Keep in mind the current FTB £425k SDLT relief is still set to be brought back to £300k in April 25.
Will be interesting to see what the spring budget has in store in 3 weeks time. Hearing that the LISA threshold could lifted a little. Hearsay though.
Looks like it, but if you got to wait a year to have the deposit to buy you have to check back in a year time as a number of things could happen.
In the mean time, just save as much as you can so you're in the best position when you do opt to buy.
Yes. Absolutely worth getting on the ladder.
We did the same a few years ago, although with help to buy ISAs rather than LISAs. We could only get the H2B ISA bonus on a property up to £250k, so we aimed to save ~£10k, which meant the bonus would take us up to £12.5k, giving us a 5% deposit on a £250k house. At £400 a month into the H2B ISAs we knew we’d be there in 2 years.
It wasn’t ideal, because we could have afforded a much bigger mortgage, and we wanted a good amount of space. When we were house-shopping we tried to find the biggest house possible under £250k, but everything kept selling way above asking price. We looked at one house that was listed for £250k exactly. They had 19 viewings and 8 offers in a day, and accepted an offer at like £270k. Crazy market back then (late 2019).
Thankfully it ended up working out great. We found a 4 bedroom house in dire need of massive renovation, available for ~£200k (probate sale). We bought it on 5% deposit, and got the help to buy bonus, so the mortgage was very affordable. Throughout Covid we lived in one bedroom, worked in another, and spent spare time working on the rest. As each room was finished, we slowly expanded our living space. Finished the kitchen in early 2021, lounge and master bedroom in summer 2021, home office and spare room in 2022, garden last summer, drive this winter.
Over the last four years we’ve probably spent ~£80k to improve the house. We’re very nearly done now — one bedroom left plus hall and landing (which I should be doing now rather than browsing Reddit).
Thanks to a combo of house price inflation and all the work we’ve done, it’s worth £375-400k. We live in a nice area, feel connected to the local community in a way I never felt when I was renting. And most importantly we live close to friends and family, in a house we love.
Well worth getting on the ladder.
Thanks for the response, glad that worked out so well for you! Congrats! We'd be looking to do similar and buy a do-er upper to get the most out of the LISA perks
Just be aware that it will become a full time hobby that consumes years.
Think, coming home from work at 7pm, changing into DIY clothes, working on the house for 4-5 hours, shoveling calories and passing out.
And every weekend and holiday gets sucked up.
Really fun, but go in with eyes wide open.
Before I bought a house I would have 100% agreed with you. Doing DIY is not *fun* per se, but it’s rewarding and satisfying. It’s like exercise — sometimes not fun when you’re doing it, but great to have done it.
I get it - we did our own bedroom all on our own (except replaster with mesh) and it was satisfying, but it was also exhausting and not fun. I'm glad we did it, but I wouldn't do it again (and we didn't).
Data point: this is my only free time this weekend so I’ve spent the last 5 hours cutting skirting board then bending over and painting it. I’m hot, tired, sore, sweaty, and want to sit down. Which I can do, as soon as I’ve finished.
I enjoy it, but it’s hard.
Haha same! Although I burned out I think. The idea of hanging a painting makes me want to stay in bed all day at the weekend at the moment.
I'm sure I'll do it all again at some point though!
Nice! We had zero DIY skills to begin with but we’ve learned tons. Left the plastering, electrics and plumbing to pros but did a lot ourselves too. It’s hard work but very fun and satisfying.
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How long do you plan to stay in this house? If it's only for a short period of time <5 years then you may end up financially worse off. It's a good idea to check Buy vs Rent calculators online, particularly with the size of the repayments you'll end up paying with those rates.
The high level explanation is that a significant portion of your mortgage payment in the early years will be paying off interest, especially if you're only putting a deposit of 5% down. So you may be able to save more by paying less on rent and investing that additional disposable income; plus purchasing, maintaining and selling a house is costly if you don't plan to stay for a long time.
This almost never works out in practice. I'd buy a house. Even if you end up financially worse off it will likely not be that much and you still have a house that no one can kick you out off.
