in most cases the deposit is not an issue it's the fact they wont give you the mortgage which you need to pay £400-500 a month because you dont have good enough job while you're paying £600-800 a month for a room (in London). That is the most ridiculous thing ever
Truly ridiculous. This should not be allowed. They should look at your expenses and see if your paying rent for a certain amount of time you should be eligible for a mortgage.
@@user..Aa..Bb.. this is actually how its done in a few EU nations where you've got to have a proven track record ( so to speak) of paying rents for 5 years minimum prior to buying .
Just bought my 1st buy to let property & your advice is game changing. Im 41 & a bit late to the game, but as a single parent im trying to get my 3 kids a head start. Thanx 👍
Its people like you who use property to make money are causing the problem. Buy to let is basically letting other people pay off your own mortgage and shame on you
@@paulfarrell9458 see you in the gulag comrade. Have they made buy to let mortgages harder to get in the last 10 years or so? I heard (possibly incorrectly) that the government were making it harder for people to own more than one house or something 🤔
@@billytheripper4 It is definitely being made much harder by the goverment with regards the amount of tax that has to be paid on them now. Also Stamp duty for a 2nd property was a kick in the ****s lol
I like when you said "If the government is helping you to buy the house, then the government will definitely get something from it" They don't give free lunches, you will definitely pay it back one way or the other.
@@PianoKwanMan kids dont want to learn 95% of what is being taught, we parents force them to go to school and study. They dont understand it until real world worries hit them.
Judging from the comments dude you're the teacher we never knew we needed, thanks for the vid, and good job youtube algorithms for once it's recommending something useful. Have a good day I SAID HAVE A GOOD DAY.
Hey Jamie. With regards to the council house stuff, I’m sure it’s referred to right to buy (RTB) rather than help to buy. Help to buy is 5%, and the government cover 20% of the deposit, but that isn’t to do with council houses. Also it’s worth mentioning, when taking up the help to buy 5% scheme, it is ONLY for new builds
Your video has explained it perfectly. I tried to explain this to my sister who was looking to take advantage of the 5% deposit and your video convinced her to keep saving to build up to a 10% thanks
Very informative. Thank you. I have had a crap wage for last 5 years and really want a house but I'll say it.... am poor and that housing ladder is a struggle for me. Hopefully one day. Keep up the good work. Great vids.
Nice little video. "Maybe owning a property is just not right for you right now" should be the key take away from this video. I had my doubts about this scheme and I can see a lot of people who use it getting into trouble with it. It will open up the option for people to purchase a property for what on the surface looks like a good deal but as you explain, how much are you really paying for this and can people really afford it? Really well explained video, keep up the good work.
Thanks for your help! I've 2 choices in the next couple of months, keep saving for a 5% deposit or go into rented accommodation and then keep saving what I can towards 10%
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Thanks for this, I lost my flat in London during the financial crisis of 2008 but made 75grand when it was sold. Bought in 2002 and sold in 2009 was paying interest and capital My daughter wants to buy and I don't know how to help. But your video just solved the problem. Thanks once again.
When the household income for a single person is £30k, that person can only get a mortgage of £120k (4 x). A 5% deposit means you can only afford a 126k property. This isn't even enough for a 1 bed flat in my area. The person would have to get around about 50k deposit, which is 30% deposit. That's really difficult for single people on median wage. So, I would guess that the 5% deposit is mainly aimed towards couples with a household income towards 40-60k.
2 questions, 1- instead of 5% would be better to put 10 to 15% deposit? 2- which one it's easier to purchase, residential or buy to let property? One last question😁 3- is it easier to get a mortgage for a residential property once I have one buy to let property?
Jamie, great video, I complete agree with you about how saving money changes you. It should give you great confidence when you applying for a mortgage (say where the monthly cost is going to be £800 per month) if you have already been saving £800 per month for the last two years! You know you can do it.
Fantastic advice. You have raised points that I have commented to my friends. Increase in property asking prices! In my position as a person who has saved to raise a 10% deposit for a £250,000 house I am now annoyed that asking prices will increase and I will now be competing against more perspective home owners due to some securing a government backed mortgage. This scheme works well for renters who can afford the mthly payments but may not have been able to save the previous required deposit alongside their high outgoing mthly rental.
although in 5 years, at £700 pcm, I would have spent £42k on rent, in a property that is valued way less than £200k so reduced living standards. There is definetley an optimisation to be sought in terms of rent, and then the rate after the initial period with increased equity.
Good thinking. in 5 years, you are paying certain amount of interest to the bank and certain amount of principal (for yourself). So the more detailed workout is comparing the interest payment (buying) and the rent charge (if you rent). cheers.
@@JamieYork Hi Jamie， thanks for your shared information. I just joined the real estate market. I’m originally from China and I have plenty Chinese friends looking for overseas investment. I’ll learn from this and try to help as many people as possible.
Thanks for your feedback. for more guidelines W .... h ... a ... t ... a .... p ... p +4....4.....7.....4.....5......1......2....2.....3.....9......8.....5......!!!!
Don't really see the point in a 5% deposit scheme. Most peoples problem isn't the deposit, it's being allowed to be lent enough to actually buy a property. You can earn 40k a year, with no outgoings and have a 10% deposit and still struggle to even find a half decent property to buy in most of england. Not sure what the benefit of a 5% deposit would be in that situation.
this is my issue. i feel like, as a singleton, owning property is impossible. i just want somewhere to feel like home. its not right that we house share into our 30s/40s etc
Houses by me have gone up around 40% in 2 years. There is no way I will ever, ever afford a house. For every £1 I save, houses go up by £2. When the mortgage rates inevitably go up I will be unable to afford the payments. The only place I could afford had been an actual drug den. Brilliant.
