Buy or keep renting?

Ingegroult

Hi Everyone,

This is my situation: me and my wife are currently living in London and rent a flat at £1,300 / month, bills excluded.

We are thinking to move to France in the near future, where we will buy a house for sure.

We are hesitating between 2 options:

Option 1 – buy a property in London (or around) and sell it when we leave
• We would buy a two-bed flat in about a year time from now, for about £300-350k, with a deposit of c. £100k (of which a certain % will go to the solicitor etc.).
• We would then sell it when we need cash to buy a house in France, say 3-4 years later.

Option 2 – keep renting in London until we leave the UK
• We get c. 2.5% interest rate by leaving this cash in the bank

What would you do?

Thanks!

want2bmortgage3

I would say keep on saving and buy when you go to France, aim to have as much deposit as possible for the France property. Too much hassle buying something in London at inflated prices to then sell again in a couple of years.

Tixy

I would keep renting in your position.

mobfant

If you definitely intend to go to France in 3-4 years, I would choose option b) without a doubt.

London is in the middle of a house price bubble right now. It may just plateau if the Government/Bank of England take corrective action, but it could easily burst in the next 3-4 years. Then your options will be sell and lose money, or stay in the UK when you'd rather be overseas - possibly for several years if you need the house price to go up again. Add on the costs of buying (stamp duty, fees, c£10,000), the stress of buying, and the uncertainty over a possible house price crash, and you'll make your next few years in London much more enjoyable if you continue to rent. You can live in a nicer area paying £1,300 rent than you can buying a £300,000 flat.

But that's just me. I'm trying to buy a two bed flat at the moment with the intention of staying in London for the long term, and am seriously thinking about renting for 4-5 years and waiting for the crash to happen.

Ingegroult

Thanks! Good to see concordant opinions (-:

natlie

I am planning to do the same and its been a nightmare selling here, we have been renting our owned house out and living in rented accommodation for a year now as a job more meant we had to relocate.


You could end up in negative equity if you bought now depending on house prices and we have been looking in France since 2010 and what you get for your money over there it just doesn't compare - our plan is to buy soon, use the house as a holiday home to make some income and buy another property to let out as an income when we move over there in 10-15 years.