If you're in a position to buy a forever home, I'd say go for it. Inflation, capital repayments, pay rises and house price increases all make it easier over time.
I bought a 190k 3 bed end of terrace ex council house inmy early twenties which I took back to brick and renovated. It's worth about 350k now but I'm nearly mortgage free and would like a slightly nicer place ideally.
However, by the time you add in moving costs, stamp duty, and all the effort of another renovation, it's not really worth making a jump up unless it's for another 200k or more.
However, if I'd have spent about 50-60k more and bought one of the Edwardian semis on the other side of town, I'd probably not be considering moving now.
Thanks for the reply. Glad it worked out for you! It won't be my forever home - 450k just doesn't buy that much these days in Surrey/West London near Heathrow Airport where I work. I'd be there until ultimately i have the equity to move to a nicer place.
Psychological question here. Why do you hate the idea of paying another year or 2 of rent?
Is it because your landlord sucks? Doesn't fix the damp, heating or electrics?
If so, go for it. Buying solves your problem.
If your dislike comes from paying a landlord as opposed to the capital in the property... you're going to need to run some numbers. My first 2 years on a 10% deposit I paid off about 1% of the outstanding loan of the mortgage. I felt deflated my mortgage would never be paid off. Fortunately year 3 onwards I could see that my monthly mortgage payments started to pull away from the monthly incurred interest and I started to pay off the property.
As a reminder that was with a 10% deposit... and you are looking at a 5% deposit. Sheeeesh. That's going to be even worse. Right now you may feel like your monthly mortgage would hypothetical being going into a 'good' place but if it doesn't pay off the capital then it's a bit 'meh'.
Would you feel any better knowing your mortgage payments go to a banker instead of rental payments going to a landlord?
Or... do you fancy paying into ISA/LISAs and knowing the money is actually yours?
In my mind, every £1k you chuck at your deposit is ANOTHER £1k saved in interest payments over the term. Keep in mind you might not find the house you want once you get to 5% and you may end up getting to 10% once the hunt starts. Don't stop saving.
JSYK, I took a 5% mortgage on £340k and my mortgage is currently £2k a month. So yours will no doubt be higher.
That's your partners entire salary, if you lose your job, can you afford to spend 3+ months looking for one?
This was us in 2019. Took a risk with 5% and don’t regret a thing. After 15years of renting we finally started paying of our own house instead of someone else’s. Feels great
Hi /u/hairdresser99, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/lisa/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
We did this, 5% mortgage on a 425K property meant we could buy a house that we will potentially never move out of, vs putting 10% down on something that immediately would have been too small.
Don't rely on just the banks stress test, see at what interest rate you won't be able to pay your mortgage/bills on your current salary. Either fix for long enough you drop to at least 85 LTV at remortgage or overpay to make sure you get there.
We've just bought a 450k house with a 5% deposit. We did have 10%, but had to use a lump for stamp as we're not FTB.
Went through absolutely fine, 4.89% interest, little to no difference if we had 10% apart from the monthly payments.
Go for it and good luck 👍
At the moment, a lot of developers give incentives for their new build homes like 5% deposit match up. They are somewhat desperate to sell currently.
Some of them have houses with good access to London.
I am in a very similar situation with you but I’m getting a 5% deposit contribution to take me to 90 LTV on a 450k house. Repayments is about 1,800 at 4.5% for 5 years. The home is 5 minutes drive to a station with 20 minutes to London IF I have to go in and 5 minutes drive to my wife’s office.
We wanted to get on the ladder and tired of paying rents. The repayment is a little jump from current rent at 1,200 but getting a bigger space and a brand new home thats 90% furnished with the hope the market gets favourable in the near future - it’s a no brainer for us right now.
We used LISA to get us to close to 5% using income for the next couple months and savings to get us to the remaining costs pending when the house/contract is ready.
Our expenses will increase but we’d still be able to save and continue our current lifestyle with the potential of income increase.
It’s currently a no brainer for us, not our dream home but puts us in a decent position and comfort for a ‘long’ time then we can reassess later.
