Is buying a house a good idea?

CarbonImage

I'm 25 and chose to buy my first place last year instead of spend my savings - although I was fortunate enough to be able to take a zero-interest loan from my parents as part of the deposit.

I would say that £10k will not be able to get you much at all now, and even less by the time you've managed to save it. As mentioned before your £4.5k will have to go on fees etc. and you will need another couple of grand for furniture.

Personally I'm really glad I've bought my place, as I can now use all the money I was saving towards a deposit towards holidays and nice things for the house, whereas I couldn't have done it the other way around.

I would say that the market in Bristol is fiercely competitve at the moment and I was often steered towards dodgy things by estate agents who were supposedly trying to help - tiny cluster houses racked with damp, houses miles out of town, leasehold flats where the ground rent and service charge was almost as much as the mortgage again. My advice would be to save up for as long as you can manage in order to get something you will be happy to live in for a good few years.

Remember that whilst getting a mortgage is serious and something a lot of people aspire to, it doesn't completely take away your flexibility. If you change your mind you can always sell the house and spend all the equity on living in Thailand for 6 months.

sv722

buggy_boy wrote: »

I think the OP was looking to buy in Bristol not London, I have to agree London had a huge bubble and is now falling, Bristol is relatively strong and did not have anywhere near the sort of gains of london especially some of the outlying towns....

Your biggest cost in London will be accommodation and I have have to commend you for having a good head on your shoulders, London is a great experience but IMO you are right that you don't want to stay there too long as its a harsh environment that can make you hard.. Try to save money where you can, you can still go on holidays, some of the best holidays ive had have only cost around £400-500 including spending money... You should enjoy your youth but always remember the sooner you start to save regardless for a house or a pension or whatever the longer you have to save so the easier it is...

You've precisely hit the nail on the head. In fact i've found myself becoming a bit of an assshole. As i said i've already got £4.5k and if/when i transfer to the LISA i'll be able to get a maximum £1k extra a year provided i save the maximum of £4k a year.

What do you think is the latest age to buy a house? I'm aiming for 33. I've got a work pension which is pretty good but of course i'll save too.

jonnygee2

Savings are something you can access immediately or at short notice if needed, equity isn`t savings.

I don't agree at all. Savings do not have to be liquid in order to be classed as savings. The point is it's money you own. When you increase equity you are increasing your net wealth. Eventually you may be able to convert it into liquid assets (e.g. by remortgaging or selling up). Pension plans are another example of illiquid savings (when you are 30, anyway).

When you give money to a Landlord your net wealth is not increasing. This is obviously the difference and one of the main reasons people buy and not rent. You can (and should) still keep liquid savings available after you buy a house, but I don't think you are right when you say that increasing equity in a property you own is not a form of saving.

jonnygee2

What do you think is the latest age to buy a house? I'm aiming for 33.

Something I discovered when buying is that you will only get a morgatge up to the age of retirement, likely to be 68. At 33 is the last year you'll get a 35 year mortgage, therefore.

Obviously, I don't know if you'll need a 35 year mortgage or will be able to get a shorter one, it depends on affordability and income, but it's worth looking into. Also, when you are older you might earn more, so maybe this evens out.

However I'd say 42 is about the limit you want to think about - after that you'd need a first time buyer mortgage of <25 years which might be difficult if you are not on a high income and start running the risk of renting indefinitely (which might be okay if you have enough retirement savings to cover this into retirement, I suppose).

Long story short 33 is a good age to buy :beer:

GoingOn30

Or even before 33 as that would mean another 6 years of throwing money away on rent.
You can't bet on being able to work until 68 as you never know what's going to happen with your health.
All you can do is save as quickly as you can, but it pays to buy as soon as you are able.

louloubelle79

I would say buy. I bought my first property at age 23, wasn’t one for spending loads on big nights out etc and knew I wanted to buy before I couldn’t afford too. 15 years on I only have a 3bed terrace now; that suits me and my family, won’t need to downsize and can stay here happily without the huge mortgage and outgoings. Look at your budget, what you can cut back on etc

Crashy_Time

jonnygee2 wrote: »

I don't agree at all. Savings do not have to be liquid in order to be classed as savings. The point is it's money you own. When you increase equity you are increasing your net wealth. Eventually you may be able to convert it into liquid assets (e.g. by remortgaging or selling up). Pension plans are another example of illiquid savings (when you are 30, anyway).

When you give money to a Landlord your net wealth is not increasing. This is obviously the difference and one of the main reasons people buy and not rent. You can (and should) still keep liquid savings available after you buy a house, but I don't think you are right when you say that increasing equity in a property you own is not a form of saving.

You need a buyer to get at the savings though, if there are any savings to be had, many recent buyers won`t make anything on their house IMO, and many are now finding that buyers are harder to find than they thought (they originally thought that buyers would be lined up round the block probably) If you throw savings into a deposit and the market crashes, that money is gone, nothing you can do about it.

caronoel

Crashy_Time wrote: »

You need a buyer to get at the savings though, if there are any savings to be had, many recent buyers won`t make anything on their house IMO, and many are now finding that buyers are harder to find than they thought (they originally thought that buyers would be lined up round the block probably) If you throw savings into a deposit and the market crashes, that money is gone, nothing you can do about it.

Ignore the rantings of Crashy.

He sold up and moved into a rented room in the mid 90s, waiting for the crash that never came.

Now he's single, still renting and in his mid 50s. What a catch for the ladies!

He has almost stopped posting on the Debate house prices board, as they rip his wisdom on house prices to pieces over there

Mickygg

caronoel wrote: »

Ignore the rantings of Crashy.

He sold up and moved into a rented room in the mid 90s, waiting for the crash that never came.

Now he's single, still renting and in his mid 50s. What a catch for the ladies!

He has almost stopped posting on the Debate house prices board, as they rip his wisdom on house prices to pieces over there

Yeah if he had a lady or guy in his life it may stop his constant thread hi jacking and totally wierd and off topic links.

As I've said before I know someone at work who posts on forums hi jacking threads and posting nonsense. He is late forties, living alone and single! He just craves internet attention as he's lonely.

buggy_boy

caronoel wrote: »

Ignore the rantings of Crashy.

He sold up and moved into a rented room in the mid 90s, waiting for the crash that never came.

Now he's single, still renting and in his mid 50s. What a catch for the ladies!

He has almost stopped posting on the Debate house prices board, as they rip his wisdom on house prices to pieces over there

+1 on that, he has some bizarre thought that if he comes on here and post enough trying to get people to think there is a crash coming it might actually come.... Of course anyone who has an alternative thought is a highly leveraged landlord... Hes a numpty.