Need some advice- updated!

Imelda

Hi everyone,

I am in the process of selling my flat- due to exchange next week :beer:

My boyfriend and I are currently living in his small one bed flat (and have been for some months). The original plan was to live here for a year, scrape together as much money as possible and then hopefully buy somewhere with little or no mortgage. However, the flat is way too small, we have rented a storage unit which houses most of my stuff (OH is very funny about his belongings and refuses to store anything :mad: but that's a whole other story!) which is ok but not ideal (it costs £70 per month, not very MSE).
So we have started to look for houses. This is where the dilemma starts. Is it the right thing to do? Here are our options:
1. Stay in the flat, save up (we could save about £3000 per month with this option, plus we both get good annual bonuses, we estimate to be able to save about £100k by this time next year). We already have £100k in savings.
2. Sell the flat and rent, OH refuses to live in another flat though, rental places that he likes cost about £2k per month :eek: As you can see my OH is very fussy. He is concerned that the right place will not be available at the right time (ie when the sale of the flat goes through).
3. Sell the flat and buy a house, there are a few on the market at the moment that look suitable (going to see them tonight) for between £500k- £600k. The only downside to this is we are not planning on living in London forever, 5 yrs maximum. What if by then prices have dropped dramatically? Is this completely the wrong time to buy?

If Lynzpower is about can someone point her in this direction? We are looking at houses in the Bow conservation area, I just wanted her views on the market in this area. Thanks!

Doozergirl

lynzpower has been suitably directed

lynzpower

hiya huns

Honestly ive been watching the bow market since I sold up and i cannot get whats happening there. I know in south bow ( devons rd way,) there are houses going on at 480 achieving 460.

Definately, property in the conservation area is popular, is there much coming up?

Personally, and you know my views, Id stay put. saving that sort of money.

lynzpower

had a quick nose

420 for a 2 bed on wrexham road http://www.rightmove.co.uk/viewdetails-15875738.rsp?pa_n=2&tr_t=buy


seems a lot for what it is or maybe im just tight

Imelda

Exactly what I was thinking Lynz, maybe it's the Olympics.....

The houses we're looking at are in North Bow:

http://www.rightmove.co.uk/viewdetails-8272260.rsp?pa_n=2&tr_t=buy
(can't find the other one at the mo)

I personally like this one but it is way too much:

http://www.rightmove.co.uk/viewdetails-16070720.rsp?pa_n=1&tr_t=buy

My head says, stay where we are and save for the next couple of years and then we can move away from London, mortgage free. However I think we would go stir crazy living in this shoe box for too much longer- here is an identical sized flat:
http://www.fish4.co.uk/iad/homes/advert?adId=15005739&sid=s13815138A600055&pos=31&src=search&tot=141&page=4

We work hard,(ok, sometimes, I don't always spend my time on here!), earn good money and would love to have a bigger house so we could have a better quality of life. Really torn!

lynzpower

could you not rent a house/

How much will you pay in stamp duty on buying any of those- sory my head is caved in abit today - figures not working lol

Doozergirl

Wow! That IS a small flat! If you were somewhere a bit bigger, I could see the logic in staying put and saving, but that is definately a one bed flat for one person!

The second house is very nice!

Imelda

Renting is what I am suggesting at the moment, OH is not so keen. There's not much around that's unfurnished (we both have furniture). And it's mostly flats which we're both a bit fed up with (would love a little garden!).

Stamp duty is 4% over £500k so between £20 and £25k. This would be at least one year's rent. Property prices would only need to drop 10% for us to have made a loss vs renting so for me it is a huge possibility. It would be different if we wanted to buy a house that we plan on staying in forever but we both know it is relatively short term.

nobblyned

You have a large income, large bonuses and plenty of savings. Why is your desire to have a place mortgage free so strong?

I'm all for saving, but you seem to be living like paupers on a king's salary just to meet that target.

There has to be a balance between living and saving. I guess everyone's position on that balance is different but yours seems pretty extreme.

Imelda

nobblyned wrote: »

You have a large income, large bonuses and plenty of savings. Why is your desire to have a place mortgage free so strong?

I'm all for saving, but you seem to be living like paupers on a king's salary just to meet that target.

There has to be a balance between living and saving. I guess everyone's position on that balance is different but yours seems pretty extreme.

Hi nobblyned,

I know it seems extreme but our plan (well dream!) is to move out of London, preferably to Devon, have no mortgage and do low stress jobs, raise a couple of kids and lead a simple but happy life. We can't do our jobs anywhere but London. Our theory is that if we live simply now it won't hurt so much in the future when we don't have this level of income.
We don't scrimp on everything, we love travel and are going on a dream holiday later this year. It's just a house is such a huge commitment and has the potential to go very wrong and delay our escape from the city.
Many of our colleagues have saddled themselves with huge mortgages, if there was a crash in the markets they would find it very hard to survive as they rely on their bonuses to pay the bills.
I hope this explains a bit why we're as keen as we are to get rid of any mortgage asap...

nobblyned

We're not in a very different position ouselves, except for the fact we bought about 18 months ago, which has thankfully done us ok in the recent market. But we too dream of escape!

I'd think if you are so concerned about the property market and this is your dream then renting is the far better way to go. You remove the risk and still can save at a good rate. Otherwise the only reason to buy a house motgage free is if you believe that the rent saved will outstrip the interest coming from your saved capital (assuming you are neutral on property appreciation).

If your OH claims he can only live in £2k+ p.c.m rental properties, he needs to reassess his commitment to your dream.