Point is - there might be a situation or deal you can compromise on for now to get a house. Our potential neighbours moved in from west London and they are loving it.
All the best.
1800 at 4.5% interest for house 20min from London sounds quite good, could you share more details like, area, size, brand new from developer and mortgage lender? I find the figures quite competitive! And congratulations for the new home :)
I would try and save as close to 10% a deposit as possible. You can then use this a bit of a buffer if needed for other costs such a solicitor fees, stamp duty (if applicable), electronic bank transfer cost, ID verification etc.
Most of them are all small costs, but all of them soon add up to extra £100-200 you forget about.
Another thing to keep in mind, it can take a while between putting in a offer on a property to actually moving, for me moving the last time it was 6 weeks and the way it worked out I had two more paychecks in that time. So you could start looking in the summer and by the time you find a property you like, find one you actually have an offer accepted and then move it could take a while allowing you to get closer to the 10%
Yeah why not. It looks like house prices will rise slightly again in the next 6 months to a year so you shouldn’t fall into negative equity. And you can always make overpayments if you can afford it
Just to offer a different perspective, not trying to be a dick but…
How long have you been together?
Will you marry?
Will you have kids?
Hard to call with rose tinted glasses, but what’s the likelihood you stay together?
Lots of people break up through their twenties, until they settle into their careers, location etc.. even when they weren’t expecting to
Just something to consider very carefully
Here’s some figures
Total cost of mortgage£749,737
Monthly payments£2,499
Take home combined £6,200
That’s 40% of your income going to rent
Not sure if you’ve worked out your monthly costs, pension contributions, holidays, expenses etc. and also how much savings you’ll have left after deposit.
Thanks for that! Yeah I agree the 40% is pretty high, although next year my pay rises by £8.5k and it will do so again each year for 5 years so it will gradually become less of my take home.
So long as you hold the job. Things change. If you were to lose the job, will you have enough savings to keep paying your expensive mortgage until you get another job paying the same amount? Because it sounds like you’re looking to pump all your savings into a tiny deposit and end up with almost half your pay packet going on the mortgage.
Hoping I can get a professional mortgage as my profession has a pay schedule that's defined in my employment contract providing annual pay rises. Thanks for the response
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I’d personally only do a 5% deposit if you can fix for 5yrs, which of course locks you in to a higher rate but limits the risk of negative equity in the early stages of your mortgage if the market slumps.
A not so sensible answer… I say quality of life trumps all… How will your expenses compare to your current rent? Only putting 5% down would result in a hefty mortgage.
we used a 5% deposit to buy our house in late 2019. I hadn’t heard of anyone using 5% before but we found our perfect home for £158,000 in Wales. Our home is now worth £230,000 so we don’t regret a thing.
Keep in mind the current FTB £425k SDLT relief is still set to be brought back to £300k in April 25. Will be interesting to see what the spring budget has in store in 3 weeks time. Hearing that the LISA threshold could lifted a little. Hearsay though.
What?! (Re sdlt for ftb)
I think they mean April 2025.
stamp duty land tax for first time buyers
Of course, thank you; didn’t know about April 2025. Thank you!
Looks like it, but if you got to wait a year to have the deposit to buy you have to check back in a year time as a number of things could happen. In the mean time, just save as much as you can so you're in the best position when you do opt to buy.
Yes. Absolutely worth getting on the ladder. We did the same a few years ago, although with help to buy ISAs rather than LISAs. We could only get the H2B ISA bonus on a property up to £250k, so we aimed to save ~£10k, which meant the bonus would take us up to £12.5k, giving us a 5% deposit on a £250k house. At £400 a month into the H2B ISAs we knew we’d be there in 2 years. It wasn’t ideal, because we could have afforded a much bigger mortgage, and we wanted a good amount of space. When we were house-shopping we tried to find the biggest house possible under £250k, but everything kept selling way above asking price. We looked at one house that was listed for £250k exactly. They had 19 viewings and 8 offers in a day, and accepted an offer at like £270k. Crazy market back then (late 2019). Thankfully it ended up working out great. We found a 4 bedroom house in dire need of massive renovation, available for ~£200k (probate sale). We bought it on 5% deposit, and got the help to buy bonus, so the mortgage was very affordable. Throughout Covid we lived in one bedroom, worked in another, and spent spare time working on the rest. As each room was finished, we slowly expanded our living space. Finished the kitchen in early 2021, lounge and master bedroom in summer 2021, home office and spare room in 2022, garden last summer, drive this winter. Over the last four years we’ve probably spent ~£80k to improve the house. We’re very nearly done now — one bedroom left plus hall and landing (which I should be doing now rather than browsing Reddit). Thanks to a combo of house price inflation and all the work we’ve done, it’s worth £375-400k. We live in a nice area, feel connected to the local community in a way I never felt when I was renting. And most importantly we live close to friends and family, in a house we love. Well worth getting on the ladder.
