First time buyer, but I am fairly young.

[Deleted User]

Hello there,

This is my very first post, I do read the forums from time to time though. It is a lovely place for some really important life information, and thus I am here today to ask for a bit of help.

I am looking to get my own property, I want to move out of my family home and start my own life and rely on my own self. I do not feel safe with the idea of renting as I would prefer my money to be going back into my pocket financially, I want to have my own home.

I am considering whether to buy a flat or a house, somewhere near Greater London. I have researched the most affordable places that are left within the M25 ring and just outside of it.

To be honest I just want a reasonable property with good transport links into Central London, as this is where all of my work/future work is.

I am 27 years old, I work in London, and my salary is around £40K a year. I have £40K saved up. According to some calculators I can borrow up to £180,000 giving around £220,000 purchasing power.

I fell quite scared to leave home, and buy my own home, that I would be responsible for.. I am not relying on anyone's help... this is just me and myself.

Any tips please? I am open to any information or guidance at this point

Flat or House? What if I rent a room out... what could go wrong.. could I lose everything ? Can I do this alone and make ends meat?

Thank you for reading.

marksoton

For that money you'll only be looking at a flat in greater London.

cashbackproblems

hi i am a year older than you, i hardly think you are "fairly young", i expected to open the thread to read about a 16yr old!

Prices are falling in and around london, firstly keep an eye on the area you want to buy in and see how long things are staying unsold/being reduced then make lower offers.

For your budget you are looking at a 1 bed in outer london and i think as prices fall you will get something decent. But bare in mind, out of that 40k you have stamp duty, legal fees, furniture etc. So no harm in waiting another 6-12 months and saving.

smile88egc

Hi,
I'm also 27 and looking forward to buying in the next 6-12 months

Where we differ is that I have lived away from my family for 10 years and lived in 9 different house shares/private rentals.

The experience this gives you is invaluable and I would highly recommend a period of renting before you buy your first home, even if it's only 6 months.

dc197

A few years ago my numbers and position were nearly identical to yours.
I bought a 3 bed detached house, of course outside London.
Would you consider getting far more for your money by living in the home counties and commuting? The journey time from Milton Keynes is not that much different to from some parts of the M25 perimeter.

economic

putting all of your savings and then borrowing 4.5x times your salary just to get on the ladder that too probably not a great property and not a great area AND in a now very uncertain market, just does not seem like a good idea to me. i do not agree with most of the people on this board that long term "you will be fne". you really dont know whether prices now will be higher or lower then in 10, 20 years time.

i personally would stay liquid with the little cash you have by investing in global stocks (overweight US stocks). save hard and try increase your income as much as possible. rent in a cheap place as well. i just think with your financial position and the current market, buying a property in london is very dangerous.

dc197

economic wrote: »

putting all of your savings and then borrowing 4.5x times your salary just to get on the ladder that too probably not a great property and not a great area AND in a now very uncertain market, just does not seem like a good idea to me. i do not agree with most of the people on this board that long term "you will be fne". you really dont know whether prices now will be higher or lower then in 10, 20 years time.

i personally would stay liquid with the little cash you have by investing in global stocks (overweight US stocks). save hard and try increase your income as much as possible. rent in a cheap place as well. i just think with your financial position and the current market, buying a property in london is very dangerous.

I think this is bad advice.
Just as no one knows how house prices will change, no one knows how US stocks will change.
The OP earns well and has already saved well. He doesn't need to increase either.
It is unfortunate that the bottom rung of the ladder in London is so expensive, that's why he might like to consider the bottom rung elsewhere so that he either gets more for his money or gets the same for cheaper.

MobileSaver

economic wrote: »

you really dont know whether prices now will be higher or lower then in 10, 20 years time.

Has there ever been a time in history when UK house prices were lower over a 20 year period? (And this ignores that a typical mortgage would be mostly paid off after that time.)

economic wrote: »

i personally would stay liquid with the little cash you have by investing in global stocks (overweight US stocks).

This has to be amongst the worst "advice" I've ever seen on MSE.

bouicca21

220k won't get you far in London. In my bit you'd struggle even to find a studio, though before the bubble it would have bought quite a decent 1 bed.

It's anyone's guess what will happen to the market over the next few months, but going on past experience, when it does fall it won't fall as far as pre bubble prices.

Your choice is to wait and hope, save even more or look for somewhere commutable at a distance.

I know people who earn even more than you do and still can't afford a place. It sucks.

hcb42

I too thought you were going to say you were 18 or something - by 27 I was on my fourth owned house!

I would say go for it personally, providing you can find somewhere you want to live with a reasonable commute that won't kill you.

You can always get a lodger to help with bills to make it easier should finances take a turn for the worse.

remember you will need money for fees etc, on top of deposit

wjr4

economic wrote: »

i personally would stay liquid with the little cash you have by investing in global stocks (overweight US stocks).

Completely agree with everyone else who says this is terrible advice! I wouldn't invest into anything if you need the cash within the next 5 years.. There are so many better places to place the money so it is safer than the stock market! You should only invest cash that isn't needed in the next 5 years, especially for a house deposit/fees/emergency fund!