Halifax August - 1.8% yoy -10.9%

GDB2222

Chris2685 wrote: »

dopester, seriously... I have repeated this several times, but here it goes again:
I am buying a 3 bedroom semi. The monthly payments on the amount I am borrowing for the house is around £800 per month.
Please try and find me even a decent 2 bedroom house for less than that on the rental price within the area I am buying (Wooburn Green, near High Wycombe)?

Not to mention the fact that 40% of the money I am borrowing is repayable based on the valuation of the house at the time I choose to repay it.

If house prices do drop 50% in the next year, surely that gives me even more of a cushion? Some of you may say 'well if you waited a year you could buy the whole thing for 50% less'. I don't think house prices will fall that much, and even if they do, I do think that by the time I come to want to sell again, the house will be worth at least what I paid for it plus inflation! Not to mention the fact we NEED to move into somewhere, be it rented or bought, and we NEED 2 bedrooms as we have a baby on the way.

I am not an idiot, and I know exactly what I am getting into! Does anyone really think I would be better off renting a smaller house for the same price as I can get a bigger one paying off my mortgage & making small equity loan repayments?

Nothing wrong with a 3 bed house. Nothing wrong with £800 a month mortgage, assuming you can afford it. The thing is that, if you waited until house prices drop 20% further, your mortgage payments will be £600 a month. That's a fair difference, particularly with a growing family. You would need to rent for a while to wait for that 20% drop, and it's obviously much nicer to be settled in your own house now with a baby on the way.

I can't help feeling that the argument about what you can rent for £800 a month is a bit of a red herring. For a start, you might only be renting for a year or two, whilst the mortgage savings would be for many years. Also, as a householder, you have a lot more outgoings than just the mortgage. Not all of those are included within the rent on a rented property but insurance and maintenance are.

Of course, that begs the question of whether prices will fall another 20%, but I'm pretty confident that they will.

Chris2685

Thank GDB, I know what you're saying and it is reasonable. I have considered it long and hard (hence why I am even on this forum). I considered the merits of us moving into rented accommodation for a couple of years, or just taking the plunge and buying. I have thought about it very very hard and I am extremely grateful for the comments I've read on this forum.