Never mind the house prices, I'm saving a deposit.

born_again_saver

dannyboycey wrote: »

I find it absolutely sickening that we have got to the stage where honest, hard-working, financially responsible young people have to save for 4,5,6 (or more years) just to get together a basic deposit. Effectively putting their lives on hold, some even putting off starting families.

For the sake of these people, (and our country !!!!!!) bring on the crash! I hope it's a monumentally huge one!!

Much as a crash would help me and the others in my position a lot, I think it's actually fair enough that people do actually save up for a few years towards the biggest purchase of their lives.

Lending has been so permissive in recent years. I think it had all gone a bit mad to be honest, what with the 100% and 125% mortgages, the return to popularity of the interest only mortgage, 30 and 40 year terms, borrow at least 5 times your income and not 3 like it used to be, gifted deposits, buy to let mortgages, etc etc. Think of all those "how to get on the property ladder" articles aimed at the aspiring first time buyer - how many times do they roll out all the above options "if the Bank of Mum and Dad can't or won't put down your deposit", while rarely if ever suggesting knuckling down and saving up your deposit as a sensible option? I honestly think that many people have forgotten how or why to save in this climate of easy credit - except MSE-ers of course!

Because lending has been so permissive and so many have borrowed so much, sensible savers have been made to feel they are the ones taking the risks by not taking the plunge and signing up for a huge mortgage, not those who have mortgaged precariously. Either way feels like a gamble though - save and be priced out forever due to rising prices? Horrible thought. But it's far less horrible to me than to buy and be repossessed with remaining debts to carry forward from it.

They're the extreme risks at each end though. I suspect at worst if the market goes up again, I'll end up with a deposit and a mortgage at a couple of income multiples higher than I'm comfortable with - if anyone is still lending at those levels by 2011?

neverdespairgirl

Turnbull2000 wrote: »

EVERY worker is the backbone of this country and should be treated equally.

Prostitutes? Drug dealers? Gun runners? Estate Agents?

bryanb

Running_Horse wrote: »

Rubbish, we own our house and don't plan to move for 20 years, but are not against a crash. Has it occured to you that you don't have to be for or against something? Like last nights storm, if it happens it happens. Most the people at work almost never mention house prices. It just isn't that interesting.

I look forward to hearing from the others that I mentioned as against a crash, I fear they may not be as philosophical as you.

lostinrates

Sigh...as a young, married saver I get frustrated that its ASSUMED we don't save for a deposit. I worked through university, (still needed a loan, though not full 'entitlement') and since then have saved a significant amount by todays standards. DH and I married while he was post graduate (and working) but both on very low incomes. Now DH is on an above average income and I am not working again, though trying to! as I have been following him round world with his job (below UK average income bt broke him through into his career) My choice was to keep working ...the modern and wise option I'm sure, or to traditionally and perhaps stupidly and selfishly live with my husband!

So we have, against most odds, managed to save a healthy deposit. I'm now wondering whether it makes more financial sense for me to have a baby now rather than start working at the bottom of the rung again....but that seems so desperate. We'd love to buy NOW...but interest rates are such that somewhere we could start a family, even with our large deposit, seems scary, where as if we buy a one bed flat and then need to move quickly the market may well have trapped us in. Three in a bed does not appeal!

We've been aiming to be in a position where with our deposit and his wage we could both buy a house and have a baby, I'm almost 30....it hasn't happened yet.

WTF?_2

Ivrytwr3 wrote: »

people who have bought property tell you they are better off, those that haven't predict a property crash.

No-one knows what will happen, but i do know i bought a property 3 years ago for £92k which is now worth £130k. I could have saved £20k in that 3 years, but that £20k, had i saved it, would have been wasted on the purcharse price as that had risen almost £40k.

What you seem to be forgetting is that house prices can go down as well as up.

