Should I bite the Bullet, move out and rent?

firsttimetom

Hi All,

EDIT: Sorry it is such a long post!!

Me and my Girlfriend have currently been looking at renting a place together. The main reason for this is that she cannot bear her home life as she really does not get on with her Stepdad and is confined to her room all the time.

She's 18, I'm 23 and I still live at home, sharing a room with my Brother (21). I like living at home, and as I didn't go to Uni don't know any difference (although I did enjoy the freedom when touring the USA for a month).

I don't know what I am more afraid of, leaving my family (which I appreciate that I will have to do anyway someday), the huge increase it will put in my expenditure, or the fact I've always been told renting is 'Dead Money'.

As for the last bit. Based on the house next door to my Girlfriend going for £182,000. Assume an accepted offer of £170,000, 10% deposit and 7.5% interest rate and you get a monthly mortage of £1143 repayment or £950 Interest Only (All this interest sounds more like dead money too me than renting). These are crazy figures and with the withdrawal of Credit, makes me think that houses will come down in price over the next couple of years.

Because of this I have been saving hard for a deposit and have about £50,000 for my deposit on a house ready to go. I also have an Isa of £14,000 for dire emergencies or going towards when I retire, plus another £4,000 that is my short term savings). I personally beleive that house prices will not be rushing up and probably down, so would hate to buy now. However, I had intened a 18-24 months at home and saving my deposit to the region of £65,000, by which time I could be 25, still at home sharing a room.

We've found a nice place, which we went to view today in a nearby town. It is £675 a month (which based on my figures for a 3 bed town house abovemake it seem very cheap) for a 3 bed spacious barn conversion. The rent includes electricity, water and severage. No gas is needed. Our combined Guaranteed income per year (after tax) is £1460 a month. My g/f only works part time as she is also studying, although she can earn a lot more over the summer as whe will effectively work full time from April - September.

Other expenditure is Council tax - 97.5, Phone - 12, Broadband - 12.99, food, 160, tv licence - 11.25. We've then got our petrol, car insurance, tax and mobiles which come to 196, so total expenditure of £1164.74. This would leave us with £295 every month. I also run a website which in the last year this has hit £300 once and averages about £600 per month, so that should give us about £595, of which I imagine £400 (£4800 per annum) could be saved (hopefully more).

But what do you all think. I am not used to this kind of expenditure and it frightens me a little bit (I haev been paying £20 a week keep money to my parents). Should I finally leave home and enter the real world? Mum says I'm always welcome back if things don't work out etc, (she knows I wouldnt buy a house in the current market).

There aren't many places to rent around our area. There is a 1 bed annexe for £450 which I feel would be too small and a 3 bed bungalow for £595 exclusive, but the house we looked at is very nice.

If you were in my situation what would you all do?

In my heart I am quite up for it, but my head takes one look at what would I could save and is trying to stamp out the idea (that's thanks to years of reading MSE and being very frugal coming back to haunt me!!!). Would my deposit be large enough that I needn't worry too much for the forseeable future?

Thanks for any advice you can offer.

Lotus-eater

Do you want to live with her? If you do, whats the problem? If you don't really, then why are you thinking about it?
I don't know how long you have been together, so please excuse this, but are you sure you are not being used as a way for her to get out of her bad situation at home?

What do you mean "gas is not needed" Something is needed to heat the house.

Btw, you seem well up on the money side of it, well done I hope she is as good as you. How on that small wage did you manage to save so much money though.

edit, after reading PasturesNew post, I hadn't actually realised you were seriously thinking about buying a house, if I was you I would rent, you've got a family to go back to, you get to sleep with your 18year old girlfriend (in the same bed!) everynight..... you're 23 and share a bedroom with your 21 year old brother......... ummm

PasturesNew

I think you'd be mad to tie up all that money in buying a house right now.
Rent somewhere really small.

To be honest, at 18 your gf just wants out. Once she's out she might want something else.

Keep your savings. Rent somewhere small and clean.

firsttimetom

Lotus-eater wrote:

I don't know how long you have been together, so please excuse this, but are you sure you are not being used as a way for her to get out of her bad situation at home?

Hi Lotus,

Thanks for the reply. We've been togerth for 18 months. I'm quite cautious about my money and she doesn't know how much I have saved. We will be splitting the rent and major bills. I know she is desperate to get out, things really are bad. A couple of weeks ago we went back to hers and he was in the kitchen wearing nothing put stockings and suspenders and he didn't seem bothered. He's a nice enough bloke when he wants to be, but he can also be vicous, manpulating and actually drinks while he drives. Her mum kicked him out, but has recently taken him back after his brother kicked him out and now he has no where else to go.

I do trust her to know ebough that I am not being taken for a ride. She is what I would call a 'true person', who values the happiness of me, her mum, dog, friends and finally herself (in that order) before anything else. Unfortunately she has not been able to get through to her mum and almost feels as though she has been cast aside in favour of her step dad.

What do you mean "gas is not needed" Something is needed to heat the house.

Its got night storage coupled with electric panel heaters.

Btw, you seem well up on the money side of it, well done I hope she is as good as you. How on that small wage did you manage to save so much money though.

She is very good with her money. She put in a lot of overtime, working 8 - 9 some days (8-4 at uni, 4-9 at work) to save for her car.

As for my money, it's mostly come through having very cheap living costs and my business was very successful in its first couple of years due to my innovativeness and lack of competition. Now the market is quite saturated (hence it not making as much money now), but I have a good customer base, and people know of my good service.

And as for:

Do you want to live with her? If you do, whats the problem?

I honestly think its because my savings won't grow as fast as previous years, and I'm afraid of this. I know that this is either sad, selfish or down to lack of real world living (possibly all 3), but thats just me. If I could get my head round this there would be no problem at all.

Thats why I posted this, just to see if I really am being an idiot or too cautious etc.

Badger_Lady

Get out of your parental home and rent a place that you can comfortably afford. Keep your savings untouched (but well invested) until you have need of them - you have a fabulous nest-egg there.

Once you've lived alone, you'll never look back - it is always the right thing to do IMHO. But don't commit to a joint mortgage at this stage... rent might be "dead money", but in this case you will not be stretching yourself, and the monthly payments will be buying you freedom, space, flexibility and a place to mature into an independent adult as well as testing your relationship with your girlfriend.

I moved out on my own at 17 and had a fantastic time living alone, renting various different places, before finally "settling down" into a mortgage at 21 - there's no rush

Lotus-eater

firsttimetom wrote: »

Thats why I posted this, just to see if I really am being an idiot or too cautious etc.

:rotfl: Live with the woman Rent...

clutton_2

what a fabulous young man !!!! whatever you decide to do - i wish you the VERY best of luck !!!!!

Lotus-eater

clutton wrote: »

what a fabulous young man !!!! whatever you decide to do - i wish you the VERY best of luck !!!!!

Now I'm a Dad, phrases like "I hope my daughter marries one like this etc" creep into my head
:rolleyes:

bryanb

The rent you quoted seems to low to include electric heating, be careful if you go for this one, there will probably be arguments.

oramgepekoe

If you rented the 3 bed place could you get an extra person in to share costs? Or maybe another couple?

I'm also surpised the rent includes electricity as an all-electric house will have high bills.

geoffky

rent m8 and enjoy your new found freedom.and well done on not going to uni and learning thedebt is good syndrome, you have learnt finance more than most..it was hard saving so please treat it well and dont let your girlfriend run off with it all..