Sunday, Jul 18, 2010
"But I'm worried about the property market and if it suddenly starts to rise again before we buy"
Independent: Wealth check: Is a young guitarist in tune with the market?
Luke Grahame, 28, is a musician from Cardiff. He plans to buy a property soon and wants to make sure his finances are in good shape. "My salary is inconsistent, but I made about £20,000 last year." Luke's financial focus is getting a foot on the property ladder with his girlfriend. He has amassed £20,000 in savings in an ISA paying 2.8pc. At present, he pays £200 a month for a room in a two-bed flat in Cardiff, but he would like to buy a two-bed flat around the area. A property of this size will cost between £100,000 and £115,000. "But I'm worried about the property market and if it suddenly starts to rise again before we buy. Nobody seems to know what's going on, so I'm keen to hear what the advisers have to say on this." [Go on HPCers, let's hear what advice you'd give!]
13 Comments
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1. bidin'matime said...
The problem is he wont find an 'adviser' who doesnt have a vested interest in him buying somewhere...
2. novice pete said...
"But I'm worried about the property market and if it suddenly starts to rise again before we buy. "
What exactly will cause prices to suddenly rise in the current environment?
He is re training as an personal trainer, that is a little dodgy unless there are enough people in Cardiff with money to burn, again
in this current economic environment?
£200 quid a month is not bad for a room imo, about £300 to £380 where I live. Crappy flats are about 50% above value as far as I'm concerned, so stay put is my advice.
corner jobbing
3. drewster said...
I find the whole mindset incredible. Most people in Britain still think house prices will rise forever. Americans used to think that too; but now their attitudes have changed. Soon there will be an attitude shift here too - from "my house is my savings account" to "my house is a millstone round my neck". Already we can see signs of it in the advice provided in the article.
4. novice pete said...
Plus where the hell is he going to get a mortgage with an inconsistent income?
5. drewster said...
novice pete,
"My girlfriend earns more than me and so the mortgage will be based on her salary," he adds.
6. novice pete said...
oops! missed that.
7. novice pete said...
Yes the advice given seemed quite sobering.
8. wiltshire said...
His band have got a Myspace site. Tomorrow I'm going to drop him a line and point him in the direction of this site.
He should, at least, try and get some alternative perspective to all the VI advice he'll have been receiving lately.
9. Stevie Dee said...
My advice for the girlfriend is to help him spend his £20k. And then get rid. The guy is clearly a mummy's boy or a village idiot. Anyway, who wrote this?!
10. mark wadsworth said...
£200 a month rent???
In that case he ought to keep renting!!!
11. Stevie Dee said...
No, he should definitely buy, a nice leasehold 2 bed flat, so when the market turns south and she goes off his guitar music, or finds another boyfriend, they can have a bedroom each.
12. monty032 said...
If he wants his own income taken into account he had better buy this year before the FSA bans self-certified mortgages. I doubt he can provide three years of audited accounts.
13. drewster said...
What Mark Wadsworth says. £200pcm per room, that's £400 for the whole flat. For £400 a month you can get an £80,000 mortgage (amortised over 25 years at 3.5%); add that to his £20,000 deposit and he can just about afford that £100,000 flat. Just about.
Given that the market looks distinctly peaky, and that flats tend to fall further than houses, he could probably get a better bargain by waiting a bit longer.