Rent a dream or buy a dump?

pinknsparkly

You cannot change the location of the property, I would feel incredibly unsafe in the location. And so my answer is rent, but rent as cheaply as possible (within reason, avoid any deathtrap properties) in a reasonable area that you feel safe. Seriously consider renting a room in a shared property (that's what we're currently doing, we are renting a three bed house and are subletting the other two rooms [with the landlords permission!]). And save save save

Then buy a cheap property in an area you feel safe in. We currently rent (and are hoping to buy) a property in an ex-council estate (half is still social housing, half is privately owned). It's not quite the "worst" area in my town (by reputation), and I wouldn't ever chose to live in the worst area. But we chose the location to live in based on actual experience of the area rather than reputation and have ended up in a very friendly area in an ok house, and are able to actually save money! I love the people in our little council estate

SparksAlive

If at all possible, I would say wait, don't make either choice. I can't afford a dream home but I don't want to rent again, so I'm buying a middle-ground house. It's not in a dream location but it's also not one of the worst, and it's a really nice little place that just needs some cosmetic work. So not a dream, but not a dump either.


However - if you have to make the choice right now and can't wait, I would say rent. If you're in a position to buy the dump right now then you must already have some savings, so just sit on them till the right thing comes along and if you can, keep adding to them while renting.

AlexMac

For waht it's worth, I bought a dump in Brixton, South London, for £10k in 1975; needed a roof, heating, wiring, etc; way before the area was gentrified, or trendy or uber-cool (or whatever it is now)...

I checked it out on Zoopla a year or two ago- soon after it had sold on (albeit much blinged up) ... for well north of £900k!

And it got me on the ladder so I've also managed to migrate up-price wise, with a series of house moves and lots of hard work and a good bit of luck.

But although that was a rough, multicultural area, it wasn't druggy; so altho' til you said that I was all for buying anything, I'd be cautious if it's really that bad... is it?

missbiggles1

AlexMac wrote: »

For waht it's worth, I bought a dump in Brixton, South London, for £10k in 1975; needed a roof, heating, wiring, etc; way before the area was gentrified, or trendy or uber-cool (or whatever it is now)...

I checked it out on Zoopla a year or two ago- soon after it had sold on (albeit much blinged up) ... for well north of £900k!

And it got me on the ladder so I've also managed to migrate up-price wise, with a series of house moves and lots of hard work and a good bit of luck.

But although that was a rough, multicultural area, it wasn't druggy; so altho' til you said that I was all for buying anything, I'd be cautious if it's really that bad... is it?

Not sure which bit you lived in - Brixton was pretty druggy in the mid 70s!

Pixie5740

Notnow wrote: »

It's because of the way what you can afford is calculated. Let's base it on an income of £18,000

Rent - They divide the amount you earn by 30 and that's the amount you can afford to pay in rent each month. £18,000 divided by 30 = £600 a month

Buy - The most I could possibly borrow is £70,000 with repayments of £300 per month.

Even though I can rent at £600 a month I can only buy at £300 per month so that's why I can afford to rent a lovely new build with parking, 2 bedrooms and everything working which is worth £140,000 or I can buy in a slum and get a tiny 1 bed flat worth £70,000 and all the problems that go with it.

Not quite. You should be able to borrow more than £70k on an £18k income unless you've got debts and/or dependents. Plus you'd have a deposit because you wouldn't get a 100% LTV mortgage so your budget would be more than £70k.

I still wouldn't buy in the area you describe though. It's all very well waiting for the next area to gentrify in London where masses of people are still moving to and want to live in but if a 1-bedroom flat costs £70k this can't be London.

What about renting a nicer 1-bedroom flat and saving a larger deposit or maybe looking at shared ownership?

Harper123

Neither. I'd rent something cheap to save enough money to buy somewhere else.

Hoploz

Notnow wrote: »

It's because of the way what you can afford is calculated. Let's base it on an income of £18,000

Rent - They divide the amount you earn by 30 and that's the amount you can afford to pay in rent each month. £18,000 divided by 30 = £600 a month

Buy - The most I could possibly borrow is £70,000 with repayments of £300 per month.

Even though I can rent at £600 a month I can only buy at £300 per month so that's why I can afford to rent a lovely new build with parking, 2 bedrooms and everything working which is worth £140,000 or I can buy in a slum and get a tiny 1 bed flat worth £70,000 and all the problems that go with it.

Have you seen an independent broker? It can be possible to get a mortgage up to 5 x salary. I pay about £300pcm on a BTL mortgage I have of about 100k. Maybe you could go beyond the 70k you are suggesting, if you get the right product from the right broker. All depending whether you have a deposit of course.

Notnow

I've been to brokers, I've been to banks, I've tried online calculators. They all promise figures of 80k to 100k yet when I start applying it goes down to 70k. I have no debt, no kids, no wife, the same job for over 10 years, a great credit score with tens of thousands of pounds paid back over many years without ever missing a payment. I've tried everything and I just keep being told I can't afford more than £300 per month even though I could pay double that and have money spare.

I'm just sick of the whole situation where I can't get a mortgage that I could easily afford.

I even have a 20% deposit saved with the cash in the bank. I don't see what else I can do and they give me no reason for knocking the figure down other than saying It's what I can afford.

AndyBSG

cmazza wrote: »

I would buy. Renting is money down the drain.

This.

I rented in a right hell hole for years because it was cheap and allowed me to save for a deposit while friends of mine threw their money away on renting swanky apartments.

I'm now approaching 40 with a 4 bed detached house with garage, driveway, garden in a nice area while they are struggling to find the deposits to buy 1 or 2 bed flats.

This is despite most of them earning the same or more money than me.

For some friends it's a real problem because they're at the ages now where if they want a family time is running out so they're pretty much resigned to having to rent for the rest of their lives.

warby68

Be careful your frustration doesn't lead you to an unwise choice

Better to rent cheap and save more and buy something that isn't quite so dodgy in my view. A wreck of a house in a run of the mill-half decent area is a safer bet and if your mortgage payment ends up low and you have spare cash you will be able to do it up over time.

I'd rather go for a dodgy rental in the knowledge its a means to an end and won't be forever than a dodgy purchase that could entrap you.

What are your numbers like? How long would it take you to save for a better area assuming the mortgage offer stays at £70k. It sounds as if you perhaps need only another £10k to buy a better property. Could you save that in a year? A second job perhaps?

A seriously dire area is a big risk

Thinking a bit 'off the wall', if you're really considering that purchase , why not rent in the dodgy area and see if you can tolerate it or what its 'really' like? Two benefits, you get to try it out AND presumably save a good chunk of extra as well.