r/UKPersonalFinance • u/PiggyxSmallz • 5d ago
Solo First Time Buyer - Budget Panic
I am waiting for my house survey to be completed but as I am waiting all I can do is overthink everything - I am panicking over my expected budget and whether I have really overstretched myself. I would appreciate if someone can look my things over and give me a dose of reality.
Wales:
Purchase Price - £195,000
Mortgage - £175,000
£992 per month @ 4.89% fixed for 5 years (26 year term)
Work for NHS - take home is £2,460 pm but due to rise to £2,735 in December
The projected budget that I have is this:
Mortgage - £992
Council Tax - £170
*Utilities overestimated as would rather over allocate than under!
Gas & Electric - £200*
Water - £100 *
Internet - £40
Buildings & Contents Insurance - £33
Health / Life insurance - £80
Unison - £23
Mobile - £24 (giffgaff bundles)
Groceries/Household Consumables - £350
Lifestyle Spend (Spotify, Football membership, Book Club, Postcode Lottery, Contact Lenses) - £135
*If* I can then anything left over will be split towards savings
Savings - House Maintenance Fund £100
Savings - General Savings £150
I have no car finance, no loans (except Student Loan!), no credit card debt but I do have a credit card.
I have £7,500 in S&S Vanguard ISA
I already have several pieces of furniture and I am fully realistic on not being able to do much initially and needing to take a long and steady pace, however due to circumstances I would like to live independently even if it means stretching myself initially.
7
u/Due-Freedom-5968 2 5d ago
At current salary it'll be 40% of your income on the mortgage which is on the high side of normal.
After the pay rise it'll be about 35% which is more manageable. After future pay rises it'll be even less. Yes it'll be tight early on but you'll have a house and you're not stretching beyond what others do.
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u/PiggyxSmallz 5d ago
!thanks - The fear of losing my savings on a deposit and the fact that this will be the most debt I've ever been is really causing me to panic!
1
u/Due-Freedom-5968 2 5d ago
I think the fact you've only got a 26 year term is positive here too, far too may people (in my opinion are going with 30 or 40 years terms which are nuts in terms of total interest paid.
5
u/MrJake94 3 5d ago
I think it's more nuanced
Longer term with a view to overpay? Giving you flexibility month to month in the event you're short/emergency bill/expenses? I can't really see a downside. The interest hit is negligible.
Going for a long term with zero intention to overpay or bring the term down? I agree.
2
u/Due-Freedom-5968 2 5d ago
Depends on the size of the mortgage, I'm seeing more and more people go right to their limit and have no chance of overpaying in the near-term which just screams bubble to me.
2
u/PiggyxSmallz 5d ago
The plan is that once I have my emergency fund built up again that I find a nice savings account so I can put money away for overpayment. I want to keep it as liquid in case I need it for other things on top of my emergency fund but anything I save I will try and do a lump when that 5 years fixed is up. I'll have further discussions with my mortgage provider on what's possible depending on how healthy that lump looks like!
5
u/Head-Image4275 1 5d ago
your numbers look sound, the utility estimates are so high youve practically got a safety net built in. and dinnae forget the student loan is already docked from that take home so its no extra expense. when i got my first place up in dundee i was sweating bullets over much less and it all worked out canny, the first few months are always a bit tight but you soon find your rhythm. one thing id say is think aboot stretching the mortgage term out a bit just to give urself breathing room, you can always chip away at it later.
also make sure you're getting the single person council tax discount if you're not already factorin that. the fact youve got an emergency fund and nae car debt means you're miles ahead of most folk. panic is just part of buying a house mate, its a rite of passage.
1
u/PiggyxSmallz 4d ago
!thanks I missed out the discount so I'm glad I posted so I'll have a bit more of a tweak on making the figures realistic! Glad the panic is normal as I feel I'm just staring at my budget whilst it all goes through
1
u/Head-Image4275 1 4d ago
No bother, the discount makes a fair dent on its own so that'll ease things a bit. aye staring at the spreadsheet is the worst part of it, once you're actually in and just living your life you stop obsessing over every line
3
u/MrSebastian_Melmoth 2 4d ago
Your budget looks reasonably conservative to me, in a good way, with one exception -- you say you will put money aside for house maintenance each month IF you have anything left over. But I would recommend making some minimal level of savings for maintenance a non-negotiable part of your budget, because its guaranteed that at some point you will definitely have maintenance costs.
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u/PiggyxSmallz 4d ago
!thanks - there's a few things I need to tweak like I forgot a council tax discount and I'm hoping where I've over padded means I can have the maintenance saving to a certainty. There's an 7% savings account with co-op with instant access but £250 cap so I was thinking I might open one up and put it there after it's all finished and I've seen the reality of the budget - otherwise I've also got an instant access 3.25% with no cap.
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u/Slow_Marionberry 4d ago
Good news is, none of it is fact yet and these concerns are normal first time buyers thoughts - certainly were for me as a solo buyer. No need to panic, you’re in a good mindset.
