First time buyers have got it bad right now, haven’t they

[Blueberreh]

We are first time buyers with deposit saved. We were looking at houses but we have stopped now and are just going to play it by ear. Soaring rates mean we would be paying many hundreds of pounds more each month than we currently pay for our secure tenancy, just to say we own a house after a very long term of 35 or 40 years (which is what it would need to be to make repayments affordable)

The answer is not to buy a starter property. It’s not viable anymore to do that if you have a family or want a family. A studio flat or one bedroom place is not a wise purchase as house prices are forecast to fall and then what do you do when you find yourself in negative equity at the end of your 5 year fix? Trapped there unable to sell, and/or onto the standard variable rate. Not to mention the fact you are 100% responsible for maintenance, repairs and everything to do with the property.

We have the average joint combined income living in a relatively inexpensive part of the country and are priced out the market. To give you an idea a house that we were looking at 3 weeks ago is still on the market, 3 weeks ago our monthly repayments would’ve been £180 less than they would be today at the new rates. That is how quickly things are rising.

We are lucky in that we can stay where we are, 1 and 2% rates are likely a thing of the past but even 3.5 or 4 would be manageable and affordable. BoE seem to think this will be 2025

For now I must think practically, having £400-700 less in our budget every month due to interest rates would seriously affect us. We would be stretched to the limit. We don’t have children yet but hopefully will have soon, and even thinking of maternity leave when I’m on reduced income… we would be sleepwalking ourselves into a position of hardship.

I pity everyone, truly - those looking to remortgage, those trying to upsize and of course first time buyers in our identical situation. If you’re a first time buyer what are your thoughts, are you buying anyway or sitting tight for time being?

I know someone where the interest on his savings basically pays the £800 mortgage and he has 60% LTV. His 1.5% deal expires in 3 or 4 years and even he is concerned. Not sure why.

@Blueberreh.
thank you
He’s being sensible and he is ring fencing his deposit
but his partners parents I think are giving him around 20k at the end of the year so they will add that an adjustment the deeds of trust when this happens

My son will also have around 30k left over which he is going to sit on in case he needs it later

he got the money via an inheritance- it seems like the only way you can buy is if you inherit money

I’ve offered to pay his solicitors fees and buy him the white goods so fridge / freeze and washing machines his flat comes with white goods

The way I see it is that he can afford to get a forever home and is willing to take in a lodger if he needs to

I don’t mind helping him if he got a bit stuck in the future but if he is like well I don’t want a lodger I would be well you ain’t getting my help 😂

lodgers easily pay 600 /700 a month for a room where we are but he chose the house with the thought of having a lodger and got the extra bathroom

@BalanceMeHumours Those not concerned presumably don't have anything else they'd rather do with that money?

It's not that I am unconcerned, it's just that forums like this have been saying for years "these low interest rates won't last, they will shoot up sooner or later" so for the last 8 years (since a couple of pay rises that made this possible) we have been making overpayments which we calculated as being what the repayments would be if interest rates went up to 6%. And then they didn't go up after all. And because we were told to expect this rise for so long, we haven't upgraded from our basic home that is a bit too small for us, because we valued the safety of knowing we could afford to weather any future financial storm more highly than having a guest room or a utility room. So whatever interest rates do if they don't go too much over that I will be saying "ah so those cheaper times have gone, we knew this was coming, how lucky we have been to have enjoyed so many years of it" because we never expected it to last as long as it has. We will be paying the same into the mortgage no matter what happens to the rise, it's just that when the interest rates are peaking we won't be overpaying (and it's possible we may even be "underpaying" for a bit but that will just be a case of our "overpayments recieved" total going down instead of up for a bit)

Yeah, not sure what the point is..

My rule of thumb has always been rent versus mortgage interest.

The last place we rented was a brilliant place for £950 a month in 2013.
Landlord offered to sell it to me for £300k but I wasn’t enamoured about the houses being built spoiling it’s view. It was cheaper to rent it, especially as no maintenance to pay for. The key though is finding a good landlord.

A 2 bed semi for rent near me now is on at £595 and to buy a similar house would mean £600 mortgage interest at 5%.

Yes i am so stressed out, first time buyer, worked hard saved had one fall through 2020 due to the pandemic so lived off the deposit as lost job saved again and have a family to support, we need a minimum of 2 bed, live in a small town with hardly any houses and only one in our price range, its in bad condition and they want full asking price and has already been on the market six months and needs a totally refurb! yet if we could borrow 15 grand extra would put us in a position to buy something that needs no work doing. If we save the extra 15 grand will take at least a year or two, and will the prices of gone up again! i just dont know what to do am so stressed out have worked and saved every penny for 5 years and still am no closer to buying anything, plus the mortgage we had in place is going up. I cant help but feel this is one very pointless up hill battle wasting our lives my husband has worked six or seven day weeks for 5 years its absolutely insane, please tell me we are not the only ones going through this and that it is eventually worth it. All i can think to do is relocate?!