Not sure I will ever afford a home.

Angel_Jenny

I have looked into how much houses around here cost and even those that are small and in not so safe areas are pretty pricey compared to what I earn. I was working on the theory that I would get maybe 3 times my income as a mortgage which wouldn't really be enough to buy anywhere as I earn just over £16000 a year.

Is it better to save for longer to have a bigger deposit? The lady at the bank said they would probably offer £50000 to £60000 as a mortgage and to aim for a 10% deposit. She seemed to think that buying now would be better than saving for a while - comments about the house prices going up and interest rates going up too.

I live with my parents which is ok and I work full time in an office and I am also a carer for a family member so there is no immediate rush to escape!

I am not fussy about the house itself so long as it doesn't require building work as that isn't something I could do myself. My main priorities are in a safe area within a 2 mile walk from work / the shops and that it has a reasonable garden. Double glazing and central heating would be a plus too.

The idea of being in debt like that scares me! Would it be better in the long run to stay put and budget strictly and aim for a bigger deposit (say 30 to 40%) or would the house prices / interest rate increases overtake any benefit?

ACG

4x income is not unreasonable so £60-65k should be feasible.

As for whether its better to wait or not is entirely your decision. My personal opinion is that house prices are only going to increase but you have to weigh up whether living at home and saving up a bigger deposit and having less expenditure is worth it for you. If i was renting i would say its a no brainer but living at home makes it a little different.

Din85

Not being rude ! but how old are you ?

A lot changes in life, you may end up getting a partner and buying together, your wage may not stay at 16k for ever etc etc.

Angel_Jenny

I am 27 - not sure my wage would go up as I have a job rather than a career. Always focused more on the caring at home than an actual career.

I get all the comments that I should go out and start renting as I am too old to live at home but between working 37 hours a week and doing about 30 plus hours caring at home it just seemed like a waste of money to rent somewhere and never actually be there.

Din85

Angel_Jenny wrote: »

I am 27 - not sure my wage would go up as I have a job rather than a career. Always focused more on the caring at home than an actual career.

I get all the comments that I should go out and start renting as I am too old to live at home but between working 37 hours a week and doing about 30 plus hours caring at home it just seemed like a waste of money to rent somewhere and never actually be there.

It does feel like a waste, we have been renting for 10 years, never been in a position to buy either, (me and the wife are both 28), but we are trying now on the help to buy scheme.

If you do want to buy, i suggest you stay at home and save like mad for now, we have not been able to save much due to renting since 18, its only recently that we have got to a stage where we are more comfortable and are giving it a shot !

Good luck

Angel_Jenny

Save like mad seems like a good plan! I think having a proper strict budget is the way to go. Oh and starting a bottom drawer!

I suppose the bigger my deposit the more likely that I get a home that I like - I don't see that I would move again.

jules888

Have told my teenage sons,aged 16 and 17 to stay at home as long as poss and save as much as they can for a deposit.I think it will be harder for them than for us.Buying the best house you can too and moving as least as possible as so expensive now and stressful!

jb66

Best to wait and meet a partner or team up with a friend

attila_

Dont listen to peers. Stay at home as much as you can and hopefully they can help you by not charging rent. I don't expect you pay student loan at that salary so you could be saving around £800 per month if your commute is not silly which saves £10k/annum.

Other option would be to find another job (easier said than done I know), but the worst thing is to convince yourself there isn't anything out there or that you can't. Rule of thumb you should be earning your age number (i.e. 27k) if you're a graduate.

moneyistooshorttomention

As regards the "team up with a partner or friend"..I note the 30 hours per week caring on top of a full-time job. That's a 67 hour work week...which does rather restrict opportunities to get a friend or partner to team up with.

Realistically...I know "how long is a piece of string"...do you think you might be a carer for? Is this something that is likely to continue for a few more months/few more years/could be quite some time yet?

Are you living in the home of the person you are caring for? (ie they are a parent) and what do you anticipate will happen to your home if/when that is no longer an option? (ie is it going to be left to you?)

As regards the idea of borrowing a higher multiple of 3 of your salary...bear in mind these incredibly low interest rates we currently have are not the norm and surely can't last much longer. Not sure how much longer us savers can be used as a cash cow to subsidise everyone else by not being given the interest on our savings in effect ...but at some point most of us will have spent our way through our savings (in order to protect them from being nicked by inflation) and, at that point, I am guessing interest rates will return to normal levels. So only take a mortgage with a level of repayments you can manage at normal interest rate levels (not 2014 ones then).

Frugalsod

House prices are already seriously overvalued and will fall significantly when interest rates return to normal. The only problem is when will that happen? It could be next year or in five years time. Bubbles can stay inflated for far longer than you expect. So my plan would be to save as fast as possible. Also avoid a high income multiple. Three should be enough in normal circumstances.

Also do not expect wages to increase. The government might want the wealth spread around a little more but remember that many have not had a real wage increase since 2003. With unemployment and underemployment so high I doubt that wages will rise appreciably. You might have to change career to get any chance of a wage increase.