My girlfriend and I are looking at taking the plunge into the housing market this summer – by then we’ll have £15,000 saved which is 10% of a £150,000 house. Of course, I’ll seek professional advise closer to the time and reserve the right to hang on if we feel prices are going to keep dropping significantly (which means our deposit will be bigger too), this is just musing as I’m at work with very little to do.

How much can you knock off an asking price these days? We’re looking at £160,000 houses assuming we could knock them down to £150,000. A little optimistic?

Is your deposit and mortgage meant to cover the solicitors fees, surveys etc or do you need a separate pot of money for that?

Any other interesting interjections appreciated

Tick

You might not be able to get a 90% mortgage!

As with Doosuck.

You might not be able to get a 90% mortgage!

Too true!

Fees, stamp duty etc obviously have to come out of your saving- we were offered the ‘opportunity’ to tack it onto our mortgage, but of course you pay interest on it- these days, best to assume that you will need the deposit plus enough cash to cover the fees etc.

If your income (combined I guess) is less than 60k, I think all first time buyers are now eligible for the shared ownership stuff – a bit of a kick in the teeth for those that had to save a huge amount for their mortgage 😈 but it could make things a lot easier for you if the kind of things that are being offered suit your needs.

There arae 90% mortgages available, but you’re right, we may not be accepted for one. I’m crossing my fingers that Northern Rock and Lloyds will step up their lending by the Summer.
I was afraid we may need to raise extra money for the extra fees. It all seems a bit unrealistic at the moment. Your average FTB is expected to have a 15% deposit lying around with enough left to cover everything else. We’re both graduates with jobs with good prospects and seem to be financial pariahs!

Also, how much does elec, gas, water, council tax, phone, home insurance etc come to each month for most of you? I know how much I have each month but don’t know how much to put aside for these.

Council tax £100 p/m
Gas & Electric £120 p/m
Water £30 p/m
Phone £20 p/m
Building & Contents £25 p/m

Council tax is more than my mortgage at the moment…!!!

Gas and leccy depend hugely on the house you’re in. Gas is £30/mo for us in our new house, a colleage in a 12 year old house pays £120.

Ours are;

CT £120
Gas & Electric £134 (but we have an open plan downstairs that costs a lot to heat)
Water £25 – get a meter fitted they do it for free and it’s much cheaper if there is only 2 of you
Insurance £37 – (M&S so covers bikes!)
Our phone is £9.99 rental and free evening and weekend calls, but is lumped in with our tv and broadband as well.

don’t forget to budget for life insurance to cover your mortgage too, we pay £20 a month.

It depends on the seller. If they need to sell then you can get more of a reduction. It also de[ends on the exact house and location. The 20% ish falls seen in the media do not mean that every house will have fallen by that much. It seems to mostly be flats that are plumeting, not 3 bed family homes (in Newcastle at least).

Remember 10% of the asking price is not a bargain if it was 20% over priced in the first place. DO your home work find out what other houses have sold for over the last few years and try and work out what it is worth based on a drop from peak price in summer 2007 (try houseprices.co.uk)

There is a wealth of advice on this type of stuff on housepricecrash.co.uk. AS the title suggests thoug it is biased.

My GF and I are currently looking for houses we’ve approached one owner on a significant reduction and they said no. We are really struggling to find anything we like but are in no rush so just keep on looking till we find the right house at the right price.

We’re both graduates with jobs with good prospects and seem to be financial pariahs!

You’re not financial pariahs. It’s just a quesiton of timing – you have arrived into the housing market when the lending market is fecked.

You will surely help yourselves if you are able to save additional amounts to cover the costs of buying (fees, searhces, survey, stamp duty, etc.) because that leaves your £15k intact.

Also, make sure that you have no other significant debt (i.e. credit cards, etc.).

Bikemonkey,

There is a potential way that you can achieve the equivalent of a 15% deposit with only 10% in actual cash. It’s too complicated to explain on here, but you’re welcome to drop me a line (email in profile) and I can talk you through it on the phone. You will need extra cash for things like conveyancing, valuation fees etc, but it varies from lender to lender.

Stu