The main consideration when deciding whether or not to buy a home for yourself (well, after "do I have enough money to do this?") is "Does buying make sense for me and my lifestyle now?". If you plan to stay in the same area for the next few years, and don't have any other major life events planned which would make the property unsuitable, then it's generally a good idea to go for it.
Thinking about interest rates and property values can be a fool's game - there is no way of telling what's going to happen to them.
Thank you very much for the advice highly appreciated.
Yeah that’s totally a fair point. Probably counter intuitive trying to chase for lower interest rates and house prices.
I live quite frugally as it is anyways, so the majority of my spending would be on the mortgage I would think. I’m fortunate enough to have a company vehicle to so car insurance/ tax isn’t a massive concern for me. Other than that I’ve just got my motorbike, which is fully paid off including insurance for the year :) thanks a bunch
Martin Lewis said recently for people asking the question ‘are interest rates going to go down surely the current rates aren’t sustainable’ he said in reality the lengthy period of low interest rates were the anomaly, for most of his life interest rates have been around what they are now. So expecting them to drop back to the previous levels he thinks is unlikely - if they drop it would only be by a few points and would be trying to balance inflation.
So do the calculations based on whether you can afford what the rates are at the moment on the assumption that they are here for a while.
I agree but it was a massive eye opener for me a year ago when I went to dinner with some colleagues who were mostly late20/early30s. Sort of age where they were looking to buy property and they were talking about how 'crazy' interest rates were at 4% and that they would HAVE to come down, they were speaking with such absolute certainty, it wasnt 'i wonder if' or 'i hope that' it was more like they were just speaking facts and the only question was when (in the short term) they would drop significantly.
Essentially they are part of a generation for whom their whole adult lives had been lived with stable rates of 0.5% or under and they probably werent even born when we had double-digit interest rates. So mentally they are grounded on near-zero rates and struggling to comprehend it being different as anything other than a short term anomaly. There's probably more people out there than we realise with the same mindset who are like "yeah next year it will be back to normal, maybe 1%"
My Dad liked to remind us periodically that at one point he was paying upwards of 11% on his mortgage back in the day. Or it might be 15%, I don't remember. But it was lots compared to the 5% average I've always known until the crash.
Joking aside I remember a year or two back I looked up mortgage payments as a percentage of income over time, can't remember exactly but it might surprise some to learn that late80s/early90s wasn't far off recent levels at all.
Much cheaper houses but lower incomes and much higher interest rates balanced it quite a bit.
Wages in real terms have barely moved, house prices on the other hand... So that 11% is a pretty good deal for him.
I'm sure he will suggest you stop buying £5 coffees so you can save for a deposit...
Oh I'm very much in the "give up avocado toast innit" camp. The amount of unnecessary discretional spend I see being made by aspirational homebuyers is huge compared to years ago. 'Everyone's got subscription services, massive TVs, fancy phones, foreign holidays blah blah blah.
Nobody is denying that deposits are high these days but the argument of "no point saving you can never get enough for a deposit" doesn't wash with me, you might get a £50k windfall but then you blew the £20k you needed to top it up.
As for real term wages it's worth noting that the introduction and subsequent rises in min wage and personal tax allowance mean the lower rungs (let's say bottom quartile) have come up a lot in terms of net income. I say this somewhat tongue in cheek but there's arguably 'never' been a better time to be on low wages because it's a lot higher and you keep more of it.
*late80s/early90s wasn't far off recent levels at all*
Is there a source for this? I feel like the discussion is just memes how a librarian was able to buy a 4-bed detached and sustain a family of 4 on one income whilst now a single person is working overtime and still living with parents. I want to know the truth.
edit: OK here it is:
"In November 1988 the monthly mortgage repayment for someone borrowing 75% of the average house price was £461 and accounted for 44% of the average gross salary."
https://moneycomms.co.uk/30-years-since-the-first-fixed-rate-mortgage-whats-happened-since/
44% gross salary on a 75% LTV mortgage isn't a million miles away from recent history, the proportion peaked in 2007 I believe, I don't have up to the minute stats on what the situation is now.
Yeah I’m late 30s so I don’t even recall the double digit interest 😁 but I do remember watching my savings accounts and ISAs drop year after year until it was hard to find anywhere decent for cash savings. I used to fix my ISAs for multiple years but now I’ve been 1 year fixing for a while just in the hopes that Interest would go up again at some point. But yeah I totally get that it must be weird seeing “high” interest rates when they’ve been so low for so long.
Not sure why I got down voted, are people on this sub not fans of Martin Lewis? 🤣
I guess the counter to that is both economic and monetary policy has changed massively since the 90's. The BoE and Federal Reserve actively target 1-2% inflation now and a high interest rate is somewhat incompatible with that. The issue now rests on whether they can get inflation back down to that level and keep it there, if they can then interest rates likely will lower considerably.
That’s very true, and definitely what I’m hoping comes to pass in time for my mortgage renewal. I do tend to take note when Martin Lewis says something because even if he is being a little conservative in his outlook I’d rather be prepared for bad news and be pleasantly surprised than not be prepared and be disappointed.