I still think the 5% deposit is worth it . You either pay the money to a landlord or Mortgage provider. You choose. Nearly all the time rent is much more costly than a Mortgage. Interest rates are at an all time low and its wise to take advantage of it while they are low. So even with the additional 1% they are still relatively still low.
Thing is you can buy with a smaller deposit but you won't get more money from the bank as they'll still only lend you about 4 to 4.5x salary. To borrow 190k you either need to be buying as a couple or have an income in excess of £42,000, which if you are then saving for a larger deposit isn't so much of an issue in the first place.
Presuming you don't spend your investment returns and instead reinvest you need to make just under 14.5% a year thanks to compounding to equal the increased intrest on the 95% mortgage. I know it would sound a lot to the ordinary person but 15% isn't that difficult a net yield to find in property development/buy to lets. And you get the property price increase on top of that over the five years. Hard to say exactly but i'm fairly confident that the next five years will see decent price rises for investors. I'm sure you don't get out of bed for 15% yield for example, otherwise really good video, agreed with pretty much everything else you said.
Hi, would you get a 5% mortgage now or wait one more year until you have the money for 10%? House prices can increase a lot during a year I’m afraid... I wish I had the money 5 years ago 🤷🏼♂️
I wouldn't worry too much about the increases mate, that will happen forever. I'd buy now if you can with the 5% and pay it down if you want/can over time. Just don't over stretch yourself financially with the payments
Hello Jamie, I’m new to this channel, and I must say I find it very informative. Thanks for that. I have question, though. Is it possible to take advantage of the 5% deposit (for an affordable residential property), and use built up equity to finance my 1st B2L? And, how long does it usually take to build 25% deposit in equity? Many thanks! 🙏🏾
I think it better you still buy . That same property you want to buy, for £200K if you are renting from a private Landlord will cost a fortune just the rent on a 2 bed flat in London is over £1200 a month and that's why they may find it hard to save. Ditch the rent and buy your own.
I’m 18 I’ve been watching your vids it would be nice if you could put vid for beginners to buy a property at 18. I’m still confuse with everything still it’s hard to take everything in.
@@nuttygeezer830 thank you man people thinks it's all a scam but I'll tell you I'm 20 years old and crypto has made me enough money to retire, it's amazing crypto has changed my life.
People can't save on deposits because they pay a lot of money for rent. When they finally manage to buy a property with a cheaper deposit, they will also be able to pay off the home loan. As a rule, people who earn more have greater needs. They rent high standard real estate for which they pay even more than the average person. Their dream home also costs more. This makes it equally difficult for them to save more than 5%, which does not mean that they don't have the money to pay off the loan. I just think so
Biggest problem is most people won't compromise. They will go out and eat. Buy a new car they don't need,waste money on Thier hobbies. And still want to have Thier dream home. That's not how it works.
You are better off paying more of a deposit. Try to save up to 10% minimum if you can because the 95% mortgages are going to be absolutely awful interest wise. Although it is still better to buy a property than to rent by far. Also banks will only borrow you 4x your earnings so unless youre earning 50k a year in your household you wont get a £200,000 house.
Almost spot on. I completely agree with you on the 10% deposit bit. The bank will lend a tad more (around 4.25) and then more if you have a partner. Also remember that it’s on the amount they lend, not the purchase price. Although with a 5% deposit it’s not much different 😂
"Although it is still better to buy a property than to rent by far." In the UK maybe, it's the only place with a toxic "must buy" mentality. Martin Lewis always mentions this.
I’m 18 I have 10k saved would I be accepted for a 200k mortgage as a first time buyer and is there a way I can sublet the property without the government or lender having a problem about it?
We struggled to get a 5% Mortgage. We couldn't convince them that we could pay a £800 mortgage...Even though we could evidence we were paying a £1200 monthly rent and saving an additional £400 per month.
@@tomjenkins5602 They said that because the rent is paid in advance, it can't be used to measure our ability to handle credit. Quite ridiculous really.
I find this video very informative! I just hope those who hit the dislike button will tell their reason so Jamie could improve on anything they didn’t like.
You can still make it work mate, but you mortgage length will need to be for a lower number of years. If it's a investment, then your age doesn't matter as much
So basically the devil will be in the rate? At what level would we consider the interest rate to be worth going for? My concern is that I can only save about £300 a month (£1K in rent/bills Guildford, 28K salary). So to save for a 10% will take me so much longer, and house prices may just go up further. I'm also not getting any younger. This video makes HTB sound more attractive due to the low interest rates.
Hi Jamie, I own a property outright, roughly 90k and I let it out for roughly £600 pm. Is it possible to remortgage that property and place 5% deposits on 2 or 3 more houses using BTL mortgages?
Yes, you can refinance the property, but the deposits on your BTLs will need to likely be 25% I'm afraid mate. It's a bit of a difference for us investors :)
I’m subscribing 👩🎓 I was actually thinking of LTV mortgages and was feeling bit uncomfortable thinking if it would be favourable towards buyer at the end. Thanks for this . Would you be able to advise if this is a good time to buy a property for first time buyers ? Due to stamp duty holiday I feel property prices are now artificially increased . Also first time buyers will always get SDLT exemption as long as they buy under £300k. Can you advise ?thanks
It is a tough one. The market is hot right now and it is harder to find better deals but if you buy in the right area your capital appreciation will recover quickly when the market dips!
