OK Plan A has failed, so what do you think of my plan B?

[fiodyl]

Plan A was to move to rented house near the school this year to get DD into the nursery intake (sept 09) but it has all fallen through and there are no other similar properties for the same rent(up to £200pcm more which £700pcm more than we pay now) so it would mean paying the extra rent from our savings until they fell below the amount to claim Housing Benefit or get a part-time job.

So I have thought up a plan B, which is to stay where we are for another year(its cramped but we can manage) and put the savings we were going to use to move into a high interest account. THere are some offering 6-7% if you agree to not touch the money for a year as bank are desperate to borrow atm, and also put away the extra £500 amonth we were gonna pay in rent (halifax are offering 10-12%).

After a year we will look at the market again and possibly be able to buy if prices have fallen enough as by then we will have a good deposit.We should still(just) be able to get DD into the nursery intake for sept 09.

I am also stil considering getting a part time job and saving the extra income for that as well for the year as it would improve the amount we could get on a mortgage.

There is also a posible plan C which is the same but we would wait 2 years and save more, while hoping prices will continue to drop. It would mean sending DD to a nursey in this area(not too bad) and applying for the reception intake for sept 2010 instead.

That sounds a great idea.I think the next stage in all this will be banks trying to attract savers.

without knowing area prices etc plan c!
Halifax were advertising an account at 10% last time I went past there must be a catch in the small print but might be worth looking at?

(please note I'm not a financial advisor and am very bleak about outlook for property prices)

PLAN C. Buying is always better. Buying with more rather than less money is always better. Nursery is pretty insignificant in a child's big picture life. Cramped house will fade into the forgotten memories as soon as you move into beautiful big place that you own in 2 year's time.

OK the kind places we would be looking at are approx £180k atm and as we are social tennants we would qualify for the homebuy scheme meaning we would have to get a mortgage for at least 50% so £90k.Our income is £23k pa but would be £28-30k with a part time job.

I rekon that if we save hard for the next year and I get a part time job we would have £35-40k as a deposit and after 2 years this could be as much as £50k.

The plan would be to either buy the remaining 50% from the homebuy agents or sell and buy a new house once I am back in full time work- this would be 2012-13 when kids are both at school full time.

Plan C would definatley be the best idea if house prices definatley fall alot in the second year, more important than nursery places.
The downside of staying 2 more years really is the space, 2 kids in one tiny bedroom(just fits 2 cots and a small wardrobe) so their toys have to stay in the living room which also doubles up as dining room too. Also has tiny kitchen with just 3 cupboards and no room for washing machine/tumble drier so its in the hallway and no garden(hence need for tumble drier)

Other factor is the area- drug addict neighbours always asking to borow money, knife weilding gangs on the street corners and incredibly noisy neighbours above us that regularly wake the kids up at night as their kitchen is above kids bedroom.

If this were me I would stick where I am if I was reasonably sure of my ability to save and was confident to get on the home buy scheme. I would also do it with a 'one day at a time' outlook, ie every day you stay you can put a bit more aside and thats a bonus, but if one day you wake up and think "I am miserable and cannot cope here anymore" then thats ok too and you start to revert to something along lines of plan a or b.

All the best, you sound determined and you will get there in the end