What would you do in this situation? (property question)

[DoubleYellow]

Morning All,

In this situation, personally, what would you do.

You are 22, living at home with parents and have a steady job earning around £20k per year.

You own a car but that is about it. You have no other real outgoings, bar a mobile phone bill of £30 per month.

Over the past couple of years you have saved around £15k and have access to around another £10k if you really need it (interest free parental loan).

You are getting the itch to move into your own place and see the current climate as a good opportunity (providing you can get a mortgage of course) to buy.

You would consider renting but for the money it will cost, it seems impractical.

What would you do?

[Sheets Tabuer]

I'd stay at home and save more

[Nimbus]

as long as you are thinking of staying somewhere for the next 5 years, not worried about your job, and willing to look on it as a long term investment.....

on £20k I'd look into a 'shared ownership' scheme, there must be plenty of deals going at the moment.

[zippy500]

I'd hang on a bit longer. You have some very good savings there, but I feel it may not be quite enough still to get you a decent mortgage.
Prices of places are still dropping, so bide your time. Investigate some mortages in the meanwhile though just to keep you in the know as it were.

[DoubleYellow]

I can completely understand that but feel like I would be missing a good opportunity. However, I also understand that attitudes like that got us into this mess in the first place.

When you say 'save more', how much 'more' are you talking.

I can usually put away around £500 per month with my current spending habits.

[JRM]

Depends where you live and the stability of your job. You are right it's a pretty good time to try and buy, prices may shift down by 10% over 2009, but if you are keen to get out then you may as well - bargain hard and see what you can get

Personally I;d go for it as it's great having your own first place, just don't over stretch yourself i.e. keep LTV as low as you think you can

[Horse_Apple]

Property isn't yet going up, therefor, in your situation it would be mental to buy a major asset which you absolutely know for a fact will be cheaper next quarter.

You are in a brilliant situation and the simple truth is that you need to stay put for a little longer. The time to buy is when the media becomes bullish and the hype begins to pick-up. It's not important to pick the rock bottom but to buy in a clearly rising market.

£15K is a good sum, but you ought to aim to have that additional £10K back-up yourself and then have the parental loan as a real disaster fund.

Common sense would see you sponging off the folks for another 12 months at least.

[cs02rm0]

DoubleYellow said:

When you say 'save more', how much 'more' are you talking.

I'd say, save as much as possible until it at least looks like we're nearing the bottom of this crash, then jump on as high as you can afford to. I wouldn't worry about exact figures. You're doing remarkably well at saving on a £20k salary, but house prices are still falling faster than you're saving money!

[DoubleYellow]

Thanks for all the input. Definately taking advice from these posts.

I think a realistic aim would be to get about £25k together. Would make it alot easier if I was buying with my (long term) girlfriend but I have seen a couple of mates do this and both occasions have ended in (financial) tears.

[Tony*T3]

What are your current out goings? Car and Phone? Do you not pay for rent etc?

If you buy a house, you will face other bills....

For example:

Mortgage (obviously) eg £500
Council Tax eg £95
Water Rates eg £30
Electricity Bills eg £35
Gas (perhaps) eg £30
Compulsory House Insurance eg £25
Maitainance bills - things need repairing, upkeep, redecorating
Furnishing costs
TV license eg £12 (month)
Sky? eg £ you cant afford it

If the intrest rates go up (as surely they will long term) you can factor another 20% on your mortgage costs.

You also have the house buying costs eg £3500 (Tax, solicitor, removals etc)

So how much does that leave you for food, travel and other expenses?

Can you really still afford it?

I'd suggest renting an unfurnished flat for a year and seeing how you cope with the finacial commitment then.

[DoubleYellow]

Horse_Apple said:

Property isn't yet going up, therefor, in your situation it would be mental to buy a major asset which you absolutely know for a fact will be cheaper next quarter.

