Should I save to buy or rent soon not knowing what the future will hold. Age 21

Trina90

My husband and I earn less than the average salary each but bought our first home 2 years ago (I was 24, he was 23). I think I was on £17000 and him £15500 (we do also have guaranteed overtime however). We are in a fairly expensive area, but this is where I grew up and knew I wanted to stay (also close to our work). We were lucky that my parents let us (my then-fiance moved in for a year) stay until we built our deposit up. We saved £45000 (admittedly, most of that was mine as I'd already been saving for years!), but we found our £195,000 home, and it is more than what we need (3 double bedrooms) but I wanted a home we could stay in for a long time. We are currently overpaying to the max. on our mortgage too. It can be done - you just need to stop seeing luxuries as necessities, work hard and SAVE.

Running_Horse

You should always be saving. Not necessarily specifically for a house, but you never know what life will throw at you, or what your circumstances will be in a few years. It's the old Dickens quote about £20 income per year and happiness or misery being dependent on expenditure.

http://www.telegraph.co.uk/finance/personalfinance/9066005/What-Charles-Dickens-said-about-money-12-memorable-quotes.html

And he would have known; his father having been in a debtors prison.

Crashy_Time

https://www.amazon.co.uk/Investing-Demystified-Speculation-Sleepless-Financial/dp/0273781340


Read this...the property lecture starts around page 120 I seem to remember...and whatever you do don`t pay (borrow) 500k for a London rabbit hutch. Good luck.

ska_lover

You are right, you don't know what the future will hold.

Sounds morbid in some ways, but people seem to be staying with their parents for far longer these days, in some kind of pending mode, waiting for their life to start

Start living now. Owning a house is not the be all and end all of life.

xylophone

Nobody knows what the future holds.

Have you and your girlfriend considered a LISA?

You are living at home - presumably you are making your mother a payment to cover your share of expenses but over and above that, have you really examined your personal budget?

Where are your saving opportunities?

Crashy_Time

Save, invest, travel, enjoy life, work on creating new streams of income, be nice to your mother, and forget about blowing your money on a housing Ponzi is the best way to go IMO. Book into a hotel once in a while if you want to party a bit and with the time you spend at work and socialising you are not going to be at home that much? If you are getting a favourable deal on rent at home this is a golden opportunity to get ahead financially.

[Deleted User]

Only you can decide if it's worth doing without now to get on the housing ladder. But your question did remind me of a conversation I had a couple of weeks ago with a friend. She and her husband are in their early 50's and have never bought - they were just unwilling to sacrifice holidays, having a good times, etc. and were happy living in a gorgeous flat overlooking the river. In some ways I've envied them over the years but now, our mortgage is paid off and we are much better off, whereas they're still paying £800 pcm in rent, living in a house they don't particularly like, and worrying about how they're going to ever be able to afford to save for retirement.

I know, at 21, you'll think - but I've got loads of time yet! But, the truth is, that it goes a lot faster than you think.

Only you can make the decision. Good luck.

Crashy_Time

Corona wrote: »

Only you can decide if it's worth doing without now to get on the housing ladder. But your question did remind me of a conversation I had a couple of weeks ago with a friend. She and her husband are in their early 50's and have never bought - they were just unwilling to sacrifice holidays, having a good times, etc. and were happy living in a gorgeous flat overlooking the river. In some ways I've envied them over the years but now, our mortgage is paid off and we are much better off, whereas they're still paying £800 pcm in rent, living in a house they don't particularly like, and worrying about how they're going to ever be able to afford to save for retirement.

I know, at 21, you'll think - but I've got loads of time yet! But, the truth is, that it goes a lot faster than you think.

Only you can make the decision. Good luck.

The OP is living at home though, maybe rent free, what has this got to do with your friends not saving/investing and probably over-paying on rent?

goodwithsaving

Crashy_Time wrote: »

The OP is living at home though, maybe rent free, what has this got to do with your friends not saving/investing and probably over-paying on rent?

I suspect the poster is saying that it is better to think long term. Fine live the life of riley now, but how will you fund life later on. Imagine paying rent out of a pension! The OP's parents won't be around to live rent-free with forever, inheritance isn't guaranteed and is subject to care home costs etc and the OP should be thinking ahead.

Owning offers more stability not just in the present, but the future.

Crashy_Time

goodwithsaving wrote: »

I suspect the poster is saying that it is better to think long term. Fine live the life of riley now, but how will you fund life later on. Imagine paying rent out of a pension! The OP's parents won't be around to live rent-free with forever, inheritance isn't guaranteed and is subject to care home costs etc and the OP should be thinking ahead.

Owning offers more stability not just in the present, but the future.

To eventually own though you would now have to take out a mortgage at peak prices with interest rates at their lowest rate ever, not a gamble the OP needs to take at all in their present situation IMO.