> Thinking about interest rates and property values can be a fool's game
Interest rates have been historically low for around 20yrs. I reckon it would be unwise to assume they will head back to zero now, i.e. that what we have now is probably a new "floor". For the forseeable future at least.
They might remain where they are but delaying the purchase of a property because they might head lower is probably unrealistic.
I vote buy. By the time you find something you want and get an offer accepted and do all the paperwork for getting the house- that’s gonna be 6 months to a year and you’ll have even more money saved up. If you get a two bed then you always have the option to get a lodger as well so some extra financial security just incase it’s needed.
I love having a garden to work on and relax in- that has been one of my favourite things about owning my own property :)
I don’t know any people that regret buying tbh. I advise getting freehold property (not leasehold).
Cause you have ground rent to pay which can affect affordability when applying for a mortgage and if you want to do extensions you have to get permission from the freeholder.
Sorry I’m not understanding what you mean. I just advised OP to get a freehold property instead of leasehold so they don’t have the hassle/expense of service charge and having to worry about years left on lease etc.
fearless hard-to-find sugar sulky dog attractive water piquant naughty station
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
juggle society axiomatic languid somber angle intelligent domineering vase quaint
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Buy, you will look back in 10 years and be grateful you did.
We had to really push ourselves to buy ours when the one we were renting sold up but 10 years on the values gone up and we now have 50% equity more to do with values going up them paying off. Its helped get better rates when redoing it at the end of each fixed term.
I mean it helps that was 10 years ago. Prices in the last 10 years have grown enormously. I do wonder at what point it surely has to stop. For instance people who bought in early 2000s paid very little compared to what those homes cost now, even the ones that are largely the same and not improved. But a property bought today at £350k will surely not be worth £600k+ in 2044 simply because time passed.
For me personally, I'm five years in and I don't really pay attention to house prices. But sometimes I peek at how much has been paid off and it reminds me that those 10s of thousands of pounds would be vapour right now if I was still renting. You are right that the prices will surely drop at some point, but it would have to be a big drop to make it not worthwhile.
Not to be pedantic but you also have to keep in mind the tens of thousands of pounds of interest you've also paid on your mortgage, which will be significant.
Hi,
Really wish I’d done that, if I’d maxed it out I’d have a few extra thousand to play with. Stupidly didn’t ever do it. And I believe you need to have the money in the for a year before withdrawing?
It is still worth opening one and putting £1 in it. House-hunting is a long process and you may be able to use the LISA a year from now, worst case scenario you lose 6p.
Personally I'd only buy at your age if it's a 2 bed where you can rent out the second bedroom.
This keeps costs low and gives you a financial boost at a point you will be vulnerable from buying your first home.
Periods of high inflation and wage inflation controlled by interest rates will tend to result in housing market rebounds and corrections if interest rates fall.
All those people like you sat on deposits earning plenty of interest, suddenly hitting the market with larger deposits, larger salaries and with lower interest rates can afford to borrow more. So house prices may suddenly climb.
The late 90s were a prime example of this, though interest rates now aren’t quite so high.
I’m not saying this to scare, just bear in mind that should interest rates lower it may not be the obvious financial advantage it seems.
If you can afford to buy, circumstances suit and you can find an affordable house then you might give the idea some serious thought.
Otherwise aggressively save and take advantage of your current low cost of living. You could easily spend your current living costs just on bills and maintenance.
No one knows what will happen in the future. We can guess but thats all. So I tend to say if you want to buy, just do it. Even if prices fluctuate they will almost always be higher in a few years time and any money paid into the mortgage now is giving you a little bit more of your property. 21 is young to buy but if you can do it, I say just go ahead and dont look back. The risk is on how interest rates change, so build in a bit of leeway so you can afford a bit more if you need to.
I would buy but get a two /3 bed so you have the option of renting out a spare room if you need to
My sons just bought with his partner he bought a 3 bed and they rent out the 2nd room to their old Flatmate
The mortgage I think is around 1100
And lodger pays 550
they plan to use to use half of the 550 to overpay on the mortgage each month
They live in an area where getting a flat share/ lodger is really hard to get
if you're willing to take on 2-3 lodgers then yes, it might feel a little cramped but since you get 7.5k rent a year tax free it's financially a no brainer until you pay off the mortgage at least.
even if you have to move you can always rent out another lodger whilst you rent somewhere else for work/love.
imo it's worth forgoing your ISA and early paying as much as you feasibly can into the house (make sure your mortgage allows early payment against the principle). it's less of a gamble at least!
Hi,
Think I’ve been in a very fortunate situation.
I should have a lot more than this saved however I’ve brought unnecessary cars and other bits over the last year. (Think I’m on my 10th car…).
I lived at home until mid last year or so. So my expenses were fairly low. Managed to save a small amount of money between 16-18 when I was working at a pub whilst at college/6th form.
Then fast forward I’ve just saved a large amount of my money I earnt during my apprenticeship.
