How do you afford to buy?

[SpacePuppy]

We are "first time" buyers we've never bought a house in the UK before, however, looking at what houses cost and what we earn we can only borrow around 250k, which buys nothing in the south west that suits a three person household. Which means we either need to save about 25k to put down as deposit or buy a small affordable property and try to sell on and make a profit. We'll be in a rented property for the rest of our lives!

are you sure?? I live in herts (which is the second most expensive place to live in the country after London) and you can buy a 3 bed house in some areas for under 250k.

We had a big deposit to buy our house, and we were so so lucky to get it at the price we did, 3 months later we couldn't have bought it. £250k should buy a 3 bed house in a nice area - not a nice new build type, but definatly a ex - council type terraced. Well, that's what you would get around here (Berkshire). Best thing is to save a deposit, TBH if you can help it, even if you have to live in a shed I wouldn't rent - Dhs brother pays more than us in rent for a grotty 2 bed flat above a shop, and it's money totally down the drain. You could look for a more run down house, and do it up over time aswell and just climb the ladder, which is what I am trying to do.

We live in Horsham and the average according too BBC is:

Average Cost: £322,741
Detached: £510,376
Semi-detached: £279,224
Terraced: £244,301
Flat: £172,633

I don't know if we're doing something wrong, but we can just afford rent at £985 for a three bed (rural location though). According to some finance sites we can borrow between 250-270 on dh income ( I don't work). Either we're waisting money or we're missing something with our general expenses.

£1000pm won't get you a 250k mortgage. Rememebr those figures are skewed a bit by new builds and character property. You need to look more specifically road by road or consider changing location , further out of commuter belt, into Kent or Hants if needs be . Is that feasible ?

Even in our area (just outside M25) it is possible to get a 2/3 bed cottage or ex-Council 3 bed for between 250 and 300 but you would compromise on the location. The headline figures equivalent to those you quote won't indicate that though as there are others selling well above that.

Don't think now is the right time to buy a small affordable property to sell on at a profit, SpacePuppy. All forecasts are downwards for this year and next - I would wait and see for a bit.

Yes, I agree about the current market not being a feasible time to buy, but I do need to investigate as I think the market will slow down, but prices would not necessarily drop by much. I'll look at the Barret thing we are also contemplating self build, but to find a plot is another nightmare, it seems it's easy to find land, but it is not sure that you'll be able to build on it.

I wish there was a simple book explaining these things in black and white (especially about rent being money down the drain) for dh. He can't grasp that it would be better to buy even if we didn't live in it all the time due to working abroad - we've got to end up somewhere when we retire!

There are places you can buy in the south west for that amount - they may just not be what you'd ideally like to start with. The other option is to move to a cheaper area. I was brought up in the south east, my extended family still live there, but the first thing DH and I did on qualifying was stick a pin in a map of all the areas where we could afford to buy. That was our priority. No one has an automatic right to live in a particular part of the country - there's days when I think I'd live living in London again, but we can't afford to so that's that!!

If you want to settle in Horsham then you work out a plan for getting there: you might buy in somewhere less desirable, such as Crawley, do up, buy bigger place in Crawley to do the same or small place in Horsham that needs work and keep going. If you choose sensibly, then the market almost doesn't matter because the price you pay will take into account fluctuations. It's hard work but it is a way of working towards whatever your particular housing goal is.

Depends where you are in the south-west. I wouldn't count Horsham as the south-west! You might need to think a bit laterally - choose a slightly smaller house, or one in a location that is not quite as nice as you'd like. Or an ex-council house. Or move to a cheaper area, that needn't be far at all.

Also, don't just look at what the BBC quotes. I've just had a look for Horsham on Rightmove, and there are loads of 2 and 3 bed houses and flats for under £250,000, which for 3 people sounds fine.

Those ae averages though, you need to spend ages hunting, and be prepared to buy somewhere that needs work. Even if it's just decorative it means you can get a bargain.

Where are you looking?
It kind of depends what you mean by suits - obv there are many newer properties that would fit the bill!

Are you looking at a repayment mortgage or interest only - for eg a £250k repayment mortgage at 5.5% will cost you £1553 a month on repayment and £1145 on interest only.

Not that that makes any diff to the amount you could borrow, but you may be able to find a lender who will lend you higher income multiples that would be affordable on interest only. Beware though as you have no cushion if interest rates rise (ie you can't cahnge to interest only), plus the rise will affect you more dramatically if you are repaying all interest and no capital.

how about this

or this

Lots in fact that look suitable! Browse that site

According to the figures you have quoted then you can buy something in Horsham for under £250K.

If you are worried about affording the repayments, then make sure you know what the monthly cost will be (rather than just what the lender will lend) IME the lender will always lend more than we can afford to pay back each month

Remember to check what the repayments would be if the interest rate increased and choose a fixed or capped rate if you are near the top of your budget.

Has Horsham recently moved west?