FTB Pros/Cons

DireEmblem

Well my life in my current flat will be coming to an end in a few months, so there are decisions to be made....

I have ~8k in savings, some of which in shares which firstly I guess that I should move into cash(and realise gains/losses).

Do I then:-

A) Look to share a flat with someone else

Get a flat on my own to rent

C) Look into a FTB Mortgage - perhaps one of these shared equity things

D) Take the oppertunity for some time out, and travel.

Each all have their merits, but in the current financial climate, what are the general pros/cons of buying/renting a flat these days?

I mean I could potentially rent by myself/share for the next year, then have a greater deposit(If i push, I reckon 15k+), or do I go for it now.

Is there any downside to the shared equity mortgages - from first glance my payments would be lower, but could I overpay and reduce this further/own more?

All comments/thoughts/advice welcome.

vixarooni

how old are you?

Yorkie1

What do you actually want to do?

Is taking time out to travel definitely something on your agenda for the near future?

DireEmblem

Basically I overthink things a lot.

Yes I would love to travel, and by that I mean a RTW trip of my own. At the start of the year I was seriously considering it, I actually thought people were going to be made redundant at work, and I was all ready to stick my hand up and that would be my incentive to go. Instead thats not happened in my department, and i've done a lot of adhoc travelling/working instead if you could call it that.

So much so, that by the end of April I've spent a total of 38 nights in hotels covering 5 different cities/4 countries - not bad considering we were only 120 days into the year by then!!!

Now that time was amazing, and I decided to slow down and have a quiet May, but I kept my old ways and just spent what I earnt each month. So rather than making a decision, and 5 months of saving for a potential trip, i saved squat. I actually spent some of my savings instead.

I worked out a route I was going to take, and then tried to budget. This basically worked out that I would need to stay in hostels in order to complete the whole trip, and to be honest thats not something I've ever experienced, and sharing a room with potentially several other randoms kind of puts me of the idea.

So that brought me to another thought - why dont I just make the most of the holidays I have? I mean 6 weeks a year isnt that bad. I'm tempted by some of the options on sites such as http://www.contiki.com, and I would be more than happy doing some of them, even if they have to be spread about over the year.

Then we now get to the part where I need to find somewhere new shortly.

I've rented the past 11 years, and its probably time to change. If I take the most/least i've paid on rent, and average that over those 11 years, thats just shy of 50K I've paid out on rent. I'm never going to see that again.

Then you get to the point - should I settle down, or should I not look at it that way? I mean I could always rent out a property should I decide to move in a few years. Then I get to, do i want to stay here for another few years - I've already done the past 11.

And there goes the dilema. I'm basically at the point where I need to put all my options on the table, and choose the one thats right for me.

Yorkie1

Owning a house is an aspiration or reality for many people, but it isn't the be all and end all. It brings with it associated costs and responsibility. If the boiler goes or roof needs mending, it's down to you and you alone to fund and organise.

Being a LL is not a walk in the park. There are lots of laws to comply with and you need the financial resilience to be able to sustain the mortgage if the tenants stop paying or you have a void period. If you are out of the country for any long period of time you'll need to get someone else to manage the property in your absence.

I don't say this to put you off, but just so that you compare the options equally - you already know what renting is like.

If you plan to take a career break to travel round the world, it's quite a high risk to assume a) you'll be able to get a tenant for the duration of the trip, and b) you'll be able to get a job on return. That's assuming that your mortgage lender grants consent to let rather than insisting you obtain a Buy To Let mortgage instead.

If it's always been your heart's desire to do a long-haul trip, and you're prepared to make the sacrifices (hostels etc) to do it, then perhaps ask yourself whether you'll always regret not doing it.

If you think that you will equally enjoy maximising your annual leave allowance, and feel as though you might be ready to take the step of owning a house, then perhaps work out where you are in relation to achieving that.

Depending on where you are in the country, house prices may be static or they may be changing. London is its own bubble! With the various schemes to help people buying houses which exist now and coming on stream in the New Year, it could be said that there's never been a better time to buy a house. Equally it could be said that once you buy a house, you probably won't have the funds or ability to do a long-haul year-long trip.

Have a long look at your finances. Work out what funds you have available and what you want to have. How far off buying a house are you financially, for example? Are your aims achievable on your current salary or outgoings?

Also have a look at how much you might save if you moved into a shared house for a set period of time - but be aware that if you've lived alone for so many years, it might be difficult to readjust to the shared lifestyle. It depends on what sacrifices you feel willing to make to achieve a specific goal in a set period of time. If you know why you're doing something, it makes it easier to deal with.

None of this says you should do X or Y, but hopefully there might be a couple of points in there which you might not have thought about before.

Good luck!

DireEmblem

Theres some good advice there - thanks.

I have always had 'some' savings, but to be honest I have never grown them, and kind of gone by day to day 'living within my means'.

I have lived in shared accomodation with friends the past 10 years, and its been great, but I should probably have thought about slicing some of my pay off each month into a ringfenced pot.

Its all fair and well saying things in heinsight, but as long as I take that into account going forward, I will be better of.

I'm currently in the process of weighing up all my options, and trying to get my head round these 'shared equity' deals.