Rent or buy - What would you do?

foreversomeday

Me and my boyfriend are looking to move in together. We both currently live at home. I've been studying and so my mum hasn't charged me any rent yet, but bf has been paying his mum £50 a week to live at home. He earns probably about £20,000 a year and when I start working in July I will be on £16,000 a year.

In about 3 years bf stands to inherit about £250,000. His mum thinks we should rent for a while and when the money comes through get a mortgage. His original idea was to rent for a bit and then buy outright with the money, but now she has suggested this he wants to get a mortgage on our combined salary until the money comes through.

House prices in my area are roughly £500-600 a month renting, which we will be able to afford on combined salary.

Just wanted some opinions and more experienced advice :-)

Rick62

I would rent for now. If you bought for £250,000 your payments would be about £1300 just on interest, plus all the maintenance costs etc and prices are very high right now.

Get used to living together, being responsible for a cheaper rented place, wait and see what prices do (they may even ease off). Also with the costs of buying & selling best wait a bit, if you do get £250k in 3 years then you'll be in an excellent position.

BrunoM

Rent now until the money comes through, then consider how much of the money to spend on deposit/partial cost of house, vs how much mortgage to get (if any).
Decision then will probably depend on the market and economy at the time!

All in my very ignorant opinion

Feanor

Hi,

I also think you should rent for a while first. You have never lived together and its a difficult thing to get used to sometimes. It may be absolutely fine, but there may also be difficulties. Taking on a mortgage is a huge commitment, not only to repaying money but to each other also.

There are alot of hidden costs involved with buying and you really need to have an understanding of it all and have a good grasp on your budget. Until you live together and see what kind of lifestyle you want to lead, it will be very hard to truly know what you can afford etc..

I would see how it goes for 6 months and then reassess the situation then?

Good Luck x

Unknown1234_2

Do you have a deposit?

Ay funds for the legal fees and stamp duty?

Ay funds for furnishing the place?

If you do have all of that you could get a mortgage and then when the money comes through pour it into the mortgage and either reduce term or monthly payments.

Is renting cheaper than what a monthly payment would be?

What prices are you looking at?

You have a joint income of £36000 so on a X4 salary basis you could get a £14400 mortgage.

Would that be enough to buy something suitable?

Destined_to_be_skint

I second Feanor - you never know what you are letting yourself in for! Don't mean to be patronising but if your BF has never lived on his own before he probably doesn't realise what his mother does for him (no matter how mature he is) and how much time it takes to run a household, even stuff like sorting out the bills. So, I personally would rent first, then reconsider when the cash comes through. Good luck with whatever you decide.

nobblyned

As you haven't lived together, and I'm guessing you're both young (guess BF must inherit when he reaches a certain age - 21? Unless of course he's planning on bumping someone off in 3 years time...), then to buy a house together would be a risky and expensive strategy. Much better to wait, rent and test the living together water first.

jay7_2

You can compare the two options here:
http://www.allagents.co.uk/calculator/mortgage-rent/

There are a lot of other things to consider but the above calculator might give you an idea of how much you would spend on interest if you buy and how much renting would cost.

foreversomeday

Not 21, as his mum pushed the age up - he used to be a bit of a tearaway! But we are quite young.

pricedout_1

buy buy buy buy buy buy buy !!!!!

Cliff_Wright

It might sound cold but taking an unemotional pragmatic view, you mention that your boyfriend stands to inherit £250k not you.

What happens if, however unlikely it may be, in 1 or 2 years time, you part ways with your BF ... what position does that leave you in then?

Either way I personally would want to cover all my bases and make sure the investment that you are making is an investment that pays off for you whatever tomorrow brings.

If you see renting for 2 years almost as throwing money away (not entirely true I realize) then you'll have spent a fair amount and personally gained nothing in an investment sense.

If you jointly buy a house, then you own half the equity of a house (albeit mortgaged) ... Then when your BF inherits £250k he can buy you both another place to live and you can either continue to rent out your mortgaged place which will then provide you with a longer term growing investment, or you can sell the mortgaged house and keep the equity.

Might sound like a very cold-hearted approach (nobody, including me, likes to doubt their relationship) but it's a way to ensure you personally don't end up with nothing.

If I were in your BF's position and was waiting for a windfall, I'd probably gamble with renting for a short period to see what inflation rises happen and what effect this has on the housing market. If the effect is a decrease in house prices, then I'd jump on board and buy while it's low and adopt the above investment approach, if nothing much happens then you can continue to rent until the £250k comes along.

Hope this helps - Good luck with whatever you do.

Cliff