Buy or not to buy

Littlefishinbigocean · 29 June 2016 at 8:05AM

I bought a property after uni and I currently rent it out due to a relocation/change of work contract. The rental covers the mortgage but I'm now paying £1000 a month in rent where I am. I've managed to scrimp and save to have a deposit to buy a place where I am.

My question is, this saved deposit is it more beneficial to buy a property where I am (approved for second mortgage) or to pay it into my original mortgage and just continue to rent?

brodawel · 29 June 2016 at 8:23AM

How long do you expect to be staying in your new area?

Bluebirdman_of_Alcathays · 29 June 2016 at 8:32AM

Do you have enough for the extra 3% SDLT?

Littlefishinbigocean · 29 June 2016 at 8:33AM

Next 5 years though I won't be going back to my flat.

Littlefishinbigocean · 29 June 2016 at 8:35AM

Bluebirdman_of_Alcathays wrote: »

Do you have enough for the extra 3% SDLT?

Yes, I've taken that into consideration.

brodawel · 29 June 2016 at 8:50AM

I'd say if the rental income is easily covering your first mortgage then perhaps your saved deposit is better put towards your second property. I suppose it all comes down to whether or not you are happy renting or would you like to live in your own home.

cashbackproblems · 29 June 2016 at 8:57AM

Think it all depends on how prices are going in your area, as with Brexit and house prices to be impacted, it might be a good idea to wait it out.

smile88egc · 29 June 2016 at 9:10AM

How much equity do you have in your first property? You dont want to get into a situation where house prices drop so you are unable to sell the first one in the next few years without making a big loss.

Littlefishinbigocean · 29 June 2016 at 1:36PM

smile88egc wrote: »

How much equity do you have in your first property? You dont want to get into a situation where house prices drop so you are unable to sell the first one in the next few years without making a big loss.

Still owe about 77% on the property from purchase price. Though that drops to 72% of current house value. Rental market seem to be strong still, as since I moved out 4 yrs ago it's been empty 8 days. But maybe best to wait it out...

But kills me that I'm paying rent to someone else ... Earning practically nothing interest wise on this money saved. So have been thinking use it either pay off the first one quicker or pick up a second one so I'm Atleast paying into my own pocket. Or sell my rental property and just buy here with a bigger deposit. Though the rental is bringing in good money as it is a great area so why change that I'm thinking. Ah the joys of choices that can actually effect your life.