You are in a brilliant situation and the simple truth is that you need to stay put for a little longer. The time to buy is when the media becomes bullish and the hype begins to pick-up. It's not important to pick the rock bottom but to buy in a clearly rising market.

£15K is a good sum, but you ought to aim to have that additional £10K back-up yourself and then have the parental loan as a real disaster fund.

Common sense would see you sponging off the folks for another 12 months at least.

That seems like excellent advice. My thinking was pretty similar but aiming to buy in a rising market instead of rock bottom seems much more sensible and ultimately safer.

Looks like I will be staying put for the next year or so then.

22 is starting to feel old to be at home though. Never thought I would get that feeling but I have. None of my mates have moved out properly either so maybe that has kept me there. I know of other friendship groups where they have all moved out by 18.

Thanks again!

[Olf]

I'd probably start putting small amounts of heavy metals into food and drink I prepare for one of the parents. Slowly, as that parent first loses mental and then physical capability I'd convince any siblings that they needed to be moved into a care home. I'd only move one at a time though just in case the siblings suggested I moved out of the house. Having made sure you kept the most easily influenced at home, then start piling on the pressure for them to get power of atorney. This can take a while so you might have to be patient. Once the remaning parent has power of atorney get them on the heavy metals too. Slowly as they become more impressionable get the house signed over into your name. Best not tell the siblings about this. Get the old bd out into a care home too and hopefully you can then take control of the house and start stripping out the piss soaked mattresses and carpets. Get yourself a good 60" screen with the money you've saved (or by dipping into their pensions) and while away their final days playing call of duty on a mega big screen stopping only to recieve pizza and curry deliveries.

Edited by Olf on Thursday 8th January 09:10

[JRM]

Horse_Apple said:

The time to buy is when the media becomes bullish and the hype begins to pick-up.

The time to buy is most definitely NOT when the media say so. They lag markets considerably both stock and property.
I agree there is more drop to come in most parts of the country, but certainly not all - so partly depends where you live. You would be much better off looking at key indicators such as mortgage approvals, average completion times etc and the info the BOE publish - whatever you do DON'T follow the newspapers!

[klootzak]

You're 22, earning 20k and still living with your parents?

Ye gods, no wonder society is in the sewer. Scrounging off your parents is no better than scrounging off the state.

Grow some and move out. Rent or buy doesn't matter, you're old enough to be looking after yourself.

k

[JRM]

klootzak said:

You're 22, earning 20k and still living with your parents?

Ye gods, no wonder society is in the sewer. Scrounging off your parents is no better than scrounging off the state.

Grow some and move out. Rent or buy doesn't matter, you're old enough to be looking after yourself.

k

That's helpful

[Engineer1]

move out if you want after all you should be buying a house not an investment, just make sure you plan to be there for a few years, also depending on where you are 10K could be a good 10-15% deposit on a first time buyer property.

[Plotloss]

You've got the potential to borrow £75K at a reasonable interest rate with £25K down giving you a £100K lump.

Is there anything near you for £100K?

Wouldnt get you a shed around here, even in this market.

[changingman]

klootzak said:

You're 22, earning 20k and still living with your parents?

Ye gods, no wonder society is in the sewer. Scrounging off your parents is no better than scrounging off the state.

Grow some and move out. Rent or buy doesn't matter, you're old enough to be looking after yourself.

k

As long his parents dont think its scrounging then thats what loving parents are for.

[Olf]

changingman said:

klootzak said:

You're 22, earning 20k and still living with your parents?

Ye gods, no wonder society is in the sewer. Scrounging off your parents is no better than scrounging off the state.

Grow some and move out. Rent or buy doesn't matter, you're old enough to be looking after yourself.

k

As long his parents dont think its scrounging then thats what he's loving his parents for.

EFA

Edited by Olf on Thursday 8th January 09:14

[parakitaMol.]

Sheets Tabuer said:

I'd stay at home and save more

Likewise.