idea that any form of renting is a riduculous idea/ way to throw money away especially if im lucky enough to live in their house and save.. saying there's no point moving out until i can get on the property ladder otherwise i'll end up renting forever...That's the main source of advice i have atm and am a bit confused with whether it's the best advice or if they're worrying too much!

Ronaldo_Mconaldo

Ah to be young again. Come on, people. Tell this person the ways of the world. Quit your job and go travelling and you'll likely find you have no money and that there might not be any jobs for you to go back in to. If you're a graduate you should have got the travelling thing out of your system as soon as your exams finished, now it's too late, fun's over. It's time for the drudgery of modern day life to take it's toll on you.

Give up your dreams and get settling down, live with your folks for a few more decades in order to save for that elusive deposit.

malteaser04

Ronaldo_Mconaldo wrote: »

Ah to be young again. Come on, people. Tell this person the ways of the world. Quit your job and go travelling and you'll likely find you have no money and that there might not be any jobs for you to go back in to. If you're a graduate you should have got the travelling thing out of your system as soon as your exams finished, now it's too late, fun's over. It's time for the drudgery of modern day life to take it's toll on you.

Give up your dreams and get settling down, live with your folks for a few more decades in order to save for that elusive deposit.

eek that was depressing to read...!!

I couldn't afford to go travelling 'as soon as [my] exams finished' & had some unpaid internships before landing my current job so not possible til Jan

olly300

malteaser04 wrote: »

Thanks for your replies silvercar/lottie!

I will be looking to stay in London for now as friends/family live here.

House sharing does sound like a nice option & tempting as i have graduate friends looking to houseshare. My only concern is, can I still save to get on the property ladder whilst house sharing? Is that feasible? Or will it be likely all my salary would go on rent/expenses?

Depends on your job and how much you earn.

Also there are quite a few people I've met over the years who have moved to a different country and a lot of them have been in that country for over 10 years so I guess it's a permanent.

Those that brought property have had to work out whether to sell it due to the hassle of dealing with tenants.

malteaser04 wrote: »

My family are quite traditional... inbedding the idea that any form of renting is a riduculous idea/ way to throw money away especially if im lucky enough to live in their house and save.

So are mine.

They were shocked when I went and worked abroad and then when 5 other cousins and a sister followed me within 2 years. 3 of those cousins and my sister haven't come back.

I_have_spoken

Give up your dreams and get settling down...

Aye, you missed the bit where g/f get preggers to trap you into marriage.

LondonDreamer

19lottie82 wrote: »

You won’t be able to afford to buy in London on a salary of £21k. Or £25 k either, i'd imagine. Renting on your own would be quite tight financially too.

Agree with this. Actually, with everything posted but especially this. It would help a bit to know more specifics of where you're looking as London is a very large place but I think you'll struggle in most areas. As an example, I pay more in rent (just rent, no bills) for a 2 bed flat in a nice area of zone 3 London than your entire take home wage. And it's not in an inflated rental area, it would actually cost more to own it.

malteaser04 wrote: »

I get £21k from my new job. Thanks to life savings from my parents I have £11k saved which I can easily bring up to at least £16k in a few months.

This sounds incredibly optimistic. Your take home is around £1400, to save £5k in a few months you would have to have literally zero outgoings.... who pays for your travelcard, clothes, food, etc??

BobQ

malteaser04 wrote: »

Hey, hoping someone could tell me what my best housing option is as I don't know too much about buying/renting etc!

I graduated from uni in 2012 and am 23 currently living back at home with my parents & am finding the lack of independence very tough and defs want to move out in a year. I live/work in London.

I get £21k from my new job. Thanks to life savings from my parents I have £11k saved which I can easily bring up to at least £16k in a few months.

I am also saving to go travelling for a few months next year, aiming to return in April 2014. I will have to quit my job to go travelling & get a new one when back and this is when I'd like to move out.

What sort of options do I have based on my salary for a house in a decent area in London? I could rent a house as this offers flexibility but not sure how I could continue saving for my own property by doing so/ if its a waste of money.

I looked into government schemes like the share to buy one and the new 20% equity loan which seemed like possibilities but the FAQs said you can't rent these out to people. Since my eventual long-term goal is to be self-employed and have the option to travel and rent my house out, I was a bit put off the unflexibility of it this no-renting-out rule!

What options would you recommend based on my financial situation and goals?

To summarize, the dream (perhaps idealistic!) is to move out April/May 2014. Will have £11-16k savings by then. Currently on £21k, when applying to 2nd when back from travelling this would hopefully rise to £25k. Eventual long-term goal is to become an entrepreneur, be flexible enough to be able to rent out my property a few months a year if travelling...

Thoughts?

You seem a really nice person, naïve certainly, wanting to have everything as soon as possible (like a lot of people of your age).

The simple point to make is that to buy a house or indeed be considered a good potential tenant you need financial stability, a steady income, evidence of financial prudence, and be a good credit risk. At the moment you are on your way to doing this, building up savings being careful and planning your future. Then you say you are going to give up your job, spend months travelling, return with no guarantee of getting a job and that you want to live in one of the most expensive cities in the world. Once you have returned from your travels, got a job and spent a year building up your credibility are you sure you will not do it again?

I think you need to be more realistic.