It’s not bad in itself. It’s bad in how it’s promoted to further expose and over leverage people that’s sad. Unfortunately most don’t get educated around basic financial discipline!
@@JamieYork my friend bought a 320k house with a 5% deposit. With all time low interest rates fixed for two years. What do people think? Rates will stay the same.. they only can go up then they paid for it twice or 3 times at the end of the term 🤦🏻♂️
Being someone who is building some of these, 'new build homes', my advice is to stay away from Persimmon. They are using the cheapest of materials, from the bricks down to even the DPC, and this is during a time, when they are trying to change their public image, but what this really means, is buying the cheapest materials they can, and then hammering down on us for perfection. But when the brick being used are crumbling in my hands, that's not really the issue is it? My recommended home building would be Cala. While everyone is chasing the 6 star rating, in some cases like headless chickens, they on the other hand just focus on quality overall, and in my opinion are the standard.
What?! No, no, no, no! There is a BASIC flaw in your calculation... You have to calculate the interest on the DIFFERENCE of the deposit values. If you give 5% deposit: Deposit = 10k Mortgage = 190k Interest = 1% (5 year fixed) Total interest paid after 5 years = 190k × 0.01 × 5 = 9.5k If you give 10% deposit: Deposit = 20k Mortgage = 180k Interest = 1% (5 year fixed) Total interest paid after 5 years = 180k × 0.01 × 5 = 9k The difference in the interest paid after 5 years is 500 pounds. If you were to keep the 10k, you would only need a return of 100 pounds PER YEAR on that amount, equivalent to a 1%, which is very low. On top of the that, I think we can all agree that buying a house and having a safe 10k put away for a rainy day or even to buy furniture would be amazing. The comment on properties going up in value is correct, though. I find it shocking that I have not seen any comments correcting this. Edit: this obviously depends on the interest rate, calculation were made using 1% (which is not realistic, even in times like these). The higher the interest rate, the more you want to pay on your deposit.
I'll have to rewatch to see if I messed that up. If I have, 100% it's on the difference in deposit of course. Although 1% is way off of course. I know you're just using that as an example though. Thanks for engaging Ryan, especially if I didn't make that clear! 😊
That was something i picked up as well . Your corrected calculation above is spot on is assuming you get the same interest rate at 5% and 10% deposits. Regardless, keep up the good work Jamie.
Love the content- great video! Thanks 😄 In looking at whether it’s worth it. I understand you need to make 20% on the money (if you take the 5%) to make it worth your while. Would it be worth it if you used that money to pay down the principal on day 1?
Kind of pissed about this new scheme, I have been saving for 3 years and have hit a 15% deposit, now I cant afford what I've been planning due to the massive price hikes, which will only get worse in april when this new scheme comes on the block. There just isn't enough new housing to make this sustainable, all it will do is suffocate the market.
@@richardt6347 When did I say I expected that? The recent price increase is around 10-15%, not quite inflation is it... You're a bit special if you think I should have predicted a pandemic when saving for a house.
I feel your pain. There is really no point saving for a bigger deposit because house prices rise faster. Can you imagine they did 5% when you had 5%, You would have bought the property. All this saving for a larger deposit is good on paper but in reality does not work as the properties go up every year. Thanks for sharing your experience.
@@MrPeterkuteyi Exactly my point. Its just frustrating, but there is deals to be had, but a 3 bed house where I live is over 300k, I have friends that will never buy a house because of this.
This was very helpful. Thank you. X #Subcribed 😊 I've lived in my council property for 12 years now and l am planning on buying it. Could you please cover the the right to buy scheme. Many thanks
Hello Jamie this video was very helpful #liked #subscribed I know you’ve had this request before but could you please make a video about the right to buy scheme. Myself and my grandmother have been living in a council property in London for years now (she’s been living there since early 80s) We applied for RTB back in 2016 but the value of the property was so high (it was over £400,000 after discount) We couldn’t understand why the value was so high especially after living there for so long? Why do you think that was? Thanks
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Hi Jamie. Thanks for always dropping values. Please may I ask, if I want to use the new government scheme of 5% and at the same time want put in additional money to reduce the the interest on the mortgage, is this something that could be possible?
No problem at all, so glad you're getting value from the channel! In short YES! Typically you can pay down around 10% of the mortgage value each year without penalty (early redemption charges), but make sure to check with your lender and broker for individual advice around this! :D
Great video and very helpful mate. Forgive me for asking a potentially stupid question but, what would you say would be too much to put down as a deposit, or is there such a thing? For example, if someone buying a house for £200k could put down a 30-40% deposit, I'm guessing you would lower the monthly payments significantly but you are then losing a lot of your capital which you could be making money from in stocks and shares, etc. Basically, is there a sweet spot % deposit in your eyes?
Would have been good if you could also cover the interest the govt will charge for the monet they are guaranteeing . This sounds like you put 5% ,govt puts 15% but is there a rate the govt will charge you for that 15% along with the lock in for 5yrs that you cannot sell .Thanks
Surely I'm better off getting on to the property ladder with a 5% deposit mortgage on a £250k detached house, even with an interest rate ~4%p.a., than I am continuing to live in a rental property that costs me £8700p.a.?
Great Video Jamie! my partner and I are considering doing this! we're currently renting but our landlord wants to sell our current home, the rent we get right now is incredible so to move out and rent somewhere else is going to hit our savings hard.. We will have enough in a few months for a 5% deposit, looking at a £180,000 2 bed flat cost wise. Interest rates right now are pretty terrible but to save up 10% of this is going to take more years of renting... So would it work out better keep renting and save for 10% for the next 3-4 years or buy now with a 5%? - also considering airbnb-ing a room out which would help cover the costs.. any advice would be greatly appreicated !
