Wait to save up more money, or buy a house sooner?

rabbithopper3

Me and my boyfriend have been together for 5 years, we are in our early twenties, and we are currently saving up for a house. We are on a joint income of £38k, and we live in Lincolnshire. The plan is to save 20% deposit (so about £33-£36k), and additionally have around £4k for fees, £7k for emergency fund, and £6k for furniture. I have estimated that we will be able to apply for a mortgage by April 2023, if everything goes smoothly. However, that is three years away, and it is a long time and I am starting to feel slightly impatient because I just want our own house, and to start the next chapter of our lives, yet I know that if we saved up for that long, we would be in a more comfortable position when the time comes to buy a house.

As I am new to this, can anyone give me any advice? Do you think we are saving too much, and it wouldn't make much difference if we spent less time saving for the decorations/white goods etc and the emergency fund, or do you think it's sensible to just carry on and wait until 2023?

Thanks  

atrixa

Are you currently renting? If so, I would check how much in rent I'd be paying out over the next 2-3 years as it might be worth it to buy sooner on a smaller deposit.

MovingForwards

I picked up my furniture from a charity shop (BHF) with brand new bed / mattress and kitted out my last rental, curtains were from Argos and I selected from whatever was on sale, everything was under £750. It all moved with me to my home.

I had about £1k in the bank when I moved to my home and didn't stop saving again after paying my solicitor. £340 of my leftovers was paid to a tree surgeon to remove two big trees, more was paid to a garden centre 😁

I had been saving all along, still saving now and will continue to save.

No one can say what the right thing to do is, everyone is different. From the posts I've read a few have done it the way I did, some have done it with £10k in the bank, others wouldn't dream of doing it unless they had a few years EF together.

It's all about your appetite for risk, whether you will be controlled with your savings or if you will go out and buy everything now and take out finance to buy more things. 

AnotherJoe

I dont know whats happening to house prices down your way but watch out that they arent rising ata rate that eclipses some or all of your savings rate.

Also, as said, look at how much you'd spend on rent.

My gut feel is, you'd be better off buying sooner than paying rent for 3 years.

steampowered

If you can afford a house that you will want to live in for at least a few years, you are both settled in your jobs and you are quite sure that you will want to stay in the same area - then it makes sense to buy sooner rather than later.

The advantage of renting is that it gives you flexibility to move to different areas - for example to pursue higher paid job opportunities. Is there a chance that you might want to increase your salary by moving to Manchester or London for a few years? If yes, then keep renting until you are settled more permanently. If no, then buying is a better option.

Personally, I think your figures are way too conservative. You do not need a £7k emergency fund when you are in your early twenties with no kids. You don't need a £6k furniture fund - you can buy furniture over time. £4k for fees also sounds like too much.

Have you been making the most of a Lifetime ISA? If you and your boyfriend save £4k each into a Lifetime ISAs this tax year and again next tax year, the government will give you a bonus of £2k each when you use that for a house deposit. That's an extra £4k !!

blue_max_3

Three years in your early twenties is an eternity! And actually, you should be enjoying your life. Having wonderful memories is more important. There is plenty of time for home buying.

Shakin_Steve

We've bought a few times now and, although everyone has their own ideas about what's needed or not, we've always moved as soon as we could. Furniture etc. can be sorted over time, in our first place we had a set of paste tables to eat our dinner off. Getting into your own house, on to the ladder, is the first, most important, step. That first night in our own place, cheap bottle of plonk, telly on a cardboard box, couldn't stop smiling.

I'm not suggesting you sleep on the floor (or maybe I am), but, once you're in, everything else will follow.

rabbithopper3

atrixa said:

Are you currently renting? If so, I would check how much in rent I'd be paying out over the next 2-3 years as it might be worth it to buy sooner on a smaller deposit.

No we both live at our parents houses, about 10 minutes away from each other.

rabbithopper3

MovingForwards said:

I picked up my furniture from a charity shop (BHF) with brand new bed / mattress and kitted out my last rental, curtains were from Argos and I selected from whatever was on sale, everything was under £750. It all moved with me to my home.

I had about £1k in the bank when I moved to my home and didn't stop saving again after paying my solicitor. £340 of my leftovers was paid to a tree surgeon to remove two big trees, more was paid to a garden centre 😁

I had been saving all along, still saving now and will continue to save.

No one can say what the right thing to do is, everyone is different. From the posts I've read a few have done it the way I did, some have done it with £10k in the bank, others wouldn't dream of doing it unless they had a few years EF together.

It's all about your appetite for risk, whether you will be controlled with your savings or if you will go out and buy everything now and take out finance to buy more things. 

Thanks for the reply! I don’t like the idea of risk and only having a few thousand saved up, I would prefer to make sure everything is planned and we are both comfortable, but at the same time 3 years is such a long time and I don’t think I can wait that long!

rabbithopper3

steampowered said:

If you can afford a house that you will want to live in for at least a few years, you are both settled in your jobs and you are quite sure that you will want to stay in the same area - then it makes sense to buy sooner rather than later.

The advantage of renting is that it gives you flexibility to move to different areas - for example to pursue higher paid job opportunities. Is there a chance that you might want to increase your salary by moving to Manchester or London for a few years? If yes, then keep renting until you are settled more permanently. If no, then buying is a better option.

Personally, I think your figures are way too conservative. You do not need a £7k emergency fund when you are in your early twenties with no kids. You don't need a £6k furniture fund - you can buy furniture over time. £4k for fees also sounds like too much.

Have you been making the most of a Lifetime ISA? If you and your boyfriend save £4k each into a Lifetime ISAs this tax year and again next tax year, the government will give you a bonus of £2k each when you use that for a house deposit. That's an extra £4k !!

steampowered said:

If you can afford a house that you will want to live in for at least a few years, you are both settled in your jobs and you are quite sure that you will want to stay in the same area - then it makes sense to buy sooner rather than later.

The advantage of renting is that it gives you flexibility to move to different areas - for example to pursue higher paid job opportunities. Is there a chance that you might want to increase your salary by moving to Manchester or London for a few years? If yes, then keep renting until you are settled more permanently. If no, then buying is a better option.

Personally, I think your figures are way too conservative. You do not need a £7k emergency fund when you are in your early twenties with no kids. You don't need a £6k furniture fund - you can buy furniture over time. £4k for fees also sounds like too much.

Have you been making the most of a Lifetime ISA? If you and your boyfriend save £4k each into a Lifetime ISAs this tax year and again next tax year, the government will give you a bonus of £2k each when you use that for a house deposit. That's an extra £4k !!

Thanks for the reply! The houses we are currently looking at are definitely ones that we can live in for a long time, say 5 or more years. Those figures were just estimates, I know that buying a house is a big financial step, and I am just worried that something could go wrong like losing a job down the line, but I guess an emergency fund and furniture is something that can be built up over time too. And yes, we’ve been making the most out of the LISA, it’s such a great option for first time buyers! 

rabbithopper3

Shakin_Steve said:

We've bought a few times now and, although everyone has their own ideas about what's needed or not, we've always moved as soon as we could. Furniture etc. can be sorted over time, in our first place we had a set of paste tables to eat our dinner off. Getting into your own house, on to the ladder, is the first, most important, step. That first night in our own place, cheap bottle of plonk, telly on a cardboard box, couldn't stop smiling.

I'm not suggesting you sleep on the floor (or maybe I am), but, once you're in, everything else will follow.

I have heard several times from friends and family and people online that they did not have much furniture when they first  
bought a house, and I guess it’s just the fact that you have your own place to call your own which is the great part about it all!