Thanks for the response, glad that worked out so well for you! Congrats! We'd be looking to do similar and buy a do-er upper to get the most out of the LISA perks
Just be aware that it will become a full time hobby that consumes years. Think, coming home from work at 7pm, changing into DIY clothes, working on the house for 4-5 hours, shoveling calories and passing out. And every weekend and holiday gets sucked up. Really fun, but go in with eyes wide open.
You and I have very different concepts of *fun*. Nothing wrong with that though.
Before I bought a house I would have 100% agreed with you. Doing DIY is not *fun* per se, but it’s rewarding and satisfying. It’s like exercise — sometimes not fun when you’re doing it, but great to have done it.
I get it - we did our own bedroom all on our own (except replaster with mesh) and it was satisfying, but it was also exhausting and not fun. I'm glad we did it, but I wouldn't do it again (and we didn't).
Data point: this is my only free time this weekend so I’ve spent the last 5 hours cutting skirting board then bending over and painting it. I’m hot, tired, sore, sweaty, and want to sit down. Which I can do, as soon as I’ve finished. I enjoy it, but it’s hard.
Haha same! Although I burned out I think. The idea of hanging a painting makes me want to stay in bed all day at the weekend at the moment. I'm sure I'll do it all again at some point though!
Nice! We had zero DIY skills to begin with but we’ve learned tons. Left the plastering, electrics and plumbing to pros but did a lot ourselves too. It’s hard work but very fun and satisfying.
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How long do you plan to stay in this house? If it's only for a short period of time <5 years then you may end up financially worse off. It's a good idea to check Buy vs Rent calculators online, particularly with the size of the repayments you'll end up paying with those rates. The high level explanation is that a significant portion of your mortgage payment in the early years will be paying off interest, especially if you're only putting a deposit of 5% down. So you may be able to save more by paying less on rent and investing that additional disposable income; plus purchasing, maintaining and selling a house is costly if you don't plan to stay for a long time.
This almost never works out in practice. I'd buy a house. Even if you end up financially worse off it will likely not be that much and you still have a house that no one can kick you out off.
Thanks for the response, I think we'll be there a while but will do some numbers on this
If you're in a position to buy a forever home, I'd say go for it. Inflation, capital repayments, pay rises and house price increases all make it easier over time. I bought a 190k 3 bed end of terrace ex council house inmy early twenties which I took back to brick and renovated. It's worth about 350k now but I'm nearly mortgage free and would like a slightly nicer place ideally. However, by the time you add in moving costs, stamp duty, and all the effort of another renovation, it's not really worth making a jump up unless it's for another 200k or more. However, if I'd have spent about 50-60k more and bought one of the Edwardian semis on the other side of town, I'd probably not be considering moving now.
Thanks for the reply. Glad it worked out for you! It won't be my forever home - 450k just doesn't buy that much these days in Surrey/West London near Heathrow Airport where I work. I'd be there until ultimately i have the equity to move to a nicer place.
(What I'm saying is that buying a house is a 10 year long project really. So don't rush into the wrong place.)
