Rent? Wait? or Buy?

dansylvester

Hi

I am wanting to ask advice on my current housing situation. I currently work full time earning circa 22k pa, and my partner doesnt work due to disabilities. We are currently renting privatly a 2 bed terrace for £410pcm, however our landlady is likely to be wanting her house back in the coming months, so we are unlikely to be living here much longer (after 3 years we have treated this place as we would our own, we have been able to decorate as we wish, and have made lots of small improvments to the house & garden, and are absolutley gutted at the prospect of having to move...)

We currently have about 6k in savings between us, and homes in our area start for around 50-80k for a terrace, so we are protenially not far of being able to buy somewhere, however this would clear us out financially and we wouldnt have a rainy day fund to fall back on, which we are not comfortable with.

We are also on the waiting list for LA housing, however the waiting list is around 8-9 years around here, and we have been waiting 18 months so far...

We could take on another private rented, however being used to treating it as if we own a house, we are unlikely I feel, to find another landlord that will give us the freedom to do so, and also the home wouldnt be secure, as we are finding with private rented we are having to move every couple of years or so...

What would you do in this situation?

Many thanks in advance...

pop_gun

dansylvester wrote: »

Hi

I am wanting to ask advice on my current housing situation. I currently work full time earning circa 22k pa, and my partner doesnt work due to disabilities. We are currently renting privatly a 2 bed terrace for £410pcm, however our landlady is likely to be wanting her house back in the coming months, so we are unlikely to be living here much longer (after 3 years we have treated this place as we would our own, we have been able to decorate as we wish, and have made lots of small improvments to the house & garden, and are absolutley gutted at the prospect of having to move...)

We currently have about 6k in savings between us, and homes in our area start for around 50-80k for a terrace, so we are protenially not far of being able to buy somewhere, however this would clear us out financially and we wouldnt have a rainy day fund to fall back on, which we are not comfortable with.

We are also on the waiting list for LA housing, however the waiting list is around 8-9 years around here, and we have been waiting 18 months so far...

We could take on another private rented, however being used to treating it as if we own a house, we are unlikely I feel, to find another landlord that will give us the freedom to do so, and also the home wouldnt be secure, as we are finding with private rented we are having to move every couple of years or so...

What would you do in this situation?

Many thanks in advance...

if you can tighten you belts for awhile, i would suggest raising 10k then buying. it also depends on how much of your income is siphoned off by debt obligations, luxury items etc. 50-80k is nothing if you're earning 22k. is it a stable job? does your partner's IB cover the cost associated with his condition? only you know how much you can afford in repayments. whether you'd entertain a lodger to help cover monthly outgoings etc.

poppysarah

The more you save the less mortgage you have.

I'd do a review of your spending and see what else you can cut.

Nitramak62

I would advise you to buy, a 40-70K mortage will work out cheaper than the rent your paying and you will own the property (eventually), where as renting is dead money.

I know some people will say house prices must fall etc, etc, but a house is home & not an investment & given the prices you are quoting I wouldn't expect a fall in the market to effect housing in your area to any great extent anyway.

Cannon_Fodder

Nitramak62 wrote: »

...given the prices you are quoting I wouldn't expect a fall in the market to effect housing in your area to any great extent anyway...

Don't get the logic of this.

How can we tell their area won't be affected, just from the prices ?

The cheapest housing is likely, though admittedly not certain, to be in a regeneration/low employment area. Pockets of NW, NE, Wales etc

These parts of the country are said to have around 30% employment from the public sector. With the cuts about to hit the PS, those areas could be hit really hard. Harder than London, for sure.

A 10% drop in prices would eat up their deposit. Making re-mortgage difficult, at best.

While disagreeing that "renting is dead money" - because renting is putting a roof over your head, away from the parents, while you save a deposit - if the mortgage would be less than renting, it is worth considering. £50k to £60k might be less, £70k may well be the same or more - depends on the % rate they can get.

IF, imo, they can sign up to a 5-year fixed deal, to protect both from rising interest rates, and falling house prices over the next few months.

A 2-year deal might drop them in it, at the worst conjunction of factors.

dansylvester

Thanks for all your comments

We were origonally hoping to buy some time next year. After all outgoings we are saving £150-£350 a month. The only debt I have is a car loan which ends in January 2011, which costs me £104 a month. (plus a student loan but i dont really count that!!). I have really trimmed back our living expenses over the last couple of years to save up, so there isnt really much more we can do on this front...

House prices round here have been falling steadily since 2008, and we didnt see any of an increase last year unlike some places, however I am in an area where most of the jobs are in the public sector, so this may push house prices even lower again in the future, it may not who knows...

If we were to buy we would be looking for somewhere we could live for about 10 years... However, I work for the council here, so although there has been no mention of job cuts etc in our department, and we are taking on new work from other departments, you still never know, and this has to be a major factor in the next couple of years...