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[Mister Rog]

Daughter pays £2150 for a one bedroom, third floor flat near Liverpool street station. She is trying to save a deposit to buy something similar for around £700,000.
Utter madness, but its supply & demand.

Liverpool St 25 mins no changes. Station 1 minute walk. Trains every 20 mins. Rent half what she's paying. No, I am not trying to sell ! 

https://www.zoopla.co.uk/for-sale/property/enfield/dunstan-mews/en1-1gf/?q=EN1%201GF&results_sort=newest_listings&search_source=home

You don't understand (neither do I), where she lives is classes as Shoreditch, so worth every penny. 
She walks to work, which takes around 1o minutes apparently.
It looks like London house prices have started cooling off, so a year to 18 months might be a good time to take the plunge ?
She was well on the way to having a decent deposit but was out of work for 15 months until recently, so the savings almost disappeared.

I know. My daughter & partner lived in a fantastic flat overlooking the sea in Poole. Wonderful etc, after I twisted arms they've bought a place, much more modest, but their outgoings have dropped significantly, and it's theirs ! The financial saving is going towards a move upmarket after a sensible time.

London prices are fairly stable, pehaps dropping slightly, but that's because they were so ridiculous. BUT the ridiculous prices a few years ago are why I moved to Wales ! The house I sold continued to go up up by about £200K 

[Doctor Gollum]

If your daughter was really serious about a deposit, Albs, she would have been slumming it and not paying over two grand a month in rent. I realise, in her position, she couldn't have lived in a dive (friends round and all that) but with her being in banking, surely everyone would have seen the financial sense in it.

As Dave says, "Live like no one else, so that later you can live like no one else."

 

[BazaJT]

Two bedroom terraced house we used to rent near town centre was £395 per month when we moved out about 4yrs ago.Needed a bungalow for Maureens disabilities and started renting the housing association one I'm still in.The other week there was for sale a detached house[5 bedrooms I think]with some outbuildings and 9 acres of land near Market Raisen for £1.5m is Lord Opti selling part of his vast estate I wonder

[2boxerdogs]

All our rental properties are now sold , did very well from them but now had enough of everything it entails , as I've said on here many times, property is still the best place for any spare cash.

[TheBoy]

In Barnsley, you can get a very decent house for £150000. If you have a 10% deposit, i.e. £15000, your mortgage repayment at, say, 3%, would be around £640 a month. Much better than renting.

I've never been to Barnsley. Ever. But I envisage its a much nicer place than Londonium.

[Doctor Gollum]

All our rental properties are now sold , did very well from them but now had enough of everything it entails , as I've said on here many times, property is still the best place for any spare cash.

Emphasis on spare should be considered gravy rather than a primary revenue stream...

[scimmy_man]

In Barnsley, you can get a very decent house for £150000. If you have a 10% deposit, i.e. £15000, your mortgage repayment at, say, 3%, would be around £640 a month. Much better than renting.

I've never been to Barnsley. Ever. But I envisage its a much nicer place than Londonium.

some parts are........

[Migv6 le Frog Fan]

If your daughter was really serious about a deposit, Albs, she would have been slumming it and not paying over two grand a month in rent. I realise, in her position, she couldn't have lived in a dive (friends round and all that) but with her being in banking, surely everyone would have seen the financial sense in it.

As Dave says, "Live like no one else, so that later you can live like no one else."

 

You need to bear in mind the shein this conversation.  There is always a justification for buying shoes etc.
But to be fair, she works extremely hard and long hours and can only bear it by having a half decent place to crash out at the end of the day.
She suspects that holding off from buying for the time being will turn out to be a wise decision. We shall see. 

[Broomies Mate]

[Devils Advocate]

I am 36, my Missus is 28.  We have no children and have agree'd that we will never have children.

We both earn decent money and could quite easily buy a house if we wanted to, but we like the fact that our outgoings are never likely to change.  Interest rates are very low, but what about 5, 10 years time?  Surely most of you remember the last recession?  It very almost pushed my Parents to sell Kidneys to survive.

Yes, I'll never 'own' anything, and yes, I'll be paying the rent until I die, but at the same time, I do put something away with every pay-cheque.

For the record, we privately rent a 2 bedroom penthouse apartment just outside of the Bristol city boundary.  We've been here for over 7 years, and despite genuinly looking at property, we couldn't invisage living elsewhere.  Our Landlord is good-as-gold, we've had the ocassional problem which has been resolved extremely quickly, and the odd bottle of wine, or flowers have been left as a 'sorry'.

For me and the Wife, we like to holiday, we like to spend our income on other things than roof-tiles after a storm, or replacement floors after the washing mashine has shit itself.

And, finally, it's a possibility I may die tomorrow!

[/Devils Advocate]

[Doctor Gollum]

Here's a rule of thumb for buying...

Before you do anything, pay off any outstanding debts, limit retirement to 15% of your gross pay and save 3-6 months of household expenses... This is solely your go to 'oh shit' fund rather than using credit.

As much of a deposit as you can muster, but at least 20%. Then put the rest on a maximum of 15 year fixed rate and ensure that the repayment is no more than 25% of your household take home pay.

The key components are the amount of the monthly payment as a percentage of your net household income and the overall term.

Fifteen year fixed rate mortgages are rare, but 10 year ones are readily available and, anyway, your mortgage should be paid within 7-10 years.

Throw any spare cash at the mortgage until it is paid off, then throw everything at retirement.

If the numbers don't work then you are looking at too much house for your income. Or you need a better budget.

[Broomies Mate]

Loads of Maths

Not quite clear-cut though.  Take an example of a £225,000 house/flat.  Nothing extravengant, just a reasonable 2bed Semi or 2bed Apartment.

Mortgage of £185,000 over 15 years would be roughly £1,250 a month.

That's IF you have a decent deposit to put down. 

And the older generation wonder why so many people rent nowadays! 

[Doctor Gollum]

The concept is very simple, but doesn't quite work here as house prices are insane compared to rural Arkansas...

It is designed to ensure that the house is a blessing rather than a curse by ensuring that it is affordable...

https://www.daveramsey.com/blog/5-steps-to-buying-home-wont-bust-your-budget

That said, living in an expensive area simply means a larger deposit or a larger income...

[aaronjb]

If your daughter was really serious about a deposit, Albs, she would have been slumming it and not paying over two grand a month in rent. I realise, in her position, she couldn't have lived in a dive (friends round and all that) but with her being in banking, surely everyone would have seen the financial sense in it.

Living where she is, paying what she is on rent.. one assumes her income is well into six figures, so slumming it shouldn't be necessary..

[STEMO]

If your daughter was really serious about a deposit, Albs, she would have been slumming it and not paying over two grand a month in rent. I realise, in her position, she couldn't have lived in a dive (friends round and all that) but with her being in banking, surely everyone would have seen the financial sense in it.

Living where she is, paying what she is on rent.. one assumes her income is well into six figures, so slumming it shouldn't be necessary..

'Slumming it' was, perhaps, the wrong term. But even paying £1500 a month would make a big difference in her savings, and I'm sure you'd get more than a cardboard box for that.

[tunnie]

I bought my flat in London not long after starting with Sky, best thing I've ever done. My mortgage payments, were less than equivalent rent by a considerable amount.

I now have 4 bed detached place in Surrey, less than 18 years to go, sub £1k payments and it currently represents ~35% of the value of the house.

If I don't extend the term to move for next house, which is possible on some options out there, I'll be mortgage free before I'm 52.