I am a 22 year old currently renting accommodation with my partner in the UK, and we are wondering if now is a good time to buy a property, and whether or not we can afford it.
As background, my salary before tax is £70,000 p.a. and my partner's is £36,000 p.a. This year I have a guaranteed bonus of £30,000 (i.e. written into my employment contract) before tax. After this, my target bonus is £10,000 p.a.
We are looking at houses around £500,000/£550,000 in the area just inside the M25 and when we are ready to buy, we will have savings of £55,000 for a deposit and £20,000 for stamp duty and legal fees.
Looking at Mortgage calculators such as provided by Halifax, based on these figures it would appear that we may be eligible for a mortgage up to ~£530,000, which should be enough. A mortgage of this amount will require repayments in the order of £2300-£3000 per month. After tax, our joint earnings per month is about £6345, without bonuses.
I am aware that interest rates are currently low, and am conscious that recently 3 members of the Bank of England MPC voted in favour of raising the base rate; so I do not want to miss out on preferential mortgage rates.
Moreover, if we do not buy a house, we will be spending money on rent, probably ~£1500 per month and this will just be expenditure with no assets at the end to show for it.
So my question is: based on this information, should we be looking to buy ASAP, or wait to accumulate more savings and buy a house using a smaller mortgage?