Flats...buy or rent?

la_farfallina

I am hoping to buy a property soon, however I can only afford a flat. I could dedicate my life to scrimping and saving but I still wouldn't be able to buy a house.

In view of the possible minefield that leaseholding could be, do you think that ultimately I would be better off renting indefinitely?

I value your opinions. Are there any happy renters out there?
Or any happy leaseholders?

cwcw

I'm a leaseholder and have been glad to have bought rather than renting, despite buying at the top of the market, as we now have a fairly decent amount of equity which we can use to move up the ladder. The mortgage has always been similar to, or less than, the cost to rent, so for us it has been better but does depend on your own circumstances.

guitarman001

You're in money even though you bought at the top of the market? Where is this?

Mortgage and rent are about the same in many places but I would not recommend buying now. I would say keep renting and saving... then as prices decline the capital you'll have to pay (as well as the interest on it!) will be much less. You know it makes sense. Don't buy into a falling market. Buy just after the bottom. (Alternatively, move to the US if you can get a job there and buy an absolute mansion for the price of a flat here - you'd be amazed at the affordability of some places after their housing dip, which is still in effect I may add).

cwcw

guitarman001 wrote: »

You're in money even though you bought at the top of the market? Where is this?

Mortgage and rent are about the same in many places but I would not recommend buying now. I would say keep renting and saving... then as prices decline the capital you'll have to pay (as well as the interest on it!) will be much less. You know it makes sense. Don't buy into a falling market. Buy just after the bottom. (Alternatively, move to the US if you can get a job there and buy an absolute mansion for the price of a flat here - you'd be amazed at the affordability of some places after their housing dip, which is still in effect I may add).

We're actually selling now, and based on the highest offer we've rejected so far, the value has lost 6% since peak, but because we've been on such a low rate mortgage for the last 3 years, we've paid a lot more capital off. Our mortgage is around 85% of what the rent would cost, and of that, around 80% is straight into our capital and 20% is interest (the equivalent of rent). So we are much financially better off than if we had rented. And because our mortgage is similar to a rent, we've still been able to save a lot too, so we have savings plus equity.

On top of that, we suspect an acceptable offer is going to come in tomorrow (but don't want to jinx it too much!), so the value since peak hit won't be as bad - somewhere in the region of 4%. The OP is not buying at peak, so I would advise that if he/she can get a mortgage for around the same cost, or lower than renting, and it's not all going on interest, that buying could still be a good option (factor in possible rate rises though). I think property values are near their bottom and a few years from now will be at least a few % higher, but no-one can predict what will happen with them.

In summary, buying V renting depends on several factors and most are individual to the person and their local market. However, I wouldn't let the leasehold factor put you off, provided you check thoroughly that it's well run and speak to some other residents of the building you intend to buy in. It has worked well for us.

dawyldthing

i think house prices will go down for some while yet. Also the problem with flats is the leasehold as it could be like a second morgage/rent for what you have to pay towards the upkeep of the building (i don't know the real name of it, just seen it on here)

Tr1pp

I own a leasehold, really nice top floor split level maisonette, cant fault it, and happier then when we were renting, we now have a property that we can use as a spring board in the future to get a better place.

only annoyance is that you do have to pay service charges usually about £50-100 per month (within the M25 area where i live). however this means you dont have to worry about any unexpected problems. our blocks have had their roofs replaced at a cost of about £155000...im glad we had a pot saved to pay for that. If you own a house you will have to pay £7000+ for a new roof once it wears out.

Swings and round abouts really

Id say buy if you can afford it