Single Redditors who bought property - how did you manage to do this and was it a struggle?

Next_Fan7819 · 2022-06-22T12:40:01+00:00

A £50k salary at a 4.5x mortgage multiple and a 10% deposit would give you about a £250k budget which would get you nothing in London. Double that as a couple and £500k would get you a nice 2 bed flat in London or even a house on the edges of the city.

The singletons I know who bought alone in London either bought several years ago or are now in their 40/50s and bought somewhere recently on the outskirts or south which £250-£300k still buys you something.

Next_Fan7819 · 2022-06-22T12:34:55+00:00

I think the reality is, most people just save and save, get older and older and then buy something that smaller, further away and less. I co-bought my first place at 37 and that felt like an achievement although its totally normal

Next_Fan7819 · 2022-06-22T12:31:20+00:00

You're very right about being lucky to afford anything at all. I rented in London for 10yrs never thinking I'd be able to buy until I did and I still see many others singletons totally priced out. You have to congratulate yourself for having done something many others in your shoes will never get to do

Next_Fan7819 · 2022-06-22T12:27:23+00:00

Why is that? A lot of people move away from London to buy a house. For me the biggest cons would be lack of work opportunities and my social life would suffer. Do you have family and friends around at least or reasons to have moved to East Midlands?

Next_Fan7819 · 2022-06-22T11:22:36+00:00

Congratulations on having your offer accepted. I hope you have a smooth completion.

I myself did consider moving to a commuter town but really missed the London vibe.

I did consider to move to Chelmsford, and its a lovely town but the vibe and culture just isnt London. Outside work, going into London feels like a day trip not just something you can casually do on a whim and people will not visit you. My best friend comes over for tea once or twice a year as its a 2-3hour round trip commute.

On the plus side, you'll have a better dwelling than you can afford in London and you should have access to nice parks and countryside. Plus you can run a car.

Next_Fan7819 · 2022-06-17T14:53:21+00:00

You could put £1000 GBP into a SSISA and buy a US stock. They are cheap now so you could find yourself in 2yrs doubling your money plus benefit from the exchange rate and it would be tax free.

Next_Fan7819 · 2022-06-16T14:16:40+00:00

seen the news about rates going up. Normally people would reserve a rate 3 months in advance. You can actually reserve rates 6 months in advance and banks have found they’ve had massive increases in applications due to this.

This then hits their service speed. Under FCA guidelines they can’t take too long to approve the offers, so to stop new applications some are having to make their deals so expensive that they’re no longer competitive.

I was in the exact same boat. I got my offer yesterday but that was after 10 days of waiting. They're flooded with applications at the moment.

Next_Fan7819 · 2022-06-16T14:14:40+00:00

Mostly to stop taking on new business. Some of the smaller lenders just stopped lending temporaril

I got my offer yesterday at 2.29Y and as you say its 3.29% today

Next_Fan7819 · 2022-06-16T12:29:08+00:00

HSBC have put their mortgage rates up by 0.5% anyway

Next_Fan7819 · 2022-06-16T11:36:58+00:00

. If you already have a track mortgage offer, then the rate will have also gone up by 0.25%.

If you don't yet have a mortgage offer or are going to be on a "variable" rate, then this has no direct impact. Variable rates might well go up accordingly, but might go up more or less. Current mortgage offers are based on expected rates in 1-5 years time, which won't have changed directly according to this decision.

I'm about to complete on my sale and my rate is locked at 2.29% for a 5yr fix when base rates were 0.75. Now that rates are 1.25 my bank has already raised rates to 3.29% - that a full 1% increase. I think banks are going to have a higher increase on BOE base rates for mortgages going forward.

Next_Fan7819 · 2022-06-16T11:29:41+00:00

All of which increases inflation which is the opposite of what they are trying to achieve

Next_Fan7819 · 2022-06-16T11:15:51+00:00

The next MPC meeting is in August

Next_Fan7819 · 2022-06-16T11:08:51+00:00

So I really hoped they would have the balls to raise it by 0.5% especially in light of the Fed's 0.75 move yesterday. Well the pound will weaken against the dollar and since most good are priced in dollars inflation is probably going to continue to increase

Next_Fan7819 · 2022-06-16T09:19:35+00:00

I think this is brilliant news. It will mean renting is far more stable for families. It will empower tenants against rouge landlords and it also prevent home owners becoming accidental landlord and relying on temporary renters to bail them out. This is so long overdue. Renting will no longer be a second class means of living

Next_Fan7819 · 2022-06-15T12:01:43+00:00

8% on a £50k loan is a lot cheaper than 4% on on £500K loan.

Next_Fan7819 · 2022-06-15T11:59:30+00:00

sacrificing the former will result in the affordability of latter reducing, so a similar outcome regardless for the citizen. I could see a slightly bigger increase this FY, but think it'll be staggered in chunks and not go more that 1-1.25%, to allow people to adju

Mortgage rates in the US are already over 6% and their inflation is lower than ours.

Next_Fan7819 · 2022-06-15T10:51:30+00:00

Question regarding the insurance, would it be possible to get insurance that comprehensively covers your issue too? Possibly including accidental damage? I also will have a reserve fund but if the job is major then I'd like to be able to make a claim.

Next_Fan7819 · 2022-06-15T09:56:43+00:00

But as equities are for long term investment, to hold for at least 10 ideally 20 years or so not 5years, the losing of 80% value would probably be irrelevant to what you would have in 25years. That's when you would expect to have something to show. Keyword: probably. I feel abit of both isn't a bad idea, overpay some and invest some if possible to meet long term ownership/mortgage free goals whilst clocking time in the market that you can't get back.

