Mortgage amount?

I wish it was the law or medical field, much more stable careers! But he's a pilot for BA. The salary increases each year, then additionally is increased ontop of that for when you're moved up in rank. He's only 23, so just now starting out actually working for the airline. The thing that worries me is the airline industry is so unstable. My grandpa and father are both pilots too, and I grew up with "we might have to move bases, we might be going out of business" type stuff. I'm hoping since its with BA they'll see that as a bit more stable than the smaller airlines but still, I'm thinking they won't look too much into earning potential since airlines have such issues.

I told him to go into law, or work in the financial district(which he did in the summers during uni) but no, had to follow his dream!

Yeah, the prices in the south east are crazy! Its easy to find a studio, for £120,000 then if you look up north, you can get a 4 bedroom house for around that!

I'm not going to be back in the UK until the april/may but when I do go I'll start seeing things in person and talking to professionals. Knowing my fiance we'll get offers from everyone under the sun before we choose anyone to go with, which is good, just time consuming! Luckily we have a place to stay worry free while we do all of this. Its just eek, my first time renting/buying any property whatsoever, and it happens to be property in the UK, adds to the pressure!

I just hate the idea of paying rent, but at the same time I've only moved once really since I've been old enough to remember and it was horrible enough, and I was 15! My parents were nervous wrecks trying to sell the house, build another, dealing all that. I really don't want to go through that so close together! Renting might be the best option for now. I just looked at  rightmove lastnight for rentals and you could get 2 bedroom flats for £600 a month. To me that doesn't seem too much but I don't know much about property in general over there to know if its a good/bad price. My fiance isn't much with knowing about property either as he's been living either at uni in leeds or at training places around the globe. His parents have owened their home forever so  don't seem much help other than to rub in our faces they bought their 4 bedroom 2 bathroom semi detached home for something like £100,000 20 years ago,

His friends all are either still in training, still in uni, or rent.  So we're pretty much on our own to figure out what's decent pricewise! Though I keep converting £ to $, so nothings sounding decent to me, lol. I need to get that converting thing out of my head, that's for sure! 

Mortgage Advisors are regulated by the FSA and MUST offer impartial advice.

My boyfriend is a journalist on a broker focused mortgage mag (as opposed to a consumer focused mag) and he has furnished me with a list of reputable brokers, if that would be of any use to anyone.

He also wrote an article on how renting is currently cheaper than buying in some areas of the UK, including the South East.  Needless to say, we rent!

Vicky

We live in Kent.  On our street, there is a 3 bed Victorian terrace for sale, very much like our house.  It's asking price is £169,995.  There is another one asking offers in excess of £140,000.  I can guarantee there is not £30,000 difference between these houses!  Right next to the £169,995 one are two identical houses for rent - both renting for £595.  We bought our house for £129,995 two years ago and we are paying more than that in mortgage.

So if we were in the market now instead of two years ago, we would probably look to renting on this street rather than buying.

What part of Kent are you in? If you don't mind my asking. My fiance lives in Sidcup(not sure if you know where that is) and whenever I search I can't really find a 3 bedroom house under £200,000! I did find one for £130,000 but that was because it basically needed heavy remodelling and updating. Your post gives me new found up I can find a 3 bedroom house for under £200,000! ;-D

We're in the Medway (post codes start with ME) area, which is further out from London than Sidcup, but on the same train line.  Maidstone is a bit further than us (covered by ME post codes as well) and more expensive.

You can find a three bedroom house for under £200,000 in a lot of areas.  Just depends on where you want to/need to live!   

Well, my co-workers bought a small 2 bed terraced house here in the grotty section of Cambridge two years ago for 137,000.  The same house across the street just went on the market for 210,000.  It is small, sort gross, in a bad part of town with no real garden. 

We are never going to get a house.  If we had been together two years ago, maybe, but not now.

Depending on what you want to buy where you want to buy in some areas birmingham upwards you can get 3 bed house for the figure you have, down south its harder but if you look for something that requires a face lift you can get a bargin and a good way to earn more on the property, thats what my wife did and she has done well out of both houses she has and they have been 4 and 5 bed houses with good size gardens, it really depends what you want and what your pocket and (the bank) will let you borrow.


Indy

My fiance lives in Sidcup(not sure if you know where that is) and whenever I search I can't really find a 3 bedroom house under £200,000!

I applied for my provisional driver's license in Sidcup, it's not too far from Bromley where we lived with MIL when we first moved over here.  It's fairly expensive around there, Bromley is expensive borough (or is it in Bexley?) and I understand Chiselhurst to be very expensive and posh.  It's got good transport links into London.  I imagine to find a cheaper place you'd have to move further out into Kent around Medway or south towards the coast.

For Gatwick, you might consider Brighton, it's by the sea and a city with lots of interest although I suspect it is quite expensive as well.  I think the trains between Gatwick and London go through Croydon so if you are car-less then you might considered somewhere along there.  Sussex and Surrey are pretty expensive on the whole so it may be difficult to find a house in your price range that isn't falling down!

