Buying first property in the UK, need advice

[LukeS1]

I want to get to buying a property at £600k-£750k within 5-6 years, Im trying to understand the best way of getting there. Have enough starting capital for a 10% deposit and fees up to a £375k

Option 1) Buy a property at £300k-£325k, mortgage repayments of £1,000-£1,100. Invest the spare initial money, and invest large amounts each month into mutual funds and ETFs

Option 2) Buy a property at £375k, mortgage repayments £1300 ish

Option 3) Save for a few months more (prob like 6-9) and buy for £450k. Probably the max I can leverage based off current circumstances


Which is likely to get me to the second house quickest/most efficiently?

[PenorBrahNoHomo]

Surely depends on what house prices will do in your area over the next few years, and the increase in your salary. I'd say buy what you can comfortably afford now and work on increasing your earnings to be able to afford a bigger mortgage in future. That's what I'm going to be doing, also wanting to buy this year.

[atgbrahsrs]

check out moneysavingexpert as well with guides on this

[LukeS1]

Surely depends on what house prices will do in your area over the next few years, and the increase in your salary. I'd say buy what you can comfortably afford now and work on increasing your earnings to be able to afford a bigger mortgage in future. That's what I'm going to be doing, also wanting to buy this year.

Thats the crux of it bro yeh

I feel like going with the minimum you can comfortably live in is the way, as with a larger property you are mostly paying more interest and arent building equity faster than you would be building investments at a lower monthly cost

[AndyKerrison]

There are only two factors that really matter - % deposit and total borrowed. It's a year or two since I looked but typically you'll get much better rates if you hit 15% deposit rather than 10. The difference between 15 & 20 isn't so big. Beyond that, what you can borrow will be, depending on your other monthly expenses, up to about 5x your annual income (assuming buying solo).

So if you need to save for either a bigger deposit or to boost your income enough to get the bigger house, your best choice really depends on what you think will happen to the economy
- If you think there will be rampant inflation due to money printing, then you probably want the biggest house you can afford right now so you can benefit from this eroding your debt
- If you don't think inflation is so much of a concern, then it depends which you think will go up in value faster - either buy the most house you can if property, or else the smaller house now and invest everything you can if stocks/etc

[DesiredUserphag]

Advice: Don't do it

[Didlid]

Whichever way is best to get your money to work for you. Which to me sounds like option one.

If you buy something more pricey your money will be locked up in the house and be left to the mercy of the housing market say you bought a 375k house whos to say that doesn't drop down to 350k (housing is currently sky high in the uk due to the stamp duty breaks currently going on). Whereas if you buy the cheaper house and invest the remainder + savings theres a good chance you'll be in a far better position later.

This of course if you're buying the house to live in. It might vary if you was using it as a rental property where you're actually getting a decent return on your money.

Just my opinion though

[bemyguest]

Which city?

[bristol83]

Earn more money or just buy a house you can afford? Mad idea maybe.

[LukeS1]

Which city?

South East

You need £600k min for a proper family home

[LukeS1]

There are only two factors that really matter - % deposit and total borrowed. It's a year or two since I looked but typically you'll get much better rates if you hit 15% deposit rather than 10. The difference between 15 & 20 isn't so big. Beyond that, what you can borrow will be, depending on your other monthly expenses, up to about 5x your annual income (assuming buying solo).

So if you need to save for either a bigger deposit or to boost your income enough to get the bigger house, your best choice really depends on what you think will happen to the economy
- If you think there will be rampant inflation due to money printing, then you probably want the biggest house you can afford right now so you can benefit from this eroding your debt
- If you don't think inflation is so much of a concern, then it depends which you think will go up in value faster - either buy the most house you can if property, or else the smaller house now and invest everything you can if stocks/etc

Interesting other option, save for 15% deposit on a cheaper one and wait to see if prices fall

[LukeS1]

Earn more money or just buy a house you can afford? Mad idea maybe.

No such thing as buying a house you cant afford dumbass

Banks are super risk adverse, if they lend you the cash youre good for it

[bristol83]

No such thing as buying a house you cant afford dumbass

Banks are super risk adverse, if they lend you the cash youre good for it

I own a house in the UK already so I'm pretty sure I know what I'm on about. Mortgages are primarily based on your savings and earnings, i.e. your salary. You want a £700k house then you'd better have a salary to support this...hence, earn more money.

[samsbolton]

ive tried to get a better rate with less leverage twice.. as per advertised..then was told nope.. check a decent mortgage forum for a building society that actually does this, as opposed to saying they will.

impossible to say if stocks do better than housing, anyone who tells you for a fact one or the other is bsing.

follow the golden rule of investing. No over exposure to one equity class. Spread your risk.

[LukeS1]

I own a house in the UK already so I'm pretty sure I know what I'm on about. Mortgages are primarily based on your savings and earnings, i.e. your salary. You want a £700k house then you'd better have a salary to support this...hence, earn more money.

Im not saying buying a £700k house now

My income allows me to borrow up to £450k now, but Im 26 so that will go up in time

Im trying to understand the most efficient way of building equity before that point

[LukeS1]

ive tried to get a better rate with less leverage twice.. as per advertised..then was told nope.. check a decent mortgage forum for a building society that actually does this, as opposed to saying they will.

impossible to say if stocks do better than housing, anyone who tells you for a fact one or the other is bsing.

follow the golden rule of investing. No over exposure to one equity class. Spread your risk.

I heard they don't give the best rates to baldcels, its a sign of ill health and old age, therefore a credit risk

[RichardRarvos]

don't

[samsbolton]

I heard they don't give the best rates to baldcels, its a sign of ill health and old age, therefore a credit risk

If I ever need a transplant I’ll use some of the profit from my first three properties in Hertfordshire, honestly they were so cheap I’m almost embarrassed.

Terrible what you millenials have to pay now, just awful..

[MatthewChav]

No such thing as buying a house you cant afford dumbass

Banks are super risk adverse, if they lend you the cash youre good for it

You tell him Luke - he prob owns a garden Shed he gives out at a "decent rate" to poor Lituanian Refugees!

[MatthewChav]

Ignore Bristol Luke bro - he's a Drunked who's on Weed mate!!

[Toker095]

If I ever need a transplant I’ll use some of the profit from my first three properties in Hertfordshire, honestly they were so cheap I’m almost embarrassed.

Terrible what you millenials have to pay now, just awful..

You need to transplant some balls on you old man .


BTW op , congrats for even thinking about making such a huge decision. You've come a long way since I've know. U planning to move in with the girl you were with when I was talking to you during early 2018

[MatthewChav]

You need to transplant some balls on you old man .


BTW op , congrats for even thinking about making such a huge decision. You've come a long way since I've know. U planning to move in with the girl you were with when I was talking to you during early 2018

Lol - a great 1 here Token Bro!!!

Well dune, good call!!

[MatthewChav]

I own a house in the UK already so I'm pretty sure I know what I'm on about.

Yeah you do Bristol mate .... as a looser on weed who is drunk as a skunk

Granted here yeah mate, okay!!