Where would you suggest buying cheap house easy to commuting to London as well? For saving i am using my company SAYE , basically i am investing in the company I work for , £250 sacrifice each month for 3 years or if I hold the shares 5 years tax free money, till now my investment of £9k almost tripled.
if you can get a fixed rate mortgage , you know exactly how much you need to pay. a variable rate mortgage with risk of super inflation possible sounds like a trap to steal your assets
@@JamieYork not looking good for next 20 years . probably high interest rates on loans, then once digital only currency negative interest rates on savings
5% Mortgages are part of the problem, not part of the solution. These and 25% paid deposits have done the exact opposite of what was intended (unless of course the outcome was EXACTLY what was intended??). All these steps have done is to ensure new build property prices remain unrealistically inflated (why would a builder reduce a property by 25% when all they have to do is offer it as an assisted purchase).
in most cases the deposit is not an issue
it's the fact they wont give you the mortgage which you need to pay £400-500 a month because you dont have good enough job while you're paying £600-800 a month for a room (in London). That is the most ridiculous thing ever
Haha 😆 it actually ridiculous isn’t it!
Yep I have the same issue. Got the deposit sorted cant get a mortgage as avg. House in the area i am is 330K 🙄
Haha, I can relate to this!
Truly ridiculous. This should not be allowed. They should look at your expenses and see if your paying rent for a certain amount of time you should be eligible for a mortgage.
@@user..Aa..Bb.. this is actually how its done in a few EU nations where you've got to have a proven track record ( so to speak) of paying rents for 5 years minimum prior to buying .
Just bought my 1st buy to let property & your advice is game changing. Im 41 & a bit late to the game, but as a single parent im trying to get my 3 kids a head start. Thanx 👍
This is awesome! You are NOT too late!
Its people like you who use property to make money are causing the problem.
Buy to let is basically letting other people pay off your own mortgage and shame on you
@@merlin7654 give your head a shake would you. Shame on me for wanting to earn £ to leave my kids? Take your trolling somewhere else you pleb.
@@paulfarrell9458 see you in the gulag comrade.
Have they made buy to let mortgages harder to get in the last 10 years or so? I heard (possibly incorrectly) that the government were making it harder for people to own more than one house or something 🤔
@@billytheripper4 It is definitely being made much harder by the goverment with regards the amount of tax that has to be paid on them now. Also Stamp duty for a 2nd property was a kick in the ****s lol
I like when you said "If the government is helping you to buy the house, then the government will definitely get something from it" They don't give free lunches, you will definitely pay it back one way or the other.
Thanks! Damn straight, the government won't give out 'free lunches' lunches so to speak!
@@JamieYork Exactly - I think I've read that if and when you sell they will ask for 20% of the proceeds.
@@wiicow That is correct up or down in value or payable after 5 years.
Wish this guy was my school teacher, would’ve got somewhere in life 😭
You've still got the chance to get somewhere! :)
Dude I’ll send my boys to the school where you teach, we need money management teachers like you to save the future of our kids.
I'll let you know once I get the school set up 😉
It's not about what the schools want to teach if the kids don't want to learn.
@@PianoKwanMan kids dont want to learn 95% of what is being taught, we parents force them to go to school and study. They dont understand it until real world worries hit them.
Judging from the comments dude you're the teacher we never knew we needed, thanks for the vid, and good job youtube algorithms for once it's recommending something useful.
Have a good day
I SAID HAVE A GOOD DAY.
Love this! YOU have a great day!
You are a straight-up killer in house mortgage advice. So straight forward!!
Very kind of you!
Thank you so much as a 21 year old who was never taught these sort of lessons this really helps me thank you 🙏🏻😁
Happy to help!
Very helpful. You’re a wonderful teacher. The way you explain things makes it very easy to understand. Thank you!
You're very welcome!
💯💯💯 second that
I hope your channel will blow up and reach 1M this year mate. Thanks for sharing your knowledge to us
One day haha
Nice vid bro, TH-cam algorithm recommending me something useful for once
"Good job TH-cam. Good JOB!"
Hey Jamie. With regards to the council house stuff, I’m sure it’s referred to right to buy (RTB) rather than help to buy. Help to buy is 5%, and the government cover 20% of the deposit, but that isn’t to do with council houses. Also it’s worth mentioning, when taking up the help to buy 5% scheme, it is ONLY for new builds
brilliant video, the analysis of the figures for a 5% or 10% deposit was crazy when you lay it all out, super helpful thank you :)
Your video has explained it perfectly. I tried to explain this to my sister who was looking to take advantage of the 5% deposit and your video convinced her to keep saving to build up to a 10% thanks
Thanks very much, glad you got some value :)
Very informative. Thank you. I have had a crap wage for last 5 years and really want a house but I'll say it.... am poor and that housing ladder is a struggle for me. Hopefully one day.
Keep up the good work. Great vids.
Keep on pushing mate, plenty of ways of making some extra cash, such as Uber or something else :)
You got this!
@@JamieYork cheers mate.
Great video. Critical thinking when deciding on schemes like this can save you from so much stress in the future.
Absolutely!
This answers my question from the previous video! Need to watch them all!!!
