Buying or renting??

tigger23

My girlfriend and I bought our first house in May 2008. We were living with her family in Herefordshire but couldn't find anywhere remotely affordable nearby, so moved back up to Derbyshire (where I'm from) as the housing is much cheaper.

We now want to move baack to Herefordshire, but do we sell our house and buy another or rent?

It would seem a bit stupid to get off the property ladder after only 2 years, but we're not sure what to do. Buying somewhere else in the area we want to be in is nearly impossible because everything is so expensive. We bought our home for 90k, with a mortage of 75k and can't afford to pay any more. Finding anything below 120k where we want to be is rare, never mind below 100k!

But then renting isn't plain sailing either, as rents are quite high too and very few places allow dogs.

I think I'm a bit of a property snob and am struggling most with the idea of renting because i never have, my parents never did. My other half never has either, although her sister has always rented. In my head it seems madness to give up our place on the property ladder, especially given how hard it is to even get on these days...but our chances of living in Herefordshire and owning are next to none. Having said that, renting seems like such waste of money, just lining someone elses pockets every month. At least with a mortgage every payment makes it a little bit more yours.

Owning a house is secure, and could be an investment for the future if you're lucky. But renting is so much more flexible. If we wanted to move again its just a case of finding somewhere, applying and waiting for references. No hassle or expense of putting your house up for sale and hoping someone likes your home enough to buy it at a reasonable price and within a reasonable timescale.

With renting we couldn't realistically decorate whenever we wanted to, but equally we wouldn't have to pay for boiler repairs etc. We wouldn't have to pay building insurance, or mortgage protection or life insurance, which in total is only about £40 but its better in our pocket than someone elses.

We have applied for a shared ownership house and are currently waiting to hear if we are eligible. It's in the same town as my other half grew up in, and where her Dad lives also, so we're hoping the local connection will get us in. It's a bit complicated with us already owning a house as these schemes are usually aimed at first time buyers only...but we'll see what they say. It's the only way we can afford to buy a house there, so we should qualify.

We are going round in circles...anyone have any thoughts / advice please?

Cannon_Fodder

According to Land Registry, Derbyshire is around -11.5% down from May 2008;

[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=1&a=Derbyshire&s=01 March 2008&e=01 February 2010&t=1[/IMG]
Which makes a £90k property worth £80k now. Giving you £5k less fees/costs to take onto the next place. Perhaps.

The savings you have for a deposit, having so little equity, will therefore affect the range of properties you can look at, realistically.

Do you have any/much ?

I would definitely agree with the comment about renting giving flexibility - especially in light of your mention of Shared Ownership. Should you decide to move again within another two years, you will probably find you are unable to rent a SO place out, and selling it might be problematic because of the limited market to which they appeal and the conditions/terms applied by Housing Associations.

So, if flexibility is key, I'd think long and hard about SO.


Maybe, be led by where you find the best paying job(s), as an increase in income will lead to you having more choices for either renting or buying.

tigger23

Oooo thanks for the graph - interesting ! Houses similar to ours are selling in the 85-95k mark at the moment so we're hopeful we'll get our money back.

We have no savings.

If we are eligible for the SO house, then we don't plan on moving for quite a while. It's a perfect house in a perfect village location that has a good little local primary school for when we do decide to have kids. Realistically we will never be able to afford a house like this, even to rent !

If we're not eligible, then our only option is renting but we won't be able to afford anything remotely 'nice' or in a preferable area...it will get us back to the same county at least. As silly as getting off the property ladder seems, we don't want to stay on it if it means being stuck 150 miles away from where we want to be, even if we do like the house we have lovingly decorated.

As for jobs, our joint income is £27,500, in Herefordshire-ish we would only earn up to about £28-29k so not really enough difference to change what we could afford.

motherofstudents

Just wondering if it would be viable for you to rent out your present house, would you get enough rent to pay the mortgage? If it works out financially then maybe you could rent a house to live in giving you the flexibility you want and you would have somewhere to sell later on if house prices increase. It is just something to consider and maybe it would get you through the next few years, on the other hand it might not be what you want to do.