how on earth will we ever buy a place?!!

Ok, I'll admit it. I've got "buyers envy" (ie my brother-in-law and his wife have just bought their first house and now I want one too). 

Our first wedding anniversary is coming up in a few weeks, as well as my first anniversary of moving here and I guess I'm just getting antsy with our furnished rental. It's nice, but we're almost 27 and I just feel like we should be at least in a position to consider buying.

My question though is, how does one even get started? Our  biggest problem is debt. We have absolutely no savings because back when we were dating, we spent every last penny on plane tickets. When you make $800 a month, spending $500 on a ticket 2-3 times a year doesn't leave much to save. As a result, we've spent the first year of our marriage living paycheck to paycheck and just barely making it work. We've tried saving, but necessary things like groceries and petrol just eat up all of our money.

There's also the problem of credit card debt. We've almost completely stopped using them since January and have recently moved DH's to a 0% interest card. That said, we've still got thousands to pay back and will likely take us another 4-5 years to pay back. Sigh. How do people do this? Surely we're not the only people in this situation? Is it even possible to get a mortgage with debt like this? It feels like such a losing battle.

It certainly is difficult to save up enough to buy a house over here, especially with the ever-increasing house prices.  But you are still very young and have time.  It may not happen as fast as you'd like but with careful spending and a savings plan its probably a goal you can reach.
It does seem at times that its impossible to work long enough and save fast enough to get ahead of the game. 
My DH and I are retired and have resigned ourselves to living in a rented flat.  Ay least we don't have upkeep and repairs to worry about at this stage of our life.
Good luck to you, I hope your dreams come true!

I think sooo many factors influence whether or not someone can afford to buy a house here.  We're quite lucky in that we both make good money (for the North) and that house prices here are generally lower -- I really can't see how anyone on an average salary could afford to buy anything decent down south without having to borrow from family or go into major debt.  Even up here, we were only able to seriously consider buying once I started working full time.  If I was still at my part-time job, we'd still be renting or would've had to settle for a fixer-upper or a flat.

Our first focus was getting rid of debt.  We kept a close eye on our credit card balances and paid off as much as we could each month and transferred balances to 0% cards whenever possible.  DH kept a little tally sheet on the calendar so we could watch the debt go down.  Once the debt was gone, we paid as much as we could into savings and then we started watching the savings go up!    I think, overall, it took us 9 months to save enough for a deposit. 

When you do get around to buying, I'd suggest looking into new builds.  I originally thought we couldn't afford a new house, but in the end it worked out cheaper as they gave us a £10k discount as first-time buyers.  In addition, we haven't had to pay to gut the place or redecorate, etc., which we certainly would have had to do if we'd bought an older house. 

Now, of course, we're in debt again because we moved from a furnished house and had to buy new EVERYTHING.  Still, Ikea helps!    We're back to paying as much as possible each month and should be debt-free in a few months and we'll go back to saving.

I guess your options are:

*budget -- really analyse where your money is going and see what you can cut out...once you've made your budget, stick to it

*pay off debt -- make that your first priority -- if you have to go without luxuries for a little while, it'll be worth it

*look for higher salaries/ask for raises/take second jobs

*move -- house prices vary so much within this country...moving 50 miles away could mean you'd be able to buy sooner

*think about what you really want -- I was WAY against buying a flat or a terraced house, but now I know I was being unreasonable.  If all you can afford is a flat, buy it.  I'd rather be on the property ladder in a flat that throwing my money away in a big rented house!

*use public transport, if possible -- neither DH nor I drive, so we don't have the added expense of petrol/insurance/maintenance, etc.

Thanks for the suggestions. We're already living on a pretty tight budget, which we barely get by on. I think our biggest problem has been me not finding a good, full-time job this past year. Out of the past 11 months, I've spent about 4 of them unemployed. I've also just quit my job to go back into full-time education to try and help me get a real job in my journalism field over here. Something that didn't happen when I first arrived. So, for the next 3 months or so I'm back to being unemployed and we'll be living off DH's salary. He's a teacher as well so he doesn't make much. Until I finish this postgraduate course and can finally find a proper journalism job, then I think we'll just have to carry on as we are.
Sigh. I guess we'll just have to accept the fact buying is out of our reach for at least the next few years.

Have you talked to a mortgage advisor? There are lots that you can talk to for free. In the end that's the only way to know if you qualify or not. If it were me, I'd make an appointment. All they can do is say no, but they might just surprise you and say you qualify for something. Now whether that something would stretch to what you need in your area is another thread  but I am a bib believer that it can't hurt to ask!

We just bought earlier this year and it feels great to be on the "property ladder". BTW - there are 100% mortgages out there as well if you don't have a deposit. You never know, maybe you could qualify for a small studio flat while you finish your degree. Then by the time you are working, maybe the market will have risen, you might make some money on it and that along with your earning potential might allow you to get something bigger/better.

good luck!

many people ignore the flip side of this first-time buyer/still-booming housing market "problem" - and it's that by buying a home, while obviously getting into debt, within 6-12 months you'll already have a nice amount of equity in the home by virtue of owning it. you'll probably make more in one year than you will from your full time job.

i purchased a home a few yrs ago w/ a 100% mortage and paid interest only - i couldn't afford it by any means looking at my salary, but because i bought during a boom, i had instant equity within a few days. within a month i was able to release an extra 20K in equity which i used to make the monthly mortgage payments and pay off credit card debts. i hadn't even exhausted the 20K before i sold it some months later and made a further 30K profit on top of that. i never once made a single mortgage payment using my own money from salary. the house paid for the house and then some!

