If we had a sane property market renting would be cheaper than mortgage repayments. 0.5% base rates are not something you can rely on. Unless your in London you've probably seen a fairly large fall in the capital value of the property. Purchasing a property is something you should do if you plan to live in a place for a long time. Otherwise it's just a highly undiversified investment although with nice tax benefits if you've already used up the normal tax wrappers of ISA's and pensions.
Nope. The value of my property has very slightly risen. And even if it had just remained the same, the monthly payments I have been making chip away at the mortgage meaning I get something back for when I leave. Even if staying in my flat for a year I would have saved money on rent and walked away with a small lump sum. Fact is I was planning to be there 3 and it turned out 7! I accept circumstances are different for different people in other areas. Plus I was mainly trying to identify an outcome for the op. Because the question asked was...how much should I earn, which I think is a pointless question unless you know what they want to be doing in life. Which is why I asked about savings or mortgage plans etc
Remember inflations been about 25% since 2006 although if you've done well on rental vs interest price disparity then its not to important. Was the mortgage interest only payment less than rent in 2006? In which case buying was a sensible decision by you. In combination with the unexpectedly low interest rates of the last few years you've made a fair bit of money.
I realised I never actually mucked into this thread with my situation, potentially interesting as it's fairly unique. Always worked for myself, first company in IT support, turning about 40-50k with less than 5k costs at year one (one man band), when I was 23-24 I think. Now gradually evolving into a digital agency of sorts. I must be in the region of effectively a 75k salary (taxing is very different so takehome pay is comparable to a higher salary than I actually get). I'm now 26.
Looking at this thread for the first time I am honestly jealous of most people in here. I'm 27 and I am now on £24,000 a year before tax with private health etc and a company car at the moment which is a brand new Ford Focus Estate. I loose £600 a year though due to the company car, which since the recent announcement it looks like I will be loosing the car. I am trying to decide also at the moment as to whether I should be going to night school to get some qualifications as I have practically none.
^ With you on that Damien.... Looking at this thread, I'm wondering what the fudge I'm doing with my life. At 26 I have no qualifications beyond a high school diploma that doesn't even translate well to UK standards (some say A levels, some say GCSE, some say neither). I'm stuck in a deadend job where after 4 years of taking on 3-4 x the amount of responsibilities that I was initially hired for I have only recently received an increase in salary to reflect that.... a whole 1.5k more (pushing me now to £18k a year). After starting out purely doing Typing for a magazine, I've since taken on roles including advertising sales (no commision, not much money in it); Accountant / Finance b***h (processing all the Advertising sales each month); organising newsletters for the magazines (was working on 2, 1 got canned, 2nd is frozen since the account with the mailer was marked for spamming [one of the newsletters was marked as spam, freezing all accounts under the corporate account]); Postal work: posting and packing all sales of our vinyl series (100's per); creating and managing a database for said vinyl, since without it they'd have no record of wether the orders where sent or not (this has helped on a lot of occasions, especially since the program they use to process the orders likes to fudge things up at times); and recently (within the past year) taken on roles as User Support for our website, as well as basic admining of the site, and also have to figure out small ways to improve the site (something I've never done before, nor have any creative knowledge how to; basically a stfu and do what you're told kind of job. Having seen the site, the only option I gave them was to rip it up and start again, its that badly done.... nope, they want small suggestions on how to improve it that will end up costing them more to implement)
Being realistic, £24k is a good wage, add in the benefits you get and its a pretty good deal. I don't know many people who earn above that. Just take a look at the salaries on offer in your local job center to make yourself feel better.
I'm on 26k a year, thinking about going solo and freelance for a higher wage. Solely earnt the company i work for over 10g this month alone. Yet i will take home about 15% of it.
At this rate I don't think I will ever own my own home - not unless I win the lottery or rob a bank. I'm 31 now and I have no chance of affording the required 10-20% deposit. Neither of us really want to move far from Cardiff (preferably not even outside of Cardiff), and a 2 bedroom house in this area will range from about £120k to ... whatever you care to spend. Even at a generous (and possibly unrealistic) 10% deposit that's a minimum of £12k for us to pay. We can't even afford to save for a decent holiday abroad at this point, so we've got no chance of getting a deposit that large together. Before anyone suggests the Help to Buy scheme I would point out that I'm Welsh and living in Wales, and the Help to Buy scheme doesn't extend to Scotland or Wales. If you want financial assistance with buying a house here then you have to be deemed as "in need" - a young(ish) professional couple, both in stable full-time employment, with a combined household income of circa £43k per annum isn't what they call "in need". If we buy a house in England (which isn't really that far from Cardiff, to be fair) then whatever saving we make on rent will be offset by increased commuting costs. TBH, I'm on around the same wage, although I don't get a company car, and I only just started earning this much about 6 months ago. And you're (a little) younger than me - four years ago my wages didn't even break £17k. Right now I'm focusing on getting a few more years professional experience at what I do (MI/BI developer) before I start to worry about my earnings. My "new" job got me a pay rise of around £4000 this year, so I'm pretty damn happy with that at the moment.
