buy now or in two years' time?

rocks8

Hi all,

I am debating whether to buy a 1 (or 2) bedroom flat this year or wait two years before doing it.

I work in Slough and would be interested in buying a house in Surrey, I have almost 11000 Pound saved and if I keep saving £500 pm for the following two years I should have roughly £23000. The reason why I want to wait two years is because by then I would be able to get roughly £11000 from some shares that I buy every single quarter in the company where I work. That would make £34000 worth of saving.

My question is whether I should buy a small flat now and use the 11000 pound as a deposit and by doing so getting a less advantageous mortgage ? Or should I wait two years and risk that the cost of buying a house further increases?

Thanks a lot for your help

Planet_Switzerland

It depends on whether you can get a mortgage at the moment and would you would do in the two years instead i.e. would you be renting


I suspect your deposit would be too small for Surrey even for a small flat.


If you are renting, I would say as soon as you have enough deposit and are able to get a mortgage then go for it. You may get a less advantageous mortgage, but the amount it would cost you in rent and potential price increases could easily cost you more than the extra interest you would pay on that mortgage in that time.

worried_jim

Buy as as soon as you can. In the S.E. you snooze, you loose.

pathtofreedom

How much do you have saved for solicitors, arrangement fees, survey, moving costs, stamp duty etc on top of your deposit? How much are you thinking of spending and what LTV as I'm not sure 11k is a big enough deposit for around there, but I might be wrong.

rocks8

HI all,

Thanks for your replies, I am not paying the rent at the moment and the idea is to rent the property once I buy it. I am aware 11k is not much but that is what I have got atm unfortunately. If I were to buy it with my GF we could get to 20-22k but that would mean a shared property which may create problems if we ever split up...

I think I would have to wait two years then although the cost of a flat would be increasing too..

Thanks

Caz3121

rocks8 wrote: »

the idea is to rent the property once I buy it.

you are going to need a 25% deposit for a BTL mortgage, also there are fewer lenders for BTL for people that do not already own a property

AnotherJoe

rocks8 wrote: »

HI all,

Thanks for your replies, I am not paying the rent at the moment and the idea is to rent the property once I buy it. I am aware 11k is not much but that is what I have got atm unfortunately.

Pipe dreams. Recent changes in legislation are aimed at deterring amateur wannabe landlords like you but it appears they haven't worked.

Hoploz

My advice would always be buy asap as prices tend to go one way, esp in this desirable part of fhe country. Prices are likely to increase by 20k sooner than you'll have the extra saved up.

However, going on the figures you've given, even if you used the full 11k as deposit, assuming you could get a 90% LTV mortgage, which you wouldn't if you're letting it, you're very very unlikely to be able to afford even the smallest of flats in Surrey. Unless there is a cheap little enclave I haven't heard about.