Cash to buy a small house, Advice please.

cbr600f

Hi,

Ive recently aquired the means to purchase a house. I want to put the least amount possible into a house, but be comfortable.
My wife and I need to be in a certain area in North east england.

I was nearly drawn in by a shared ownership scheme, with a value of 140k, and a promise of 25% share - 35k, (had solar panels and was new) I pushed for a more realistic valuation in line with nearby properties - 120k but then i got an email back saying that theyve decided that 25% is not finacially viable for them, them being the housing association. therefore now they want 50% - 70k. and wont revalue the house despite good reasoning from me.

I feel I have just had a close shave?? Would that have been a terrible thing to do? Or should i push for the 25% still?

any way in light of that situation should I find a small semi or bungalow an put 30-50k into it, location not ideal?

rent this 140k house for £440pcm (which is £100 less than our current rent) on the rent to homebuy scheme until we no longer need to live in that particular area (around 2 years)

Or some other idea?

Id welcome any constructive input, has anyone else been in this situation?

Thankyou.

Some extra questions:

Due to not having a mortgage and not wanting one is shared ownership a bad idea?

Is there another way to live in a nice house in a good location?

iwilldoitthistime

where excatly in the north east do you want to be?

cbr600f

County ...

Annisele

If you only need to live in the area for two years, just rent.

Unless you're expecting house prices to rocket, the buying and selling costs mean that it's unlikely to be worth purchasing for such a short period.

cbr600f

Good point. But then again 8,000 on rent over those two years cancels out any interest earnt so id the have the same funds but be slightly worse of due to inflation. Is it worth risking the property market increasing and being even more pushed for choice?

If were happy where we are we would probably continue to live in durham. So whats best for long term? ...hmm

cbr600f

I must just say after these two quick replies im eagerly anticipating other peoples input. Thanks.

Annisele

There aren't many insomniacs around here; be patient!

By "buying and selling costs", I didn't really mean interest - I meant legal fees, surveys, estate agent's commission, that sort of stuff. If the rent you'd pay cancels out the interest you'd earn, then that makes calculations nice and easy. However, you could easily pay £3k on buying and selling costs (or considerably more or less).

So, you'd need the value of the property to increase by at least as much as the buying and selling costs for buying to be worthwhile on a purely financial basis.

Buying does have other benefits; you're protected to some degree against future house price rises, and you have security of tenure - so long as you pay your mortgage, you won't be kicked out of your house.

Renting protects you against house price falls. And when your boiler dies a death, it's your landlord's chequebook that sorts it out. Finally - and possibly most importantly, given that you don't seem at all sure of your plans - it gives flexibility. You could buy a house, be unable to sell it, and then be stuck somewhere you don't want to live for months or years. If you're renting, once you're out of your fixed term you can just give your notice and go (flip side of course is that your LL can give you notice and get rid of you almost as easily).

I don't think the "rent or buy" question is the no-brainer some people seem to think it is. I'm probably biased though - I've rented for years, and while I'd ultimately like to own a house that just isn't practical for me at the moment given my circumstances.

cbr600f

Food for thought there...
I brought the interest into it out of the blue, I must remember everyone hasnt.heard my thoughts in the past few days. I think theres obvious pros and cons to renting and buying but any advantage in either is hardly distinguishable.

Ove got four or five options which i need to narrow down.

A pros and cons list may help!

Ive just been looking at building a container home... worth all my capital? My wife says she knows i want to be different but a terraced house would be a bit more normal in her eyes.
75square meters at £1000 p sm. would be bespoke and luxury. . .Its late. haha

dimbo61

I have know idea about the property market in Durham or the rental market.
Why are you only staying in county Durham for 2 years ?
Work or study ?
Do you like the area ?
Would you like to live there for the rest of your lives ?
Have you got family and friends elsewhere ?
Income? Jobs? type of house you want ?
Where did the £101K come from ?
So many questions Age, kids? career ? long term plans ?
Me I would buy the best house I could afford with a great deposit and a mortgage IF? you plan on staying more than 2 years!
Not shared equity, a place that you own ( after the mortgage is paid)
A house not a flat where you have people above and below as well as each side.
If you can afford a semi great and a detached even better.
Garden, garage, good sized rooms?
Now you could take on a older property that needs work by putting down a smaller deposit and having the cash to refurb the place

cbr600f

Work and study, we like the area, family are local.
Were very low income under the tax bracket.
Ideally a little.detached property in good location would be excellent. In just dubious about parting with most of the capital...

Were young and no kids.

The poll is brilliant!

SG27

Wait and gain interest on capital +10% of capital p/a (over 5 years)

I'd save up and buy mortgage free in a few years. If you have no mortgage you are free all your money is your own.