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Ok heres my situation

Ive been lurking on this site for over a year now and come back every now and then. Im 28 and live with parents. I have savings of 30k to my name and really need to move out. I am considering all the options:

1. Live in a seedy 1 bed council flat in a bad area. Dont want to

2. Rent a shared house - Dont want to. Like my privacy.

3. Rent Privately. Dont want to pay someone elses mortgage. At £350 a month I could get my own mortgage for this.

4. Buy a house. Would have my own place and this would be the same cost as renting privately so to me this seems like the best option.

As for the bull, bear thing I dont really care I just want some space of my own and am fed up with waiting around. I live in the northwest of england and prices arent quite as bad as south. After the initial deposit I could get away with borrowing x4 my salary and still live in a fairly decent area. What would you do?

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Ok heres my situation

Ive been lurking on this site for over a year now and come back every now and then. Im 28 and live with parents. I have savings of 30k to my name and really need to move out. I am considering all the options:

1. Live in a seedy 1 bed council flat in a bad area. Dont want to

2. Rent a shared house - Dont want to. Like my privacy.

3. Rent Privately. Dont want to pay someone elses mortgage. At £350 a month I could get my own mortgage for this.

4. Buy a house. Would have my own place and this would be the same cost as renting privately so to me this seems like the best option.

As for the bull, bear thing I dont really care I just want some space of my own and am fed up with waiting around. I live in the northwest of england and prices arent quite as bad as south. After the initial deposit I could get away with borrowing x4 my salary and still live in a fairly decent area. What would you do?

altogether now.... A

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Ok heres my situation

Ive been lurking on this site for over a year now and come back every now and then. Im 28 and live with parents. I have savings of 30k to my name and really need to move out. I am considering all the options:

1. Live in a seedy 1 bed council flat in a bad area. Dont want to

2. Rent a shared house - Dont want to. Like my privacy.

3. Rent Privately. Dont want to pay someone elses mortgage. At £350 a month I could get my own mortgage for this.

4. Buy a house. Would have my own place and this would be the same cost as renting privately so to me this seems like the best option.

As for the bull, bear thing I dont really care I just want some space of my own and am fed up with waiting around. I live in the northwest of england and prices arent quite as bad as south. After the initial deposit I could get away with borrowing x4 my salary and still live in a fairly decent area. What would you do?

If you fancy some negitive equity, I would go for buying one :P

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Ok heres my situation

Ive been lurking on this site for over a year now and come back every now and then. Im 28 and live with parents. I have savings of 30k to my name and really need to move out. I am considering all the options:

1. Live in a seedy 1 bed council flat in a bad area. Dont want to

2. Rent a shared house - Dont want to. Like my privacy.

3. Rent Privately. Dont want to pay someone elses mortgage. At £350 a month I could get my own mortgage for this.

4. Buy a house. Would have my own place and this would be the same cost as renting privately so to me this seems like the best option.

As for the bull, bear thing I dont really care I just want some space of my own and am fed up with waiting around. I live in the northwest of england and prices arent quite as bad as south. After the initial deposit I could get away with borrowing x4 my salary and still live in a fairly decent area. What would you do?

What could you buy in your area that would only cost £350 a month in mortgage repayments? Could you post a few rightmove links of houses you have looked at that fit this profile? Might help us give you better advice!

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If you can buy somewhere you're happy enough with to stay there for ten years or so for a mortgage of £350 a month, I'd say go for it. That's a total value property including your deposit of under £100k, so £30k should be enough of a cushion if you have to sell up and are facing price falls.

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I'd like to see the maths/proof.

Impossible to comment appropriate otherwise.

But £350 for a mortgage seems low.

Interest only on £52k at 7% would give that

So using £25k of the savings (other £5k going to fees and furniture etc) this would mean a property of £77k

Most places that would only buy you a 1-bed flat in the aforementioned council estates.

Where I am living at the moment, £75k will buy you a studio flat. £360/month will get you renting that same studio. So they'd work out the same on that piece of paper... it's the other piece of paper where the sums fall apart:

Repayment of the capital

Repairs

Buildings Insurance

General upkeep (as it's yours you'd be wanting to titfer about with it)

If it were me, based solely on those sums, I'd choose to buy as on paper they do look the same cost.

However, I feel the market is about to drop - and I think a £75k studio today will be possibly £50k in 5 years' time... so I am waiting.

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Mortgage at 4X salary i'd advise agains this.

If you where willing to share a property you could rent somewhere really nice and still carry on saving for more of a deposit, i realise its a personal choice, but if you move in with professionals it can be a lot less hassle than it sounds, major advantages

i) The markets not likely to rocket upwards so its not your last chance to buy

ii) You're not stretching yourself with a X4 mortgage

iii) Council tax , water rates, leccy bills they really do start to add up, a bill shared is a bill halved.

iv) You'll get an ace place, freedom, can save up for a higher deposit and not worry about negative equity.