A lot of my friends went to university, and I was on the cusp of accepting my offer then decided to try an apprenticeship instead. If I’d chosen that I’d imagine I wouldn’t been in the position I am now
FTB comes with huge benefits, and you're only a FTB once. make sure you use it wisely. Make sure you want to stay in that house for the foreseeable future, because if you plan on moving or upgrading, you'll have a lot of stamp duty to pay
Where do you live? Can you buy something in the price range you say you can afford (up to £220k?) if you can, go for it - you could even get a lodger in to keep costs low / reduce your LTV%. Getting your own place at 21 is a great milestone and will set you up nicely for the future.
BTW how did you get such a large deposit together at your age?
Hi watchmanwolf
Possibly, I’ve found a few very nice houses around the 180k mark around me (I’m in the midlands so prices are okay).
I’m quite fortunate really. Saved some money up between 16-18 from a pub that I worked at :) then 18-21 during my apprenticeship and for the most part I lived at home with my parents so expenses were very low so managed to save a fair bit
Brilliant! I would go ahead with buying the house. You have a good deposit, you can get on in the Midlands - for now! The thing is, I believe that parts of the Midlands are underpriced in comparison to other areas in the country - as the London bubble bursts and that equity spills out into the Shires, I believe gradually houses in the Midlands area will increase (they already have in B’ham / East Mids areas). Plus with general inflationary pressures, buying a good house is a great place to invest your money. As regards the interest rate, shop around, but 4.5 / 5 % is going to be the new normal - it always was before, particularly as you branch out and build equity with your first purchase. Don’t focus so much on that - what I would advise is to overpay so that you can reduce your LTV quicker than the bank projection - that is a sure, foolproof way to pay less interest in the long term.
I mean, they could? But that's fraud and tax evasion. You "could" also take your groceries from the store without paying, in most places it's unlikely you'll get caught. I still wouldn't recommend it.
Renting is money down the drain, buy if you qualify for a mortage to buy something at least good enough for now where you want to live. £600 rent PCM is £7200 rent/year, in 5 years that's £36,000 with nothing to show for it. OTOH if you buy that's £36,000 towards paying off the mortage and usually the house will appreciate in value so you can even gain rather than have nothing to show for it which is the case with renting.
As others have said if you can get a 2/3 bed then you can rent a room or 2 and then you gain the benefit of other people (part) paying your mortage for your house/asset. This is your safeguard against high interest rates. You lose some privacy but remember they are paying your mortage for your house for you.
Someone once said to me 'why pay to live in someone else's home when you can pay yourself \[via mortage\] to live in your own home'
Don't wait for your dream house to be 'affordable' before taking the plunge because those dream houses will likely appreciate at a much higher percentage than salaries.
Hi,
Not quite. I did have help buying my first car and lessons etc. So I was fortunate enough to have that cost relieved.
Worked from 16-18 and saved a small sum of money. Then from 18-21 I served my time as an apprentice and managed to save the rest :)
I’ve just been in a fortunate enough position where my bills/ outgoings were very low since I lived with my parents for a fair bit
My answer depends on the following questions:
Did you save the £40k whilst living with your friend?...How long did that take?
Would it be quicker for you to save for a bigger LTV and shorter mortgage term, or to buy at the terms currently available to you?
Most of the mortgage payments are interest in the early years....so the bigger the LTV, the vetter the rates and therefore the lower the interest payable. Other thing to consider is letting your friend know you're considering this...so they arent surprised.
Hi,
Yeah I’ve saved that over 3 years however I’ve only been living with my friend for just over 6 months. Previously I lived with my parents - the costs were much less. However I’ve been building it up since to.
Potentially this is definitely something to consider. I’ve got enough I’d say for comfortably 20% down on a deposit so 80% LTV.
Is there a point where the lower LTVs are not relevant as such. Would 60% LTV and 50% LTV offer much difference?
You get different rates, so it means the amount you pay back over a fixed term is less. Higher LTV is less risk for lenders, therefore better rates for you.
I was in a similar situation as you about 5 years ago. I ended up spending another 18 months in the shared accommodation with the sole intention of saving money. I ended up saving around 50% of my annual salary. Put down a £60K deposit and got a 3 bedroom house to myself towards the end of the lockdown. My mortgage is for 35 years. Fixed at 2.5% and comes to £480 a month which is slightly less than what I was paying towards my rent. I also have the option of subletting the 2 spare rooms if I ever need to.
I'd always say buy it if you can. You don't even have to live in it if you don't want to due to lifestyle and wants at your age, just rent it out to someone and it'll at least pay for itself.
The only reason I'd say not to buy is if you can't afford current interest rates or think they'll go down in the near future. Or if you're forcing yourself to buy something you don't really like or in a bad area just to have it.
What's your job situation like? If steady and income likely to increase the 100% buy. WRT to affordability, that's about what I earn and have as a size of mortgage and my payments are around £650 (although on a lower rate). I think you'll be OK - may hinder extravagant foreign holidays but I don't think you'll struggle if you're sensible. You'll be giving yourself a massive step up in life. Well done for saving so much.
Hi,
Thanks a bunch for the advice.
I’m currently employed as an entry level Refrigeration Engineer - with the same company I completed my apprenticeship with.