Once you take that into account, it makes a lot more sense to save rather than buy at this moment in time. :rolleyes:

born_again_saver

Hi Lostinrates, I think many people are doing exactly as you are and saving hard in difficult circumstances. Please don't lose hope of achieving your dreams of buying your own home and having a baby, although I know it's frustrating and that the solutions don't seem to add up right now. I didn't mean to assume that most young people aren't saving, it's just the way the whole property industry has offered short cut solutions to property ownership for those willing to skip the deposit-saving which has left the savers like you in a difficult position.

If you keep saving, particularly now that your husband's income situation is better, then it may not be so long before you are in a position to afford somewhere? Especially if house prices do continue to stall or fall. If you're able to find a job before you have a baby then you'll be able to add to the savings more, and hopefully qualify for maternity pay etc. You'll also achieve a better income multiple for the mortgage. If you want to put off your career until after you've had a baby then it really doesn't matter what the job is, so long as it brings in some money and you know it's for the short term with your growing deposit in mind at all times.

You'll know what position you need to be in for it to be possible, the market is unfortunately out of our control. Good luck in your quest to buy a family home.

IveSeenTheLight

MrSafeGaz wrote: »

Yes, I agree that this approach has its advantages in certain scenarios, such as if the persons parents need the money (presumably not if it will be given back) or if the 'saver' does not have the restraint required to save alone.

However, I think the learning potential is greater if a person is given the responsibility to save this money themselves. They learn about restraint and not having to spend everything they have there and then for the sake of it. They learn about the benefits of saving first hand which is a potential motivator for doing the same in later life. Lastly and perhaps most importantly, the person is almost forced to learn/research about how it is best to save/invest this money in the relative long term ready for when the cash is needed. The research done here can provide large benefits down the line.

Horses for courses I guess. I am glad that I was given the responsibility of saving this money for myself. In the past few years since I left uni I have learnt a massive amount in terms of finance due to my own research and that will be extremely valuable in the coming years.

I think what was not clear from my previous post was that my parents did not tell me they were puting the money away for me.
As far as I was concerned I was paying rent, never to be seen again.

This meant I had to pay my share and save up in order to move out.

As a parent there's no point collecting rent from a sibling informing them that they will get it back when they move out. That way you are essentially just a Big Brither Bank Savings Account.
Best for them to pay rent to you as a parent and then surprise them when they set up their first home

born_again_saver

IveSeenTheLight wrote: »

As a parent there's no point collecting rent from a sibling informing them that they will get it back when they move out. That way you are essentially just a Big Brither Bank Savings Account.
Best for them to pay rent to you as a parent and then surprise them when they set up their first home

Yes, that makes sense IveSeenTheLight. In fact when I was younger I knew of someone who was doing this very same arrangement for their eldest kid who'd just started working. If parents can afford to do without the money, I think it's a great way to help a young person learn to budget for commitments; they've still got the rest of their money to manage and to spend wisely or squander.

As a comparison to living with parents, my rent and share of all the bills in a shared house totals up to something like £280-£300 per month, which I think is fairly cheap for living costs and gives me plenty of scope to save. Not to mention the independence

Running_Horse

born_again_saver wrote: »

Much as a crash would help me and the others in my position a lot, I think it's actually fair enough that people do actually save up for a few years towards the biggest purchase of their lives.

Let's be honest. How many 21 year olds know what they want to do in life for the next 25 years? If prices do fall sharply, millions could find themselves unable to move for 10 years, especially those without the cushion of a deposit.

skap7309

bryanb wrote: »

I am not advocating stopping deposit saving, However I would just like to list who would like to see a house price crash and who not.

For crash- Anyone wishing to buy
Against-Estate agents (GREED)
Against-Government (GREED)
Against-Surveyors/valuers( GREED %)
Against-Lenders (GREED %)
Against-BTL landlords (GREED %)
Against-Home owners not intending moving (GREED %)

I'm sure there are many more against but how many more for?

Edited for accuracy . PS thats meant to be light hearted so do not shoot me at dawn.;)