Will I ever afford a house?
I am 21, earn 23k and my boyfriend is also on 23k. We want to move in together and get on the property ladder. The average house price near us is 170k for 1/2 bed house- 145K for 1 bedroom flat! How are we ever going to afford a place? we have £7000 towards a deposit- which is nothing really! It is so irritating we work our butts off and get nothing- yet others walk in, get a 4 bedroom house and contribute nothing towards our country!
Apart from keep saving, what can young couples do now to get a place?
Also- dont want to rent, it is dead money!
- 1 decade agoBest Answer
This is a problem faced by so many people at the moment and sadly there is no magic answer.
You need to save a significant deposit. Without knowing your exact circumstances its hard to offer meaningful advice but perhaps these are useful tips:
1) Clear all debt, starting with the most expensive. This will enable you to maximise your monthly deposit contributions.
2) Make a realistic savings plan ensuring regular and affordable contributions to your savings account.
3) Set yourself a savings goal which will give you something to aim at. Keep the time scale realistic.
My advice would be to wait, the market is a difficult place at the moment and whilst there are some bargains to be had, with vendors negotiating 30% discounts and so forth, I personally believe the current prices are not sustainable. I personally am not moving for that exact reason, even though I want to.
You say renting is dead money, thats a common misconception. Depending on the specific numbers, this need not always be the case. There are certain areas of the country where renting makes economical sense. The idea being that you invest the difference and profit from the interest earned over time. Below is an example, taken from Thisismoney.co.uk.
Full article: http://www.thisismoney.co.uk/mortgages-and-homes/a...
A search on findaproperty.com reveals two similar two-bedroom flats in the same period building in Aubert Park, Highbury, North London – one for sale at £415,000 and one for rent at £450 per week, both with agents Kinleigh Folkard & Hayward.
A buyer with an 80% mortgage at 6.05% would need to to borrow £332,000, have a deposit of £83,000 and pay out £2,175 per month on a repayment mortgage or £1,675 on an interest-only deal.
Meanwhile, the same person opting to rent would pay £2,000 per month and as a higher rate taxpayer could earn £2,598 in interest per year from a 6% account - £216 per month.
The renter will be £391 per month better off than the buyer with a repayment mortgage, although the buyer will one day own the £415,000 property.
On the other hand a buyer taking an interest-only deal would be better off by £109 per month than the renter, but face all the bills associated with maintenance that a landlord would normally pay.Source(s): Own experience and http://www.thisismoney.co.uk/
- Anonymous1 decade ago
Come on Catherine, you are only 21 and time is on your side. Between you and your partner you have 46k a year coming in so 7k in savings does not exactly say that saving for a house deposit has been much of a priority in your life style. Around a third of the population have a family income of under half what you and your partner to be have. How are you ever going to afford a place - make saving a priority, not spending. There is a saying in the sports world about there being "no gain without pain" - that could also apply to a rigid saving routine. You make big economies now in your lifestyle for the longer term good.
- emandgeeLv 41 decade ago
I sympathise entirely - my bf earns 50k, I earn around 16k. Sounds good until our outgoings come into the equation. We pay his ex-wife a heck of a lot each month, he has huge debts from a failed emigration move and we both work what feels like more than full time, with 3 kids between us. At least you have a deposit of sorts. Keep topping up that fund and you'll get there. I agree renting is dead money and also that it appears others don't have to work but still manage to have a decent home and all the trappings. We're stuck in our situation for about another 5 years (until the emigrtion debt has gone) All the best :)
- ltLv 41 decade ago
The property ladder is a ladder to the basement right now. Renting is dead money? If you bought a house in the last 2 years, that would be dead money too. It sounds like you think real estate is going to appreciate again soon. It isn't. If you buy now, you will be throwing away money. You are so young. What if you want to move or you or your boyfriend break up? Do you really want to be tied to a house that has lost value? I think you should calm down, save your money and rent. The right time will come but it isn't now based on your age, your dating relationship and the economy.
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- 1 decade ago
You could look at the shared equity schemes some of the new house builders are offering. On a £140k property, you might be able to borrow £35k (25%) on shared equity and get a mortgage for £98k. In 10 years time, when hopefully the property will have gone up in value, you get a new mortgage to cover the whatever you still owe on the mortgage plus whatever you owe the builders (usually 25% of it's value then).
- phociny85Lv 41 decade ago
Try to get a side job for both. save every penny. Start a small retail business if you have enough knowledge and capital. then turn it to accumulative saving that u can use to buy a house. hope this helpSource(s): 21 and own my first retail business
- WelshLadLv 71 decade ago
"yet others walk in, get a 4 bedroom house and contribute nothing towards our country!"
True, but they don't own the property.
Your combined wage is good, why not visit your bank and query how maximum you can borrow.
- Sparkling WaterLv 41 decade ago
This is a BIG problem for yougsters why dont you get a Big caravan and live in your parents garden ... it'll only cost you the electric or maybe they might let you off with it ..