How much to borrow?

hammyham

Hello, hope this is ok to ask. Me and my partner are FTB's and are looking to be buying a home in a year. We live in Leeds, but are happy to move out and live elsewhere in Yorkshire to save some money.

Combined income is £46k, no dependants, no debts other than student loans.

We have a deposit of £33k currently, and are hoping to have £50k by this time next year.

My family think we should buy the cheapest we should spend up to £100k on a flat, but I don't know if we'd be better trying to spend £150-175k on a house, as we'd be looking to start a family in about 3 years, and I'm guessing that house prices would go up?

I don't know if we'd better off getting the cheapest we can afford as we'd pay it off quicker, but then we may be priced out by the time we could sell on to get a larger house, or if we'd be better off trying to get a larger home that we would have more room to start a family in?

Many thanks in advance for any advice xx

da_rule

If you can afford to get something that will give you time to grow then this would be the best route to take.

Buying cheap now is a bit of a false economy when it sounds like you'd probably need to upsize anyway in a few years as you'd have another set of legal fees and mortgage fees to pay. You'd also have estate agent fees, moving costs and maybe stamp duty. Plus you'd have to go through all the stress of selling and moving at a time when there might be a baby or one on the way.

glasgowdan

Go for the house, it's such a better way to live!

chelseablue

If you can afford it I would go for the house over a flat any day

spadoosh

Id say house. No guarantees with housing so i think its best to think in terms of could you live in that house forever if needed. A flat will give you restrictions not least when it comes to sell, you will be looking for people in a similar situation to yours and in general its a short term solution for people in similar situations (wanting a family). Im not dissing flats and plenty of families can and do live in them with ease but they do tend to offer less flexibility/options.

Petite_Anglaise

I would say that if you can afford to buy a house, go with that option.

If you are looking to sell and trade up in the next few years, you will have all the same buying costs plus selling costs on top.

If you are looking to have children in the next few years, buying a house would be a better option rather than finding that you do not have enough space in the flat and have to go through the buying/selling process while pregnant/have a tiny baby.

Also, buy somewhere & get a mortgage now before you have childcare costs which will reduce affordability and ultimately reduce your buying power!

Grenage

I would not buy somewhere for just a couple of years; you could easily lose money from fees and stamp duty alone. If the market goes a bit badly over the next two years, you could lose a lot more (or you could gain if it goes the other way).

With your income and plans, I would buy the most practical long-term family home you can afford, and can still afford if one of you is out of work for a bit or rates have gone up after a fixed term. If the market craps itself, you won't really care, as you're not planning to move.

Being financially up to the hit can work out if everyone stays employed and prices go up, but life is unpredictable.

You could wait a year and save, seeing if the market drops after article 50, and saving some money. You could save for a year and see prices go up, wiping out your extra savings. Flip a coin on that one.

cjm888

Go for the max you can borrow now. I made the mistake and it cost me a lot more in moving costs after we outgrew the house in three years...

Bossypants

Go for the house if you can. When I was looking to buy for the first time, I was initially looking at flats, based on what I could afford at the time. Then I had a windfall which unexpectedly put me in range of a house. I was undecided at first (it was just me and a flat would have been fine sizewise), but eventually went for the house. I'm so glad I did, not just because of the house itself, but because over 5 years it gained significantly more in value than a leasehold flat would have, which put me in a much better position than I otherwise would have been when I needed to move to a more expensive town.

Cakeguts

As it is Leeds I would suggest a house based on the fact that a 3 bed house would be easier to sell if there was a problem than a flat. Leeds has a lot of flats.