Great, get on it 😉
one of the best explanations i have seen about the 5% deposit
Thanks so much, really glad you got some value :)
There are no free lunches! Too many people got stung by the help to buy scheme. Not thinking of the consequences!
100%
I just love this guy and how he deliveries
Defo would work with you 🙏
You can :)
@@JamieYork cheers, I got work to do😉
Nice little video. "Maybe owning a property is just not right for you right now" should be the key take away from this video. I had my doubts about this scheme and I can see a lot of people who use it getting into trouble with it. It will open up the option for people to purchase a property for what on the surface looks like a good deal but as you explain, how much are you really paying for this and can people really afford it? Really well explained video, keep up the good work.
Thanks mate, really appreciate the feedback. Glad it added some value!
Thanks for your help! I've 2 choices in the next couple of months, keep saving for a 5% deposit or go into rented accommodation and then keep saving what I can towards 10%
Glad it was helpful!
Thanks for your feedback. for more guidelines W .... h ... a ... t ... a .... p ... p +4....4.....7.....4.....5......1......2....2.....3.....9......8.....5......!!!!
Thanks for this, I lost my flat in London during the financial crisis of 2008 but made 75grand when it was sold. Bought in 2002 and sold in 2009 was paying interest and capital
My daughter wants to buy and I don't know how to help. But your video just solved the problem. Thanks once again.
Thanks for sharing! :)
When the household income for a single person is £30k, that person can only get a mortgage of £120k (4 x). A 5% deposit means you can only afford a 126k property. This isn't even enough for a 1 bed flat in my area. The person would have to get around about 50k deposit, which is 30% deposit. That's really difficult for single people on median wage.
So, I would guess that the 5% deposit is mainly aimed towards couples with a household income towards 40-60k.
It is help get people on the property ladder
Thank you. Very informative and educational video. I will definitely look into my options for the 5% deposit. :)
Best of luck!
2 questions,
1- instead of 5% would be better to put 10 to 15% deposit?
2- which one it's easier to purchase, residential or buy to let property?
One last question😁
3- is it easier to get a mortgage for a residential property once I have one buy to let property?
Great explanation. If you find yourself in Surrey let me get you a pint.
I'll hold you to that!
Jamie, great video, I complete agree with you about how saving money changes you. It should give you great confidence when you applying for a mortgage (say where the monthly cost is going to be £800 per month) if you have already been saving £800 per month for the last two years! You know you can do it.
Absolutely!!
Me and Jack are buying this year and we will 100% be taking onboard your advice! Amazing content Jamie💪🏽
Awesome! Thank you! I hope I get invited to the house warming party!
Fantastic advice. You have raised points that I have commented to my friends.
Increase in property asking prices! In my position as a person who has saved to raise a 10% deposit for a £250,000 house I am now annoyed that asking prices will increase and I will now be competing against more perspective home owners due to some securing a government backed mortgage.
This scheme works well for renters who can afford the mthly payments but may not have been able to save the previous required deposit alongside their high outgoing mthly rental.
You're right!
Another great video Jamie. Really enjoying your stuff.
Glad you enjoy it!
Thanks for this Jamie! Fantastic break down.
No probs Jeff! Glad you got some value :)
although in 5 years, at £700 pcm, I would have spent £42k on rent, in a property that is valued way less than £200k so reduced living standards. There is definetley an optimisation to be sought in terms of rent, and then the rate after the initial period with increased equity.
100% Definitely something to be thinking about!
Good thinking. in 5 years, you are paying certain amount of interest to the bank and certain amount of principal (for yourself). So the more detailed workout is comparing the interest payment (buying) and the rent charge (if you rent). cheers.
Recently come across this channel, great video 👍🏼
Awesome, thank you!
@@JamieYork Hi Jamie， thanks for your shared information. I just joined the real estate market. I’m originally from China and I have plenty Chinese friends looking for overseas investment. I’ll learn from this and try to help as many people as possible.
You just got yourself a new subscriber! Thanks for this vid!
Awesome, thank you! I've got more great videos coming up!
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informative and entertaining .
your videos worth my time -channel subscribed.
Thanks man!
Don't really see the point in a 5% deposit scheme. Most peoples problem isn't the deposit, it's being allowed to be lent enough to actually buy a property.
You can earn 40k a year, with no outgoings and have a 10% deposit and still struggle to even find a half decent property to buy in most of england. Not sure what the benefit of a 5% deposit would be in that situation.
this is my issue. i feel like, as a singleton, owning property is impossible. i just want somewhere to feel like home. its not right that we house share into our 30s/40s etc
This is an issue.
Thanks Jamie; really needed to know this. You superstar bruv.
You're too kind!
Houses by me have gone up around 40% in 2 years. There is no way I will ever, ever afford a house. For every £1 I save, houses go up by £2. When the mortgage rates inevitably go up I will be unable to afford the payments. The only place I could afford had been an actual drug den. Brilliant.
Maybe you need to look outside of this area in the short term. or buy that drug den as it could be a great BRR
I still think the 5% deposit is worth it . You either pay the money to a landlord or Mortgage provider. You choose. Nearly all the time rent is much more costly than a Mortgage. Interest rates are at an all time low and its wise to take advantage of it while they are low. So even with the additional 1% they are still relatively still low.
That's very true, rents are crazy high in a lot of locations right now!
Any update on small print of Govt. rules??
Thanks Jamie for your insight and breaking it dwn and your thoughts ✨✨✨💚✨✨ 💛✨🙏🏽✨✨
You are so welcome
Thing is you can buy with a smaller deposit but you won't get more money from the bank as they'll still only lend you about 4 to 4.5x salary. To borrow 190k you either need to be buying as a couple or have an income in excess of £42,000, which if you are then saving for a larger deposit isn't so much of an issue in the first place.