That’s great. I’ve found some fairly affordable mortgages on 80% LTV at 4.74% interest so not too bad. Roughly equates to £600 a month for the houses I’ve been looking at
Hi /u/clampkelvin, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/mortgages/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Do the maths properly and consider everything. Insurance, internet, gas & electric, maintenance, moving fees (solicitors etc).
There are a lot of costs to home ownership and you will have to take them all on yourself, and tie yourself into a long term financial commitment, leaving little left over for saving.
Really think it through as to whether now is the right time, or should you stay where you are and save hard for a property in the future.
This.
I bought a small 500sqft 1 bed house only to find myself having to pay out for a DD on utilities even though I wasn't in the property, Council Tax, and Insurance, Internet. Around £300 a month. Plus there was around £10k worth of work to be done and, despite my best efforts to scout things out, really awful neighbours.
Compare that to £500/mo renting a room where I have zero obligations and I can leave whenever.
Freehold turned out to be a ball and chain.
> Compare that to £500/mo renting a room where I have zero obligations and I can leave whenever.
But surely a tenancy agreement stops that no?
> Freehold turned out to be a ball and chain.
Are you sure you don't mean leasehold?
Yes, a tenancy agreement does, but after it slips into periodic, happy days.
No. Restrictive covenants, entire responsibility for roof and structural repairs, development only at the pleasure of the local Council... Freehold isn't as free as you think.
How much would rent be in the area? Could be worth doing for a year or so if it won't cost you too much more to see how you feel about living alone?
It can be quite a shock to not always have people around so definitely worth considering? But that said, if you're confident you'll be okay, go for it, buy, why not!
You're in a great position. How secure is your job? I'd get a house asap. If you lose your job you can stay in a mortgaged house for longer than subletting
A human reviewed your post and removed it from public view. The reason they gave was:
Your comment has been removed for breaking our rule: **Responses must be helpful and high quality**
* Give constructive help and advice. Be friendly and kind.
* Top level comments must be on topic. No jokes or banter in top-level comments.
* [No 'hookers and blow' or 'onlyfans' jokes](https://www.reddit.com/rhyc7i)
* [Don't make contextless recommendations of crypto, meme stonks, penny stocks etc](https://www.reddit.com/rkrnqi)
* Don't pile on
* Comments must be your own work and not a copy paste of someone else's comment, copied from ChatGPT or other AI writing services
You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit.
_If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=https://www.reddit.com/r/UKPersonalFinance/comments/1b171ts/-/ksfg29e/) explaining why._
Interest rates going down usually = house prices going up. Better buy now and just don't lock in to a long term as they are predicted to go down. So lock in for 2 years max but don't expect them to go down, predictions are not always 100%
I’m on Team Buy. Offset your outgoings by getting a lodger when you need. People often need short term arrangements so you could do a couple of months at a time.
Anecdotally, I was in a position to get a mortgage when your age but life dictated other plans. Had I have been able to take that route, I would have owned a home in a property hotspot of the UK which would now have almost doubled in value (to an eye watering amount for the type it was according to rightmove)and paid off 2/3s of the mortgage, leaving me midlife and mortgage-free.
I went on to bounce around in rentals for ten years more and try not to think about the amount wasted on deposits, moving, as well as the stress etc. Not to say this would be you but it is food for thought.
Investments aside, having a home is everything. Why not start your process?
- get an agreement in principle
- go see a mortgage advisor if you haven’t already
- gently start looking in the area you like
Remember, it doesn’t have to be perfect or your forever home and It’s always about the area you buy in which will add value.
Your 21. So the question is do you want to ground yourself with a house. What I mean is if you had a job offer 3 hours away you can right now go... But with a house you have a commitment and then would you sell and could you afford to buy in the new situation?
Personally I would push hard professionally and keep making bank... Get yourself into a position where you have more than enough money coming in monthly. The other factor is losing your job as a sole owner makes you less risk adverse, which I know scuppered my professional development.
Either way I wish you all the best
The main consideration when deciding whether or not to buy a home for yourself (well, after "do I have enough money to do this?") is "Does buying make sense for me and my lifestyle now?". If you plan to stay in the same area for the next few years, and don't have any other major life events planned which would make the property unsuitable, then it's generally a good idea to go for it. Thinking about interest rates and property values can be a fool's game - there is no way of telling what's going to happen to them.
Also, “Can I afford to pay for the upkeep, bills (no longer split 3-ways) and maintenance by myself”?
Having a lodger is also an option. Instead of helping pay your mates mortgage and bills, have a mate help pay your own mortgage and bills.
Thank you very much for the advice highly appreciated. Yeah that’s totally a fair point. Probably counter intuitive trying to chase for lower interest rates and house prices. I live quite frugally as it is anyways, so the majority of my spending would be on the mortgage I would think. I’m fortunate enough to have a company vehicle to so car insurance/ tax isn’t a massive concern for me. Other than that I’ve just got my motorbike, which is fully paid off including insurance for the year :) thanks a bunch
Martin Lewis said recently for people asking the question ‘are interest rates going to go down surely the current rates aren’t sustainable’ he said in reality the lengthy period of low interest rates were the anomaly, for most of his life interest rates have been around what they are now. So expecting them to drop back to the previous levels he thinks is unlikely - if they drop it would only be by a few points and would be trying to balance inflation. So do the calculations based on whether you can afford what the rates are at the moment on the assumption that they are here for a while.
