What are the chances of me buying a house?

kiawill

Hi guys 

I’m 29, live in Exeter.

Currently been working at dominos for last 4 months.

i hope in a couple years my photography business will kick off and I’ll be doing that full time.

I really want my own 2 bedroom new build in Exeter.

Help to buy? Half rent?

I have £0 for deposit so need to save 

I don’t know how much I need to save and where I need to be putting my money, as in which bank. 

Any help / advice really would be appreciated 

Thanks 

ic

Help To Buy ISA has closed to new applications, so your savings option should probably be a Lifetime ISA.  Read about it here: https://www.moneysavingexpert.com/savings/lifetime-isas/

Also there's this guide: https://www.moneysavingexpert.com/mortgages/mortgage-guide/

Settle down with a significant other, and pool your resources.

dimbo61

Well you need to start somewhere so why not start by building an Emergency savings pot.
3/6 months of Income.
You could consider a LISA ISA but you also need am instant access savings pot just in case.

Jadek

If you plan to be working full time self-employed by the time you come to buy somewhere, you should consider that often lenders will require a certain number of years of accounts. I'm not self-employed so don't know the details, but someone on here I'm sure will be able to help further. 

moneysavinghero

Zero chance currently (presuming that you income from Dominoes is not great).

Work on building up your photography business, and when you are making good money from that look again.

You need to save at least 10% of the cost of the house.

oldbikebloke

kiawill said:

Hi guys 
I’m 29, live in Exeter.
Currently been working at dominos for last 4 months.
i hope in a couple years my photography business will kick off and I’ll be doing that full time.
I really want my own 2 bedroom new build in Exeter.
Help to buy? Half rent?

I have £0 for deposit so need to save 

I don’t know how much I need to save and where I need to be putting my money, as in which bank. 

Any help / advice really would be appreciated 

Thanks 

you are 29, and admirably full of ambition to make your business a success. Time now for you to start reading on how to manage your finances. Start here: https://www.moneysavingexpert.com/banking/ and the mortgage guide already referenced in another's reply above

You have no savings and, it appears, no ability to save from what you earn at the moment. 

How will you fund your self employment when you have no cash to your name? Do you already own all the equipment you'll need or will you have to buy some? Most self employed businesses do not have decent profit (not income) in the first few years so don't jump the gun with thinking you'll be able to afford xyz immediately

you can easily find out what sort of size of deposit lenders require, but as newly self employed you will find it near impossible to get a mortgage at anything other than an exorbitant rate (if at all) until you can provide several (normally 2) years of tax returns ("SA302" based on your full accounts) evidencing your proof of recurring self employed "success" 

have you even looked at "new build 2 bed" Exeter prices yet? Do you mean flat or house?
shared ownership would look to be your more realistic avenue given your £zero start point, however, SO has many drawbacks
https://www.moneyadviceservice.org.uk/en/articles/shared-ownership-housing-schemes-explained

ignore "Park Homes" unless you are totally desperate to get out of rental and have money to burn that you will never see again, there is no coming back from descent into Park Homes without a huge improvement in your personal finances as you'll have no money left 

rightmove currently suggests
only 1 shared ownership (25%) 2 bed new build SP flat around £69,000 (in "Topsham")
full ownership 2 bed flats start at £175,000 
full ownership 2 bed houses start at £230,000 (but it is a coach house) or £250,000 for a proper house 

I think you need to be a bit more realistic about your expectations for the first rung on the property ladder given you have no money to your name  

Salemicus

In order, you should prioritise:

• An emergency pot for unexpected issues/loss of income/etc. Some people say 6 months income, but it will depend on your lifestyle and what things are likely to crop up for you. Keep that in the highest-rate instant-access account you can find. See e.g. here, or the savings board.
• Paying off any credit-cards, debts, etc.
• Saving in a Lifetime ISA (£1000 bonus per year!)
• Saving elsewhere.

It looks like a 2-bed property in Exeter goes for something like £200k, give-or-take. Let's say perhaps £4k fees (stamp duty, legals, mortgage fees, moving, etc). You can typically get a mortgage for something like 4.5x salary, and will need an absolute minimum of 5% deposit (10% much better)*. So in very rough figures, you'd want £24k in savings (not including your emergency pot), and a household income of £40k. Lower household income? More deposit required. Cheaper property? Less deposit and income required.

Ask yourself why you want a new-build. These are more expensive than similar non-new-build properties and tend to lose their value over the first couple of years. It's like saying you want your first car to be brand-new. Your money does not go as far. Is it the smart move?

There are also various schemes, but these may have changed by the time you are able to save sufficiently. If you did help-to-buy, you'd only need a 5% deposit and a slightly smaller mortgage, so for a £200k property you'd need about £14k savings, and £34k income. This comes with some drawbacks - like that you have to buy a new-build - but could be a decent option. There is also shared ownership, which comes with even more drawbacks and frankly I think is a trap for the unwary, but some people have had good experiences with.

These numbers can seem daunting, but there are plenty of boards here with people who can both advise and inspire you. There aren't any shortcuts. Increase your income, decrease your expenditures, find a significant other who shares your priorities and can help you.

*At the moment you need 15% deposit, but I assume this will pass by the time you are able to save up.

FreeBear

moneysavinghero said: Work on building up your photography business, and when you are making good money from that look again.

There is an old adage of "How to make a small fortune as a photographer", and the answer is to start with an even bigger one. In today's climate, every Tom, !!!!!!, and Jane has a (digital) camera or phone snapping everything in sight, so trying to get a well paid gig is near on impossible. To get anywhere, you either need a specialist niche that only you can do or have a name like Peter Cox or Tim Rudman.

MaryNB

Put together a list of your outgoings each month. I'm very bad at judging where my money goes (and I'm sure I'm not the only one). I was also very bad at not making up for a month of bad savings with over-saving the following month. I went through a phase of spending too much so I did a very detailed plan out my outgoings for 6 months to understand where I could easily cut back. That gave me an idea of how much I could reasonably save on an average month and then I used a savings tracker (with a target adjusted for changes in wage or rent) for the next few years (less cumbersome than a full budget).

Angela_D_3

So wha so in your shoes a few years ago I parked the self employment dream and kept it as a profitable side gig at weekends whilst working a proper job Monday to Friday for 13 months.  That allowed me to save a deposit,  borrow on an normal mortgage and Bullders is the business without starving if it didn’t work.  

söpöpöllö

I'm self-employed and I needed two years worth of SA302s for our mortgage application. I think some lenders are fine with just one but the more the better, so take that into account as well.

Also, a good mortgage broker will be their worth in gold if you're self-employed.