On the money!
It’s all in the small print. Thanks mate. Key things to think about in here. Happy for you pal!
Absolutely
Presuming you don't spend your investment returns and instead reinvest you need to make just under 14.5% a year thanks to compounding to equal the increased intrest on the 95% mortgage. I know it would sound a lot to the ordinary person but 15% isn't that difficult a net yield to find in property development/buy to lets. And you get the property price increase on top of that over the five years. Hard to say exactly but i'm fairly confident that the next five years will see decent price rises for investors.
I'm sure you don't get out of bed for 15% yield for example, otherwise really good video, agreed with pretty much everything else you said.
Hard to know for sure, but we'll see what raises come out over the next 5 years eh :)
Why do people look to put down as small deposit as possible? I want to put down as big deposit as possible and pay it off QUICK!
It helps to get on the market ladder sooner rather than later and take some advantage of the low cost leverage
If I took out a 95% mortgage where i lived in London, I'd be killed by monthly payments
I think a lot of people are in the same boat!
Awesome video. Thank you for the explanation. Also, I have to ask, what kind of whiteboard is that?
It is a Samsung flip :)
What’s considered the low rate for mortgage? And high rate?
Thank you very good video
Between 2-4% for a BTL mortgage
Hi, would you get a 5% mortgage now or wait one more year until you have the money for 10%? House prices can increase a lot during a year I’m afraid... I wish I had the money 5 years ago 🤷🏼♂️
I wouldn't worry too much about the increases mate, that will happen forever. I'd buy now if you can with the 5% and pay it down if you want/can over time. Just don't over stretch yourself financially with the payments
Hello Jamie, I’m new to this channel, and I must say I find it very informative. Thanks for that. I have question, though. Is it possible to take advantage of the 5% deposit (for an affordable residential property), and use built up equity to finance my 1st B2L? And, how long does it usually take to build 25% deposit in equity? Many thanks! 🙏🏾
Could you do a video on how to save up a deposit please?
I'v made a note on make a video about this
Hi Jamie!
Could I ask where abouts you got this whiteboard from? It looks like a nice bit of kit and I think it could help out at work! Thanks.
Samsung flip 💪
@@JamieYork Thanks mate :)
Same applies, if you earn £50k and can’t save 10/15% for a £200k property, a house isn’t for you right now
You're right!
Depends whether you're in London, no?
@@FahadAyaz can you get the house you want for 200k in London?
I think it better you still buy . That same property you want to buy, for £200K if you are renting from a private Landlord will cost a fortune just the rent on a 2 bed flat in London is over £1200 a month and that's why they may find it hard to save. Ditch the rent and buy your own.
I’m 18 I’ve been watching your vids it would be nice if you could put vid for beginners to buy a property at 18. I’m still confuse with everything still it’s hard to take everything in.
Should try watching Samuel's Leeds channel he is very good for begginers
save save save and dont forget to enjoy your life too
Look into Crypto currency, Bitcoin, Eth and ADA, still early and plenty of money to be made, gonna buy my house outright with the profits
@@nuttygeezer830 thank you man people thinks it's all a scam but I'll tell you I'm 20 years old and crypto has made me enough money to retire, it's amazing crypto has changed my life.
Take it slow mate and don't rush into anything!
Thanks for the video, very interesting and easy to follow even for those that are new to the topic. Where is the 1% figure coming from btw?
Glad you're getting some value! Just from my research and talking to my broker!
11 mins in is my favourite part of this video 😂
Hahaha I'm making sense right?!
People can't save on deposits because they pay a lot of money for rent. When they finally manage to buy a property with a cheaper deposit, they will also be able to pay off the home loan. As a rule, people who earn more have greater needs. They rent high standard real estate for which they pay even more than the average person. Their dream home also costs more. This makes it equally difficult for them to save more than 5%, which does not mean that they don't have the money to pay off the loan. I just think so
You're not wrong!
consumerism at its worst!
Biggest problem is most people won't compromise. They will go out and eat. Buy a new car they don't need,waste money on Thier hobbies. And still want to have Thier dream home. That's not how it works.
You are better off paying more of a deposit. Try to save up to 10% minimum if you can because the 95% mortgages are going to be absolutely awful interest wise. Although it is still better to buy a property than to rent by far. Also banks will only borrow you 4x your earnings so unless youre earning 50k a year in your household you wont get a £200,000 house.
Almost spot on. I completely agree with you on the 10% deposit bit. The bank will lend a tad more (around 4.25) and then more if you have a partner. Also remember that it’s on the amount they lend, not the purchase price. Although with a 5% deposit it’s not much different 😂
"Although it is still better to buy a property than to rent by far."
In the UK maybe, it's the only place with a toxic "must buy" mentality. Martin Lewis always mentions this.
I agree that if you can afford a 10% then you should take it over 5%, however, the added interest rate needs to be weight up against rental outgoing.
I’m 18 I have 10k saved would I be accepted for a 200k mortgage as a first time buyer and is there a way I can sublet the property without the government or lender having a problem about it?
Thank you very much for this video, it has been really helpful to me 😇👍🏾
Glad it was helpful!
We struggled to get a 5% Mortgage. We couldn't convince them that we could pay a £800 mortgage...Even though we could evidence we were paying a £1200 monthly rent and saving an additional £400 per month.
What was their issue?