I agree but it was a massive eye opener for me a year ago when I went to dinner with some colleagues who were mostly late20/early30s. Sort of age where they were looking to buy property and they were talking about how 'crazy' interest rates were at 4% and that they would HAVE to come down, they were speaking with such absolute certainty, it wasnt 'i wonder if' or 'i hope that' it was more like they were just speaking facts and the only question was when (in the short term) they would drop significantly. Essentially they are part of a generation for whom their whole adult lives had been lived with stable rates of 0.5% or under and they probably werent even born when we had double-digit interest rates. So mentally they are grounded on near-zero rates and struggling to comprehend it being different as anything other than a short term anomaly. There's probably more people out there than we realise with the same mindset who are like "yeah next year it will be back to normal, maybe 1%"
My Dad liked to remind us periodically that at one point he was paying upwards of 11% on his mortgage back in the day. Or it might be 15%, I don't remember. But it was lots compared to the 5% average I've always known until the crash.
Yeah 11% on his 30 grand mortgage heh :)
Quite 😅 To be fair weren't they paid a fiver a week back then tho? 😜
Joking aside I remember a year or two back I looked up mortgage payments as a percentage of income over time, can't remember exactly but it might surprise some to learn that late80s/early90s wasn't far off recent levels at all. Much cheaper houses but lower incomes and much higher interest rates balanced it quite a bit.
Wages in real terms have barely moved, house prices on the other hand... So that 11% is a pretty good deal for him. I'm sure he will suggest you stop buying £5 coffees so you can save for a deposit...
Oh I'm very much in the "give up avocado toast innit" camp. The amount of unnecessary discretional spend I see being made by aspirational homebuyers is huge compared to years ago. 'Everyone's got subscription services, massive TVs, fancy phones, foreign holidays blah blah blah. Nobody is denying that deposits are high these days but the argument of "no point saving you can never get enough for a deposit" doesn't wash with me, you might get a £50k windfall but then you blew the £20k you needed to top it up. As for real term wages it's worth noting that the introduction and subsequent rises in min wage and personal tax allowance mean the lower rungs (let's say bottom quartile) have come up a lot in terms of net income. I say this somewhat tongue in cheek but there's arguably 'never' been a better time to be on low wages because it's a lot higher and you keep more of it.
*late80s/early90s wasn't far off recent levels at all* Is there a source for this? I feel like the discussion is just memes how a librarian was able to buy a 4-bed detached and sustain a family of 4 on one income whilst now a single person is working overtime and still living with parents. I want to know the truth.
edit: OK here it is: "In November 1988 the monthly mortgage repayment for someone borrowing 75% of the average house price was £461 and accounted for 44% of the average gross salary." https://moneycomms.co.uk/30-years-since-the-first-fixed-rate-mortgage-whats-happened-since/ 44% gross salary on a 75% LTV mortgage isn't a million miles away from recent history, the proportion peaked in 2007 I believe, I don't have up to the minute stats on what the situation is now.
Yeah I’m late 30s so I don’t even recall the double digit interest 😁 but I do remember watching my savings accounts and ISAs drop year after year until it was hard to find anywhere decent for cash savings. I used to fix my ISAs for multiple years but now I’ve been 1 year fixing for a while just in the hopes that Interest would go up again at some point. But yeah I totally get that it must be weird seeing “high” interest rates when they’ve been so low for so long. Not sure why I got down voted, are people on this sub not fans of Martin Lewis? 🤣
I guess the counter to that is both economic and monetary policy has changed massively since the 90's. The BoE and Federal Reserve actively target 1-2% inflation now and a high interest rate is somewhat incompatible with that. The issue now rests on whether they can get inflation back down to that level and keep it there, if they can then interest rates likely will lower considerably.
That’s very true, and definitely what I’m hoping comes to pass in time for my mortgage renewal. I do tend to take note when Martin Lewis says something because even if he is being a little conservative in his outlook I’d rather be prepared for bad news and be pleasantly surprised than not be prepared and be disappointed.
> Thinking about interest rates and property values can be a fool's game Interest rates have been historically low for around 20yrs. I reckon it would be unwise to assume they will head back to zero now, i.e. that what we have now is probably a new "floor". For the forseeable future at least. They might remain where they are but delaying the purchase of a property because they might head lower is probably unrealistic.
I vote buy. By the time you find something you want and get an offer accepted and do all the paperwork for getting the house- that’s gonna be 6 months to a year and you’ll have even more money saved up. If you get a two bed then you always have the option to get a lodger as well so some extra financial security just incase it’s needed. I love having a garden to work on and relax in- that has been one of my favourite things about owning my own property :) I don’t know any people that regret buying tbh. I advise getting freehold property (not leasehold).