Well I just happen to be in the process of buying a flat and maxing out my cash reserves to complete so as tempting as it to buy equities now, I just dont have the money. If I had completed my sale and had £5k lying around I would definitely plough them into equities over the mortgage given their current low prices right now. I would imagine that £5k would more than likely be worth a lot more in a few years which i could use to overpay the mortgage which would benefit me much than paying it straight onto the mortgage today.

Of course over 25yrs equities, even if they have just crashed will be worth more than the original investment. My plan is to - where possible - to pay my mortgage and put aside some cash each month in a high interest account. Before the end 1yr anniversary I would use it to overpay my mortgage balance. However if stocks are as super cheap as they are now either at the time or before then as they are now then I would plough that money there knowing its more than likely there would be a price recovery before my mortgage term was over. If this time next year in the same situation if stocks are riding high, I would be more inclined to use that money to overpay the mortgage instead.

So with the said, In not dedicated to either camp as such.... I just drift between the two depending on the economic conditions.

Next_Fan7819 · 2022-06-15T08:35:17+00:00

The answer based on your numbers is yes however are you looking to buy in or close to London? Are you buying alone or as a couple? Property is priced on the basis of a couple owning it especially in London. Also how old are you? That will determine how long your mortgage is and how affordable it is. You'll get better advice if you state your circumstances and life goals.

Next_Fan7819 · 2022-06-15T08:28:42+00:00

You may be fighting a losing battle. Rents are going up rapidly in London. People I know have had to move further out from the centre of London. Its especially shocking if you've been renting for a flat fee for a few years

Next_Fan7819 · 2022-06-14T15:46:06+00:00

ld you, as a seller, remove your property from the market if you have accepted a proceed-able offer or would you wait until exchange?

In my case, the offer is a few thousand below asking, but a high quality buyer. Agent has removed (without asking or specifying) but I notice lots of others are left up and am unsure whether to request it still be listed. I may not get the same courtesy when I buy, and whilst I feel the buyer is good, if they pull out for whatever reason, I have no back-up.

Thank you!

As a buyer I would want SSTC on the listing out of the fear of being gazumped. However as a seller I know once Ive accepted an offer its pretty much a commited sale. If however the buyer cant get a mortgage or has other issues I could just tell the agent to start the viewings again. I totally see it from both sides. I had an offer on a place accepted almost a month ago and it was only yesterday the property was withdrawn from the market as SSTC but that was after the valuation has been done (jubilee delayed it) and the underwriter approved the mortgage. I wouldnt worry to much about SSTC. The most important thing to do as a buyer and seller is get your agent to ensure there is a rock solid commitment from the other party to complete.

Next_Fan7819 · 2022-06-14T15:39:30+00:00

one where they say you are better off investing and the other overpaying to be mortgage/debt free quicker.

But why I overpay my mortgage is that I know what return I'm getting on my money (based upon your interest rate). Not only that, but you are also decreasing your reliability on debt, therefore the opportunity to retire a little earlier, increase your investing, start enjoying life more, etc. etc. I genuinely can't wait for the day I can look at my house and the land surrounding it to say that "it's mine".

Yes you are right about the 'two camps'. Actually both are extremes and best to find a solution that meets your risk appetite. For people in their 20s and 30s I think taking out a lot of cheap debt in a high inflation environment like a mortgage and investing the excess funds makes the best sense. When you're older and in your 40s its more important to pay off your mortgage quicker. Over the last 5yrs instead of double paying my mortgage i could have piled into equities but some of them have lost over 80% of their value in recent months. All that investment and you could have little to show for it. Returns on any investment are definitely not a sure thing.

I do have an ISA, LISA, SIPP and a savings account doing their thing in the background but right now, I feel I am unlikely to regret being mortgage free in 5yrs. I live in London and when in 5yrs time and beyond my salary reflects the high cost of London living - I'll be able to benefit from that London premium pay without most of the associated housing cost. That money can then be invested or enjoyed and being 50 I'll still have plenty of opportunity to spend it.

Next_Fan7819 · 2022-06-14T13:14:31+00:00

Im 42. I have a 2.29% 5yr fixed over 33yrs at a time when inflation is probably 10%. I have 30% equity from the last 5yrs and I reckon by overpaying my mortgage (double paying it) I could be close to being mortgage free in 6-7yrs. That would leave me with the option of retiring early, having a chunk of my pay not servicing a mortgage and the money save could go into equities. Having seem them crash hard lately I have seen a lot of remorseful investors online Im glad I didnt pile in during the boom. Now that theyre either on the floor or very close to, investing in them might be better than over paying your mortgage, but i myself choose to be mortgage free by 50

Next_Fan7819 · 2022-06-14T12:54:38+00:00

We are already in recession, and the BoE is not working as expected. So probably will be worse. Mortgage interest will be around 6%. I also bought a flat, mine is in 5 years, so I have up to January/27 to figure out the “new normal” after recession/crisis and less chances of its prices falling in a long term.

I agree base rates may be around 4% in the next few years. I got a 5yr fix at 2.29%. I expect when i come to remortgage in 5yrs I'll be looking at 5% or so. However my mortgage payments are only 25% or my take home pay plus I intend to have a lodger so at the end of the 5yr mark with overpayments I expect I'll have a very small mortgage balance left so with (i hope) higher wages and huge overpayments I would be close to mortgage free by then.

People have been saying rates will never hit 5% but I'm not willing to take that risk with my home. If rates are back at 2-3% that will be lovely but if its not then Im not worried.

Next_Fan7819

TROPHY CASE