Discussion
Looking at getting a place with GF, however the houses within our current budget don't fill me with enthusiasm so I'm not too keen to rush into buying anything.
The plan is to buy something and have it for 1-2 years then move on to something better after that.
I've suggested that rather than buy somewhere straight away we rent for that time, not because I don't want to rush into anything but because having done my sums I've worked out that it will cost £8000 in fees alone just to buy and sell a house and we are in a stagnant, if not declining, market. Rent then find somewhere we like rather than be lumbered with what I consider to be a compromise which may hold up moving somewhere better. This has met with as much enthusiasm as if I had told her I had a dose.
So, rent for 18 months or buy?
The plan is to buy something and have it for 1-2 years then move on to something better after that.
I've suggested that rather than buy somewhere straight away we rent for that time, not because I don't want to rush into anything but because having done my sums I've worked out that it will cost £8000 in fees alone just to buy and sell a house and we are in a stagnant, if not declining, market. Rent then find somewhere we like rather than be lumbered with what I consider to be a compromise which may hold up moving somewhere better. This has met with as much enthusiasm as if I had told her I had a dose.
So, rent for 18 months or buy?
soxboy said:
Looking at getting a place with GF, however the houses within our current budget don't fill me with enthusiasm so I'm not too keen to rush into buying anything.
The plan is to buy something and have it for 1-2 years then move on to something better after that.
I've suggested that rather than buy somewhere straight away we rent for that time, not because I don't want to rush into anything but because having done my sums I've worked out that it will cost £8000 in fees alone just to buy and sell a house and we are in a stagnant, if not declining, market. Rent then find somewhere we like rather than be lumbered with what I consider to be a compromise which may hold up moving somewhere better. This has met with as much enthusiasm as if I had told her I had a dose.
So, rent for 18 months or buy?
Won't the house be worth even less in 1-2 years? Leaving you with negative equity?The plan is to buy something and have it for 1-2 years then move on to something better after that.
I've suggested that rather than buy somewhere straight away we rent for that time, not because I don't want to rush into anything but because having done my sums I've worked out that it will cost £8000 in fees alone just to buy and sell a house and we are in a stagnant, if not declining, market. Rent then find somewhere we like rather than be lumbered with what I consider to be a compromise which may hold up moving somewhere better. This has met with as much enthusiasm as if I had told her I had a dose.
So, rent for 18 months or buy?
I think I read on here people are still expecting prices to fall by around 15% in the next year or so.
Even renting is a bit of a waste, as you could stay in you current place and save the money you would have spent on rent. Then when the houses are even cheaper in 18 months time, buy with an even bigger deposit.
Ignore all the people who can predict what the value of the place you're looking at will be in 1-2 years time.
Personally I would never buy if I was only going to stay there for 1-2 years, the costs involved are just too high. Take a realistic look at what it is going to cost you to sell then buy again in 1-2 years time, then work out how many months rent that equates to.
Personally I'd have to be intending to live somewhere at least six years before I'd consider buying. But the stamp duty band you're looking at obviously has quite an effect.
ETA: A lot of the girls I have met are obsessed with owning somewhere and irrationaly dislike renting regardless of how the numbers stack up.
Personally I would never buy if I was only going to stay there for 1-2 years, the costs involved are just too high. Take a realistic look at what it is going to cost you to sell then buy again in 1-2 years time, then work out how many months rent that equates to.
Personally I'd have to be intending to live somewhere at least six years before I'd consider buying. But the stamp duty band you're looking at obviously has quite an effect.
ETA: A lot of the girls I have met are obsessed with owning somewhere and irrationaly dislike renting regardless of how the numbers stack up.
Edited by 2something on Monday 16th March 22:05
Property may go down and it may go up and it may even stay the same. But one thing's for sure, the rent money you pay to the landlord won't be coming back.
It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
selmahoos said:
Property may go down and it may go up and it may even stay the same. But one thing's for sure, the rent money you pay to the landlord won't be coming back.
It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
Very good points, I think people will only be hit by losing money on a purchase if they need to move quickly. Buy for the long term otherwise you're basically tossing a coin. It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
selmahoos said:
Property may go down and it may go up and it may even stay the same. But one thing's for sure, the rent money you pay to the landlord won't be coming back.
It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
Aren't you a landlord?It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
G'kar said:
selmahoos said:
Property may go down and it may go up and it may even stay the same. But one thing's for sure, the rent money you pay to the landlord won't be coming back.
It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
Aren't you a landlord?It's for certain gone.
So, what you're asking for is advice on whther you should MAYBE lose that money, or DEFINITELY lose it. Ummmm....let me think....
Stamp duty payments also don't come back.
