FTB when to buy?

happytails

Hi,

Me and my partner are currently saving up for a SO house and estimate to have the deposit £3500 and fees £1500 before Xmas 08. We are living in rented accom at the moment and really want to get on the property ladder asap.

If we are lucky enough to find a decent house for our budget just before Xmas do you think house prices will have come down any since now? We live in NW Eng if that helps any.

Should we hold on and rent? or try and buy in 6 months time?

Thanks in advance

Sarah

ejh18

Did you really mean £3500 for a deposit, or £35000? How much are you planning to spend on a house?

Regardless of affordability, I would rent for a while yet. You have nothing to lose by renting for another 6 months to a year. How long have you been renting and living together?

The way I've been looking at it is to compare what I would pay on mortgage interest to my rental costs. At the moment house prices are (apparently) not going up so I'm not losing anything by renting as long as what I pay is less then what I would in interest. I too am really keen to buy, as I really want my own home, but it just doesn't make financial sense at the moment. If all the predictions are correct and prices go down, you will be in a better position in a year. But if they stay the same you are no better or worse off. I think prices in most parts of the country are not going up so it makes sense to sit tight, as long as renting is not too much of a chore.

happytails

No i meant £3500 - the house is a 2 bed semi and is £69950 50% shared ownership.

We need a 5% deposit - £3500.

We have been renting for just over a year so far. Our rent is £480 a month and a financial advisor estimated the mortgage repayments for this house to be about £430 fixed rate for 5 years mortgage.

£3500 doesnt sound much i imagine to those who need £20000+ deposits but we are on one good wage(for our area) (19K) and then my wage (1k) as ive just gone self employed. We are becoming hermits from this payday now to save up this £5000 in 6 months.

Ideally we would like to get out of renting ASAP but obviously with house prices expected to come down id like to wait but unsure of the best time to buy.

Sarah

thriftybabe

Definitely hold off just now. Prices have not reached rock bottom yet and you will be kicking yourself if you find that you buy something now and things gets worse.

pinkshoes

The right time to buy is when you have saved up AT LEAST a 10% deposit, preferably 15% or 20%, and find the perfect property in a good area.

If you've only saved up £3500, then I would save for a lot longer, as with the cost of living going up, you may find you'll struggle. You should also/ideally have savings to be able to cover your mortgage should you be unable to work. Critical illness insurance for mortgages is very good at not paying out!

poppysarah

I think you should save for a lot longer. It shouldn't be like being a hermit - it should be normal boring every day existance without all the frills and fripparies that humans seem to expect these days.

ejh18

Ok so that's good, you can afford to buy it. But, here's a few important things to think about. Is the house definately worth £140,000? Is it a new build? If so it might be worth checking some of the threads about those as they seem to be falling fast. I'm not sure about the new homebuy regulations, but can you now get these deals on any property or just new developments? Don't be swayed by the affordability of the shared ownership, be 100% sure the house is still worth the price you pay, and if its a new build I would suspects thats probably not the case.

I know you're not buying a flat so you're less vulnerable, but a friend of mine is in deep !!!! due to the famous Leeds new build apartment fiasco. He bought a new flat with his gf two years ago, and now the flat is no where near worth what they paid. He really needs to sell as him and his gf and him have split up. He can't get a lodger as its a 1 bed place. Losing the deposit is a given, but he'll still owe thousands to the mortgage company if he sells for what people are will pay. At the time he was willing to pay a premium for a shiny new flat, so be careful that you are not doing the same.

Also, how happy would you be to stay there long term if prices did drop and you had no choice but to stay put? Is it big enough and in an area where you want to stay? If you are happy to live there for a good few years (say 5-10), I don't see any harm in going ahead, as long as you have thought about what pink shoes has said. Its a home after all, not speculative investment. However, from a purely financial point of view, I do think leaving it a year would be the safest option. The market seems to be stalling for now, and no one knows how hard or fast it will fall.

zippygeorgeandben

Hi Happytails,
I think people have given you good advice on here regarding buying. I think my partner and I are in a similar position to yourself. Currently we have £10K saved up and I have also got a similar amount of money to come from my mum (who sadly I lost recently).

My partner and I are not so much fed up of renting but hating the constant what seems throwing money away, living in temporary accommodation, we don't live in a nice area (east london) and are crying out for things like a garden, somewhere to sit outside, somewhere which isn't basically where we are now.

From researching a lot on this site and listening to people's stories, it does seem at the moment that many people are negotiating bigger margins of percentage off a property and in some cases 15-20%!!

I totally concur with people advising to hold off and save more money. You'll be in a strong position if you decide to hold off. I also know that my partner and I will be in a strong position but if there is a property we really want out there and I can negotiate a discount which I think is reasonable, then I may just take the plunge.

Good luck it what you decide to do and make sure you keep us informed!! :T

Ben

happytails

If we can successfully save £5000 in 6months perhaps we can save another £5000 again so in a year we may have £10000 which would be a good deposit for a house that isnt shared ownership.

We waste £6000 a year renting a big house but its not in a good area and its without a garden or a driveway. We have 4 big dogs so we cant downsize to save money.

Kind of hoping saving is addictive as i have always struggled to save for anything.

brit1234

happytails wrote: »

If we can successfully save £5000 in 6months perhaps we can save another £5000 again so in a year we may have £10000 which would be a good deposit for a house that isnt shared ownership.

We waste £6000 a year renting a big house but its not in a good area and its without a garden or a driveway. We have 4 big dogs so we cant downsize to save money.

Kind of hoping saving is addictive as i have always struggled to save for anything.

I strongly wouldn't get a shared equity property in a falling market, especially a new build. You will loss out financially.

You are going to need to save a far bigger deposit, say about +£15K. The best mortgage rates are with the higher deposits. So the more you save now the better you will be in the long run.

Saving can get very addictive especially with internet banking where you can set a separate account and give it a personalized name such "my house deposit". I find great pleasure in transferring £700-1000 a few seconds after payday at midnight and then transferring a bit more to round up the total after interest payments later in the month.

happytails

Hmmm, It seems Shared Ownership isnt what its cracked up to be. I would rather spend £125,000 on a 3 bed semi in an ok area round here and know that i have it all.

Has anyone got any tips about reducing outgoings etc. We have reduced our weekly shop by about £20 and have cut out dvd rentals, takeaways, beauty/hair treatments etc. We have no credit cards or loans, just our overdraft. We are only on one decent wage as i am newly self employed and only make a small amount. I have applied for a p/t weekend job to help save.

Any ideas will be appreciated

New plan - Save 15K in less than 2 years. Is this do-able on 19K a year renting as a couple with 4 dogs? realistically?

Ta x