Buy or not?

bluedrop

Now we found a house that ticks ALL the boxes for us. We are first time buyers but we have very specific choices....so, we don't find too many houses that match our criteria...

The last time we found a house we really liked was in aug 2011. We had to let it go because we were told in the last minute that the house was underpinned.

This house that we saw now is lovely. But, we need to stretch a bit to buy it.

We have around 15% deposit now, but will have 25% if we can complete after April 6 (new fin year I can draw dividends from my company). We currently pay £1000 in rent for a 2bed flat in a nice area. Apart from the comforts of owning a house, it will make financial sense to buy this house only if house prices go up 5% in the next 5 yrs. If we buy now, our mortgage will be appx £1700. This can come don to £1300s by apr 2014...It's still quite comfortable at 1700 since both of us work - but we always planned to have a mortgage that is comfortably affordable on one salary (all living expenses on one salary policy)...

This house is in Bromley and is in the catchment area of excellent primary and top secondary schools. It's appx 0.4 miles from the rail station (London bridge is 30mins)...

The question is : do you guys think I should go ahead and buy it? Is it worth that financial stretch for the next two years???

What would you do if you were me?
............................................
Edit: some more details
My husband and I are 31. We have a 4yr old who is in school. My husband makes 60k as a perm employee. I make about 100k from my own business. I take about 40k as salary and dividends together each year. I have a spreadsheet where I calculate buy vs rent financial situation. That's where the 5% figure came from.

Gra76

It's worth it. Two years will fly by and you'll wonder why you even asked yourself the question. Do you really want to look back in a few years and regret not doing it?

crash123

Its your choice not ours.

bluedrop

It is my choice - without a question.

But I want to hear what others think!

CLAPTON

not really enough facts here

no idea of your age, your incomes, your family asperations, what's special about the house, what effect a rise in interest rates will have on you
or why 5% growth in 5 years is important ..do you intend to sell then?

bluedrop

Updating my post with answers to your questions Clapton...in 5 mins

What's special about this house is, it's in a very nice area, in catchment for good secondary schools, close to station. It has 3 double bedrooms, very spacious for the price it is on for

sss555s

If it's right for you then buy.

Sounds very right for you from what you say.

Jegersmart

If you rarely find a house that you like, have a decent buffer in terms of liquid assets that can be used to pay the mortgage in case something happens to your incomes then I would say do it......but

consider a scenario that is unlikely but possible to happen. Look at a situation where your husband loses his job and doesn't work for 9 months and you unexpectedly find out that you have another child on the way.If it still looks doable then you should be OK, imho.

J

paulmapp8306

Financial sense, and that 5% doesnt really come into it. buying your own home to live in is about much more than financial sense. If you were buying as an investment then its different, but not to live in.

If your so specific about what you buy, this ticks all the box's, and you can afford it - its a no brainer for me. Just buy the house and make yourselves a permanant home.

CLAPTON

ah well

with two children and pretty good incomes the house seems a no brainer to me.
You surely wouldn't be planning to stay in a two bed place for another 5 years?

Generali

It seems like a good idea to buy, especially if you have needs or wants that mean a suitable house comes up less than once a year!

The most obvious risk at the moment is that interest rates go up. Normally mortgage rates are somewhere between 5-7%, possibly peaking at say 9-10%. At what point would you cease to be able to afford the mortgage? That's not to say it's a bad idea to buy, more that it's a good idea to know what has to happen for things to go pear shaped.