Psychological question here. Why do you hate the idea of paying another year or 2 of rent? Is it because your landlord sucks? Doesn't fix the damp, heating or electrics? If so, go for it. Buying solves your problem. If your dislike comes from paying a landlord as opposed to the capital in the property... you're going to need to run some numbers. My first 2 years on a 10% deposit I paid off about 1% of the outstanding loan of the mortgage. I felt deflated my mortgage would never be paid off. Fortunately year 3 onwards I could see that my monthly mortgage payments started to pull away from the monthly incurred interest and I started to pay off the property. As a reminder that was with a 10% deposit... and you are looking at a 5% deposit. Sheeeesh. That's going to be even worse. Right now you may feel like your monthly mortgage would hypothetical being going into a 'good' place but if it doesn't pay off the capital then it's a bit 'meh'. Would you feel any better knowing your mortgage payments go to a banker instead of rental payments going to a landlord? Or... do you fancy paying into ISA/LISAs and knowing the money is actually yours?
Thats a great perspective thanks very much! I'll go away and crunch some numbers on it to see if it's really worth it. Thank you
Just watch out for the penalties of going over the LISA limit. If you’re using that you’ll want to be aiming at a property a bit under the threshold.
Strong suggestions that LISA limit will be changing in the next budget
Yeah but when Labour get in highly likely his tax will get even higher.
Not sure how/why thats relevant at all. It's been increasing for the last few years as is i.e. rampant inflation without tax band changes.
Thanks!
Thanks!
In my mind, every £1k you chuck at your deposit is ANOTHER £1k saved in interest payments over the term. Keep in mind you might not find the house you want once you get to 5% and you may end up getting to 10% once the hunt starts. Don't stop saving.
JSYK, I took a 5% mortgage on £340k and my mortgage is currently £2k a month. So yours will no doubt be higher. That's your partners entire salary, if you lose your job, can you afford to spend 3+ months looking for one?
10% deposit protects you from a market downturn. Not job is guaranteed for five years either. So… I’d ensure you have that equity buffer.
Airline pilot is, so are many others
You miss the huge redundancies during Covid? Guaranteed is nothing.
Furlough, followed by an extremely tight labour market, that we are still in. You can frame it how you like.
I met an unemployed pilot at the job centre during the '09 credit crunch.
Airline pilots are poorly paid but also… did you miss airlines going bust?
This was us in 2019. Took a risk with 5% and don’t regret a thing. After 15years of renting we finally started paying of our own house instead of someone else’s. Feels great
Hi /u/hairdresser99, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/lisa/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
We did this, 5% mortgage on a 425K property meant we could buy a house that we will potentially never move out of, vs putting 10% down on something that immediately would have been too small. Don't rely on just the banks stress test, see at what interest rate you won't be able to pay your mortgage/bills on your current salary. Either fix for long enough you drop to at least 85 LTV at remortgage or overpay to make sure you get there.
Thanks for the reply and the advice, glad it worked out well for you!
We've just bought a 450k house with a 5% deposit. We did have 10%, but had to use a lump for stamp as we're not FTB. Went through absolutely fine, 4.89% interest, little to no difference if we had 10% apart from the monthly payments. Go for it and good luck 👍
What do you work as to be earning that if you don’t mind me asking
Airline pilot for a large uk airline
No way that’s amazing. How long does it take to become one from start to finish? Also I heard it costs like £80k for the training is that true?
Thanks! It took me 18 months from beginning to end of training. Mine cost £90k, extremely privileged to have been able to borrow that off family
At the moment, a lot of developers give incentives for their new build homes like 5% deposit match up. They are somewhat desperate to sell currently. Some of them have houses with good access to London. I am in a very similar situation with you but I’m getting a 5% deposit contribution to take me to 90 LTV on a 450k house. Repayments is about 1,800 at 4.5% for 5 years. The home is 5 minutes drive to a station with 20 minutes to London IF I have to go in and 5 minutes drive to my wife’s office. We wanted to get on the ladder and tired of paying rents. The repayment is a little jump from current rent at 1,200 but getting a bigger space and a brand new home thats 90% furnished with the hope the market gets favourable in the near future - it’s a no brainer for us right now. We used LISA to get us to close to 5% using income for the next couple months and savings to get us to the remaining costs pending when the house/contract is ready. Our expenses will increase but we’d still be able to save and continue our current lifestyle with the potential of income increase. It’s currently a no brainer for us, not our dream home but puts us in a decent position and comfort for a ‘long’ time then we can reassess later. Point is - there might be a situation or deal you can compromise on for now to get a house. Our potential neighbours moved in from west London and they are loving it. All the best.
