How much does it cost if you buy now and climb the ladder later rather than mortgage?

CakeIsALie

I am in position of buying a house outright but it won't be in good location nor will it be good sized.

I don't mind living in a house like that as I'll be on my own for a while anyway.

I was wondering how much it costs to buy a house and then onto larger property and whether you think it's worth it.

I was also looking at shared ownership properties as they are very good value for money if you live outside London and don't buy one of those new build. S/O properties of that type are sold at market price around where I live.

I'm avoiding mortgages for now as I won't be approved for it any time soon.

HappyMJ

CakeIsALie wrote: »

I am in position of buying a house outright but it won't be in good location nor will it be good sized.

I don't mind living in a house like that as I'll be on my own for a while anyway.

I was wondering how much it costs to buy a house and then onto larger property and whether you think it's worth it.

I was also looking at shared ownership properties as they are very good value for money if you live outside London and don't buy one of those new build. S/O properties of that type are sold at market price around where I live.

I'm avoiding mortgages for now as I won't be approved for it any time soon.

You've got stamp duty and solicitor costs in any transaction. When selling you've got agency fees to pay.

My advice...Buy a house which is worth holding on to for quite a number of years. I would suggest you hold on to a property for at least 7 years.

If you can't get a mortgage could you get a personal loan at very low rates to give you some more to buy a larger house with? You don't always need a mortgage especially for smaller amounts.

G_M

well if you won't qualify for mortgages, that option is out anyway.

I'd do a forum 'search' for shared ownership. Lots of threads detailing the pros (a few) and cons (more).

I agree with Happymj that buying/selling has overheads, so doing it regularly is uneconomic.

alchemist.1

A lot of shared ownerships properties outside london are in not so popular areas. This may lead to issues when you come to sell and try to climb the ladder. Prices are flat in these sorts areas aswell.

CakeIsALie

HappyMJ wrote: »

You've got stamp duty and solicitor costs in any transaction. When selling you've got agency fees to pay.

My advice...Buy a house which is worth holding on to for quite a number of years. I would suggest you hold on to a property for at least 7 years.

If you can't get a mortgage could you get a personal loan at very low rates to give you some more to buy a larger house with? You don't always need a mortgage especially for smaller amounts.

I'm talking about £50k or so properties. Stamp duty will be zero. I don't know the usual solicitor fees are though.

I'm in a phase between finishing a uni and starting a family. Finding a permanent/family home at this point isn't really suitable for me.

G_M wrote: »

well if you won't qualify for mortgages, that option is out anyway.

I'd do a forum 'search' for shared ownership. Lots of threads detailing the pros (a few) and cons (more).

I agree with Happymj that buying/selling has overheads, so doing it regularly is uneconomic.

I searched for some further info about shared ownership but most are about new builds and those with mortgage + rent combination

I haven't seen much info about those buying a S/O house with cash and rent combination.

I plan to do it only twice - a small house/flat first and then family home. I hope fees won't be that much.

alchemist.1 wrote: »

A lot of shared ownerships properties outside london are in not so popular areas. This may lead to issues when you come to sell and try to climb the ladder. Prices are flat in these sorts areas aswell.

It appears that most S/O properties around where I live are indeed in not so popular areas. I guess it would be tricky when selling a property although there is some gentrification process ongoing in these areas.

ManuelG

CakeIsALie wrote: »

I'm talking about £50k or so properties. Stamp duty will be zero. I don't know the usual solicitor fees are though.

I'm in a phase between finishing a uni and starting a family. Finding a permanent/family home at this point isn't really suitable for me.

I don't come from the most affluent area in the country, but I can safely say that £50k properties are not the type to aspire to live in around here for even the shortest time... and certainly aren't the type that fly from the estate agents' windows.

CakeIsALie

ManuelG wrote: »

I don't come from the most affluent area in the country, but I can safely say that £50k properties are not the type to aspire to live in around here for even the shortest time... and certainly aren't the type that fly from the estate agents' windows.

I lived in one a few years back. Not everyone feels the same as you do.

HappyMJ

CakeIsALie wrote: »

I lived in one a few years back. Not everyone feels the same as you do.

Make sure you look at how energy efficient the £50k house is. Older houses tend to cost a lot more to heat. Spending a bit more on a house that is already fully double glazed with an insulated cavity wall can save you a lot more in the long run. Installing external solid wall insulation can cost thousands.

ManuelG

CakeIsALie wrote: »

I lived in one a few years back. Not everyone feels the same as you do.

Enough do for them not to move swiftly.

That, therefore, makes them a poor investment around here, cash purchase or not.

As in an earlier post you suggest that "It appears that most S/O properties around where I live are indeed in not so popular areas. I guess it would be tricky when selling a property," I can safely say that around where I live, you'd find a £50k property far, far harder than any shared ownership to sell on.

Pixie5740

Do you actually want to tie yourself down to one location at your stage in life? The freedom of renting after I graduated allowed me to take opportunities anywhere with relative ease.

moneyistooshorttomention

I recently swopped house. That involved a house move across country - in the process of which I bought a cheaper house. So you have to bear in mind that, added into the costs were additional removal costs because of moving across country (ie rather than locally) and I paid £300 to the removal firm to do my packing for me (wouldn't do that again - as their employees turned out to be Thieves 'R Us). I also had to pay some stamp duty (in view of price of house).

Total costs were, as anticipated, around £9,000. In your case - say knock a couple of thousand £s off that and say £6,000-£7,000 for the sake of argument perhaps??

That was for legal costs/removal costs/stamp duty/estate agent fees.

You have to bear in mind there might be what I call "Other B*gger Costs" - ie other people wasting your money for you and the law not allowing any comeback for that. So - you might find that you pay out money to buy Next House (eg survey/possibly some solicitor costs/etc) and the vendor wastes your money for you by not selling the house to you after all (eg because they gazump you or they've even gone and changed their mind about whether they wish to sell to anyone).

I've not allocated any money in case of "Other B*gger Costs" on either house purchase I've made to date - and there hasn't been any on either house I've bought. But quite a few people have had those costs. The one time I was at risk of OB Costs was when I had a valuation done on a house I was buying, but the vendor did one of those "change mind about selling it" scenarios. But I got those costs back - because the vendor had said to them that he "wasn't sure whether he would be selling the house or no". I was refunded the costs because that valuer was honest enough to admit to me that the vendor had said that to him and he had gone ahead anyway with checking the house out. Obviously, he should have rung me and asked if he should proceed (in view of what the vendor had just said to him) - but he hadn't given me the chance to cancel the valuation.