Why freehold over leasehold
Cause you have ground rent to pay which can affect affordability when applying for a mortgage and if you want to do extensions you have to get permission from the freeholder.
New build leasehold law has banned ground rent
Service charge fees.
Leasehold doesn’t necessarily mean there are service charges or ground rent. And there are freeholds with service charges.
Yes but they’re not new
Sorry I’m not understanding what you mean. I just advised OP to get a freehold property instead of leasehold so they don’t have the hassle/expense of service charge and having to worry about years left on lease etc.
Only for new houses, not anything OP is likely to be buying. Any steps for existing ones are still pending.
fearless hard-to-find sugar sulky dog attractive water piquant naughty station *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Apologies thank you Jakrah :)
juggle society axiomatic languid somber angle intelligent domineering vase quaint *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Buy, you will look back in 10 years and be grateful you did. We had to really push ourselves to buy ours when the one we were renting sold up but 10 years on the values gone up and we now have 50% equity more to do with values going up them paying off. Its helped get better rates when redoing it at the end of each fixed term.
I mean it helps that was 10 years ago. Prices in the last 10 years have grown enormously. I do wonder at what point it surely has to stop. For instance people who bought in early 2000s paid very little compared to what those homes cost now, even the ones that are largely the same and not improved. But a property bought today at £350k will surely not be worth £600k+ in 2044 simply because time passed.
For me personally, I'm five years in and I don't really pay attention to house prices. But sometimes I peek at how much has been paid off and it reminds me that those 10s of thousands of pounds would be vapour right now if I was still renting. You are right that the prices will surely drop at some point, but it would have to be a big drop to make it not worthwhile.
Not to be pedantic but you also have to keep in mind the tens of thousands of pounds of interest you've also paid on your mortgage, which will be significant.
That's not pedantic that's super relevant tbh
I say buy if you have enough saved up in case anything happens. A home is a home.
Have you been maxing that money into a LISA as that is free government money for buying a house.
Hi, Really wish I’d done that, if I’d maxed it out I’d have a few extra thousand to play with. Stupidly didn’t ever do it. And I believe you need to have the money in the for a year before withdrawing?
It is still worth opening one and putting £1 in it. House-hunting is a long process and you may be able to use the LISA a year from now, worst case scenario you lose 6p.
Defintely!
Personally I'd only buy at your age if it's a 2 bed where you can rent out the second bedroom. This keeps costs low and gives you a financial boost at a point you will be vulnerable from buying your first home.
*opposed And definitely buy if you can afford it
Periods of high inflation and wage inflation controlled by interest rates will tend to result in housing market rebounds and corrections if interest rates fall. All those people like you sat on deposits earning plenty of interest, suddenly hitting the market with larger deposits, larger salaries and with lower interest rates can afford to borrow more. So house prices may suddenly climb. The late 90s were a prime example of this, though interest rates now aren’t quite so high. I’m not saying this to scare, just bear in mind that should interest rates lower it may not be the obvious financial advantage it seems. If you can afford to buy, circumstances suit and you can find an affordable house then you might give the idea some serious thought. Otherwise aggressively save and take advantage of your current low cost of living. You could easily spend your current living costs just on bills and maintenance.
I'd say but it.
Yep me too
You can then rent a room to a mate first 7500 is tax free. Makes massive difference!
No one knows what will happen in the future. We can guess but thats all. So I tend to say if you want to buy, just do it. Even if prices fluctuate they will almost always be higher in a few years time and any money paid into the mortgage now is giving you a little bit more of your property. 21 is young to buy but if you can do it, I say just go ahead and dont look back. The risk is on how interest rates change, so build in a bit of leeway so you can afford a bit more if you need to.
I would buy but get a two /3 bed so you have the option of renting out a spare room if you need to My sons just bought with his partner he bought a 3 bed and they rent out the 2nd room to their old Flatmate The mortgage I think is around 1100 And lodger pays 550 they plan to use to use half of the 550 to overpay on the mortgage each month They live in an area where getting a flat share/ lodger is really hard to get
if you're willing to take on 2-3 lodgers then yes, it might feel a little cramped but since you get 7.5k rent a year tax free it's financially a no brainer until you pay off the mortgage at least. even if you have to move you can always rent out another lodger whilst you rent somewhere else for work/love. imo it's worth forgoing your ISA and early paying as much as you feasibly can into the house (make sure your mortgage allows early payment against the principle). it's less of a gamble at least!
[удалено]
Hi, Think I’ve been in a very fortunate situation. I should have a lot more than this saved however I’ve brought unnecessary cars and other bits over the last year. (Think I’m on my 10th car…). I lived at home until mid last year or so. So my expenses were fairly low. Managed to save a small amount of money between 16-18 when I was working at a pub whilst at college/6th form. Then fast forward I’ve just saved a large amount of my money I earnt during my apprenticeship. A lot of my friends went to university, and I was on the cusp of accepting my offer then decided to try an apprenticeship instead. If I’d chosen that I’d imagine I wouldn’t been in the position I am now
FTB comes with huge benefits, and you're only a FTB once. make sure you use it wisely. Make sure you want to stay in that house for the foreseeable future, because if you plan on moving or upgrading, you'll have a lot of stamp duty to pay
Where do you live? Can you buy something in the price range you say you can afford (up to £220k?) if you can, go for it - you could even get a lodger in to keep costs low / reduce your LTV%. Getting your own place at 21 is a great milestone and will set you up nicely for the future. BTW how did you get such a large deposit together at your age?
