Better to buy or rent for 4-5 year period as first-time buyer?

pjcox2005

You don't appear to be comparing like for like with your examples of rent vs house price costs otherwise someone is making very good margins.


If I take Luton for example, then a 2 bed house goes for £220k-£140k so your cost is at the base of that range, but rentals for two bed houses are £600-£800. Similar to Potters Bar where the 2 bed house is £450k-£320k where as rent for a 3 bed house (no 2 beds renting) was £1,350.


If you take the Luton example then the difference between a £750 rental and a 4% mortgage on £150k (potentially low amount given house prices and interest rate given 5% deposit) is £250, as the mortgage will be £290 capital and £500 interest. So it will take you the first 6 months (probably more) to recover the stamp and conveyancing cost.


Over 4-5 years you are likely to be better of assuming house prices rise, but if you find that you want to relocate/change house as life gets in the way earlier then you probably won't see much difference between the two costs.


So basically there should be upside to buying but you increase risk in terms of house issues, neighbours and not being able to sell if you do need to relocate.

Ebe_Scrooge

Another vote for buying, if it were me. Even if you end up moving after 4 or 5 years, odds on the house will have increased in value so you can view it as an investment.

Yes, you have the maintenance / repairs to factor in, which wouldn't be an issue with renting. Also, things like bills / council tax ( would these be included in the rent, or would you be paying them yourself anyway ? ). But on balance, if it were me I'd buy. Certainty of tenure, and you can decorate, knock walls down, redesign etc. to your heart's content.

PasturesNew

4-5 years.
Working from home, needing to know you're "allowed"/able to and knowing you can sort out your space and not be asked to leave/move.
Want a pet.

All adds up to "buy".

Mallotum_X

Another vote for buy. You have probably missed the better priced places in Potters Bar, but Luton still has plenty of decent property at your price range. Two bed houses in the better areas are between £160k and £200k, if you want a dog then there are plenty of older 2 beds with larger back gardens, (typically 1920s and 1930s houses).

csgohan4

I would rather pay my own mortgage than someone else's

ViolaLass

You might not want to buy immediately in an area that you don't know.

hcb42

buy.......