Buy now or wait?

Dave93

Hi folks,

long time lurker, first time poster. I have searched this forum but couldn't quite find a thread from somebody in a similar situation. I am considering buying a house and I am not sure whether to go for it now or to wait.

I am currently 24 and working full time with a promotion coming in the next couple of weeks (includes salary increase), I live with my girlfriend of 8 years who decided to go back to University and is in her 3rd of 4 years. She works part time at a chip shop but only ~6 hours per week and I am not 100% certain but I think it is cash in hand payment.

Getting a mortgage I have been told that I am better off going alone without my girlfriend on the mortgage given her current situation so my mortgage value is pretty low but enough to get us a 3 bedroom semi - usually in need of some TLC. We are currently renting and we are both saving what we can for a mortgage and have access to enough money for a 10% deposit at a push.

We are viewing houses but we are unsure whether it is better to just hang on 2-3 years or buy now. If we bought now in 2 years time I will have been promoted with pay increases and my girlfriend will have a full time job as well so our income will near enough double. We are considering the following options:

- Buy now and live there for the foreseeable future - The property will be very cheap to us in a couple of years so saving most of our disposable income but living comfortable with holidays etc would be achievable

- Buy now then buy a bigger property once we have saved again - renting the first property out

- Hang on and buy a bigger property in a few years time

Our current situation is renting a terraced house in a street that we hate, loud neighbours, no parking etc; and renting feels like burning money. And with Brexit coming up in the next couple of years house prices may be affected one way or another so we are really looking for some advice.

If you level headed folks have any advice or suggestions it would be greatly appreciated.

Thanks!
Dave

AnotherJoe

How is your rent compared with what your mortgage would be?

Dave93

AnotherJoe wrote: »

How is your rent compared with what your mortgage would be?

Rent is actually about 10-20% more expensive depending on how much we stretch our mortgage. But our rent includes insurance, so we would have to factor in house and contents insurance into the mortgage price as well.

tom9980

Buying now means saving rent but anything saved will get spent on upgrading the new house. Also consider the likelihood of gaining employment in other parts of the country due to promotion may mean you have to move and pay all those fees to agents and stamp duty again.

The option of becoming a landlord I cannot recommend you will pay extra stamp duty and have to service two mortgages and most likely have little backup savings left to cover non paying tenants and repairs.

I would scrimp and save until she has a job given the current situation.

Pixie5740

There are lots of threads from would-be buyers getting their knickers in a twist about BREXIT. If you wait until after BREXIT to make a decision then some other policy or political upheaval will come about and you will continue to procrastinate.

Who has told you that you will be better off buying on your own? Have you spoken with a mortgage broker? If you are intending to use some of her savings but for her not to be on the mortgage then that will rule out a lot of lenders.

Dave93

tom9980 wrote: »

Buying now means saving rent but anything saved will get spent on upgrading the new house. Also consider the likelihood of gaining employment in other parts of the country due to promotion may mean you have to move and pay all those fees to agents and stamp duty again.

The option of becoming a landlord I cannot recommend you will pay extra stamp duty and have to service two mortgages and most likely have little backup savings left to cover non paying tenants and repairs.

I would scrimp and save until she has a job given the current situation.

Thanks for the response! Scrimp and save is currently our approach, it's just difficult given that everybody around us is either settled in their own home or have no thoughts on buying, often live with parents and they are buying expensive cars, frequent holidays etc. I guess we feel like we are working just as hard as anybody else but are getting 0 benefit at this point.

dimbo61

You are running away with yourself.
Start with how much you can afford now and what will that buy in your area.
10% deposit is good.
Martin talks about Atom online bank doing under 2% five year fixed deals ! With £900 fee.
You can move out of a place you hate and get a home you both want ? How long have you lived together and is the relationship strong ?
Driveway for parking and you can add value over the next few years.
When your girlfriend gets a job and you earn more money then consider buying bigger and better.

Hoploz

Buy now, upgrade later if you want.

You're throwing rent money away every month. If you buy you'll be paying off part of the loan so the capital amount reduces.

If you buy now it will most likely be cheaper as prices tend to edge upwards so what is £250k now could easily be £280k in 2 years time, for example. Buy now and your loan will be less plus your house will be worth a bit more - win/win. Wait 2 years and you'll be 30k down on buying plus whatever you've spent on rent as well.

There's always debate about house prices and whether they're going to go up or down. Nobody has a crystal ball. But it's incredibly rare to reduce by a large amount. Far more likely that there will be increases. Even if a crash happens then it only matters if you need to sell at that exact time.

Dave93

Pixie5740 wrote: »

There are lots of threads from would-be buyers getting their knickers in a twist about BREXIT. If you wait until after BREXIT to make a decision then some other policy or political upheaval will come about and you will continue to procrastinate.

Who has told you that you will be better off buying on your own? Have you spoken with a mortgage broker? If you are intending to use some of her savings but for her not to be on the mortgage then that will rule out a lot of lenders.

Banks when speaking to them about mortgages, the bank that offered the best rates suggested even with my girlfriend providing savings as well, due to her lack of income contribution having her as a name on the application would hinder rather than help. They suggested all deposit contributions going through me regardless of where the money came from to get the mortgage. Spoken with my girlfriend about this and she is fine with this.

dimbo61 wrote: »

You are running away with yourself.
Start with how much you can afford now and what will that buy in your area.
10% deposit is good.
Martin talks about Atom online bank doing under 2% five year fixed deals ! With £900 fee.
You can move out of a place you hate and get a home you both want ? How long have you lived together and is the relationship strong ?
Driveway for parking and you can add value over the next few years.
When your girlfriend gets a job and you earn more money then consider buying bigger and better.

Running away with ourselves is part of the reason I posted, given the people we are surrounded by reaping their rewards for working i.e. via buying homes are living with parents spending all of their income we are feeling like the scrimp and save approach for a few more years is a tough pill to swallow.

Relationship is strong 8 years together (since being 16) and lived together for 4 years.

In terms of properties we can currently buy either a 3 bedroom semi that needs TLC or a nicely fitted 2-3 bedroom terrace. With my girlfriends salary in a few years we could probably afford a nicely fitted 3 bedroom semi in a nicer area, bigger house, more garden space etc (house prices in the North West are cheap)!!

I guess one worry we have is if we buy now, and then sell and buy in say 3-5 years time if house prices drop we wont have much money paid into the mortgage so will end up taking a hit by selling the house.

IveSeenTheLight

Dave93 wrote: »

Buy now or wait

Not been in here for a few years, but amazing this is still the same question being posted.

I've always found that if your in a position to buy, then you should not delay and generally, those that do own their homes financially are always better off than delayed / prolonged renting

Dave93

Hoploz wrote: »

Buy now, upgrade later if you want.

You're throwing rent money away every month. If you buy you'll be paying off part of the loan so the capital amount reduces.

If you buy now it will most likely be cheaper as prices tend to edge upwards so what is £250k now could easily be £280k in 2 years time, for example. Buy now and your loan will be less plus your house will be worth a bit more - win/win. Wait 2 years and you'll be 30k down on buying plus whatever you've spent on rent as well.

There's always debate about house prices and whether they're going to go up or down. Nobody has a crystal ball. But it's incredibly rare to reduce by a large amount. Far more likely that there will be increases. Even if a crash happens then it only matters if you need to sell at that exact time.

Throwing money away renting is exactly how we feel, that coupled with us hating our current rented property are the driving factors behind wanting the move. But we are both very cautious and don't want to jump into something finding out that we can't sell and move on because we will lose money - leaving us stuck in a situation we can't get out of without taking a hit.