How much money do I need to buy my first home?

[springloves]

I'm a recent graduate in my first ever proper job. My parents have always rented so I'm not really sure what the process is for buying a property. I'm single so will be buying alone.

I leave in the South-East so things are quite expensive. If I wanted to buy something for £250,000 how much do I realistically need to earn and have saved up? Do you have any advice for someone in my position?

I'm a long way off being able to buy a property as I've only just started in my new job but I'm trying to work out how much I should be saving per month. I don't have any debt aside from student finance.

Government bringing back 95% mortgages. Do 5% of asking price plus all solicitors fees etc

So 5%

About £12,500 and a salary of around 50/53k

You can buy a studio flat for £200k. If you get a job paying £30k, you can easily save £12k per year for next 2 years.

This will cover you for a 10% deposit and solicitor fee.

When I was earning 30k in 1st job after Uni, I paid £500 per month for a room to live in, £50 petrol and £200 all other expenses each month; and saved the remainder. Also did some extra work for £3k -£5k pa. Managed to save my deposit for a studio flat within 1 year. Whilst others my same age were holidaying, buying starbucks and leasing new cars.

If you put your mind to it, you can do it within 1 or 2 years

5% deposit = £12,500 plus budget £2k for searches and conveyancing fees. You would need a single/joint salary of around £50K + to get a mortgage for £237,000.

Optional, but I'd budget another £1-2K for removals, appliances if needed, possible lock change etc.

Whereabouts in the SE are you? Places like the Medway towns and Maidstone will be cheaper than Brighton, edge of London etc.

Forgot to add - save as much as you can. The more you can put down as a deposit, the less you have to earn to qualify for the mortgage.

There are also schemes like 'help to buy' and 'shared ownership' but these can be fraught with difficulties so do your homework. You can always post questions on here or the property bit of Money Saving Expert for further advice.

Thank you for your replies. I didn't realise you have to earn so much! I only earn £27,000ish at the moment... Seems it will be impossible without a partner.

The way it works is that banks lend on multiples of your salary. Currently it is 4-5 times your salary as the maximum amount you can borrow. If you have a partner then it is normally 4 x joint income. Maybe speak to a mortgage broker like London and County to discuss options. They can go through figures with you.

Everything you need to know, you can find on Moneysavingexpert.

www.moneysavingexpert.com/first-time-mortgage/

Do you want to live in the SE or would you consider moving to somewhere cheaper? You could easily buy on your own in or around many other UK cities and have good job opportunities and a nice lifestyle, so worth considering.

Speak to a mortgage adviser to find out how much you can borrow- i was offered 6x salary when I bought. Then you'll need your deposit to make up the rest. 250k will be a stretch on 27k, is there anything cheaper you could look at to get you on the ladder? Then your mortgage payments will go towards increasing your deposit for the next move.

You could look at part rent, part buy schemes.

For now, I would focus on saving what you can and working towards career progression. It might feel impossible right now, but with increases in salary, opportunities increase quite quickly.

Focus on saving. Do you have a LISA? I have one with the Moneybox app (linked to a proper bank) for every £4 you save the government give you £1 (up to a max of £4000 saved a year and £1000 govt bonus). The money can only be accessed without losing the bonus when you buy your first house or when you retire so would be perfect for you. I like the one with the moneybox app as I link all of my normal accounts to it and it rounds up whatever I spend to the nearest pound which is useful.

Do you have to live in the South East or can you move areas? You wouldn't even need to go too far north, you can get a nice 2-3bed in Norfolk for £250K