Solicitors fees also don't come back.
Estate agents fees also don't come back.
It's very simple, just work out:
2 years interest payments
+ 1 set of stamp duty
+ 2 sets of conveyancing fees
+ 1 set of estate agents fees
vs.
2 years rent
It's a different calculation for everyone, how does it stack up for you ?
selmahoos said:
G'kar said:
[
Aren't you a landlord?
Yes, so is the OP. But I don't rent the house I live in.Aren't you a landlord?
Sure mortgage payments go towards owning a little more of your asset, my question surrounds the fact that in a stagnant and possibly further declining market is it worth sticking money into it over a relatively short period when c5% of the cost will go in fees to agents,mortgage cos, solicitors and stamp duty.
Edited by soxboy on Monday 16th March 22:49
I did the calculations on this as I am in a similar postion
It cost close to double to "own" a house for 2 years, even factoring in a possible 4%PA rise in value over renting an equivalent to slightly nicer place.
But also remember rents are different in each area. What you can get for x amount as against buying is different in every region
It cost close to double to "own" a house for 2 years, even factoring in a possible 4%PA rise in value over renting an equivalent to slightly nicer place.
But also remember rents are different in each area. What you can get for x amount as against buying is different in every region
I get the feeling that what you really need, is advice on how to convince your GF that it doesn't make sense to buy for such a short time period.
You need to distill it down to cold hard numbers to show that her 'oh but it's nice to have your own place' is going to cost say 10k. Don't let the numbers be abstract, you have to present them black and white. So if it is 10k, work out how many months post tax salary that is, how many holidays you could go on etc.
You need to distill it down to cold hard numbers to show that her 'oh but it's nice to have your own place' is going to cost say 10k. Don't let the numbers be abstract, you have to present them black and white. So if it is 10k, work out how many months post tax salary that is, how many holidays you could go on etc.
For a £200k property you are looking at purchase costs of £2k stamp duty, £750 legals, £350 survey & £900 mortgage fee = say £4k. To sell in 18 months will pay 1.5% sales fee, £400 HIP, £750 legals = £4150, so without any mortgage payments thats over £8k.
If rent is £700 pcm that's a year's rent.
If rent is £700 pcm that's a year's rent.
soxboy said:
For a £200k property you are looking at purchase costs of £2k stamp duty, £750 legals, £350 survey & £900 mortgage fee = say £4k. To sell in 18 months will pay 1.5% sales fee, £400 HIP, £750 legals = £4150, so without any mortgage payments thats over £8k.
If rent is £700 pcm that's a year's rent.
we were looking at a similar situation but moving to a £500k house - If rent is £700 pcm that's a year's rent.
when the stamp duty alone is at £15k it makes simple sense for us to rent for a year.
Yes - i know it will still need paying when we do buy, but as the OP point out in a stagnant/declining market its not like you're losing out on capital appreciation....
Plus we get to 'test drive' our area of choice..
looks like these quite a disparity between rental yields and mortgage payments where were looking too.....(Elmbridge, Surrey)
for example this place
was up at over £600k initially think it sold for just shy of £500k and is now available to rent at £1700.....
BERGS2 said:
soxboy said:
For a £200k property you are looking at purchase costs of £2k stamp duty, £750 legals, £350 survey & £900 mortgage fee = say £4k. To sell in 18 months will pay 1.5% sales fee, £400 HIP, £750 legals = £4150, so without any mortgage payments thats over £8k.
If rent is £700 pcm that's a year's rent.
we were looking at a similar situation but moving to a £500k house - If rent is £700 pcm that's a year's rent.
when the stamp duty alone is at £15k it makes simple sense for us to rent for a year.
Yes - i know it will still need paying when we do buy, but as the OP point out in a stagnant/declining market its not like you're losing out on capital appreciation....
Plus we get to 'test drive' our area of choice..
looks like these quite a disparity between rental yields and mortgage payments where were looking too.....(Elmbridge, Surrey)
for example this place
was up at over £600k initially think it sold for just shy of £500k and is now available to rent at £1700.....
As a general rule - buy now only if it is a one-off house you want to live in for 10 + years
Why would you want to move in 1-2 years?
I am confused (easily done) but isn't it better to live in the GF's flat for two years and save heavily (or keep an eye on the market and as soon as it starts to rise buy) OR live in the GFs house until the notice period of the tenants in your place is up then move into your place and save and/or buy when the market is right?
I am confused (easily done) but isn't it better to live in the GF's flat for two years and save heavily (or keep an eye on the market and as soon as it starts to rise buy) OR live in the GFs house until the notice period of the tenants in your place is up then move into your place and save and/or buy when the market is right?
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