Will 2008 be better or should I give up?

[z109]

Can we try and address the issues/questions raised by the OP please?

Okay, I believe you should continue renting, but that you should save/invest the difference between your rent and the mortgage payment you would pay for a place of your own.

That way you will build up a substantial deposit and hopefully end up with a low LTV and so a decent mortgage rate. You would also feel the pain (if any) of the mortgage before you have committed yourself to 25-40 years of it!

Personally, for regular savings, I would use one of the 7% deposit accounts. Others would use a share saving scheme. It depends on your timescale and your attitude to risk.

As for your existing shares, I would keep them if you can afford to wait and look on them as a long-term investment. As pointed out elsewhere, pension contributions, especially at your age, are heavily geared towards equities, so, apart from the tax relief (which is significant if you are on the higher rate), you can consider that you have enough exposure to the markets and not feel under any pressure to make additional purchases should you feel burned by risk!