Buy now or stay at home & save more?

Korkyb

Hi all


My 19yr old daughter has recently started her 1st (proper) Job and stays at home with my wife, her younger sister & I.


My wife thinks she should get on the property ladder but I'm wondering if she should wait a bit.


She is earning £20500 and has £24k in savings - Houses we are looking at are in the 95-115k range. She also just started a "Help to buy ISA".


She has a car which is in good condition (no loan) so she has the usual costs that go with running a vehicle.


She has no debt and we have agreed to take £200 per month for rent / food).


If she stays at home I reckon she could easily save 6-7k per year as given her other outgoings are minimal (she aint a party animal & is relatively frugal with her dosh).


We aren't desperate to get shot of her & although she likes the idea of her own place she would also be happy to stay put.


Part of me also wants her to have the opportunity to enjoy some of her earnings for a couple of years before having to scrimp once bills start rolling in.


I'm wondering what is the best option financially ? (I know there is an element of how long is a piece of string given that it depends on unknown variables such as house price and interest rate increases.


My problem is I cant get my head round the maths of what her situation will be if she holds off say 2 years. (? would an extra 12k savings offset any potential price / interest rate rises) versus her situation if she bought now.


Any advice much appreciated!

zagubov

We don't know as much as we'd like about the situation.

In most parts of the country, putting money aside for a few more years would make house-buying easier.

A saving instrument for house-buying is a great idea. The prices you've mentioned don't suggest you're anywhere you can't benefit from waiting and saving.

Korkyb

We live up near sunny Aberdeen.

The housing market here has been poor for a few years due to the downturn in the oil industry but they keep saying its about to pick up.

Happy to provide any other information that might be useful !

GoingOn30

Buying a property is a big responsibility and I would have thought a bit of a drag at 19!
She would benefit much more from the help to buy ISA bonus if she waits another year or 2.
It may be beneficial for her to rent first independently or in a house share for a short period so she can build some life experience of paying bills and running a household.
She has her whole life to achieve property ownership, it sounds like she is on the right track and there's no need to rush it.

Gwendo40

Korkyb wrote:

We live up near sunny Aberdeen]The housing market here has been poor for a few years due to the downturn in the oil industry but they keep saying its about to pick up.[/SIZE]

''They'' (aka vested interests) will always say the housing market is just about to pick up!

Unless her perfect home for a sensible asking price is currently available I think she's best to just continue saving.

lookstraightahead

Nineteen is so young, in my opinion, to be tied down to a mortgage. However, the independence of leaving home is also good. Maybe a bit longer at home to see where her career and her life take her?

I see your dilemma - you don't want her jumping into a property yet there's a cut off to how long she 'should' stay at home.

Lioness_Twinkletoes

I think the most important question should be...what does your daughter want to do? Would she like to buy a home or continue to save?

babyblade41

I bought my own house at 18 but rented before that (I left home at 17) many many years ago and had mortgage paid off at 35 with very frugal living.

It really depends how your daughter feels about it all ...no one knows what will happen in the future so really depends on the personality of the people involved

PasturesNew

In such a cheap area, there's no harm in waiting.

Korkyb

Thanks all.


It is a cheaper area than some others but still a lot of dosh for what you get imho.


As for what she wants - She does like the idea of her own place but can equally see the benefits of staying put.


She would probably go for whichever option was better financially for her in the longer run.


As a few have advised it might be worth her saving for another year or 2... or 3...... (or until the "perfect" property pops up).

Slinky

At 19 there are so many different directions her life may go. Buying a property in Aberdeen, where you've said the market is slow, could be a millstone round her neck in a few short years if she wants/needs to move away. It's unlikely that property prices will rocket up overnight so she gets taken unawares and 'misses out' by being too slow at this point.