How realistic is it to live on £1.2k after mortgage and bills

[YourGreenDreamer]

Hi all,

You may remember me (27F) from the thread I made about securing a 3bed semi house (£245k, 5yr fixed at 4.79%) as a single buyer.

Majority... if not, all advised that I was in a great position and should go for the house but I'm not sure if there was a focus on the fact that I'd be living on £1.2k before I get a lodger... if I find a lodger. So my concern is that I'm biting off more than I can chew.

My take home after NI, tax, student loan and pension is £2,565. My monthly repayments will be £970pm (5years fixed rate). I am budgeting £370pm for my bills:
£159 council tax (excluding single persons discount - in the event I have a lodger)
£75 gas(?) - no idea if this is realistic in a 3bed semi detached with 1-2ppl at home. Same concern for electric and water
£75 electric (?)
£21 water (?) - I have no idea how to calculate how much water would be per month? Could someone provide some information please. How would I find out?
£27 broadband
£16 sim only deal

I have no dependents but would love to have children in the near future. That's with or without a partner. How would I manage on just £1.2k disposable? So very scary...

I really do love the house and think it'd be a great investment but I'm concerned that I can't afford it. People say your mortgage shouldn't be anymore than 35% of your take home. Well for me with bills included it'll be nearing 50% of my take home.

Again, any advice is appreciated.

Thank you.

I'm a solo parent by choice so I recognise that aspect in terms of your desire to future-proof your finances. I personally would probably not have been prepared to (and, indeed, did not) jump straight to a 3-bed semi.

There's a balancing act, here. On the one hand, if you're thinking of possibly taking this route, much better to have a mortgage in place before you have a baby, because securing a mortgage once you have additional financial responsibilities will be hard. On the other, though, I have always tried to set my finances up in such a way that I could continue to manage even in much more straightened circumstances - which has included never stretching my mortgage to anywhere near what I could theoretically borrow.

With that in mind, how come 3-bed semi rather than, say, a 2-bed terrace? Your finances do on the face of it leave your with enough to manage, but what's the backup plan in a situation where it's you + baby and for some reason or another you aren't able to earn as much?

Wow that is just so cheap, I don't know how you manage it to be so low.

The gas and lecky?
I wouldn't say I'm particularly miserly but don't use a great deal of gas for bathing and don't blast the heating.
I don't have a tumble drier. Only one tv in the property. I don't use an oven only the hob, air fryer and microwave.
I thought 130 a month was expensive!! Children are still only young to he fair

That's loads of money you will be fine

this is such a pisstake tbh. Of course it's enough.

So if you don't buy the house are you going to have a baby and stay living in your parents house? You will most likely pay more on rent than a mortgage anyway. You are way overthrowing the baby considering you are still young.

Buy the house, you have more than enough for bills etc...

That's where a 3 bed and a lodger could come in handy! That would help pay for it.

When you made your MN account to get advice, did you look at any other posts? Did you not see it was clearly very obvious that you don't have anything to worry about? And are, in fact, extremely fortunate?

Quite.

Personally, I would absolutely have considered a lodger pre-baby (so a 2-bed would work fine) but would be much, much warier about bringing them into a household with one. Nor is it necessarily a scenario a lodger would find optimal.

Then it leads to the whole "can't afford to move out" scenario. Which actually means can't afford to maintain current lifestyle and purchase a house in a half decent area and pay their own living expenses because that's the standard of living they've become used to. So would rather stay living with parents, often overstaying their welcome, whilst they save a small amount towards a house deposit every month because heaven forbid they should be expected to curb their lifestyle in order to become independent. You see thread after thread about it on here. I've also come across it IRL.

Although OP doesn't have that bad attitude and her parents are fine with the situation, she does lack the social knowledge that comes from going through the "young, skint and living in shared accommodation whilst totally paying your own way" phase of life - including the ability to write a budget, be realistic about finances and be empathetic towards others - because she bypassed that phase and doesn't realise her own privilege. Or at least, she probably does now after all these replies!

