Buy a house or live at home & commute?

never_summer

Hi,

I made a very similar thread a few months back, but I was contemplating renting. This is something I really don't want to do now - I'd rather stay at home a little longer and save for a decent deposit!

Bit about me:

• 23
• Live at home with parents
• Went to uni (didn't live there, stayed at home and traveled every day)
• Now have full time job, while doing freelance photography and video on the weekend.

I have a full time job which I really enjoy, but unfortunately it is 50 miles away and atm I've been doing 100 mile round trips Mon-Fri. I do 9 hour days at work, and with travel I'm leaving the house at 7am, and getting back about 7pm. Unfortunately I can't see my wage going up too much, maybe £1k per year.

Incomings: (after tax/take home money)

• £14,000 (salary)
• £9000 (freelance work - could potentially earn up to £14,000+ [but guaranteed £9000])

I'm only on my first year on the books with my photography business so I know the banks won't take this into account, but in terms of knowing for myself I'll have £1916-£2333/month take home money after tax.

If I had £20k in 1 years time, £15k deposit and £5k for other bits and bobs would this be a good situation to be in looking for a 75k (ish) mortgage? Also, just to throw a spanner in the works I may be looking at relocating in 3 years. So would want to sell, or potentially change the mortgage to let?

Any thoughts? Sorry again for it being so long!

Kynthia

Buying a property is expensive. There's stamp duty, solicitors fees, mortgage fees, moving costs, furniture and other furnishings, etc. Then there's the costs of ownership such as ground rent and service charges (if leasehols), repairs, maintenance, decorating, etc, plus living away from home means paying council tax, utilities, food, etc. This is all very expensive but many think it's worth it once they feel too old to be at home, no longer want the flexibility of renting and earn enough to afford to live away and buy.

Then selling costs money and no one can guarantee that property prices will have risen enough in 3 years to compensate for all the buying and selling costs. Most people recommend not buying if you intend to sell within 5 years to minimise the risk of loss, but there's no way to see in the future and know what's going to happen with property prices. Also becoming a landlord is a business which involves you complying with laws and regulations, paying tax, finding tenants, affording repairs and paying the mortgage even if your tenants have paid no rent for months and you are evicting them. You might not get consent to let from your lender and would you qualify for a btl mortgage with no other property and the level of equity?

It's all up to you but staying at home and saving at your age sounds good. Or if you want to spread your wings then renting or going into a flat share can give you independence but also flexibility to relocate to wherever you want. It could be a fun and exciting time, meeting new people and having your own space, without the expense and responsibility of a property and mortgage which could hold you back.

never_summer

Good advise cheers, I have thought about house sharing. But I really want to have my own space but at the same time I don't want to waste dead money on renting my own place!

HappyMJ

never_summer wrote: »

Good advise cheers, I have thought about house sharing. But I really want to have my own space but at the same time I don't want to waste dead money on renting my own place!

Renting isn't always wasting dead money though. It can and in many it is cheaper renting than buying a property. As advised to you earlier in this thread there are so many costs with buying and maintaining a property not many of those costs can ever be recovered so they could also be considered dead money too.

The big problem with buying (that I've found) is that it's so much more difficult to sell up and move quickly it can become very expensive. If you want to leave a rental property you just hand in your notice and go. It hardly costs anything. The most it would cost you is the hire of a van for the day if you had furniture you wanted to keep.

edit: you need to do your own rent/buy calculation. i.e I've just rented a property at £475 per month...over 3 years that'll be £17,100. Tenancy set up costs were £432 so a total of £17,532. If I were to buy it I could pay £100,000 for it. An interest only 100% loan at 4.5% interest would cost £13,500 in interest. Solicitor fees to buy it are around £500. Annual maintenance costs including insurance are around £720. Selling costs are 2% - £2,000. Solicitor costs on sale about £500. Total £17,220. There's hardly any difference.

Pixie5740

I imagine the advice hasn't changed much since March.

https://forums.moneysavingexpert.com/discussion/5190149

AdrianC

Buying a house is a big, long-term investment. You'd be daft to buy if you might relocate in three years.

Prove the concept. Live at home for a bit and commute. Then move into a rented place near work. If that works out for you, start figuring if you can afford to buy. If you're staying put.

wisnulie

nice information
thanks all