first time buyer question - how do you get a house?

MadSebW

We are really lucky with our scheme to be honest. We are able to purchase the full percentage anytime we wish with no time limit and the housing association pays the building insurrance.

It's ideal for people like us. With 2 children, both of different sex, we would definately need a 3 bed house and would have never been able to afford one without this scheme. Now we have a 3 bed house on a new ego friendly community

Turnbull2000

I can't quite grasp the benefits of shared-ownership. If you can only afford 50% of a flat, I'd imagine you're in for a very, very long wait for that two/three bed family home.

Instead of the traditional....

1. Buy first home
2. Earnings increase (often 5-10%+ pa) after 5-10 years
3. Upsize to bigger property
4. Have kids, save for pension etc...

It seems we now have...

1. Buy 50% of first home.
2. Earnings increase (today it's more like 2-5% pa) after 5 years
3. Increase share to 75%
4. Earnings increase after 5 years
5. Increase share to 100%
6. Earnings increase after 5 years
7. Buy 50% of second home
8. Mortgage as a proportion of earnings is still huge. Forget kids, you're too old and not enough spare income. Forget pension too. But get saving to live that dream of 'owning' 75% of your current home.
9. Reach 80 and make that final mortgage payment and hit 100%. The grind is over. Celebrate your achievement. Die.

Phirefly

Current house price situation aside, its possible to buy a house in your 20s, but to do so you need

1. To have been super careful with your money and saved about 10k.

2. To do everything you possibly can to up your income

3. To live somewhere less expensive

4. A partner

Not easy, but achievable.

CYBERCIDERSAVER

toasterman wrote: »

A friend of mine bought half a 1 bedroom flat on a shared ownership scheme last year, and had to sell his car (small, reliable..wasn't a Porsche or anything) to afford the deposit. He's also been employed and shall we say.. "thrifty" and saving for the last 10 years.
At the rate he's going, in 25 years, he will own half of a 1-bedroom flat. Just the idea of that I find so depressing I don't think I'd ever consider it.

Okay my example in reply to that is:

Friend bought 1 bed BTB house for 40K in 1999ish. may not sound like a lot but she only afforded it cos she was "very very" careful with money. Forward to 2004 and she and new partner (also very tight fisted... I mean careful with money;)) purchase house for 120K on mediocre salaries. Obviously the HPI meant she sold her 1bed BTB for 80K so had 40k deposit for house no. 2.

So okay at the moment the market is on a bit of a downer. So maybe wait fora bit but HPI can help fund the next step up as you can get a cheaper mortgage the bigger your deposit.


Hope that helps unravel some of the enigma that is the housing market.....

Turnbull2000

CYBERCIDERSAVER wrote: »

Okay my example in reply to that is:

Friend bought 1 bed BTB house for 40K in 1999ish. may not sound like a lot but she only afforded it cos she was "very very" careful with money. Forward to 2004 and she and new partner (also very tight fisted... I mean careful with money;)) purchase house for 120K on mediocre salaries. Obviously the HPI meant she sold her 1bed BTB for 80K so had 40k deposit for house no. 2.

So okay at the moment the market is on a bit of a downer. So maybe wait fora bit but HPI can help fund the next step up as you can get a cheaper mortgage the bigger your deposit.


Hope that helps unravel some of the enigma that is the housing market.....

So instead of borrowing an extra 20K to upsize, she had to borrow 40K as prices have doubled.

The 'ladder' is by and large a function of increased earnings, not HPI.

CYBERCIDERSAVER

My point, Turnbull, is that circumstances change enabling the next move up. Had house prices stayed stagnant then the next hop up the ladder would have been difficult with a MUCH smaller deposit, meaning a higher percentage on the mortgage payments.

You take a snapshot of her when she bought house no.1, and there is no way she could have gone up the ladder in that situation. Like the OP's example she would be destined to live in a tiny 1 bed BTB with a 25 year mortgage, but circumstances changed. You get me?? it's what happens. It's called life.

Maybe if I turned it into a Peter and Jane story, you'd understand?:rotfl:

pdrskint

back to original post, i have a few properties and wonder how my kids are going to get on the property ladder, my advice to you and my kids is look for a decent sized house with the internal plan that can convert into an upstairs and downstairs self contained units, basicly you have a main door and a entrance porch with stairs and hall way, an easy convert,you live upstairs and rent out downstairs helping with the mortgage, also you get a better house in a better area,

Turnbull2000

House prices rise 100% in 5 years

Bought for 40K
Sell for 80K

40K deposit

Buy for 120K

Have 80K mortgage


House prices rise 20% in 5 years (in line with RPI)

Bought for 40K
Sell for 48K

8K deposit

Buy for 72K

Have 64K mortgage


The second scenario provides for a 10% deposit. Mortgage payments are also lower.

But like I say, upsizing is largely a function of increased earnings. You can also save towards a deposit throughout the intervening years. Without this, you can't afford additional borrowing.

CYBERCIDERSAVER wrote: »

Maybe if I turned it into a Peter and Jane story, you'd understand?

You usually tw*ttish?

mcdelarich

I think it depends on what area you are in as to whether you think it is a good market to be a ftb.

We are just about to exchange on our first house (we're ftb) and we have bought a medium 3 bed semi, large garden, good area/catchment schools, for £91,500 - we're in East Midlands. Our mortgage is the same price as we are renting for per month too. We saved a 20% deposit though.

Rich

Phirefly

mcdelarich wrote: »

we have bought a medium 3 bed semi, large garden, good area/catchment schools, for £91,500 - we're in East Midlands.

Jesus Mary and the Orphans :eek: are you for real?! You'd not get a park home in Coalville for that... Well done you