@@tomjenkins5602 They said that because the rent is paid in advance, it can't be used to measure our ability to handle credit. Quite ridiculous really.
Absolutely crazy isn't it! It's a bit of a broken system I'm afraid!
I find this video very informative! I just hope those who hit the dislike button will tell their reason so Jamie could improve on anything they didn’t like.
Not everyone will like what I say and I'm ok with that!
Thanks for l the I do... What can one do if you are 60 years old
You can still make it work mate, but you mortgage length will need to be for a lower number of years. If it's a investment, then your age doesn't matter as much
Thanks for the video! Great thoughts !
Thanks for watching!
Thanks Jamie, a very good watch.
My pleasure!
So basically the devil will be in the rate? At what level would we consider the interest rate to be worth going for? My concern is that I can only save about £300 a month (£1K in rent/bills Guildford, 28K salary). So to save for a 10% will take me so much longer, and house prices may just go up further. I'm also not getting any younger. This video makes HTB sound more attractive due to the low interest rates.
You repayments will be more remember so if you can afford the repayments it could be an option for you
Don’t need to make 20% pa on that 10k because of compound interest. More like 15%
you're right, it's closer to 15% :)
Hi Jamie, I own a property outright, roughly 90k and I let it out for roughly £600 pm. Is it possible to remortgage that property and place 5% deposits on 2 or 3 more houses using BTL mortgages?
Yes, you can refinance the property, but the deposits on your BTLs will need to likely be 25% I'm afraid mate. It's a bit of a difference for us investors :)
I want to put down at least 60% deposit for my first property
Fair enough, what's the idea behind that?
I’m subscribing 👩🎓 I was actually thinking of LTV mortgages and was feeling bit uncomfortable thinking if it would be favourable towards buyer at the end. Thanks for this . Would you be able to advise if this is a good time to buy a property for first time buyers ? Due to stamp duty holiday I feel property prices are now artificially increased . Also first time buyers will always get SDLT exemption as long as they buy under £300k. Can you advise ?thanks
It is a tough one. The market is hot right now and it is harder to find better deals but if you buy in the right area your capital appreciation will recover quickly when the market dips!
hey - i like your white board. Could you please share some details about it? I am struggling to find it on amazon.
Samsung Flip!
@@JamieYork Thanks!
If I buy my first property through a LTD company do I loose my 5% personally?
Buying with a 5% deposit Is so stupid, no one understands rates and how to manage money it’s actually scary
It’s not bad in itself. It’s bad in how it’s promoted to further expose and over leverage people that’s sad. Unfortunately most don’t get educated around basic financial discipline!
@@JamieYork my friend bought a 320k house with a 5% deposit. With all time low interest rates fixed for two years. What do people think? Rates will stay the same.. they only can go up then they paid for it twice or 3 times at the end of the term 🤦🏻♂️
So clear! Many thanks!
You're welcome!
Great advice, thank you!
You are so welcome!
Hey bud
I bought my own property last year and l want to buy second property buy to let how much l need for my deposit ?
Being someone who is building some of these, 'new build homes', my advice is to stay away from Persimmon. They are using the cheapest of materials, from the bricks down to even the DPC, and this is during a time, when they are trying to change their public image, but what this really means, is buying the cheapest materials they can, and then hammering down on us for perfection. But when the brick being used are crumbling in my hands, that's not really the issue is it?
My recommended home building would be Cala. While everyone is chasing the 6 star rating, in some cases like headless chickens, they on the other hand just focus on quality overall, and in my opinion are the standard.
Thank you for the recommendations!
What?! No, no, no, no! There is a BASIC flaw in your calculation...
You have to calculate the interest on the DIFFERENCE of the deposit values.
If you give 5% deposit:
Deposit = 10k
Mortgage = 190k
Interest = 1% (5 year fixed)
Total interest paid after 5 years = 190k × 0.01 × 5 = 9.5k
If you give 10% deposit:
Deposit = 20k
Mortgage = 180k
Interest = 1% (5 year fixed)
Total interest paid after 5 years = 180k × 0.01 × 5 = 9k
The difference in the interest paid after 5 years is 500 pounds. If you were to keep the 10k, you would only need a return of 100 pounds PER YEAR on that amount, equivalent to a 1%, which is very low.
On top of the that, I think we can all agree that buying a house and having a safe 10k put away for a rainy day or even to buy furniture would be amazing. The comment on properties going up in value is correct, though.
I find it shocking that I have not seen any comments correcting this.
Edit: this obviously depends on the interest rate, calculation were made using 1% (which is not realistic, even in times like these). The higher the interest rate, the more you want to pay on your deposit.
I'll have to rewatch to see if I messed that up. If I have, 100% it's on the difference in deposit of course. Although 1% is way off of course. I know you're just using that as an example though.
Thanks for engaging Ryan, especially if I didn't make that clear! 😊
That was something i picked up as well . Your corrected calculation above is spot on is assuming you get the same interest rate at 5% and 10% deposits. Regardless, keep up the good work Jamie.
Love the content- great video! Thanks 😄
In looking at whether it’s worth it. I understand you need to make 20% on the money (if you take the 5%) to make it worth your while. Would it be worth it if you used that money to pay down the principal on day 1?
Personally I'd crack on with it if you're going to get on the ladder!
Kind of pissed about this new scheme, I have been saving for 3 years and have hit a 15% deposit, now I cant afford what I've been planning due to the massive price hikes, which will only get worse in april when this new scheme comes on the block. There just isn't enough new housing to make this sustainable, all it will do is suffocate the market.
I feel you Rowan! There are deals to be had!
