would you buy just to get on the ladder?

tiger135

im wondering if anyone considers buying somewhere that either:
1. property isnt exactly what they want because what they want isnt available at the time (due to lack of supply or being fussy) , but has a view to moving on in a few years to something more ideal.
2. cant afford what they want so buys the best they can afford and again plans to upgrade in a few years (example buys a flat when would like a house)
3. just wants to get on the ladder and maybe already lodges or rents somewhere so buys something to rent out with a view in the future to move in or buy elsewhere but not have to go through all the 'getting on the ladder' stress again

alternatively is it best to keep the cash in the bank until the place you want to live comes up and be a cash buyer even if this means renting or lodging for longer first?

JGB1955

I would assume that most first time buyers come under the (1) and (2) options.  It was certainly that way 40 years ago and I don't see it changing.  (3) would need VERY careful thought - have you read about the pitfalls of being a landlord?  Could  you even (as a FTB) get a mortgage for a BTL?  Good luck!

MFWannabe

I think options 1 and 2 are highly likely to be most people 
You also are probably going to get similar answers to  your previous posts 
https://forums.moneysavingexpert.com/discussion/6428143/moving-out-options#latest

ArbitraryRandom

I think it depends on how far away you are from 'the place that is exactly what you want'. And if that even exists... 

I wouldn't recommend waiting for the 'perfect forever home' as your first purchase; But at the same time, buying houses costs money - so anything you buy should really be realistically suitable for you to live in for the next 5 years or so. 

I always recommend making a list of things that you have to have (practicalities like proximity to work and anything else that's a must have); then like to have (house vs flat, garden, near your friends/social life, whatever matters to you), and finally must not haves (anything that will make you miserable or cause you problems like lots of stairs or being on the ground floor).  

Then look at the properties you can afford and those just above your budget - do any of the ones you can afford meet all of your must have and some of your wants? Go look at them... you might find you're not settling as much as you think. 

Do any of the ones that are a little too expensive meet them as well? Go look at them... never know they might accept an offer. 

If there's nothing that you can even remotely see yourself being happy in for the next 5 years then maybe wait 6 months and try again. 

ProDave

In 1986 I bought the cheapest house in the county, as it was the only house I could just about afford to buy.  It was not at all what I wanted and in a lousy location.  But prices were rising faster than my wages then and if I did not buy that one when I could I might never have been a home owner.

Now that housing is not in a silly boom phase and if anything prices might be falling rather than rising, I would wait, until I was in a better position to buy, e.g. bigger deposit, higher salary etc.  Assuming you have somewhere to live while you wait that is not costing you more than paying a mortgage.

Of course it is this positive feedback (I have to buy now because prices are rising and the converse, prices are falling so I won't buy) is what helps to fuel the boom and bust in the housing market (in spite of one chancellor telling us he dad eliminated that)

SavingPennies_2

1 and 2 surely applies to most FTB, and no doubt many second time buyers...

Unless you earn a very good salary or are likely come into some money then I wouldn't bother waiting till you're a cash buyer, prices will (likely) have risen accordingly.

Probably best to manage (lower) your expectations.

(My response is also based on having read some of your previous posts)

Als156

I've been in this position this year. We've (I live with partner but am buying the property in my own name) have outgrown our current rental but didn't want to continue renting a larger place. We sat down and figured out what are absolute MUSTS were (i.e. has to have a parking space and have some form of garden) and nice to haves (private garden and walking distance to public transport, decent sized kitchen). Then we went to market to look. We kept going until we got our musts but had to compromise on our nice to haves a bit, plus as much as we wanted a house budget wise left us with a maisonette. The plan is to move on in 3-4 years but by then will have a decent equity and partner will be able to come onto mortgage. 
The real thing I say is..is any time the best time? Even if we can't get much more for the property the mortgage rate is reasonable enough (and much less than renting a 2 bed in the area) that we can over pay and get a decent chunk off to give us a good deposit going forward. 

Alter_ego

In late 70's to early 80's my house was earning more than me. Get on the ladder!

MFWannabe

Als156 said:

I've been in this position this year. We've (I live with partner but am buying the property in my own name) have outgrown our current rental but didn't want to continue renting a larger place. We sat down and figured out what are absolute MUSTS were (i.e. has to have a parking space and have some form of garden) and nice to haves (private garden and walking distance to public transport, decent sized kitchen). Then we went to market to look. We kept going until we got our musts but had to compromise on our nice to haves a bit, plus as much as we wanted a house budget wise left us with a maisonette. The plan is to move on in 3-4 years but by then will have a decent equity and partner will be able to come onto mortgage. 
The real thing I say is..is any time the best time? Even if we can't get much more for the property the mortgage rate is reasonable enough (and much less than renting a 2 bed in the area) that we can over pay and get a decent chunk off to give us a good deposit going forward. 

Very sensible advice 
Good luck with your purchase 

ManuelG

Do many people end up with their perfect house, anyway? I mean, I like my house... but I'll never earn enough for my perfect house, and I'm not *that* ambitious, I don't want a castle!

All I'll ever get is a house I like, one I love even... but it'd never be my perfect house, there'll always be some compromise in there.

MFWannabe

ManuelG said:

Do many people end up with their perfect house, anyway? I mean, I like my house... but I'll never earn enough for my perfect house, and I'm not *that* ambitious, I don't want a castle!

All I'll ever get is a house I like, one I love even... but it'd never be my perfect house, there'll always be some compromise in there.

Absolutely this 
My first home I love; couldn’t afford to buy until in my 40’s. Was best of what I could afford on my budget in the area we wanted to live 
It’s small but it’s enough and hopefully I’ll be mortgage free by time I’m 60 🤞
Now I could afford bigger but we don’t need it and it would be stretching budget so theres no need and I wouldn’t want that pressure 
My dream house 🏡 yes I have a dream but I’ll never be able to afford it unless I win the lottery 😃

I think your answer OP is buy the best of what you can afford and feel comfortable with the amount you’re spending 
Putting off buying until you get the dream property or the next supposed house price crash could never happen and you’ll have spent a lot of money on rent in that time that could have been paying off YOUR mortgage on YOUR home