It should be perfectly possible to get your living expenses under £20k in Cardiff as a couple in which case your deposits ready in a year.
I'm not going to get into detail about my monthly finances, but let's assume that we're aiming for a 15% deposit on a £120k property - that's £18,000 total. That works out to £1,500 a month, so we'd need to save £750 a month each for one year. You forget to account for the fact that we'd actually like to have a life, buy clothes, enjoy the occasional night out, etc. Suffice it to say that if I could afford to go without £750 per month then I wouldn't be having this discussion. And there's also the fact that if I don't like where I live then I can give a month's notice and find somewhere better. None of that awkward "selling my house first" or "worrying about equity and property values" stuff. Owning my own property would be nice, but at the moment it isn't a great value proposition.
I'm not sure I like this kind of attitude. I hear it quite often and don't understand what the problem is. By all means, quit the security of working for someone else and hedge it on your own, do the company launch, finance projections, insurance, personal investment, find the business etc etc, THEN you can have that 10G to yourself. I don't actually think it's that hard in many cases, but it's swings and roundabouts. Your position is what it is in some ways, and if you think you specifically earned ten grand to your name but gave it to someone else, and you genuinely could repeat that action without that someone else, then....you shouldn't be working for someone else.
I'm 31 and on £18k and my company is doing it's best to stop pay rises, keep getting 1% for past 3 years, although they glady put my fiancees salary to £18k (work at same company) We both can easily go elsewhere but we have job security and we get to car share together which saves money. Still don't have a house but due to the misfortune of getting knocked off my motorbike we're hoping it pays for the deposit. It's a struggle and I'm a real stress head over money but as she reminds me, it's only money. Would just like some more
You've made a choice. That's fine. I just think you might be best served going over your budget if a net income of ~£35k for a couple isn't sufficient to be able to save even a small amount. By the sounds of it if you got a pay rise your first thought would be saving £2-3k and going on holiday yet you complain about never being able to afford to buy. I did just say something about how renting has its upsides. I'm certainly not saying you should live like hermits *just* so you can be on the "property ladder".
But I think a lot of people should first consider WHY they would like to own a house? And whether there are any other alternatives. I was listening to a talk sometime ago (dont remember where), and it mentioned that a European audience member asked why the UK has an obsession with buying houses, and that in Europe they are very comfortable with renting. I think before investing such large amounts of money and more importantly your time and possibly locational freedom, one should question the very basics of their decisions. I sometime in the future would like to explore living in a full-fledge tent, one that can withstand English weather and provide the basic comforts and facilities of a house.
Yes but there is a fundamental difference in Europe compared to the UK, and that is that almost all european countries have a normal culture of long term renting. Almost every rent in this country, you can be kicked out of with a relatively short amount of notice, and you can never essentially treat the property as your own (freedom to paint without asking for permission, things like that). Most EU nations have a lot more protection for tenants. Hence rent rates are also a lot lower outside capitals than compared to the UK. (This is a huge generalisation, but I'm basically saying the two are not comparable.)
I'd agree with julianmartin that there's a fundamental difference between renting long-term in the UK and the majority of the rest of the EU. Owning your home will give you long-term stability (inasmuch as that's possible) whereas renting won't. I think there's also a fundamental difference between wanting to own your home and investing in property in order to make a return. Finally, with regards to BLC's situation, why do you have to put aside the deposit within a year? We saved for three years in order to put together our deposit, and it was bloody hard work - no holidays, few luxuries and generally actively thinking "do I really need to buy this or should I put the money in the deposit fund instead?" It wasn't great fun, but it was worth it in the long run.
Totally agree with this, I did the same and saved £30,000 in 3 years, at the time I had a 2 year old and our total income including tax credits etc was just under £31,000. We still had holidays and all the stuff we were used too, just didn't go out all that much and no expensive purchases. Seriously, if you cant save on that amount of money then there is something very wrong with how you manage your finances. If you really want to own you property (which for me,the mortgage is over £100 cheaper than renting) then i'm afraid you will have to sacrifice your lifestyle somewhat Id recommend doing whatever it takes to get on the ladder now, house prices are rising again. Its an investment thats better started off as early in life as possible. Look at the current offers for 5% mortgages. You can get one of these and then save a deposit up for when you remortgage. That way you will get a better deal come renewal time.
I don't want to, that was in response to: Quite the opposite in fact, I have no desire to save for a deposit at all. Any money I save is going towards more pressing priorities, such as paying off the large amount of credit I owe (a legacy of being really bad with money).
It is possible to combine your debts with a mortgage. Go see an IFA who should give you an hour for free. Some, like the one I use dont charge for their service, he is very open about what commission he receives. I wrote off a £5000 loan and combined it with my mortgage. Although it will cost me a little more to pay the loan off, I over pay to make up for it and now my finances are looking much healthier. That and that £550 a month i'm paying is actually buying me something.
