London FTB - Feels like massive gamble!

Jhoney_2

SlapShot wrote: »

Thanks again.

@Jhoney
Kids ASAP and location is restricted by our respective commutes (S is definitely out and E would be too far east to get comparable value).

Fair enough. Re kids, if that's the plan get yourself a 5yr or 10yr fix and overpay where possible.

I think it's tsb that do a 10yr with a 5yr opt out with no ERCs, there may be more Lenders so please check to satisfy yourself that you meet criteria/they meet your needs - but that gives you a juncture to assess how things are working for your situation.

FWIW I do not use, work or endorse them, just read that offer several times within the forum.:)

If e.g you are expecting, you can just keep on rolling in the fix. If you are of another opinion you ditch it and can rent, up/downgrade or whatever you like.

Ultimately, you always have the option to sell up, but not advisable until owned for 6mths apparently!

omariqy

FYI Woolwich/Barclays are doing a 10 year fix at 2.99% if you've got a 20% deposit. I don't think it is being advertised but is available through some intermediaries. I think we will be in a low int rate environment for the next 5 to 10 years to be honest.


I'm in a similar position to you as a FTB. I feel quite lucky to have the deposit I have and the budget I have but I still have this feeling that buying in London would be buying at the top of the market. However, I should, like you, view this as a long term decision.

Snakey

I'd fix for ten years if I were you, and then you've got a guaranteed saving of £200 a month on your current rent for the next ten years. And that's your current rent - I hear what you're saying about it being an acceptable margin to pay for transferring the risks of ownerships from you to a landlord, but if interest rates shoot up and stay high landlords won't be sucking up losses so that they can keep rents the same will they?

The main difference between renting and buying is not what happens today but what happens in 25 years time. Unless you expect a storming pension or to be reliant on State benefits (risky), you don't want to be paying rent into retirement.

Keep your eye on the prize of ultimately owning a significant asset (and, even better, being able to live in it) and ask yourself: if not now, when? When would it be a good time to buy? How long will you wait to see if it all crashes - and what will you do if, in ten years time, it not only hasn't happened yet but prices have risen by 50% (and you have two young children blah blah)?