Mid-20s, buying alone. Would you buy a fairly ok starter home and then hope to move up the ladder or continue renting and save up enough for your forever home?

[Jaybird100]

I’m renting at the moment, mid-20s, first time buyer considering buying a 3 bed Victorian build terrace close to railway station but 15 miles from where I work (I currently live 4 miles away from my workplace renting a room) but do drive.

I have a partner but we’ve been together slightly less than a year (not living together) so I didn’t want to buy with him as it’s too soon (plus I like the freedom of decorating it exactly how I want etc. esp it being my first time) but I do know I could have afforded a much bigger place in the city of my workplace if we’d bought together but I’d only own a portion of it.

So I’m in two minds - would you still buy the starter home, decorate it how you like etc. live in it for a few years and then sell and upgrade (hoping positive equity). I’m guessing I could also rent it out if I wanted to rent in the city again.

I always have the grass is greener on the other side mentality so please tell me your thoughts and experiences.

If you bought the 3 bed, you could rent out a room?

Yep. Starter home. It’s far too early in your relationship to know what your “forever home” would be.

Although - why 3 beds? It seems a lot for one person.

I’d buy now and get on the ladder. If (if!) house prices continue to rise, you could rent for years and still only be able to afford to buy the starter home.

Good luck with your decision!

I love Victorian terraces, and the sound of trains. But why so far from your job? And why so big?!

Buy as early as you possibly can.

When do you see yourself buying with your partner? I’ve not long bought a place and just the buying cost a lot in terms of stamp duty, mortgage start up cost and solicitor plus costs of overlapping two places even for a few days and redecorating a new place so I personally wouldn’t buy unless I was planning on staying in the house for a good few years.
Also do you want to live in the place where you can buy or is the only attraction that you can afford somewhere there?

I bought a starter home, its plenty big enough and I love living here. Buy what you can afford now and enjoy it. Move on in a couple of years

You're right not buying with a bf of less than a year, but do your research on the house/area you're wanting to buy to be confident you could sell easily later.

I have friends who bought a 'starter' house, renovated and decorated then when they wanted to sell couldn't, 5 years later they still have a house they own but don't want and can't sell as it's a not desirable enough (Victorian 3 bed terrace with attic conversion but in a bit of a rundown area).

A 3 bed terrace sounds amazing for a first buy. I would buy it now not continue to rent. Enjoy doing it up and making it yours, and enjoy the achievement and independence it brings. It should be fun and you will learn loads along the way.
Getting on the ladder now should ensure a more secure future. And yes, wise not to buy with a partner at this time.
You could rent it out if you moved on and maybe a good idea to keep the house anyway should you buy another place jointly with a partner. It could be your security in case you are ever single again, and a pension pot.

buy - renting is dead money

you can always move, up or whatever! renting your just wasting cash you cuold be paying off your mortgage

i have bought and sold, all my houses are 5 year plans!

Buying sooner rather than later is a good investment.

Doing somewhere up takes a lot of time and energy though...

The considerations for buying alone (or for anyone but more so alone) are 1. Is it safe and secure (the home/area) 2. Can I get home safe after a night out 3. Good transport, handy local shops etc. 4. Is it desirable i.e. easy to resell.

Thanks so far everyone

Yep, buy the terraced house. That's what I did, got a lodger, paid off a lot of the mortgage, moved out, rented it out for 5 years, sold it after that for a decent increase which made a huge difference to my future. I know it's only one example, but it meant I can now afford not to work, although I wish I WAS working.

Crack on, is very liberating!

Thanks @lborgia - Did you eventually upgrade to buying a nicer/bigger forever home?

More responses welcome

Having a starter home generally means that you now have an asset that is keeping value inline with what you would like to buy longer term rather than endlessly paying out rent. It usually helps move up a league to a bigger family home/ more desirable area.

Your description sounds promising as there should always be a demand for property like that near a station and of a good size for starting a family. Would you be prepared to live there longer term if circumstances necessitated?

I know two people who got stung on their first home. One bought a 1 bed house in a village a bit out of the way, the other a shared ownership of a HA house. Both were limited in market for selling on, and not suitable for renting.

I'd definitely wait to see if there is a no deal Brexit. If there is, the economy is very likely to tank and dip into recession and house prices will drop. Re-assess next January would be my advice.

I'd buy now and if it's a 3 bed all the better if you can comfortably afford it.

Our first home was a 2 bed cottage with no parking. When the eldest was on the way, we had to move, so off to a 3 bed semi. Sold that 2 years later for double it's purchase price. What we are in now (3 bed detached with plenty of ground), is now worth £200k more than we bought it for. We'd never even afford the semi we originally bought now with just a deposit.

It's easier to trade up, than buying the "forever home" from nothing but a deposit.

I think it also depends where you are - will there be a big SDLT charge on the starter home? If so. I would be inclined to go straight to the forever home if you can do so quickly

I would get the starter home

Buy now, if you can I would also use the rent a room scheme to get a lodger and save the money from that for either a better ltv when you remortgage, or if you later buy with a partner you could keep this property as a buy-to-let and use the money as a new deposit.

Absolutely go for it. Rent out a room to generate some extra income or if your partner moves in down the line get them to pay rent/half the mortgage and then use that money to flesh out your savings towards a bigger home.

If you're a position to buy a home like that in your mid 20s, I think you'd be a mug not to.

Buy as big as you can as early as you can. If you have extra rooms rent them out to enable you to afford it. I bought at 23. I needed to rent the spare bedroom to be able to afford the mortgage. Fast forward 20 years and the house I now live in is worth more than twice what my friends who decided to rent into their early 30's are able to afford. And my mortgage is prob lower. It's a harsh reality.

Absolutely - the house I'm in now with my family. The sooner you buy something, the better. As long as -

1 - you allow for the bills, utilities etc.
2 - you are intending to stay for 5 years at least,
3 - you are careful who you share your good fortune with!

A 3 bd Victorian terrace is always going to be a decent investment, as long as it's structurally sound. It's big enough that you can get lodgers if you hit a rough patch, you can stay on for years if you have to, and there's room for a family if you need it that way.

My dh and I pooled our resources, and now live in our second jointly owned home. We've been here 15 years, and this is it unless something dramatic changes!

It used to be that in the UK you could pretty much guarantee the price of a house would double in 7 years - the 3 I've owned or co-owned have all done better than that, despite the changes over the past 20 years.

Good luck!