[James Malloch]

I'm currently thinking about buying my first home but my situation is a bit different to most first time buyers.

At present, my partner and I own a boat which we spend most of our time on. We're paying off a loan on it but have savings and can put money aside each month. My short-term plan is to continue saving over the next 3-4 years after which we're hoping to go away for a year or so around Europe and possibly relocate aboard after that.

One think I have been thinking about recently is getting a mortgage whilst interest rates are low as I've enough money set aside for a deposit. I can also take advantage of a staff mortgage (I work in a Bank) where the rate tracks the base rate (plus BIK tax) so works out about 1% interest at the current level. Though this is obviously dependent on how the BoE changes the rate over this time. The mortgage wouldn't be on something huge (likely £90k max borrowing) which reduces the impact of rate rises to something which I could afford.

My plan would be to have a lodger (I've checked this is fine with my bank) who's rent would cover bills and interest payments, and then instead of putting money into savings I'd pay off the capital each month. That way, as long as there are no big unexpected expenses it's essentially like a savings account, but hoping for a house price rise rather than getting interest via an ISA (which is crap anyway).

Having my own address and place to stay would make life easier also (I'm currently registered at my parents) but that's not something that need to urgently be changed.

The other option would be to continue saving and just have a larger deposit when we eventually move off the boat 100%. My only thought is that given the BoE have signalled it is likely to increase rates over the next 2 years, is it better to buy now and start paying off a house whilst rates are low, or hold out and keep my savings more liquid.

Or, we could pay off the boat, but the interest on that is very low so it makes sense to keep it going.

Whilst it's the kind of question I should probably ask a financial advisor, I know there are some financially savvy people on here so thought it would be worth asking first.

Any thoughts, advice or things that I've not considered would be much appreciated.

[Monolith]

Sounds like you're pretty clued up mate but am I right in thinking you're both first time buyers? Well worth checking out Martin Lewis' videos/advice on that front if so.

[James Malloch]

Yes both of us would be first time buyers - I've read some of his articles which are pretty useful, thanks. I've got the help to buy ISA which he recommended which would contribute about £1.5k to the deposit which would be nice!

I guess the decision would ultimately end up being down to:

1) Whether saving would be more beneficial than risking house price decreases / unexpected costs

2) The risk of not getting a lodger and having to absorb the cost of bills (given we spend most of our time on the boat, this would kind of be wasted money)

3) Risk of not being able to easily sell if we needed to for whatever reason.

I'm sure there's stuff I've not considered and it comes down to investment risk to a large extent. If it was something we intended to be in 100% of the time and stay in for a long time it would make a lot of sense. But our situation means it would be more of an investment which makes me more nervous...

[abarro81]

My experience of buying a house a year ago is that even if you buy a house that doesn't really need much/anything doing to it, you will end up spending money that you didn't expect to spend doing things to it/putting things in it...

This may well not be as true if you're not actually living there but is maybe worth considering. Bear in mind you'll have to fill it with useful stuff to have a lodger, or you'll need a 'lodger' who doesn't mind that they're actually a tenant furnishing the house whilst you notionally live there etc.

Probably also worth doing your calculations on whether the rent from a lodger really would cover their share of bills plus the interest, given the local market and council tax rates etc.

[andy_e]

My experience of buying a house a year ago is that even if you buy a house that doesn't really need much/anything doing to it, you will end up spending money that you didn't expect to spend doing things to it/putting things in it...

+1

[tommytwotone]

Having my own address and place to stay would make life easier also (I'm currently registered at my parents) but that's not something that need to urgently be changed.
 

Not sure if you'd benefit from "lighter touch" ID and underwriting checks on a staff mortgage but the above jumped out at me.

If you have inconsistency between where you're registered to vote, have your bank accounts etc that's gonna play havoc with your credit score / rating.

Don't forget that as part of underwriting the banks are now looking really quite forensically at what you spend and where you spend it. It wouldn't take Inspector Morse to spot you're registered in London but doing your weekly food shops in Leeds.

I've heard of more than one person being asked awkward questions about the amount of money going to and from betting companies on his account (even though they were massively in profit), and when I last remortgaged they picked out a few transactions I had to explain.