Buy or Rent?

filbert_2

Hello all ... newbie poster here, having lurked for ages. I would really appreciate your views on a dilemma we seem to be in.

We managed to sell our house privately out of the blue and we complete on the 29th of this month. We are going into rented accommodation, picking up the keys on Saturday - the lease is the standard 6 months. The intention was to watch the market and buy something in the summer.

We have in fact been looking at property for about 18 months, watching and waiting, occasionally viewing and frequently being turned down for cheeky offers.

Now the dilemma - a house we liked was on the market for £550k all last year. We always liked the look of the house but wrote it off as it was over our budget. They remarketed with a new agent over Xmas and the price came down a fair bit. We foolishly viewed it at the weekend and loved it. After some negotiation the buyer will accept £410k from us as we are a dead cert in terms of being chain-free and already have a mortgage in principle etc. (It would necessitate getting a £120k mortgage - a bit of a killer for us as we have been mortgage free for 6 months).

Big question is - should we buy it? We can't get out of the rental agreement, so would end up paying rent and new mortgage for a few months if the agent can't re-rent the rental place once we complete on the house purchase.

I think we can just about scrape the rent and mortgage for 3-4 months if necessary. The bigger question is should we go for it? mouseprice.com etc all indicate that we've got a good price for it, and we'd be there for 10 years+ if we go for it so could potentially ride out any further fall in price.

What would you suggest?

anniecave

whereabouts in the country are you? Is there a link you can post to the details of the property?

shaven-monkey

Rent for 6 months.
Buy it if it's still on the market then.

That said a 1/4 LTV isn't bad but i'd be extremely cautious about getting into debt in the current jobs climate. If you're sure you have the income security then go for it. What's the worst that could happen? Oh yeah, loss of job, loss of hundreds of thousands of pounds due to defaulting on the mortgage...
Back to my original advice.

filbert_2

shaven-monkey wrote: »

Rent for 6 months.
Buy it if it's still on the market then.

That said a 1/4 LTV isn't bad but i'd be extremely cautious about getting into debt in the current jobs climate. If you're sure you have the income security then go for it. What's the worst that could happen? Oh yeah, loss of job, loss of hundreds of thousands of pounds due to defaulting on the mortgage...
Back to my original advice.

I think if both me and my husband were in jobs that could succumb to the recession we'd not do it. But we've been given the new mortgage on the basis of affordability on just one of our salaries (we earn the same) and he's a policeman with 23 years service, so he's pretty safe (we think)!

My nerves (I'm horribly risk-averse) are kicking in thinking should be retract our offer and sit and wait?

shaven-monkey

Ah your husband's job is pretty much safe.
There's a slim chance that someone will swoop in and buy the £410k property in the next 6 months. There's a pretty good chance that they won't.

Is it uniquely suitable ? In terms of location, space, layout, state of repair, colour scheme, parking, access, garden, neighbors etc?
If there are other places available that fit your criteria then you could save a significant chunk of cash by waiting 6 months.
Ultimately you are in a position to buy, the only thing stopping you is concern that you're offering too much. Only yourself and your husband can decide whether you're content to overpay to get a place that is just right.

I would make an offer that didn't require me to get any mortgage at all... But i enjoy making estate agents cry.

filbert_2

You asked "Is it uniquely suitable ? In terms of location, space, layout, state of repair, colour scheme, parking, access, garden, neighbors etc?"

Annoyingly I can reply "yes, yes, yes, yes, yes, yes, yes and yes ... !!"

ooooooooooh.

When we sold our house, we both made a list of our criteria for the new house. We then compared lists and 90% of our lists matched and we added the extras to make our combined list.

The £410k house ticks every single one of the 15 criteria, and some (in that I did bottle it for a bit thinking it was too big and posh for the likes of us!). It's the only house so far that has even come close, let alone exceed our must-haves.

Urgh, I am SUCH a chicken and SO indecisive.

shaven-monkey

In that case i'll complete the dialogue.

You want to buy it, your husband wants to buy it. You are happy living in it while it dips in cash value over the next 10 years, You are asking a bunch of random strangers on the internet at 1 am whether you should buy it or not...

Flip a coin, I don't think it will help resolve your doubts but it'll be as reliable as asking for guidance here. None of us are omniscient or members of the illuminati so we have no way of knowing what the economy will do in the next 10 years.

jamesd

Buy it. You've clearly explained why you will be regretting not doing it for the next ten years. 18 months and nothing else close to what you're really after tells the tale.

Just make a clear promise to yourselves not to pay attention to the price drops that are likely to come, because you're buying the home you love for the long term. Mentally add the rent to the purchase price and then forget about it. Just part of the cost of completion.

t1gger

Are you sure you can't get out of the rent? We managed to break a contract not so long ago. We had 5 months left to run and the owner agreed (EA didn't care, they left it up to the owner to decide.. although we only dealt with the EA) to taking 1 months rent from us plus an extra £500 to cover the EAs costs to readvertise it.

Don't know how generous this was but it's worth asking if they're willing to negotiate.

If you do buy the house and live in it, you might find you are in breach of your rental contract. Our leases have always stated that the property must be the one that we normally reside in, worth checking.