Considering buying a £50k house then selling it and buying a £200k house...

bouicca21

House prices rise, become static or fall in unpredictable ways. Buying now means you will probably be insulated against future rises, because what 300k buys now may not be what 300k buys in a few years time. I can remember saving for a deposit in the 70s when house prices continually soared out of reach and several years hard saving saw me able to afford exactly the same sort of house as if I'd not saved at all. This year the London bubble means that I'm buying a flat for 100k more than it sold for 18 months ago.

But why not use the 50k as a deposit and take a mortgage to get something closer to what you actually want? Look at the mse mortgage calculator to see what £300 a month would get you of it were repayment rather than rent. Remember your 50k house (crikey, where In the uk are there such houses?) is going to need maintenance, redecorating, and may not be easy to sell at the right time.

quantic

We did a similar thing, bought a cheaper house in a not so great area while we worked towards the kind of house we actually wanted. One of the issues with this is that the house we bought didn't go up in value barely at all over the past 3 years, whereas the houses in the nice area which we are now buying have gone up by around 30/40k.

This would have been a big problem for us except for the fact that we bought ours repossessed at way below market value, so when we sold it - we got less than anticipated but we still did ok.

That being said, throwing away rent for 5 years isn't much better? All I'm saying is, assume the house you want in 5 years time, will probably have gone up in price and the 50k one won't.

rtcw

bouicca21 wrote: »

House prices rise, become static or fall in unpredictable ways. Buying now means you will probably be insulated against future rises, because what 300k buys now may not be what 300k buys in a few years time. I can remember saving for a deposit in the 70s when house prices continually soared out of reach and several years hard saving saw me able to afford exactly the same sort of house as if I'd not saved at all. This year the London bubble means that I'm buying a flat for 100k more than it sold for 18 months ago.

But why not use the 50k as a deposit and take a mortgage to get something closer to what you actually want? Look at the mse mortgage calculator to see what £300 a month would get you of it were repayment rather than rent. Remember your 50k house (crikey, where In the uk are there such houses?) is going to need maintenance, redecorating, and may not be easy to sell at the right time.

I cannot get a mortgage as we're not eligible for it. Even if we had a massive deposit put down, we still wouldn't get approved for a mortgage.

I think we may be buying one of these derelict houses you see in TV shows with auction houses and then living in them (we'll make sure that it has to be liveable before buying) while we fix it up.

quantic wrote: »

We did a similar thing, bought a cheaper house in a not so great area while we worked towards the kind of house we actually wanted. One of the issues with this is that the house we bought didn't go up in value barely at all over the past 3 years, whereas the houses in the nice area which we are now buying have gone up by around 30/40k.

This would have been a big problem for us except for the fact that we bought ours repossessed at way below market value, so when we sold it - we got less than anticipated but we still did ok.

That being said, throwing away rent for 5 years isn't much better? All I'm saying is, assume the house you want in 5 years time, will probably have gone up in price and the 50k one won't.

We don't mind if the house price either stays the same or raises slightly. In fact if we look at house prices in these areas, it seems to be raising at increasing rate since quite recently.

getmore4less

Get 2 ajacent £50k places and you have a 4 bed for 1/2 the price of the 3 bed......


What do the £50k places rent for?
once you factor in the selling costs the yields might be quite good.

Save up a new deposit over the 4 years from the rent money you arenot paying out. and once you are mortgagable you may be in a possition to just rent the 2 bed out

rtcw

They're terraced houses, so merging both of them into single property doesn't really work well.

£50k places usually rent out between £200 and £400 per month. I don't plan to let out properties out.

Mortgage in few years in the future is still out of the picture. We don't think we'll be ever eligible for it.

desperate_times

bouicca21 wrote: »

House prices rise, become static or fall in unpredictable ways. Buying now means you will probably be insulated against future rises, because what 300k buys now may not be what 300k buys in a few years time. I can remember saving for a deposit in the 70s when house prices continually soared out of reach and several years hard saving saw me able to afford exactly the same sort of house as if I'd not saved at all. This year the London bubble means that I'm buying a flat for 100k more than it sold for 18 months ago.

But why not use the 50k as a deposit and take a mortgage to get something closer to what you actually want? Look at the mse mortgage calculator to see what £300 a month would get you of it were repayment rather than rent. Remember your 50k house (crikey, where In the uk are there such houses?) is going to need maintenance, redecorating, and may not be easy to sell at the right time.

He has already said he can't get a mortgage and will be cash hence the question about 50k vs waiting and 200k.