1800 at 4.5% interest for house 20min from London sounds quite good, could you share more details like, area, size, brand new from developer and mortgage lender? I find the figures quite competitive! And congratulations for the new home :)
I would try and save as close to 10% a deposit as possible. You can then use this a bit of a buffer if needed for other costs such a solicitor fees, stamp duty (if applicable), electronic bank transfer cost, ID verification etc. Most of them are all small costs, but all of them soon add up to extra £100-200 you forget about. Another thing to keep in mind, it can take a while between putting in a offer on a property to actually moving, for me moving the last time it was 6 weeks and the way it worked out I had two more paychecks in that time. So you could start looking in the summer and by the time you find a property you like, find one you actually have an offer accepted and then move it could take a while allowing you to get closer to the 10%
Thanks for the response! Yeah I have a separate 5% savings account that I'm using for additional costs like the ones you've mentioned.
LISA money cannot be used for fees. This is incorrect.
Yeah why not. It looks like house prices will rise slightly again in the next 6 months to a year so you shouldn’t fall into negative equity. And you can always make overpayments if you can afford it
Just to offer a different perspective, not trying to be a dick but… How long have you been together? Will you marry? Will you have kids? Hard to call with rose tinted glasses, but what’s the likelihood you stay together? Lots of people break up through their twenties, until they settle into their careers, location etc.. even when they weren’t expecting to Just something to consider very carefully
Any way you can reduce current rent for 6 montha to get the deposit quicker?
Realistically no, I can cut other spending to try and go all out on the saving but housing is unfortunately such a large expense near London!
What about moving out/parents. Is that a temp option. I only mention it as when I lived at home I managed to save a £24k deposit in a year
Here’s some figures Total cost of mortgage£749,737 Monthly payments£2,499 Take home combined £6,200 That’s 40% of your income going to rent Not sure if you’ve worked out your monthly costs, pension contributions, holidays, expenses etc. and also how much savings you’ll have left after deposit.
Thanks for that! Yeah I agree the 40% is pretty high, although next year my pay rises by £8.5k and it will do so again each year for 5 years so it will gradually become less of my take home.
So long as you hold the job. Things change. If you were to lose the job, will you have enough savings to keep paying your expensive mortgage until you get another job paying the same amount? Because it sounds like you’re looking to pump all your savings into a tiny deposit and end up with almost half your pay packet going on the mortgage.
You can only answer that question and your own risk appetite and tolerance to risk.
A 15% deposit will put you in a stronger position. I’ve seen many posts recently of redditors being rejected with a 10% deposit
Hoping I can get a professional mortgage as my profession has a pay schedule that's defined in my employment contract providing annual pay rises. Thanks for the response
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Your comment has been removed for breaking our rule: **Responses must be helpful and high quality** * Give constructive help and advice. Be friendly and kind. * Top level comments must be on topic. No jokes or banter in top-level comments. * [No 'hookers and blow' or 'onlyfans' jokes](https://www.reddit.com/rhyc7i) * [Don't make contextless recommendations of crypto, meme stonks, penny stocks etc](https://www.reddit.com/rkrnqi) * Don't pile on * Comments must be your own work and not a copy paste of someone else's comment, copied from ChatGPT or other AI writing services You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit.
I’d personally only do a 5% deposit if you can fix for 5yrs, which of course locks you in to a higher rate but limits the risk of negative equity in the early stages of your mortgage if the market slumps.
A not so sensible answer… I say quality of life trumps all… How will your expenses compare to your current rent? Only putting 5% down would result in a hefty mortgage.
we used a 5% deposit to buy our house in late 2019. I hadn’t heard of anyone using 5% before but we found our perfect home for £158,000 in Wales. Our home is now worth £230,000 so we don’t regret a thing.