Buying a house short term?

franklee

But presumably the OP has to pay rent all year as he has to live somewhere!

Cat2011

I wouldn't choose to buy short term, if you know you're going to have to sell in 2 years. But, you're not certain of that. Are you ever going to be sure you're going to stay 2, 3, 5 years in the same place? How many years of certainty before you decide it's worth buying a house?

If it were me, I'd do some serious maths, and IF it was financially viable, then I would choose to buy assuming I'd stay for 2 years then move, and would be renting the house out after I moved. But rent obviously has to cover BTL mortgage and costs etc. etc. That is what I have done, bought a year ago, and am likely to move in another year, so plan to rent the house out (I already rent some of the rooms out).

If you're not certain that renting out is viable, then I wouldn't buy, but save as much as possible in the next 2 years, perhaps even move to cheaper renting, so you can save a bigger deposit, and in turn get a cheaper mortgage.

Finally, as a student, you may find it difficult to get a mortgage.

nollag2006

brit1234 wrote: »

I think you said it right with that last coment. I strongly believe house prices will continue to fall due to a large host of economic and social factors..

Poor old twit1234 - he has been banging on about a house price crash for years now, but it never comes.

My favourite one was where he predicted house prices would fall 50% from their peak by Christmas 2009. And he's still holding out for it.

The spelling hasn't gut mouch butter neither !!

:rotfl:

Kara_P

I am a PhD student and I went through the exact same thought process you are now however my plan is to stay in our house for 4-5 years. Our calculations (similar to Franklee's) led us to believe if house prices stay roughly the same then we would be slightly better off buying. Although our intrest rate is sadly higher due to a low deposit. We also took into consideration that we really wanted a dog (which we couldn't get in a nice flat close to work) and that our buying costs were very low (thanks to having friends in the industry). We love our house and our dog Rosie so are very happy with our decision. Regarding being a student... my partner and I got a mortgage no problem even though I was a student, as you have a higher deposit I would assume it would be even easier for you. I hope everything works out whatever you decide to do.

bristol_pilot

Do you know whether YOU can actually get a mortgage on a PhD stipend? Although it would be enough money, banks would not regard it as a permanent job and may be reluctant to lend. If that is the case, your question is answered for you.

To answer the original question directly , I wouldn't buy with only a 2-year view in prospect. 2 years used to be regarded as the minimum at the height of the property boom.

Doshwaster

Don't forget to include routine and emergency maintenance costs. If you are renting then a leaking room is the landlord's problem.

I've known a few people who bought during their PhDs but usually only if they had a really big deposit and/or a parental guarantee.

I really wouldn't think it's worth the bother. In 2-3 years time you could be working anywhere.

sopaz

Thanks for the replies! Some interesting points raised.

I've had a mortgage principally agreed... I spoke with a broker who seemed to know of only a few companies willing to consider a stipend, so the rate isn't perhaps as competitive as it could be. I also have a colleague who bought on his stipend.


Kara: A good point about having a house you love and being able to do what you want with it, but do you think it will limit your career in the future? If you've got the house to exactly how you want it, do you think you would be inclined to find a less suitable job close by so you could stay there?

jimjames

nollag2006 wrote: »

Poor old twit1234 - he has been banging on about a house price crash for years now, but it never comes.
:rotfl:

If only those pesky sellers would drop their prices enough!

I think the best case assumption is that prices are basically stable over the next 2 years, that could mean changes of say 5% either way but are sufficiently small to be invisible amongst the price variations of different property in a locality.

If you are looking for a longer term and would consider renting the property after 2 years then buying could then be a viable option.

Kara_P

I am supposed to be finished my PhD in Oct 2013 (we have lived in the house for a year already). In my lab it is normal to get a 1-2 year postdoc as soon as you finish your PhD. After this I would love to go to the USA to work. I would not let the house stand in the way of getting a better job either here or in the US. If worse came to worse we would rent it out (with the help of relatives living in near by).

The house we bought was done to a high standard i.e. new bathroom, kitchen, gas central heating so all we had to do was furnish it and paint a few walls. We know that we will not make any money through improvements etc but that is fine as we are saving all of our extra money. Plus we are banking on the fact that the house is lovely and had a lot of interest very quickly when we bought it so hopefully it will get interest again when we come to sell. We are also overpaying by our maximum (10%) each year to help bring down the mortgage over the short 4-5 term.

Hopefuly that helps somewhat? Oh we are with Loyds for our mortgage so you could check with them about your situation. We had a great mortgage advisor who helped us so much. Any other questions let me know.

beckythemadcow

Hi Sopaz

My DH has two years left of his PHD, and Halifax point blank refused a mortgage as it is not a "permanent contract". I was surprised the mortgage advisor didn't suggest a guarantor situation...

We had similar plans, to you - buy now and potentially rent out when he finds a job.

Thanks for mentioning Lloyds Kara_P, I will speak to them.