Edited by slurms mackenzie
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3. Rent Privately. Dont want to pay someone elses mortgage. At £350 a month I could get my own mortgage for this.

I would like to point out your statement in bold above is a popular misconception. Your rent does not pay someone else's mortgage unless the rent is more than the interest component of their mortgage in which case the excess amount is indeed helping to pay off their mortgage

Best,

L

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I would like to point out your statement in bold above is a popular misconception. Your rent does not pay someone else's mortgage unless the rent is more than the interest component of their mortgage in which case the excess amount is indeed helping to pay off their mortgage

Best,

L

You have a choice rent it from a landlord or rent from the bank

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Buy the house. You've ruled out all of the other options. It doesn't really matter what a bunch of strangers on the internet think.

Me - I would only consider buying the house if I could survive a few percent on top of current mortgage rates and I felt I could stay there for 10 years. 4X is definitely a bit on the high side - but possibly doable if your salary looks set to increase.

Edited by greencat
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Ok heres my situation

Ive been lurking on this site for over a year now and come back every now and then. Im 28 and live with parents. I have savings of 30k to my name and really need to move out. I am considering all the options:

1. Live in a seedy 1 bed council flat in a bad area. Dont want to

2. Rent a shared house - Dont want to. Like my privacy.

3. Rent Privately. Dont want to pay someone elses mortgage. At £350 a month I could get my own mortgage for this.

4. Buy a house. Would have my own place and this would be the same cost as renting privately so to me this seems like the best option.

As for the bull, bear thing I dont really care I just want some space of my own and am fed up with waiting around. I live in the northwest of england and prices arent quite as bad as south. After the initial deposit I could get away with borrowing x4 my salary and still live in a fairly decent area. What would you do?

I'm in a similar situation to yours as I'm living with my sister at the moment for health reasons [rent-free but paying towards everything else]. Anyway, her circumstances are changing so I am needing to find somewhere else.

I have enough for a good deposit [or even buy outright] but I need to use my capital to generate income for rent/living due to my lack of employment income. I plan to rent for up to 12 months and see how the market adjusts in this time.

It is a gamble paying rent which could be paying off a mortagage but when I do buy, I am hoping that the lower end of the market will have fallen back quicker and at worst I will break even on any monies spent renting.

IMHO, if a correction is to begin, we are on the threshold, particularly with IR's predicted to rise and also I supect [unfortunately] repossessions as many more people end fixed rate deals from 2005 this year. A little vulture-ish I know but that's why many of us are here on HPC. ;)

...The need to repeat certain basic points is so that any newcomers can get a feel for my point of view. We are all at liberty to do this. I have devloped some core beliefs* about HPI that I simply wish to express and if it helps one person to not go ahead and buy that BTL it is all worthwhile.

1. We live in a miracle economy that is based on debt.

2. The economy is cyclical.

3. Gordon's promise of boom only is unrealistic in view of 2. above.

4. IR on their own in a miracle economy enviroment where credit is unlimited are ineffectual to curb inflation.

5. Gold is one of the worst investments over the long haul but can be a good bet if your timing is good.

6. All items that exchange hands for money are "fiat" in relation to the opinion that ascribes that value (Gold included).

7. Milton Friedman was correct when he said "there ain't no free lunch" which, in the context of Gordon's miracle ecnomy, means that the value of a house must be paid for in the end.

8. The BoE is not independent and is a creature of Gordon Brown.

9. This current crash (named Great Crash II) was spawned in Southern California in early 2005 which is almost a mirror market to the UK.

10. The UK economy has a long history of housing booms and busts with each one worse than its predecessor.

11. The current boom could have been largely avoided had Gordon initiated sound fiscal policies such as prudent lending standards, Neutral to restrictive IR policy (as soon as inflation began), taxation on multiple homes, reasonable immigration policies instead of a free for all, currency management to avoid overvaluing sterling and thereby placing limit on our export and manufacturing base (from 20% to 12% under Brown's watch).

12. Great Crash II had begun here by around mid-2005 and was stalled by Gordon's decision to cut IR, raise immigration levels, allowing subprime unrestricted access to the UK market, actively promoting BTL with tax relief. Gordon bought himself a couple of years but the first real signs of a turnaround in HPI began by either the 1st or 2nd Q 2007--jury is still out on which IMO.

13. Most VI HPI indexes are unreliable and are self-serving. The least accurate being those that base HPI on "asking rpices" or so-called "like for like" sales which ignore the cost of improvements.

14. The root cause of Great Crash II is debt and price to pay will be huge with far more damage to be done than we saw in the Great Crash of '89-'96. The social costs are incalculable when you consider family dislocation, debt burdens, repossession, bankruptcy, divorce etc.

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