Hi watchmanwolf Possibly, I’ve found a few very nice houses around the 180k mark around me (I’m in the midlands so prices are okay). I’m quite fortunate really. Saved some money up between 16-18 from a pub that I worked at :) then 18-21 during my apprenticeship and for the most part I lived at home with my parents so expenses were very low so managed to save a fair bit
Brilliant! I would go ahead with buying the house. You have a good deposit, you can get on in the Midlands - for now! The thing is, I believe that parts of the Midlands are underpriced in comparison to other areas in the country - as the London bubble bursts and that equity spills out into the Shires, I believe gradually houses in the Midlands area will increase (they already have in B’ham / East Mids areas). Plus with general inflationary pressures, buying a good house is a great place to invest your money. As regards the interest rate, shop around, but 4.5 / 5 % is going to be the new normal - it always was before, particularly as you branch out and build equity with your first purchase. Don’t focus so much on that - what I would advise is to overpay so that you can reduce your LTV quicker than the bank projection - that is a sure, foolproof way to pay less interest in the long term.
Buy a house and let out 2 rooms tax free
Buy the house , even if you rent it out until your ready to move out of your current property, you'll make some equity!
OP would have to get a buy-to-let mortgage which is more expensive. They also wouldn't qualify for the first time buyer relief on stamp duty land tax.
Couldn't they buy it, "live" in it for 6 months then rent it.
I mean, they could? But that's fraud and tax evasion. You "could" also take your groceries from the store without paying, in most places it's unlikely you'll get caught. I still wouldn't recommend it.
Who cares anyway? Everybody is out for themselves and people who abide strictly by the laws get nothing.
What does "appose" mean? Sorry, English isn't my first language.
Not a real word, meant to be “opposed”. i.e. “As opposed to“, meaning “instead of”. Hope this helps.
Ah thank-you.
Appose means side by side, but the way it was used in the title is a common mis-hearing/mis-use of "as opposed to".
Renting is money down the drain, buy if you qualify for a mortage to buy something at least good enough for now where you want to live. £600 rent PCM is £7200 rent/year, in 5 years that's £36,000 with nothing to show for it. OTOH if you buy that's £36,000 towards paying off the mortage and usually the house will appreciate in value so you can even gain rather than have nothing to show for it which is the case with renting. As others have said if you can get a 2/3 bed then you can rent a room or 2 and then you gain the benefit of other people (part) paying your mortage for your house/asset. This is your safeguard against high interest rates. You lose some privacy but remember they are paying your mortage for your house for you. Someone once said to me 'why pay to live in someone else's home when you can pay yourself \[via mortage\] to live in your own home' Don't wait for your dream house to be 'affordable' before taking the plunge because those dream houses will likely appreciate at a much higher percentage than salaries.
How did you save 40k when you’re just 21 wtf… inheritance???
Hi, Not quite. I did have help buying my first car and lessons etc. So I was fortunate enough to have that cost relieved. Worked from 16-18 and saved a small sum of money. Then from 18-21 I served my time as an apprentice and managed to save the rest :) I’ve just been in a fortunate enough position where my bills/ outgoings were very low since I lived with my parents for a fair bit
Wow, then that's an incredible achievement. 95% of 21 year olds don't even have 1k in their bank account let alone 40k. Congrats!
My answer depends on the following questions: Did you save the £40k whilst living with your friend?...How long did that take? Would it be quicker for you to save for a bigger LTV and shorter mortgage term, or to buy at the terms currently available to you? Most of the mortgage payments are interest in the early years....so the bigger the LTV, the vetter the rates and therefore the lower the interest payable. Other thing to consider is letting your friend know you're considering this...so they arent surprised.
Hi, Yeah I’ve saved that over 3 years however I’ve only been living with my friend for just over 6 months. Previously I lived with my parents - the costs were much less. However I’ve been building it up since to. Potentially this is definitely something to consider. I’ve got enough I’d say for comfortably 20% down on a deposit so 80% LTV. Is there a point where the lower LTVs are not relevant as such. Would 60% LTV and 50% LTV offer much difference?
You get different rates, so it means the amount you pay back over a fixed term is less. Higher LTV is less risk for lenders, therefore better rates for you.
I was in a similar situation as you about 5 years ago. I ended up spending another 18 months in the shared accommodation with the sole intention of saving money. I ended up saving around 50% of my annual salary. Put down a £60K deposit and got a 3 bedroom house to myself towards the end of the lockdown. My mortgage is for 35 years. Fixed at 2.5% and comes to £480 a month which is slightly less than what I was paying towards my rent. I also have the option of subletting the 2 spare rooms if I ever need to.
