Property advice for first time buyer

[Marlo]

Completely depends what you are doing now, if you are living at your parents stay there. Put the £1500 you would be spending renting away each month and look at it again in a years time when you have £23K in the bank.

This. The bigger your deposit the stronger your hand is, I would wait and save every penny you can

I would add a few things, 5k is not enough for a decent place, especially as post COVID most lenders want 15% deposit an if they do give you a 90% loan to value the difference in interest rate can be up to 2% higher.

The next thing I would say is what are you looking for, is this a home you can see yourself staying in for 10-20 years or one that as soon as your situation changes you are off. If it's the latter you need to be worried about the value staying static or decreasing, if it's the former then it's less of an issue. I say this because I bought a 1 bed flat in a dodge enough area, would never of raised a family there, but the location was perfect for a young bloke in his twenties. I got lucky the value went up (area got gentrified) but could of easily lost my bollix on it and to top it off my future Mrs hated the area and would never of lived there.

Also, its always a crap shoot, but we are heading into what looks like the mother of all recessions and landlords are hugely vulnerable. The market right now is been artificially propped up by the removal of stamp duty and the furlough scheme. If you time it right and have a strong deposit coming into the new year you could easily pick up a bargain.

 

[brooklandsblue2.0]

He sounds like a pretentious twat

He’s actually ok, but a bit misguided!

 

[Northernstorirs]

Unbelievable, my old man RiP always told me rent money is like throwing it down the drain, wise words Dad although I get that these days it is hard to raise the down payment on a Mortgage at 15% plus.

Your old man is correct.

Nationwide are offering mortgages to 1st time buyers at 10% as long as it's for a house and not a flat.

As you say, stay at home if you can and save. I wasted my 20s spending £900+ in rent to live in London. Whilst I had a great time down there, I didn't save a penny and missed out on a few holidays abroad aside from a few ski trips as I was always skint with a good chunk of salary going on rent. At first it's demoralizing needing to save from nothing but it becomes a nice habit and helps you think smarter when it comes to spending and using your money.

Since moving back up North my main aim has been to save for a deposit once my overdraft was cleared. I moved back with the parents, got on track with my career and saved for a couple of years. I've since moved out but been fortunate to continue saving and had a few work bonuses along to way which elevated my savings to where they need to be. The recent lockdown finally got me over the line and I'm actively viewing places now that I have enough for a deposit for my budget in mind and enough to cover legal fees and stuff for moving in (sofas etc). I've been no miser either, managed to go on holidays and is all about being smart with your money where as in my 20s I was reckless.

The state of affairs are ridiculous whereby you can rent a £120k house for £1k (with a month's rent as deposit)but banks won't lend young professionals a mortgage at £500 a month. That said, saving for a deposit can be done, so a lot of young people you see moaning should perhaps quit their expensive holidays, go out less and maybe buy a 2nd hand car rather than lease a motor you could never afford.

 

[Northernstorirs]

This. The bigger your deposit the stronger your hand is, I would wait and save every penny you can

I would add a few things, 5k is not enough for a decent place, especially as post COVID most lenders want 15% deposit an if they do give you a 90% loan to value the difference in interest rate can be up to 2% higher.

The next thing I would say is what are you looking for, is this a home you can see yourself staying in for 10-20 years or one that as soon as your situation changes you are off. If it's the latter you need to be worried about the value staying static or decreasing, if it's the former then it's less of an issue. I say this because I bought a 1 bed flat in a dodge enough area, would never of raised a family there, but the location was perfect for a young bloke in his twenties. I got lucky the value went up (area got gentrified) but could of easily lost my bollix on it and to top it off my future Mrs hated the area and would never of lived there.

Also, its always a crap shoot, but we are heading into what looks like the mother of all recessions and landlords are hugely vulnerable. The market right now is been artificially propped up by the removal of stamp duty and the furlough scheme. If you time it right and have a strong deposit coming into the new year you could easily pick up a bargain.

There is no better time to save with restrictions in place (depending on where you live). Unless you are in a bubble, you can't meet other households so use it as a good excuse to stay in and save. Holidays are also restricted.

