I have a sizable deposit... but should I rent or buy right now?

kinger101

Option 3....

Use the 55K as deposit and buy an nice place in a better area with the £600 you were going to pay in rent on a mortgage instead. Not sure of your financial circumstances, but you'd be able service a £120-150K debt with that money. Though lenders would factor in your ability to pay with higher interest rates too.

Person_one

Buying in a bad area is never a good idea unless you have really strong ties to that bad area and are happy to live there for the foreseeable future despite the problems.

House prices in bad areas don't rise at the same rate as house prices in good areas, so you can get stuck.

You describe yourself as a young professional so presumably you've got a reasonably well paying job so why not use your cash as a deposit and get a mortgage to buy a place in a decent area? If you can buy in a crap area for 55K I'm guessing you can get a nice 2 bed or small 3 bed for say 150K?

Buying doesn't mean you have to stay in the house for 25 years! I left my first bought property after less than a year (ok that wasn't planned) then was in the second for 5 years. If you think that 3 years is when you might want to move on, just don't get a mortgage that has any early repayment charges after 3 years.

Petite_Anglaise

I would be extremely wary of buying a bad property in a bad area.

Think about how easy it would be to sell if you needed to move on/re-locate for whatever reasons.

I know people say that you're better off being on the property ladder than not, but there are some circumstances where I think you're better off hanging onto your money and waiting/searching for a better opportunity.

pokarekareana

Do you actually want to live in the area that you're looking at buying in? You can rent a room and get to know a new area pretty quickly - I understand it must be a comfort to feel that you know a neighbourhood if you're buying a property there, but the way you've described it, it doesn't sound particularly nice!

Are you experiencing some kind of pressure to get onto the property ladder, or is this your own idea? I'm not trying to be patronising - I can't find a nicer way to phrase that, I'm afraid. What I'm getting at is that you might think about renting for a while, and grow your deposit more if needed, before perhaps looking at buying somewhere in a nicer area (that might be easier to sell if and when the time comes)? I think a lot of people feel pressure to buy a property as soon as they can, even if it isn't exactly the kind of house they want, or if it isn't in a nice area.

Rent is sometimes seen as wasted money, but that isn't always the case. I've been renting for six years in an area where property is very expensive to buy, but where rents are cheaper than mortgage rates. I've been able to save up a good deposit and we're now in a position to buy in this area. The other alternative would have been to buy five years ago, but in an area further out of town, or to buy a shoebox here.

Shakin_Steve

I don't see how anyone could give you any guidance in this matter because your post is full of maybes, maybe nots, could be 5 years, could be 7. The rental v mortgage figures you quote just don't equate to living in the same areas. Stop rambling and come up with something concrete if you want advice.

AnotherJoe

tim123456789 wrote: »

If you can only afford to live in a crap house, in a carp area, I think I'd rent,

Better to look for the right plaice and mullet over before buying

kinger101

AnotherJoe wrote: »

Better to look for the right plaice and mullet over before buying

Oh for cod's hake don't start on the puns. It's not fair on OP. Eel think we're not taking his question seriously.

BoredPerson

I actually like to buy this property. I know it's in bad area but it's also the area I've lived in for a while. I have my family here.

I've looked into this and I think you guys are correct, there is too many maybes. I'll hang on until I have something concrete. Thanks for the replies!