How much of a buffer to have after fees and deposit payment for FTB

zpargo

Hi 
Looking to take the plunge and buy my first property. 
I'm guessing this one varies for every person depending on risk appetite but I'm trying to establish whether I am being overly risk averse around how much buffer to have after deposit and fees and wondering what other people have done.
Scenario A: I can size the deposit such that I have a17.5k buffer after deposit and fees (budgeting 2.5k for survey and solicitor) which I feels is more than enough should I suddenly lose my job tomorrow.
Scenario B: I can size the deposit such that I have a 12.5k buffer after deposit and fees (budgeting 2.5k for survey and solicitor). Less cash left over but may be able to purchase a better property. However on the other hand I feel more under pressure as I don't have that much cash should I lose my job.
Thanks

Redwino222

How many months salary is that?

there is no easy answer in any case.  Buying your first house is expensive, is this money additional to your budget for furniture, decoration, maintenance etc?

In reality you want as much savings as possible of course.  Six months living costs would be ideal - but hard for many particularly just after buying a house.

Sacher50

If it makes you feel better, I’m going to be down to £5k after my purchase (also FTB).

Just make sure you’re not catastrophising when you make your decision. Pragmatically, how likely are you to lose your job? Will you have the ability to save after the purchase and rebuild your savings? 

steampowered

Scenario B sounds absolutely fine.

You say that you are budgeting £2.5k for survey and solicitor. Does this also cover stamp duty?

If so, that leaves you with a £10k emergency fund. That's honestly plenty. That would give you months and months to find a new job. Remember that if you were to suddenly lose your job you would get benefits and your living expenses would reduce.

zpargo

Redwino222 said:

How many months salary is that?

there is no easy answer in any case.  Buying your first house is expensive, is this money additional to your budget for furniture, decoration, maintenance etc?

In reality you want as much savings as possible of course.  Six months living costs would be ideal - but hard for many particularly just after buying a house.

In scenario A that's 7.6 months worth of salary
In scenario B that's 5.4 months worth of salary
Assuming a budget of 2.5k for surveyor and solicitors then I'm not factoring in the furniture costs and things like washing machine, microwave, tv, fridge, hoover etc. Although might be able to borrow a small amount from dad.

zpargo

Sacher50 said:

If it makes you feel better, I’m going to be down to £5k after my purchase (also FTB).

Just make sure you’re not catastrophising when you make your decision. Pragmatically, how likely are you to lose your job? Will you have the ability to save after the purchase and rebuild your savings? 

Yeah this is the thing, very easy to do. I think it is extremely unlikely I would lose my job, been at the company over 5 years. 
Saving after the purchase, its going to be tight but I can save some money. E.g 400 per month. 

zpargo

steampowered said:

Scenario B sounds absolutely fine.

You say that you are budgeting £2.5k for survey and solicitor. Does this also cover stamp duty?

If so, that leaves you with a £10k emergency fund. That's honestly plenty. That would give you months and months to find a new job. Remember that if you were to suddenly lose your job you would get benefits and your living expenses would reduce.

I'm FTB so as I understand it no stamp duty. Though the property I'm looking at could go for above £250k. I think there were some conditions on going above £250k if I remember correctly.
Yes the benefits I should factor in which should be 8k best case (but they put a line in saying not guaranteed)

Redwino222

Scenario B then.

don’t  underestimate how much it costs to set up your home though.  I was lucky and relatives gave me some bedroom furniture, and my parents bought new carpets, but the silliest little things really do add up.  The price of paint horrified me😂.  And curtains, blinds, vacuum cleaner, bedding.  I can still remember getting very angry about the cost of the tv licence.  Full on temper tantrum. 

hippocrates1

If it makes you feel better when I offered I had no spare money not even enough for solicitor fees. Now I have £5k spare and we haven’t completed yet. I ideally wouldn’t want to have cut it this fine in case it went through quicker. However my dream house on the estate I rent on came up within my bank affordability but way more expensive than the price I was looking at prior.