OP if after thinking about it all you're still worried, know that lots of people would start with a flat as the first property, or somewhere in a not very good area or that needs fixing up (or all three). Buying a family home as your first purchase in your 20s is a relatively modern concept which, depending on a person's finances, isn't always realistic. In your case you can afford it, but if your social life feels restricted that's totally normal and a sacrifice people choose to make to own a property.

You sound like you're a sensible person so I'm sure you'll manage fine and I hope you meet someone who wants DC soon. I personally wouldn't wait on that score, especially if you're not averse to being a single parent if the relationship doesn't work out. Far too many people leave it later, either through choice or lack of options, then have troubles conceiving. Fertility does decline and for some earlier than others. Lots of people can't have DC in their late 30s/ early 40s, although everyone tends to speak about it as though it's guaranteed you can. Medical intervention doesn't guarantee you a pregnancy or a baby, either. Things may have changed since I last looked into it (a long time ago) but I remember reading the success rate of IVF was something like 20%. Whereas I find people have always spoken about it as though it's a fallback plan that'll guarantee you parenthood. I think the public image is skewed due to those struggling to conceive/infertile tending to largely keep it to themselves rather than tell all and sundry.

You have missed/miscalculated some essential expenses here:

Council tax - it make sense to budget for the discount until you get a lodger then adjust your budget for the income from the lodger and the higher council tax amount

Gas + Elec - at the current price cap for a single person average would be £100pm

Water - Average for one person £25pm

Home and contents insurance - you may pay annually but it’s sensible to build up a pot to pay this, for your house value and assuming no extravagantly expensive contents I’d budget £20pm

Home maintenance - consider boiler cover, will you be doing the gardens yourself or have a gardener, what repair works are coming up that are essential you’ll want to save towards them (did anything come up in the survery eg roof, windows, electrics etc), boilers need servicing annually, appliances and furniture need replacing every few years. you need a budget for monthly expenses related to cleaning eg buying cleaning products and a paying window cleaner

Income protection insurance - essential especially if living alone, you don’t want to lose your home if you’re unable to work for a while.
I’d also recommend having six months worth of bills saved

Food - Workout how much you’ll spend as a minimum - eating is all essential after all. I’d say a single person £200pm is reasonable for good nutrition

Toiletries - also essential

Medical - at least annual dentist and optician check ups. Also consider an emergency fund or health cover for dental work. Assuming you have no regular prescriptions otherwise include a monthly prescription cost.

Hairdressers - probably essential!

Add all of the above essentials into your budget and then see if what you have left is enough for you to have the lifestyle you want including saving for future expenses eg children. Only you can decide how much is enough.

@YourGreenDreamer you are getting an underserved hard time on here for asking a question

With rental prices at the moment and the uncertainty of rental contracts I’d say go and buy the house. Also buy the best house you can afford rather than moving every few years. I know a lot of people aren’t in this position but you are

think about furniture and the cost of kitting out the house and use free websites where you can but you can’t use it for everything. When I moved into my first house I had my bed upstairs and my bedroom furniture and a garden table and chairs in the front room. It was hard but so worth it

It seems a lot of people here are giving you shit bc they think 1.2 disposable after bills is a lot, I understand your apprehension as I would also be slightly worried if that was all I had left. For comparison, we (me and my partner) have about 5k disposable after bills. 1.2k doesn't leave a lot of room if something happens, for example if you have vet/healthcare bills to pay suddenly, want to take an expensive holiday, have an issue with the house, etc etc.

What types of unexpected things have cropped up in the past that you can use as a benchmark?

With your current disposable of 2.5k, what do you usually end up actually saving from that?

Do you have a partner that you split the bills with or is just you?

these are the types of questions I would ask myself.

When I say after all bills I'm also including pets, food, trains/travel, streaming subscriptions, etc etc. I don't think you have included any of these in your above list, have you taken them into account as well?