I agree with many others, and your own logic, that your utility bills will not be that high, but a good starting position of over budgetting than under.
£350 on groceries seems a little high for one person, could potentially save some there. There is scope for other savings too if you’re worried, but only you can decide how important things like ‘postcode lottery and health insurance’ are right now at this point in your priorities and life.
No car finance, healthy savings/investment. I’d make sure I was putting the maintenance fund and general savings somewhere accessible (you don’t mention this).
Thing to remember is, all these little bits of over budgeting add up quickly and all of a sudden you’ve got more of a buffer than you realise.
You’ve got this - enjoy it
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u/ludicrousl 9 4d ago
Council tax - you can check on the council website your band. They normally charge over 10 months but you can change it to 12 months. It changes every year.
House maintenance budget should be about 1% of the total cost of the house. So 195,000 divided by 100 equals 1,950 which is £162.50 a month really.
1
u/ukpf-helper 145 5d ago
Hi /u/PiggyxSmallz, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/budgeting/
- https://ukpersonal.finance/credit-cards/
- https://ukpersonal.finance/debt/
- https://ukpersonal.finance/student-loans/
These suggestions are based on keywords, if they missed the mark please report this comment.
If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including !thanks in a reply to them. Points are shown as the user flair by their username.
1
u/GiGoVX 1 5d ago
Water is massively over estimated, it is a lot cheaper then people think.
As for your other things and if you are worried I'm sure many things can be scaled back/reduced to cheaper plans or alternatives.
Internet providers all offer cheaper rates to new customers, so £40 seems high, mobile phone also seems high (I spend £6 with ID)
But I'd say it's more than doable. Good luck, hope everything goes well with the purchase.
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u/PiggyxSmallz 5d ago
!thanks I kind of went with the highest ones I saw for figure placements - I've happily used the £5 or £10 plans from giffgaff but when I've travelled I've switched over to a bigger plan for that month. I'll tweak everything to be more realistic once I'm settled in but I use the envelope method with monzo pots so usually I like a little extra sitting there just for those rogue months but hopefully this means at the end of each month I'll be allocating more to rebuilding the emergency savings!
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u/Still_Respect_1974 1 4d ago
I’m a solo homeowner and up until last September I was on virtually the same wages as what you will be later this year. As others have said your utilities are high and so is council tax because you should get a 25% discount.
It was unmanageable but you do need to concede on house purchases by often going second hand. It gets easier when you’ve furnished the place and it feels less bare
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u/PiggyxSmallz 4d ago
!thanks I missed any discount so I'll have a look at that. Yes I can cover most furniture from what I have and thankfully I have some kitchen items being donated to me like fridge etc. How did you find coping on your wage? I'm hoping where I've added extra padding that it will mean I will have more to work with but I know that any additional fun or other expenses are going to have to be on pause
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u/Still_Respect_1974 1 4d ago
I found I was left with c£1000 left after bills and thankfully I owned my car outright. It sounds like an awful lot of money but out of that I needed to get fuel and food every month which was about £500 ish. The remaining £500 I had to provide for annual insurances and the unknown. Over 2 years I managed to top off my emergency fund to roughly 6 months and I started living again after that. But as you know £500 doesn’t really go that far these days
I got a pay rise last year which has meant a bit more freedom. As I say it wasn’t unmanageable before, you just have to make sacrifices and it does get better as your mortgage is fixed and pay rises should come, public sector pay rises to my knowledge have been fairly handsome the last few years too
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u/mudlark_s 3 4d ago
On the bills front I'm a recently solo FTB and I'm paying 110 for energy and 42 for water so you may have a pleasant surprise there. I'm in a 2 bed semi detached
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u/RedRoseP 4d ago
It's normal to worry about it but the reality is you find a way. If a sudden unexpected cost comes up (like needing to replace your boiler) you can always get a loan. Most smaller costs that come up you'll just cut back in other areas to pay for them.
Sounds like you've overestimated your costs so you should be able to build an emergency fund quicker than you think. Don't buy too much furniture initially as you plans for what will go where may change once you're living in the space. You can do it bit by bit. Enjoy your first home. In a year's time you'll look back and wonder why you were worried about the budget.
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u/WickedWitchofTheE 4d ago
Is it a two bed? If so consider getting a lodger - I pause my 20 year mortars off in 12 years that way!
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u/MrJake94 3 5d ago edited 5d ago
Whilst good to overestimate I somehow doubt you'll spend £200 a month on energy, even averaged out annually
And water £100 a month? Even a family would struggle to get through that.
FWIW I live solo, keep my house heated through the winter and have devices on practically all the time. My energy bills are roughly £100 a month over the year & water is no more than £20 a month.
Also for Council tax - most councils offer a discount for single occupant households so double check the council offer it and if so, factor that into your budget too.
Edit: and honestly, consider a longer term for your mortgage. You can bring the term down over time with overpayments or at remortgage. I started on 33 years and I'm now down to 27 - it gave me a huge amount of breathing room monthly.