 

[bugsyblue]

Would you not class Trafford as West Manchester ?

No, Trafford is South Manchester!

 

[Gareth Barry Conlon]

Your old man is correct.

Nationwide are offering mortgages to 1st time buyers at 10% as long as it's for a house and not a flat.

As you say, stay at home if you can and save. I wasted my 20s spending £900+ in rent to live in London. Whilst I had a great time down there, I didn't save a penny and missed out on a few holidays abroad aside from a few ski trips as I was always skint with a good chunk of salary going on rent. At first it's demoralizing needing to save from nothing but it becomes a nice habit and helps you think smarter when it comes to spending and using your money.

Since moving back up North my main aim has been to save for a deposit once my overdraft was cleared. I moved back with the parents, got on track with my career and saved for a couple of years. I've since moved out but been fortunate to continue saving and had a few work bonuses along to way which elevated my savings to where they need to be. The recent lockdown finally got me over the line and I'm actively viewing places now that I have enough for a deposit for my budget in mind and enough to cover legal fees and stuff for moving in (sofas etc). I've been no miser either, managed to go on holidays and is all about being smart with your money where as in my 20s I was reckless.

The state of affairs are ridiculous whereby you can rent a £120k house for £1k (with a month's rent as deposit)but banks won't lend young professionals a mortgage at £500 a month. That said, saving for a deposit can be done, so a lot of young people you see moaning should perhaps quit their expensive holidays, go out less and maybe buy a 2nd hand car rather than lease a motor you could never afford.

One thing I have seen many times over with the younger people I work with is they get stuck in a situation where they rent a nice well located flat that is great for someone young. They then dont want to change the lifstyle that goes with it. The reality is there are dirt cheap houses in the rough parts of town that they could afford easily.

I bought my first house - a 2 up 2 down in a less than affluent part of town in my late 20's, 5 years later having been paying down the mortgage my then deposit of about £7k had turned into about £30k of equity. Circa 15 years and 2 moves later I have over £300k of equity in my house - in one of the nicest parts of town. A decent salary has helped but then a friend of mine who is on more money than me has rented all this time in Chorlton. That is a much nicer area than where my first 2 houses were.

So if anyone says i cant afford a house - I bet you can find a range of houses for less than £100k. The question is are you willing to live in one.

 

[inbetween]

Help to buy might be an option if you don't mind a new build and have at least 5% deposit on the house you're looking at. The main advantage is you only need a small deposit to get a shiny new house and it'll also get you on the cheaper rungs of the mortgage ladder which keeps repayments down.

Basically you put down at least 5% and the government gives you a loan to bring your deposit upto 25% with the rest being a mortgage (75%). So for a £150,000 house you'd need a £7500 deposit, the government loans you £30,000 and then you just need to be able to get a mortgage for £112,500.

There are drawbacks, the government loan starts to accrue interest after 6 years and the amount you need to repay increases with the value of your house so a strategy for repaying it ASAP is needed. There is also negative equity to think about but that only affects you if you come to sell the house for less than you bought it for.

Help to buy is a great option if house prices continue to rise (and that's still the prediction) and you don't plan to sell the house anytime soon (at least 5 years). Like above though, the most important thing is doing the maths and drawing up how to pay off the loan as soon as possible.

Lot's to weigh up, it's a pain but there's a lot of help and advice out there.

 

[denislawsbackheel]

Don’t forget the Lifetime ISA when saving for a deposit if you are a first time buyer.
The interest rate is unbeatable.
No brainer as long as you use it for a house purchase.

 

[denislawsbackheel]

I lived in South Manchester as a student and was keen to leave. Longsight was crap and Victoria Park boring.

As I’ve said, Failsworth was a hidden gem and Droylsden handy for City. Good Holts’ pubs on the strip including The Halfway and The Grove.

To us in the south Longsight and Victoria Park are central.

 

[denislawsbackheel]

Better schools. (Grammar school system means a top class secondary education for free)
More extensive metrolink system.

And yes, there are bad areas south of the city as we all know, but generally the significantly higher property prices are indicative of supply and demand in south mcr.

Not for those who fail the 11 plus.

They end up in spunk tanks.