You're not the only ones chomping at the bit to buy a house. Both of us at 27 had nothing, DH had just gotten out of the Navy, we had a six month old baby and we moved back to our home state with not more than $800 in the bank, our furniture and our one car, no insurance since the Navy cut ours off the day he got out and no jobs. We lived with my/his parents for the first six months trying to get settled. I got a job and he went back to school full time. It has been a struggle because he has only worked part time and we have been living in a condo for the past four years. It is a large 2 bed/2 bath condo in a quiet neighborhood in a great location so we are not really complaining. He graduates in December and we are now looking into buying a house and the fever has started to really set in to be in one, especially with our daughter who is now about to turn five. We  cannot wait to be in our own house with our own yard. We have also used the past four years to pay off our credit card debt and will be debt free by the time he graduates. At the beginning it seemed like forever away but now it seems like the time flew by.

The time for you to buy a house will be here sooner than you think, and I understand the feelings you have right now about buying. I hope you find  a house you both love. Good luck!

Hi TenthPlanet!

You must remember that 'generally' speaking, nowadays house prices are NOT rising to the extent you'll have a nice amount of equity in it say in a year or two's time. Just like you say, 'a few years ago' ...

thats exactly it, in the UK a few years ago that was relevant and indeed quite possible. I did the same myself ! nowadays not so, just this AM I get an email proclaiming I've been specially invited to check out some properties in Keston Kent which is 3 miles north of Biggin Hill Airport 4 miles or so south of Bromley so around the South East suburbs of London.

Want to be shocked at the pricing?

2 bed apartments FROM £400 grand
3 bed apartments FROM £850 grand
(heres the link - http://www.bryant.co.uk/holwood/index.html)

now is that ludicrous pricing or what?! I know its not affordable for 99.9% of 1st time buyers - but even at the entry level pricing is such that you'll get into debt and not even see any equity in it for a good few years and thats IF the price stays as it is! in the small chance it'll rise 'signnificantly' it wont be by much and I think in a few years, the values will have probably slowly receeded, thus making no financial sense at all - only 'i'm a homeowner at least sense.

It's only abroad that what you say can be achieved realistically nowadays. which is what I'm currently wanting/doing.

For the other posters - the responses so far are spot on, there is 'some' areas of the UK where home owning is possible and doable by 1st time buyers, it's just the difference between the level of debt and the value of the property is ever so close nowadays, even in relatively 'affordable' areas of the UK.

Good luck to OP - hope you can get something that suits you both fine soon!

Cheers! Dennis! West London & Slough UK!

You know its sad when we are looking forward to moving to the UK so we can afford a house! There is no way we could ever afford a house here in the SF Bay Area. But hopefully, we might be able to pull a small 3 bd cottage in the UK.

Remember also that there are loads of older people who own houses worth well over £100k, but are living in poverty because all their money is in their house, and they don't have liquid assets.

LOL!  New stats out for last year.  Average two bed home in Edinburgh has now hit the £200,000 mark and rising.  Some homes in areas like Sighthill are fetching over £100,000.  Sorry, but I'd rather rent for life than live in Sighthill.

Kaylesh has the right idea, methinks.  Middle of naewhere Fife is starting to look good, commute and all.   

To the OP, you are not alone.  My BF and I are exactly the same age and in the same position.  Any of our friends who own, had help from their parents.  I think I might try the "budget" talk again with the BF, see if we can't seriously start saving.

I don't have much advise, but I feel your pain. We are in a similar situation, except that I turned 40 this year, so I really feel like I should own a house. But I'm in a postgraduate course for a while yet, so we only have the one income. Talking to a mortgage advisor is a good idea. We found out there are mortgages we can get and afford. We almost got a place, but looked at our budget and decided we would have NO money left after the initial payment, and we had several expenses coming up (tuition, for instance) so we are holding off for 6 months or so.

Middle of naewhere Fife is starting to look good,

I think middle of Fife is quite nice, thank you. But its no picnic for first time buyers up here either. Probably better than in the city, however.

There's an academic in our department whose wife is a music teacher. 

They have a budget of £160,000.

They cannot find a decent two-bed flat to buy - one that's not in some dodgy part of town.

It's really a joke.

I don't count on ever owning anything.

TBH, it stopped bothering me long ago.

House prices have become silly in this country in recent years. 

I ended up living where I am now simply because when I returned to England in 1996 it was a place with cheap property and most other areas were simply unaffordable.   It's no palace and I'm still working on it (trying to save enough for some new windows at the moment), but at least it's paid for. 

Picture of Eccles on Sea, Norfolk