Yeah, it's in Bexely. It does tend to be pretty expensive there. We're looking into Brighton right now which actually seems to be one of the cheaper areas i've looked. My fiance has a car but on the off chance I decide to drive over there it'll be good to have a train somewhere near for him to take.

He's trying to talk me out of considering renting right now as I type this. :p

If you hate paying rent to a landlord then how do you feel about paying interest to a bank?  Compare listing prices of properties for sale with rents for similar properties and use the following simplified formula:

Rental cost per year = Rent * 12
Ownership cost per year = Interest rate * property price

(I don't use mortgage payment because a part of mortgage goes towards equity which is not a cost but stored savings; I apply interest to whole price not just amount mortgaged because of lost interest earned on savings used as downpayment)

If you think property values are falling, stagnant, or even just slightly rising you are better off renting.  Especially if you consider fixed costs like mortgage fees, legal fees, stamp duty, etc.

Also, someone mentioned that interest rates were trending upward.  FALSE!!!  Bank of England dropped rates in December and just dropped rates again last week and most expect further drops later in the year.  No one can predict with certainty what will happen but the financial markets are expecting further cuts and some were surprised the Bank of England didn't drop rates even more last week.  Two impacts of rate cuts:  (1) it lowers mortgage costs as banks charge lower interest (2) it may stop the drops in property values as more people can afford to buy due to lower mortgages.

If you do decide to buy, I would start off giving very low offers, 10-15% below asking price.  In a market like this you may just get away with it!

Useful links on Market Trends
(look at last few months which show decreasing trend, not annual movement)

http://www.rightmove.co.uk/template/publicsite%2Caboutus%2CRTPRArchive.vm
http://www.nationwide.co.uk/hpi/review.htm
http://www.hbosplc.com/economy/quarterlyregionalcomments.asp
http://www.hometrack.co.uk/commentary_survey_280108.aspx

My  only advice would be to go for an interest only mortgage. If you are here long term then think long term - over a 20 or 30 year period the hiouse is likely to double in value as they have done on average every 10 yrs over the last 40 yrs. Go interest only as your payments will be less and you can always make lump sum capital payments or swiitch to a repayment mortgage later on.

My  only advice would be to go for an interest only mortgage.

I'm curious, are you any kind of a financial or mortgage advisor cause if not, when giving advice like that, a disclaimer would be in order.

Ashy, do not do this unless you're completely and totally sure you know what you're doing. If gambling on the real estate market was such sure thing, everyone would be doing it. You can hit a period of stagantion (which has happened) and you've basically just been paying rent on a house for however many years which you said yourself you're not keen to do. I hope Vicky chimes in cause her boyfriend is a mortgage expert so she'll correct me if I'm wrong.

Dan reports what mortgage experts say, he would never give advice himself other than to see a good independent broker.

But looking through this week's magazine, it is clear that this is a crunch time for the industry.  Northern Rock have ended up in trouble partly due to issues with the sub-prime industry.  The number of mortgages granted fell last month.  And a number of large providers have withdrawn 100 per cent or 95 per cent mortgage packages.  All this tells me (not an expert) that there is a confidence issue, and if the brokers and lenders are lacking in confidence, that leads me to think the consumer should be wary. Mortgage lenders are predicting a rise in repossessions this year.

Vicky

English Bloke, I appreciate the advice.

Mort, no, I am not keen on paying rent and I really don't like the idea of interest only. I've only just turned 22 and I admittedly am completely ignorant when it comes to the subject of finances and mortgages. I really am not comfortable with the name interest only. All I know of interest is from credit cards and I know I pay my Amex off 100% every month to AVOID paying interest. I know it probably doesnt have anything to do with interest only mortgages but it still makes me feel uncomfortable, and I generally stick to my gut feelings because thus far, they've been correct!

Hiya!

Ashy - I'd say DYOR (do your own research) when it comes to making this biggest of financial decisions. Interest only mortgages do have their place, its whether or not it's suitable for your own situation where the evaluation comes in.

Englishbloke - Whilst I don't have a crystal ball and theoretically anything can happen, the likelihood of house prices doubling is a possibility but one I'd doubt really would happen (unless some economic changes take place) the gap between realistic income levels to the cost of basic's such as housing means a starter studio would on average cost around £200K and a 3 bdr house close to £400K !! if salary levels jump from the current £23K average it means to afford a place with traditional 3.5 salary multipliers, they'd have to go up to around £100-120,000 p.a.  I doubt that would ever happen!

The housing market is currently going through a 'correction' of sorts, the hope is a gradual reduction to more realistic price levels - even then, if the prices were to reduce overall by as much as 25% - it still puts home ownership out of the reach of the vast majority of the upcoming UK population.

It's a mess of a situation and only time will tell what happens - until then, the best anyone can do is research which options suit them best if they want to buy and go along with that.

Cheers, DtM! West London & Slough UK!