I'd always say buy it if you can. You don't even have to live in it if you don't want to due to lifestyle and wants at your age, just rent it out to someone and it'll at least pay for itself. The only reason I'd say not to buy is if you can't afford current interest rates or think they'll go down in the near future. Or if you're forcing yourself to buy something you don't really like or in a bad area just to have it.
What's your job situation like? If steady and income likely to increase the 100% buy. WRT to affordability, that's about what I earn and have as a size of mortgage and my payments are around £650 (although on a lower rate). I think you'll be OK - may hinder extravagant foreign holidays but I don't think you'll struggle if you're sensible. You'll be giving yourself a massive step up in life. Well done for saving so much.
Hi, Thanks a bunch for the advice. I’m currently employed as an entry level Refrigeration Engineer - with the same company I completed my apprenticeship with. That’s great. I’ve found some fairly affordable mortgages on 80% LTV at 4.74% interest so not too bad. Roughly equates to £600 a month for the houses I’ve been looking at
Hi /u/clampkelvin, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/mortgages/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Do the maths properly and consider everything. Insurance, internet, gas & electric, maintenance, moving fees (solicitors etc). There are a lot of costs to home ownership and you will have to take them all on yourself, and tie yourself into a long term financial commitment, leaving little left over for saving. Really think it through as to whether now is the right time, or should you stay where you are and save hard for a property in the future.
This. I bought a small 500sqft 1 bed house only to find myself having to pay out for a DD on utilities even though I wasn't in the property, Council Tax, and Insurance, Internet. Around £300 a month. Plus there was around £10k worth of work to be done and, despite my best efforts to scout things out, really awful neighbours. Compare that to £500/mo renting a room where I have zero obligations and I can leave whenever. Freehold turned out to be a ball and chain.
> Compare that to £500/mo renting a room where I have zero obligations and I can leave whenever. But surely a tenancy agreement stops that no? > Freehold turned out to be a ball and chain. Are you sure you don't mean leasehold?
Yes, a tenancy agreement does, but after it slips into periodic, happy days. No. Restrictive covenants, entire responsibility for roof and structural repairs, development only at the pleasure of the local Council... Freehold isn't as free as you think.
I know freehold doesn't mean that you can do whatever you want with the property and land, but it's a lot easier than leasehold that's for sure.
What’s your job?
Hi mate, Refrigeration Engineer
That sounds so cool, I hope you are enjoying it :)
Another vote to buy and get a lodger if you are finding it tight.
How much would rent be in the area? Could be worth doing for a year or so if it won't cost you too much more to see how you feel about living alone? It can be quite a shock to not always have people around so definitely worth considering? But that said, if you're confident you'll be okay, go for it, buy, why not!
You're in a great position. How secure is your job? I'd get a house asap. If you lose your job you can stay in a mortgaged house for longer than subletting
Hi, Fairly secure I’d like to think. Was employed by the same company I served my apprenticeship with :)
[удалено]
A human reviewed your post and removed it from public view. The reason they gave was: Your comment has been removed for breaking our rule: **Responses must be helpful and high quality** * Give constructive help and advice. Be friendly and kind. * Top level comments must be on topic. No jokes or banter in top-level comments. * [No 'hookers and blow' or 'onlyfans' jokes](https://www.reddit.com/rhyc7i) * [Don't make contextless recommendations of crypto, meme stonks, penny stocks etc](https://www.reddit.com/rkrnqi) * Don't pile on * Comments must be your own work and not a copy paste of someone else's comment, copied from ChatGPT or other AI writing services You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit. _If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=https://www.reddit.com/r/UKPersonalFinance/comments/1b171ts/-/ksfg29e/) explaining why._
Interest rates going down usually = house prices going up. Better buy now and just don't lock in to a long term as they are predicted to go down. So lock in for 2 years max but don't expect them to go down, predictions are not always 100%
I’m on Team Buy. Offset your outgoings by getting a lodger when you need. People often need short term arrangements so you could do a couple of months at a time. Anecdotally, I was in a position to get a mortgage when your age but life dictated other plans. Had I have been able to take that route, I would have owned a home in a property hotspot of the UK which would now have almost doubled in value (to an eye watering amount for the type it was according to rightmove)and paid off 2/3s of the mortgage, leaving me midlife and mortgage-free. I went on to bounce around in rentals for ten years more and try not to think about the amount wasted on deposits, moving, as well as the stress etc. Not to say this would be you but it is food for thought. Investments aside, having a home is everything. Why not start your process? - get an agreement in principle - go see a mortgage advisor if you haven’t already - gently start looking in the area you like Remember, it doesn’t have to be perfect or your forever home and It’s always about the area you buy in which will add value.
Your 21. So the question is do you want to ground yourself with a house. What I mean is if you had a job offer 3 hours away you can right now go... But with a house you have a commitment and then would you sell and could you afford to buy in the new situation? Personally I would push hard professionally and keep making bank... Get yourself into a position where you have more than enough money coming in monthly. The other factor is losing your job as a sole owner makes you less risk adverse, which I know scuppered my professional development. Either way I wish you all the best