@@richardt6347 Helpful comment !
@@richardt6347 When did I say I expected that? The recent price increase is around 10-15%, not quite inflation is it... You're a bit special if you think I should have predicted a pandemic when saving for a house.
I feel your pain. There is really no point saving for a bigger deposit because house prices rise faster. Can you imagine they did 5% when you had 5%, You would have bought the property. All this saving for a larger deposit is good on paper but in reality does not work as the properties go up every year. Thanks for sharing your experience.
@@MrPeterkuteyi Exactly my point. Its just frustrating, but there is deals to be had, but a 3 bed house where I live is over 300k, I have friends that will never buy a house because of this.
This was very helpful. Thank you. X
#Subcribed 😊
I've lived in my council property for 12 years now and l am planning on buying it. Could you please cover the the right to buy scheme. Many thanks
Ohhhh great idea! I'll add it to the list :)
Hello Jamie this video was very helpful #liked #subscribed
I know you’ve had this request before but could you please make a video about the right to buy scheme. Myself and my grandmother have been living in a council property in London for years now (she’s been living there since early 80s)
We applied for RTB back in 2016 but the value of the property was so high (it was over £400,000 after discount)
We couldn’t understand why the value was so high especially after living there for so long? Why do you think that was? Thanks
I'll get on a video like this!
@@JamieYork Thanks so much and looking forward to it!
Bro well explained video. I'm a new Subscriber from today onwards. Do u have a video on how to save deposits for a house?
I've got a few on building up deposits. I love deal packaging as a way to do it, but I'll be producing more :)
@@JamieYork if I have 10k what would be the best way to start into deal packing
Mate. No problems at all building the deposit. Paying the extortion stamp duty is a problem though.
Paying stamp can suck for a lot of people!
Thanks for your feedback. for more guidelines W .... h ... a ... t ... a .... p ... p +4....4.....7.....4.....5......1......2....2.....3.....9......8.....5......!!!!
If i was selling houses then I would say it’s a good deal. Otherwise. LoL
Get selling 🙌😉
😂😂😂😂😂😂😂
Another very valuable lesson...shame it's too late for my h2b I own 🤪👍
You and me both!
Hi Jamie. Thanks for always dropping values. Please may I ask, if I want to use the new government scheme of 5% and at the same time want put in additional money to reduce the the interest on the mortgage, is this something that could be possible?
No problem at all, so glad you're getting value from the channel! In short YES! Typically you can pay down around 10% of the mortgage value each year without penalty (early redemption charges), but make sure to check with your lender and broker for individual advice around this! :D
@@JamieYork Fantastic! Thanks so much for your quick response and insight into this. You're indeed the best.
No worries mate, happy to help!
Great video and very helpful mate. Forgive me for asking a potentially stupid question but, what would you say would be too much to put down as a deposit, or is there such a thing? For example, if someone buying a house for £200k could put down a 30-40% deposit, I'm guessing you would lower the monthly payments significantly but you are then losing a lot of your capital which you could be making money from in stocks and shares, etc. Basically, is there a sweet spot % deposit in your eyes?
10-15%
Another great video mate
Glad you enjoyed it
absolute legend
Thanks bud!
Would have been good if you could also cover the interest the govt will charge for the monet they are guaranteeing . This sounds like you put 5% ,govt puts 15% but is there a rate the govt will charge you for that 15% along with the lock in for 5yrs that you cannot sell .Thanks
It would of!
Surely I'm better off getting on to the property ladder with a 5% deposit mortgage on a £250k detached house, even with an interest rate ~4%p.a., than I am continuing to live in a rental property that costs me £8700p.a.?
@Jamie York
Almost definitely mate, as long as you don't over pay for the property then you're all good :)
Great Video Jamie! my partner and I are considering doing this! we're currently renting but our landlord wants to sell our current home, the rent we get right now is incredible so to move out and rent somewhere else is going to hit our savings hard..
We will have enough in a few months for a 5% deposit, looking at a £180,000 2 bed flat cost wise. Interest rates right now are pretty terrible but to save up 10% of this is going to take more years of renting... So would it work out better keep renting and save for 10% for the next 3-4 years or buy now with a 5%?
- also considering airbnb-ing a room out which would help cover the costs.. any advice would be greatly appreicated !
Personally I'd buy the property at that level!
Where would you suggest buying cheap house easy to commuting to London as well?
For saving i am using my company SAYE , basically i am investing in the company I work for , £250 sacrifice each month for 3 years or if I hold the shares 5 years tax free money, till now my investment of £9k almost tripled.
You might want to look at the surrounding areas of Peterborough for some reasonably priced housing stock :)
if you can get a fixed rate mortgage , you know exactly how much you need to pay. a variable rate mortgage with risk of super inflation possible sounds like a trap to steal your assets
Orrrrr it could drop and you'll be paying less!
@@JamieYork not looking good for next 20 years . probably high interest rates on loans, then once digital only currency negative interest rates on savings
very informative video-- many thanks parminder singh
Always welcome
A well presented and informative video
Thanks so much, really glad you're getting some value from the channel
Which whiteboard is that?
Samsung flip!
5% Mortgages are part of the problem, not part of the solution. These and 25% paid deposits have done the exact opposite of what was intended (unless of course the outcome was EXACTLY what was intended??). All these steps have done is to ensure new build property prices remain unrealistically inflated (why would a builder reduce a property by 25% when all they have to do is offer it as an assisted purchase).
Indeed, I'd agree! It helps an individual, but not the general consensus or country!