First time buyer - my situation .

FrancisBegbie

Exodi said:

FrancisBegbie said:

Hi,

I am 35 years old and no children . 

Between hard work & saving plus a leg up from my Father I have 50k for a house

I currently earn 30k although this is expected not to last forever which is the nature of my work. 

My Dad is adamant I buy a 3 bedroom house with resale value however this sounds like a brilliant idea however when I crunch the numbers it’s a tough ask to have a quality of life on my own being single.

I take home £1700 after tax NI and student loan. 

The house would cost £1000 to run.

My personal bills are £500 - which includes things like paying off a small credit card gym membership and dog

Leaving me with £200 to live on make house repairs etc. 

I feel I want to play safe and buy a flat but everyone I know who has one can’t sell it . 

Cheaper houses where I live aren’t really there or in run down and dangerous areas ( where I’ve lived before so I know )

I’ve had various relationships and no doubt will again when I want but I’ve made the mistake of being frivolous with money and never securing my living, now is the time , does anyone have any advise ?

thank you in advance 

We may be letting the tail wag the dog here.

If you earn 30k, a lender might offer you a mortgage of around £135k (generally, lenders top out around 4.5x annual salary).

Add your £50k deposit to this and you have a £185k budget, at a bit under 75% LTV. As an example, on this Nationwide are offering a 5 year fix (30 year term) mortgage at 3.99%, which a monthly payment of £650. This is expected to dramatically increase in the next couple of months after the absolute blinder our government has played in the last couple of days.

But this is largely irrelevant, as borrowers don't dictate to lenders what is affordable, the lender decides this. They won't lend to you if they believe the mortgage is unaffordable (hence lending 4.5x).

Realistically speaking, if you're buying in the south east, you'd be lucky to buy a wheelie bin to live in for £135k (OK some exaggeration, but even 1 bed flats would not be affordable). The further up north you go, the better your buying prospects become. Look on Rightmove, see what is within your budget.

Unfortunately your dad may be part of the older generation who still think that a single person on an average salary can buy a decent house, as was the case in their generation. I'd say this is virtually impossible nowadays, and most people buy as couples and/or with significant leg ups.

You almost certainly will not be buying a 3 bed detached 'forever home', sorry.

Hi thank you for your post .

You are right. 

No not a detached , but a semi detached for 150k three bedroom is possible but I would have no disposable income left . 

My plan is to find a 100k property pay 50k on it so I can still have disposable income. 

FrancisBegbie

Sarah1Mitty2 said:

FrancisBegbie said:

SensibleSarah said:

FrancisBegbie said:

I’m in Liverpool. 

It doesn’t look good doing this on my own even with £50k and £30k salary . 

It looks like I’ll need a partner / lodger . 

The problem is a partner won’t match my deposit etc . 

It’s weird I naively thought I was in a great situation . 

The more I think of it though I don’t actually know anyone who lived on their own anymore they are all with family or their partner or in a flat or house share . 

I live alone in a 2-bed house in Liverpool. You might have to compromise a little on the area you want to live in but although house prices here have rocketed in the last few years, it's still definitely one of the more affordable parts of the country.
I bought my house in 2010, so can't really offer much up to date advice. I was then on a salary of about £25k, had a £9k deposit thanks to my Mum, so was able to buy a bit of a fixer-upper for £90k in an area that is middling. Several houses in my street have sold in the last year for anywhere between 120k - 160k (most are 3-beds) so it is possible for you to find a decent 2-3 bed in your price range, but stock is low and demand is high so things tend to move really quickly and the move-in-ready houses often get sold within hours or days at most. One of the best and worst things about Liverpool is that one street can be completely different to the next and varies widely in the same postcode area, so don't discount a whole area on the strength of past experience without taking a walk/drive by a specific house again. 

Your house running costs probably aren't too far off compared to mine - but obviously mortgage interest rates at the time you take yours out will play a big part in that specific cost. I currently pay about £110 a month council tax (Including 25% sole occupancy discount) for a Band A property, my energy costs will be around £100 a month (after Oct increase - but I don't use the heating much) and TV/Broadband costs me £85 including sports channels. so could be considerably cheaper if needed. Home insurance is way cheaper than £60 a month. I pay annually but would work out as less than £20 a month for building and contents. I managed my running costs fine when I was earning under 30k a year, but saving was difficult/impossible until I started earning more. 

Thank you dear very informative post I appreciate it . 

I agree Liverpool is a lottery and always based on neighbours . 

I’ve lived all over including high rise flats in the infamous blocks in Cannibal Farm - Stockbridge Village. 

My leaning is towards a three bed for the sale aspect . 

I know as I said previously I genuinely thought with £50k I’d be in a great position and could pick up a house for £100,000 , how wrong I was . 

What do you mean the sale aspect, do you expect to make a profit on it?

I’d like to think maybe twenty years later it would be a possibility , is this not realistic ?

I also meant surely a two bedroom would be harder to sell than a three?

Rachelredwood16

FrancisBegbie said:

Sarah1Mitty2 said:

FrancisBegbie said:

SensibleSarah said:

FrancisBegbie said:

I’m in Liverpool. 

It doesn’t look good doing this on my own even with £50k and £30k salary . 

It looks like I’ll need a partner / lodger . 

The problem is a partner won’t match my deposit etc . 

It’s weird I naively thought I was in a great situation . 

The more I think of it though I don’t actually know anyone who lived on their own anymore they are all with family or their partner or in a flat or house share . 

I live alone in a 2-bed house in Liverpool. You might have to compromise a little on the area you want to live in but although house prices here have rocketed in the last few years, it's still definitely one of the more affordable parts of the country.
I bought my house in 2010, so can't really offer much up to date advice. I was then on a salary of about £25k, had a £9k deposit thanks to my Mum, so was able to buy a bit of a fixer-upper for £90k in an area that is middling. Several houses in my street have sold in the last year for anywhere between 120k - 160k (most are 3-beds) so it is possible for you to find a decent 2-3 bed in your price range, but stock is low and demand is high so things tend to move really quickly and the move-in-ready houses often get sold within hours or days at most. One of the best and worst things about Liverpool is that one street can be completely different to the next and varies widely in the same postcode area, so don't discount a whole area on the strength of past experience without taking a walk/drive by a specific house again. 

Your house running costs probably aren't too far off compared to mine - but obviously mortgage interest rates at the time you take yours out will play a big part in that specific cost. I currently pay about £110 a month council tax (Including 25% sole occupancy discount) for a Band A property, my energy costs will be around £100 a month (after Oct increase - but I don't use the heating much) and TV/Broadband costs me £85 including sports channels. so could be considerably cheaper if needed. Home insurance is way cheaper than £60 a month. I pay annually but would work out as less than £20 a month for building and contents. I managed my running costs fine when I was earning under 30k a year, but saving was difficult/impossible until I started earning more. 

Thank you dear very informative post I appreciate it . 

I agree Liverpool is a lottery and always based on neighbours . 

I’ve lived all over including high rise flats in the infamous blocks in Cannibal Farm - Stockbridge Village. 

My leaning is towards a three bed for the sale aspect . 

I know as I said previously I genuinely thought with £50k I’d be in a great position and could pick up a house for £100,000 , how wrong I was . 

What do you mean the sale aspect, do you expect to make a profit on it?

I’d like to think maybe twenty years later it would be a possibility , is this not realistic ?

I also meant surely a two bedroom would be harder to sell than a three?

Not necessarily. A lot of younger FTBs would be looking for 2 bedroom properties. Where I am 2 beds sold like wildfire before the market started to cool. They're also good for BTL too.

caprikid1

"I’ve had various relationships and no doubt will again when I want but I’ve made the mistake of being frivolous with money and never securing my living, now is the time , does anyone have any advise ?"

2 things to mention

1. Buy while you are single, two properties is a nice to have problem.
2. Buy where you can get a lodger and have a house with space for one, loss of privacy gives a considerable boost to your income TAX FREE, pays for a lot of nights out and can be quite fun (Did it for years).

A lodger could triple your disposable income or more....